Welcome to the April 18 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Boston is trying to sway Aetna to move its HQ. Is Louisville?
Cities including Boston are trying to persuade Hartford, Conn.-based Aetna to move its headquarters — but the city of Louisville and the state of Kentucky won’t say whether they’re among the suitors.
Aetna wants to buy Louisville-based Humana for $34 billion. The Connecticut company has made a commitment to Louisville — but has refused to do the same for its home state. And that has led to speculation about whether Aetna is serious about moving its headquarters — or simply wants more commitments from the governments of Hartford and Connecticut.
Aetna and corporate giant General Electric, based in Fairfield, Conn., had voiced concerns last year about Connecticut’s fiscal problems and taxes. GE said in January that it was moving its headquarters to Boston.
According to emails that Boston media have obtained through a public records request, Boston city officials are trying to get Aetna to follow GE’s example. But at least one of the emails hinted that the company has suitors besides officials in the Massachusetts capital.
“Based on our interaction with Aetna, it does sound like they are beginning to get several inquiries,” Krista Zalatores, a Boston economic development official, wrote to Boston Mayor Martin Walsh’s chief of staff, according to the Boston Business Journal.
The city of Louisville and the state of Kentucky declined to tell IL whether they are actively pursuing Aetna or, if not, why not.
A spokeswoman for Louisville Forward, the city’s economic development branch, said via email that the city is “always courting businesses to choose Louisville as their new home. Our thriving lifelong wellness and aging care sector mixed with our emerging tech scene would make Louisville a great place for Aetna to be.”
“Beyond that,” she said, “any of Louisville’s economic development discussions with individual companies and the details surrounding them remain confidential until the Kentucky Economic Development Finance Authority (KEDFA) votes on proposed incentives in a public meeting.”
The office of Gov. Matt Bevin did not respond to phone and email inquiries.
IL filed open records requests with the city of Louisville and the governor’s office in an effort to learn of any attempts the state and city are making to lure Aetna to Kentucky.
The city denied access to any records “generated or received by the mayor’s office and its employees, and Louisville Forward and its employees, since Jan. 1, 2016, related to efforts by the city of Louisville to get Aetna to move its headquarters to Louisville.”
The city said state law “exempts from disclosure any proposal containing a request for loan/grant and/or incentives and inducements to be considered by Louisville Metro Government … (and) records related to negotiations or potential negotiations between Louisville Metro Government and a private entity that are preliminary pending final agency action.”
The governor’s office provided IL with five documents in response to the records request, but they dealt primarily with Kentuckians urging the governor to try to lure Aetna to the commonwealth and revealed no specifics about any attempts by the governor or his staff to act on those suggestions.
Recruiting a company headquarters can bring lots of high-paying jobs, prestige and tax dollars — but it also can be expensive: The Boston Globe reported that Boston officials lured GE from Connecticut with a package of incentives that included $25 million in tax abatements, more than double the offer that city leaders initially considered.
While shareholders of Aetna and Humana have approved the acquisition and company officials expect it to be completed this year, the deal still needs to be approved by some state and federal regulators. —Boris Ladwig
Kentucky ranks 38th in U.S. in total breweries, report shows
The Brewers Association recently reported 2015 statistics on craft breweries state by state and the economic impact of the industry on each state; Kentucky ranked 38th in the nation with 24 total breweries, with California (518) by far being the highest.
The association reports that Kentucky breweries brewed 87,156 barrels of beer last year, or 0.8 gallons per adult (21 and over). Those numbers rank 32nd and 38th respectively nationwide. The economic impact is reported at $495 million, good for 27th in the United States.
Kentucky’s brewing industry, while it has taken a back seat to distilling in terms of popularity and growth, has shown movement in recent years. The number of breweries in the state has more than doubled in the last five years, according to the report.
In Louisville, Great Flood Brewing recently announced it will build a production brewery that will greatly increase its impact, while no fewer than two other breweries are in the process of opening.
Our neighbors to the north, Indiana, ranked 15th nationally with 115 breweries that drove more than $1 billion in economic impact. Nationally, there were more than 4,200 breweries doing business in 2015, according to the report. Domestic craft beer sales grew by 12.8 percent. —Kevin Gibson
Changes aim to help Louisville Metro Government “buy local”
Louisville Metro Government is taking a step toward walking the walk via efforts to buy locally produced goods.
The city has created an online portal where local business owner can submit information about their company in the hopes of landing a government contract. Common city purchases include construction, painting, pest control and roofing.
“Louisville has a strong small business community, but to grow, they need access to procurement opportunities right here at home,” Mayor Greg Fischer said in a news release. “Creating a public portal will allow businesses to more easily position themselves as potential vendors for Louisville Metro, allowing our agencies to be more aware of local providers of goods and services we need to purchase.”
Metro’s Division of Purchasing staff will use the database of local businesses to search for companies that can fill government contracts valued at less than $20,000. Contracts valued at $20,000 or more must go through a competitive bidding process, according to state law.
