Welcome to the March 3 Monday Business Briefing.
This is your private business intelligence briefing with Insider Louisville staff and contributors vetting tips collected during the past few days, hours and minutes before we post.
An update: Our Insiders Meetup at Z’s Oyster Bar and Steakhouse with Jonathan Blue is cancelled due to yet another Monday snow storm. We’ll let you know ASAP when Jonathan can reschedule his talk about Kentucky Wins!, the effort to expand gaming in Kentucky.
Slug this the “spring thaw” edition of MBB. Yes, we know there’s fresh snow on the ground, but we have a sure sign of spring to lead things off, and frankly, we need to lighten up, sometimes:
• We get a complaint or two – every now and then – that we have way too much real estate, health care and tech news, scandal and mayhem, but not nearly enough coverage of the frozen confections sector.
The big mystery last week was where the Comfy Cow location would be in the Highlands.
The growing chain of ice cream parlors has been a big hit at Westport Village and on Frankfort Avenue in Clifton. Now, with serious capital, they’re in the expansion mode courtesy of Chip Hamm and other investors. We know … when are we going to get to the point, right?
Well, Comfy Cow will be taking over (drum roll) the former Heine Brothers’ Coffee space at Eastern Parkway. Mike Mays told Business First last Friday the chain was giving up the location since it’s less than a half-mile from its original Longest Avenue store. (More on that later in the Monday Business Briefing.)
The Eastern Parkway location is a no-brainer in that it’s the busiest intersection in the incredibly dense Highlands. And, rare in the Highlands, the building has off-street parking. Comfy Cow’s arrival will create the Triple Dip District at Eastern Parkway and Bardstown where you can choose between the Cow’s rich concoctions, or lighter yogurt-based offerings at Lula’s on the northeast corner, and at CeFiore next to Qdoba on the southeast corner in the Schuster Building.
And all will have outdoor seating to look forward to in our post-blizzard lives. More as we get details from Comfy Cow founders Tim Koons-McGee and Roy Koons-McGee.
• We did talk with Heine Brothers co-founder Mike Mays, who plans to renovate and/or expand three of the early HB locations – the original coffee shop at Bardstown Road at Longest Avenue, the Frankfort Avenue store in Crescent Hill, and the Chenoweth Lane location. More on this as plans are finalized.
• This is puzzling. Local media – IL included – reference “Zappos” when talking about the fulfillment operations down in Shepherdsville, just south of the UPS WorldPort air freight hub. But several sources including developers are telling Insider Louisville the online shoe sales operation left Shepherdsville in 2012. Shoe fulfillment went to Las Vegas, according to multiple sources. The only part of Zappos left in Kentucky is the 6 p.m. Outlet store.
We kept saying, “But, this is a giant company. Surely they’d have to notify someone of the changes.” So we emailed Zappos media people (the only way you can contact them) and heard back from their media person.
“Our fulfillment operations have not/will not move to Las Vegas,” stated Katherine Cook, Zappos media relations, in an email. “We can confirm that the 6 p.m. Outlet store will be moving to Las Vegas in 2015. The specific date is still to be determined, but the project is commencing.”
Ultimately, it might be a matter of semantics. Zappos is part of Seattle-based e-tailing monolith Amazon, and Amazon still has a couple of million square feet of space in several Shepherdsville buildings. More as we know more on this.
• This is the goose chase that never ends. Multiple sources keep assuring us Swedish IKEA is coming to Shelby County, specifically the Shelby County Flea Market parcel just off the interstate, visible to both eastbound and westbound I-64 traffic for about half a mile. The site is across Interstate 64 from the nearly complete Outlet Shoppes of Louisville, which will have 360,000 square feet of space and 80 shops.
More than a quarter of a million square feet of retail makes it hard to justify having a flea market on the property, which sources tell us belonged at one point to Louisville-based developer William “Buck” Marshall. A Hilton Garden Inn and a KFC store are under development nearby.
Last December, Joseph Roth, IKEA’s U.S. spokesman, told us the Swedish-based furniture and interiors retailer has looked at the Louisville area, but there simply isn’t sufficient population density.
Louisville, Frankfort and Lexington combined total only about 1.7 million in population, though if you count counties around the three cities, the count is 2 million, which Roth said would be the minimum market IKEA would consider. (He hinted heavily that Nashville is the more likely market to get the next mega-furnishings store.) Yet, if IKEA execs decide to skate to where the puck is going instead of where it is now, look at the Louisville/Lexington/Evansville/Nashville corridor, which includes Elizabethtown. More after we go to Shelbyville and do our research.
