The Closing Bell: NuLu building gets new owner; Humana enlarges CEO’s golden parachute; FantasyHub implodes; and more
Welcome to The Closing Bell. This is your last stop for biz scoops and big news before the weekend — a roundup of stories that can’t wait till Monday.
Large retail building in NuLu under new ownership
Louisville-based retailer Bargain Supply Co. has sold its 25,000-square-foot building at 823 E. Jefferson St. in the NuLu neighborhood.
CBRE Realtors Scott Gilmore and Clay Hunt represented the company in the deal.
Bargain Supply Co., which sells a myriad of items from appliances to power tool to electronics, owns the majority of the block across the street between Shelby and Campbell streets.
The company still operates at 844 E. Jefferson St. The 823 E. Jefferson St. property was used for Bargain Supply’s wholesale division, which shut down two years ago.
Here’s what we know about the new owner: A company called S H Capital Holdings bought the property for $1.4 million in February. S H Capital Holdings shares a headquarters and ownership with key replacement company Car Key Express and technology firm iKeyless. iKeyless products include keyless entry remotes, replacement keys, batteries and keyfinders.
Mark A. Lanwehr owns all three companies.
Here’s what we don’t know: Lanwehr did not return calls for comment, so it’s unclear what he’s going to do with the building — if he plans to expand or move into the building, or maybe start a whole new company there.
Of course, the property is prime real estate, and Lanwehr may be looking to take advantage by bringing in a developer for a commercial project such as a strip of retail shops. After all, a few hotel and apartment projects are already in the works and there’s plenty of other retail nearby. But that’s just a guess. —Caitlin Bowling
Humana enlarges CEO’s golden parachute
If Humana CEO Bruce Broussard is let go after the company is acquired by a rival — say, Aetna — he would get a severance package worth nearly $40 million, or about five times as high as it was just three years ago, filings with the Securities and Exchange Commission show.
Three years ago, the payout would have been $8.6 million. The figure has steadily increased since then, to $12.2 million in March 2014 and $16.2 million in March 2015.
The payout swelled to $31.3 million when Humana and Hartford, Conn.-based Aetna announced last summer that the companies had agreed that Aetna would acquire Humana for $34 billion.
These so-called change-in-control provisions or golden parachutes “are structured to encourage executives to seek out and enter into sale or merger opportunities when it is in the best interest of the shareholders without having reservations about losing their own positions,” according to the Center on Executive Compensation.
Humana has said in its filings that the agreements allow the company to retain and attract important employees during times of uncertainty.
“Employee retention may be particularly challenging during the pendency of the mergers, as employees of Aetna and Humana may experience uncertainty about their future roles with the combined business,” the company said.
Humana said it “believes that the potential cost of the change in control benefits is necessary to retain the employees needed to complete the merger.”
Broussard’s counterpart at Aetna, CEO Mark Bertolini, stands to gain $76 million for a termination after the company is acquired by another entity. If they were fired for cause, Bertolini would get nothing, while Broussard would get $665,616.
Company shareholders have approved the acquisition, but the deal still requires some regulatory approvals. —Boris Ladwig
Westport Village might be close to selling
Illinois-based real estate management and development company InvenTrust Properties Corp. has a potential buyer for Westport Village shopping center in Louisville.
The company has owned a majority interest in Westport Village since 2013 and put the property on the market earlier this year, Insider Louisville previously reported.
A representative with InvenTrust Properties confirmed the company is in talks with a possible buyer but declined to provide further details, stating it is too early in the process. The company also previously declined to disclose the asking price for the shopping center and its occupancy rate.
In 2014, nearly a dozen Westport Village tenants filed a lawsuit against InvenTrust Properties, alleging mismanagement. One of the tenants involved in the suit previously told IL he believed the tenants were 100 percent behind the company’s decision to sell. —Caitlin Bowling
Yum! Brands testing Taco Bell’s popularity in China and online
Taco Bell is a hit in the United States, and its parent company Yum! Brands wants to see if the brand is as popular in China as its sister company KFC. The company also is looking to keep Taco Bell on the cutting edge in America by creating a presence on burgeoning mobile applications.
Two stories this week, one in AdWeek and another on TheStreet, look at new and interesting developments with Taco Bell.
TheStreet reported that Yum Brands’ CEO Greg Creed mentioned that Taco Bell could open its first store in China later this year, noting that Yum’s growth fits into the current climate in China.
“Job creation is important to the Chinese government, and we think our growth aligns with what the Chinese government wants to achieve,” TheStreet quoted Creed saying.
The story also notes that Yum currently employs about 450,000 people in China and plans to open 600 new stores in China this year. The company believes it could one day operate more than 20,000 stores and employ 1 million people in China.
Back in the United States, Taco Bell, which was one of the first brands to embrace the popular mobile app Snapchat as an advertising tool, has now set its sights on another app called Wishbone. Wishbone allows users to poll their followers to see which photo they like more and has been gaining popularity, AdWeek reported.
Taco Bell also has hired online mobile advertising company Aki Technologies to track consumers’ phone activity, such as what applications a user looks at first thing in the morning. With that information, Taco Bell can target advertising for its breakfast menu for example, AdWeek wrote. —Caitlin Bowling
FantasyHub implodes, leaves players and charities in the lurch
Former Louisville-based fantasy sports startup FantasyHub has imploded, according to ESPN and several gambling media sites, leaving behind hundreds of thousands of dollars of unpaid debt to their players and to the charities to which they were supposed to be donating.