John Schnatter praises fellow Louisville CEO Kent Taylor
During a forum at the University of Louisville School of Business last week, Papa John’s founder and CEO John Schnatter emphasized that company culture is a key component of success.
And Schnatter took a couple minutes to compliment fellow Louisville restaurateur Kent Taylor, founder of Texas Roadhouse, on the culture he’s built. Taylor also sits on Papa John’s board of directors.
“He has the best culture I’ve ever witnessed,” Schnatter said.
On a flight back from the West Coast about eight years ago, Schnatter said, Taylor told him about a conference he puts on every year for employees that costs about $4 million.
“I thought ‘That is the stupidest thing I ever heard,’ but I didn’t tell him that, ” he said. “I said ‘Is it worth it?’ He said ‘It is the smartest thing I do.’ ”
Taylor invited Schnatter to attend one.
“It changed my life,” he said. “I thought employees just wanted job security and just wanted a raise. They want to have fun. They want to enjoy it. And think about this, the customer experience can never be better than an employee experience. If your employees aren’t having a good experience, they’re not going to put out a good customer experience.” —Caitlin Bowling
New initiatives at Chef Space
Venture Sharks last week was held at Chef Space, the new co-working commercial kitchen at 18th and Muhammad Ali Boulevard. Founder Chris Lavenson, formerly of Durham Labs and Sweetwater Beverages, made a couple of announcements about upcoming initiatives at the snazzy Russell neighborhood space.
Soon, members of Chef Space will be hosting “pop-up pickups” during weekdays. You’ll be able to swing by Chef Space and pick up meals and other food there.
They’re also launching a new initiative called “Jay’s 120,” named after the iconic Jay’s Cafeteria, which previously operated out of that site. It’s essentially a fast-casual restaurant incubator program where every 120 days, Chef Space will host a different restaurant concept. In conjunction with Kiva Zip, at the end of the program, the restaurant will be funded with a Kiva loan if it is successful. Kiva Zip is a crowdfunded small-business loan program.
Also, Chef Space will host a “Farm to Shelf” program for packaged foods for retail sale.
More exits than we thought at WHAS11
The press release about 31-year veteran news anchor Melissa Swan’s “retirement” from WHAS11 on April 21 certainly made it seem like this was the isolated exit of an iconic Louisville newsperson. Instead, sources say Swan was one of nearly a dozen WHAS11 employees who were part of a contract buy-out based on age and service.
Sources tell us the number of people who are leaving is around 11.
We asked station GM Linda Danna about it, and she replied:
In order to accelerate change and reinvest resources in new job positions, WHAS11 offered eligible employees a voluntary retirement plan. WHAS11 is a leader in the Kentuckiana community and this reinvestment will position us for even greater success as we continue to evolve to meet the changing needs of our consumers and advertisers.
She later followed up with, “Melissa has accepted that offer and we look forward to celebrating her many contributions to Louisville and WHAS11 prior to her departure.”
When we asked Danna for more specific information about the number of people who took the offer and the nature of their jobs, she replied, “WHAS11 offered eligible employees a voluntary retirement plan. We are sharing news of the key talent departure with our audience so they can join us in wishing our talent the very best.”.
Sources tell IL that ratings at WHAS11 — the local ABC affiliate owned by TEGNA Inc. — have been lagging for several years. —Melissa Chipman
App allows prospective homebuyers to view houses remotely
Before the internet, potential homebuyers had to drive to each home that piqued their interest and check it out firsthand.
Now, they can view pictures online and take virtual tours of homes before deciding whether to make the drive to see it in person. The second annual Tour of New Homes offers homebuyers — and anyone really — the chance to see inside newly built homes scattered around the city.
The tour includes houses that are mostly complete with some options to customize the interior and others that are fully furnished, according to a news release. Members of the Building Industry Association of Greater Louisville constructed all the featured homes. Last year, 86 homes were available for virtual tours.
The Tour of New Homes will take place from noon to 6 p.m. on April 30 and May 1 by downloading a mobile app called ParadeCraze. The application will include photos of the homes, a list of details, a map showing the location and step-by-step directions for those who want to take a more serious look. —Caitlin Bowling
A bit more on Kale & Flax
On Friday, we shared with you a bit of news about the digital agency Kale & Flax, which recently moved into an office above Please & Thank You in NuLu.
Look for the company to announce a pretty major philanthropic venture soon. We’re talking about pro bono work for some nonprofits and maybe a small business. It’s all about making a community impact as they launch their business.
Also, Tarik Nally, founder, was kind enough to send some photos of their new digs to us.
Zach Hornsby, the company’s development principal, worked for Mightily, as did Nally. He also put in about one year at CompleteSet, the pop culture collectors’ app that went through the Velocity program.
“We want to be awesome at digital,” Nally told IL. It’s sounds like they’re laying good groundwork. I keep forgetting to ask about their smoothie-sounding name. I’ll nail that down next time. —Melissa Chipman