• It’s sad when the biggest downtown retail story is the opening of a CVS. But the new store in the former Stewart’s Dry Goods Building at Fourth and Muhammad Ali is a really, really nice, large drug store/notions store at about 5,000 square feet. Relocated from tight quarters on the second floor of Fourth Street Live, the new CVS has two full aisles of food offerings a la those great Walgreen stores in downtown Chicago.
On the down side, at least two of the six stores recruited by the city to the 500 block of South Fourth Street have closed. Celebrations at 536 S. Fourth and Les Filles at 558 S. Fourth are both empty.
The arrival of the stores last year was supposed to be the turning point to reviving retail on Fourth Street. Mayor Greg Fischer had a big news conference and celebration last April starring Alan DeLisle, the now-departed executive director of the Louisville Downtown Development Corp. (For the record, we didn’t buy in, focusing instead on George Stinson’s south of Fourth Street plans, which are still going forward.
The C-J played the story big, quoting DeLisle congratulating himself, calling the cluster of shops “the start of something significant. We don’t believe there’s been any comparable retail initiative on Fourth Street in recent memory.”
Our favorite part was when LDDC expanded the Trolley Hop to what they termed “The South Fourth Street Retail District,” but forgot to actually tell TARC.
Just two years earlier, DeLisle had declared Fourth Street “saved” as he and Rick Hill of Village Solutions announced a sensational plan to revive Fourth Street with roof-top restaurants, movie theaters, recording studios and art collectives. The fact that neither LDDC or Village Solutions had a penny of financing or owned any of the buildings did not diminish their ardor.
Long sigh …
Now, it comes down to what happens after Bill Weyland opens his Hilton Garden Inn at Fourth and Chestnut, and Mary Moseley’s Embassy Suites project revives Fourth and Muhammad Ali.
And what did we learn from all the tax dollars spent to “revive” Fourth Street? Easy. Central planning is fine for North Korea. But in America, only the private sector brings authentic, organic change.
• We’ve started burying GLI news down in the MBB because it was just so unrelentingly bad, it was starting to depress readers. Well, good news … it turns out everything is fine!
Last Friday, BizFirst reporter Ed Green quoted Greater Louisville Inc. Chairman Kerry Stemler as saying, “I really feel like GLI is in a good position financially. Our finances are in good order. We’re in a good cash position – no problem there.”
Which explains why GLI cut top executives last September after it lost one-third of its membership, then walked its CEO in January. (IL broke the story Jan. 29 that Craig Richard would be leaving.)
The truth comes out: Richard left because everything is awesome.
There you go.
Back in the reality-based world, our sources are telling us two major donors – “top investors” in GLI vernacular – are pulling all financial support, with internal wrangling persisting weeks after Richard was shown the door. We’re trying to double-verify. Because if true, the exit of one of the companies could seal the fate of the chamber/economic development entity, say our sources.
We do know retired PNC executive Craig Grant has told GLI executive committee members he won’t be returning to Louisville to take the reigns. It’s puzzling how little transparency there is in an organization that receives $1 million in city tax dollars. But after months of the organization sitting in neutral, the biggest question may be, “What does GLI actually do?”
• The investment website Seeking Alpha is reporting a number of YUM! Brands insiders are selling but not buying. Those include president Richard Carucci, who sold 78,000 shares representing the majority of his holdings.
Here is Seeking Alpha’s table of Yum! Brands’ insider-trading activity during the last 30 days:
• Christian Campbell, senior VP, Feb. 19 — 13,157, with 13,288 shares remaining, or 49.8 percent of his total holdings.
• Richard Carucci, president, Feb. 13 — 78,048, with 34,098 shares left, or 70 percent of his total holdings.
• Patrick Grismer, CFO, Feb. 5 — 1,770 shares sold out of 17,840, plus 8,316 options, or 6.3 percent of his total holdings.
• Jonathan Blum, senior VP, Feb. 5 — 3,664 out of 22,131 shares, plus 83,394 options, or 3.4 percent of his total holdings.
• Look for Chase Bank to further downsize its Louisville workforce as it rolls out a new branch model nationally. (Last year, we broke the story that Chase executives were moving 145 back-office wholesale loan operation jobs to either India or Chicago, emptying out several floors of the Marion E. Taylor Building at 312 S. Fourth St.)
The Wall Street bank has already installed the new tech-focused branches in San Francisco and other major markets.
The concept is to do away with rows of teller windows, and instead put sales people into the branches to help clients with loan, mortgages, investment products and other profit centers. Our sources say there won’t be as many tellers, but there will be ATMs, along with newer technology such as iPad-like self-service teller machines with cutting-edge touch screens.
The humans will handle high-tech customer services. Cool.
• Pieces of the KentuckyOne Health story keep coming over the transom. For example, we got a copy of University of Louisville Hospital President Ken Marshall’s email to employees. We’re posting it here because we thought you’d want to read it yourself. The ending is unfortunate – “see you around” – as KentuckyOne cuts 500 employees. But the rest of the letter is unusually human in tone considering its from a top health care executive.