Fantasy sports leader DraftKings is bailing out FantasyHub and paying hundreds of thousands to its players — ESPN estimates that 80 percent of FantasyHub players also have a DraftKings account — and more than $100,000 to various charities.
Why would DraftKings do this? Apparently for the good of the industry.
“This is not an acquisition deal or an asset purchase deal,” DraftKings co-founder Matt Kalish told ESPN. “We never want to see our player base go through an experience that’s negative like this. What happened here was reprehensible. It is a breach of trust for these players and we share a lot of these players with them. We just didn’t think it was the right thing to do to sit on the sideline and let that happen. We had the ability to step up and do something.”
While no one has reported exactly what went south for FantasyHub, media speculation is that they commingled the players’ funds, the charity funds and their operating funds. They shut down all operations in February with scant communication since.
FantasyHub was the second daily fantasy website to close without paying players in the last three months.
According to ESPN’S David Purdum, “at least five [FantasyHub players] contacted Texas Attorney General Ken Paxton’s office, which would not confirm or deny that an investigation had been launched.”
We reached out to FantasyHub CEO Andrew Busa on Wednesday and have not received a reply.
Busa moved the company from Louisville to Austin, where the company had been accepted by TechStars almost exactly a year ago. No word if Busa and cofounders Steven Plappert and Chris Pierce will return to Louisville. —Melissa Chipman
Open date set for Doc’s Cantina Mexican restaurant
The highly publicized demise of the former Tumbleweed on the River only added to anticipation for the concept replacing it.
And now after several months of delays, restaurant company Falls City Hospitality Group has set a date for the opening of Doc’s Cantina: April 5. The Mexican restaurant, located at 1201 River Road, will serve lunch, dinner and weekend brunch, according to a news release.
Hours of operation will be 11 a.m. to 10 p.m. Monday through Thursday, 11 a.m. to 11 p.m Friday, Saturday 10 a.m. to 11 p.m. and Sunday 10 a.m. to 10 p.m.
The menu will include dishes from all around Mexico, such as grilled beef tongue tacos, chuleta and shrimp a la Diabla. And the bar will serve up margaritas made from scratch and sangria made with brandy from Copper & Kings American Brandy Co.
Prices range from $5 to $11 for appetizers; $11 to $14 for three tacos with a side of rice and beans; $9 to $14 for sandwiches; and $12 to $26 for entrees.
The restaurant is already taking reservations for Thunder Over Louisville, April 23. Guests will receive food and prime seating inside or on the patio for $180 per person. Parking and alcohol are not included. For a reservation, contact Emily McGee at [email protected]
Vest Advertising downsizing, changes positioning in industry
Rumor has it that Vest Advertising shed around a dozen employees late last week. IL reached out to Rita Vest, CEO, for comment, and she replied, “Our employee size reflects our changes as an agency. While historically a production agency, our new positioning as a primarily digital agency necessitates that we staff to fit these needs.”
Vest clients have included the Louisville Leopard Percussionists, Toyota, Anchorage Cafe and Humana.
Advanced notice: AOL co-founder Steve Case to speak at EnterpriseCorp event
It’s not until June 16, but EnterpriseCorp announced that Steve Case, chairman and CEO of Revolution LLC and co-Founder of America Online, will be the keynote speaker at the event formerly known as Signature Event. Now it’s being called Evening of Entrepreneurship and is being held at the PNC Club at Papa John’s Cardinal Stadium
Case is currently CEO of Revolution, a Washington, D.C.-based investment firm that invests in visionary companies like Zipcar and OrderUp. Case was the founding chair of the Startup America Partnership — an effort launched at the White House to accelerate high-growth entrepreneurship throughout the nation.
As always, the event also will feature a “State of Entrepreneurship” address — from presumably either EnterpriseCorp’s Lisa Bajorinas or GLI CEO Kent Oyler — outlining the advancements (hopefully) that have been made to the entrepreneurial ecosystem in the past year. Make your reservations here. —Melissa Chipman
Louisville’s not so smart after all
Jokes aside, Louisville was not chosen as a finalist for the U.S. Department of Transportation’s $50 million Smart Cities Challenge.
Last weekend while Louisville was celebrating St. Patrick’s Day with parade gridlock in the Highlands, U.S. Transportation Secretary Anthony Foxx announced the finalists: Austin, Texas; Columbus, Ohio; Denver, Colo.; Kansas City, Mo.; Pittsburgh, Penn.; Portland, Ore.; and San Francisco.
As Insider Louisville previously reported, Louisville’s application included creating Smart Lanes, driving lanes used by connected vehicles including TARC buses; installing technologically advanced stoplights; collecting traffic and air quality data via vehicle sensors; and building a mobile application that details people’s local transportation options.
Transportation activists criticized the plan and even submitted letters to the U.S. DOT, stating that the plan did not focus enough on improving access to transportation for low-income individuals and mainly focused on those who can afford connected vehicles.
One letter called the plan “unrealistic, undemocratic and unambitious.” —Caitlin Bowling