Ken Marshall Updates 2/27 /2014
Good morning … I thought it appropriate this week to send my normal Friday update a day early. For those of you who are not aware, this week several positions in the downtown medical campus were eliminated. These changes have impacted both Jewish Hospital and University of Louisville Hospital. This was the culmination of several weeks of work looking at what changes need to be in place to better manage our labor costs. For those who continue to work in the affected areas, I know yesterday was a difficult day.
Today I can share with you some details of some of the areas affected.
• In total there were just over 40 positions eliminated from University Hospital.
• The areas impacted the most are the Lab, 7 South and 8 East.
o In the lab several phlebotomy and med tech positions were eliminated.
o On 7 South and 8 East the number of staffed beds were reduced by about half resulting in the reduction of several staff members on those units.
• Across the organization there are vacant positions that will not be filled and some hours have been adjusted.
• Employees who had their position eliminated will have an opportunity to apply for other positions within Kentucky One.
In the past, I have written about how it is necessary to make changes in the way we manage our costs in order to position ourselves for success in the future. Unfortunately, positioning ourselves for the future requires difficult decisions today. It is understandable and expected for many of us to feel a sense of loss or even guilt as colleagues and friends may no longer be working by your side. Such a reaction is normal and part of our collective healing.
In the coming weeks we will learn to adjust. As I’ve said before, this is a temporary challenge. I would be remiss if I didn’t say again that I have full confidence in those who continue to dedicate themselves to our patients and families. Repeatedly I have seen this organization rise to face challenges – it will happen again. Personally, the last couple months have been some of the most difficult in my professional life – but I continue to believe in the excellent care we continue to provide those who come to us and in our collective commitment to the community.
So let’s go forward and, as we do that, I challenge you to do a couple things. First, remember this is a single point in time – not forever. Second, remind yourself daily that we all have the ability to give compassion and understanding not only to our patients and families – but to our co-workers as well.
As always, thank you for your continued dedication and I’ll see you around!
• Louisville preservationists River Fields lost the bridge fight. Ah, you’ll be relieved they’ve found a new cause – fighting a hotel planned on property that a River Fields clarion call to members describes as “an important gateway to the waterfront.”
Oddly, the property already has a hotel. Just not a very big one. Denver-based brokerage Hospitality Real Estate Consultants has a deal to renovate and update the rather dated Ramada Inn Rivermont hotel at Zorn Avenue and River Road. Plans calls for the vintage 1974 hotel to be partially demolished, with the remaining structure integrated into a new Candlewood Suites.
River Fields objects because new construction is requesting a height variance of 23 feet 10 inches, for a total building height of 53 feet 10 inches.
From the River Fields document:
The Planning and Development Staff Report, analyzing the effect the variance will have, states that the variance “will alter the essential character of the general vicinity” and “may cause a hazard or nuisance to the public” because of the impact of the proposed hotel on the viewsheds of the Louisville Water Tower, a National Historic Landmark, and River Road, Louisville’s only Scenic Byway.
A variance not only could negatively impact the entrance to Upper River Road and the viewshed of one of the state’s only National Historic Landmarks, the Water Tower, but also it could set a dangerous precedent for future development in the area.
The Planning and Design staff report does not support granting the height variance.
River Fields is asking the public to attend the Board of Zoning Adjustment meeting this morning at 8:30 a.m. in the Metro Development Center, Conference Room 101. The Metro Development Center is located at 444 S. Fifth St. across from Cathedral of the Assumption.
Or, you can email the case manager at Planning & Design: Latondra Yates at [email protected] The hotel is case file #13DevPlan1115.
River Fields notes in the communique it owns undeveloped open space directly adjacent to the proposed development.
Actual Monday Business Briefing Briefs:
• Metropolitan Business Development Corp., or METCO, has approved a $50,000 loan to Texas and Goss LLC for a façade loan. Who? This is actually our friends at BEAM Technologies. This loan will help the property owners, BEAM CEO Alex Frommeyer and Shane Uttich, replace siding of the new Germantown digs with Dryvit, replace some windows, install awnings and make other minor repairs. The total investment is expected to be $78,280, according to a METCO news release.
• Startup nurseVersity has dropped out of the Velocity accelerator program. It’s one of the five Winter 2014 cohort companies at the Velocity program in Jeffersonville. The question is, do they have to forfeit the $20,000 they recieved?
• Look for Lynn Winter to finally sell Lynn’s Paradise Cafe. Well, maybe. We hear she has a mother-and-son team ready to pull the trigger. But we’ve heard there’s much wailing and gnashing of teeth, and Winter’s sentimental attachment to the property may be too strong for her to hand it over.