Welcome to the October 8 top secret, always confidential Monday Business Briefing.
These are biz tips Insider Louisville staff and contributors have collected during the past few days, a few of which are NOT double-verified like Insider Louisville’s daily reporting.
But as always, this is information from insider sources with direct knowledge of events.
There is a LOT going on in commercial real estate … so much that we’re breaking up the larger deals into easy-to-read bullet points so you can check those out. Or, you can jump down to the Monday Biz Briefing take on an NBA team coming to Louisville. Your choice.
• Continental Realty Advisors executives are scheduled to be in town this week from Littleton, Colo. to look at the long-empty former Mercy Academy complex in the Original Highlands. CRA executives are among the ranks of developers who think the 80,000-square-foot complex can be converted into nice apartments in an area where rents are crazy and offerings marginal. CRA has a huge Louisville portfolio that includes the Camden Oxmoor apartment complex CRA acquired in January. CRA paid Camden Properties $97 million for four properties including Brookside Apartment Homes, Meadows Apartment Homes, Oxmoor and Prospect Park Apartment Homes. CRA may be the most serious shopper – at least $1 billion in properties under management – for a property where dozens of people have walked through during the past three years, though no one has made an offer except Wayside Christian Mission back about 2008. The last time we talked to the real estate broker handling the deal, she confirmed lots of interest in the strategically located parcel, but no final deal. One thing that has changed is, the neighboring Kindred hospital has agreed to share its parking with any new development at Mercy.
• We hear a local real estate player is making a run at the Meidinger Tower. You’re saying, “Who would want it?” with its high vacancy rate. Well, our local friend has done very well buying and restoring downtown properties. Yes, he told us Friday, Mercer has moved into four floors in the former Aegon Center. As we told you last month, the Aegon Center apparently is to be rebranded as the Mercer Tower later this year, complete with a huge sign. But our investor says Meidinger still has floors of top tenants including Mountjoy Chilton Medley, Kentucky’s largest CPA firm. The mechanicals are sound, and tenant-finish work would be reasonable for new tenants. The 330,000-plus square foot, 26-story tower is owned by Meidinger Tower LLC, a Salt Lake City-based investor group, which paid about $27.5 million for it back about 1998. Do they want to sell it? We’ll find out, because our investor says he’s making an unsolicited bid.
• The Prospect Village Shopping Center is changing hands, say our real estate insiders. The strip center includes a Kroger supermarket, a Republic Bank branch, a Walgreens and multiple medical offices. This may be one of the larger shopping center deals of the year, because commercial retail real estate in Prospect doesn’t come cheap.
• The Park at Hurstbourne apartment complex at Bardstown Road and S. Hursbourne Parkway is in play. It sold about three years ago for $38 million, according to our sources, but is likely to fetch far more in 2012.
• Moving away from real estate, no one will talk about it on the record by name, but look for a more focused effort to bring an NBA team to Louisville. The quiet push to bring a team to Louisville got a very public endorsement last month when Metro Mayor Greg Fischer met with J. Bruce Miller, Junior Bridgeman, Jonathan Blue and others for a brainstorming session. This was just after Fischer spokesman Chris Poynter told us the mayor definitely wants an NBA team here. So, we’ve started asking those involved, and those in the know, how this might work in terms of a small city affording an expensive franchise. First, there’s J. Bruce Miller’s China connection, which is a way for billionaires there to bring NBA games to their massive market with a modest investment in Louisville. Second, there’s a domestic angle. Our research last week indicates basketball fans in small, NBA-less markets such as Lexington, Cincinnati and Nashville could provide the ticket sales Louisville probably can’t sustain with a 1.3 million population. Regional fans already bundle shopping trips with tickets to see the Cats, Reds, Bengals, Titans or the Grand Ole Opry. An NBA team here would give them a new and unique reason to visit Louisville. Fans from small town/rural Kentucky would come, spend and maybe even stay the night – just as they do in Cincy and Nashville. You’re thinking, “You don’t know anyone out in the state, do you?” But one of our insiders has spent a lot of time talking to influential business people, and here’s his take: An NBA team in Louisville would help bond the rest of the state to its oddball urban big brother. People out in the Louisville-loathing, Wildcat-loving parts of the state would support an NBA team. That Lexington banks and other businesses would buy season tickets (if not corporate suites). That Lexington fans would definitely make an occasional trek west to watch the pros. That an NBA team could attract visitors from Pikeville to Paducah, many of whom never go to Louisville because they see no compelling reason to come. The most likely NBA team to move, the Sacramento Kings, just happens to have a recent UK star (DeMarcus Cousins) and a fairly recent U of L star (Francisco Garcia) on the roster. We get it ….
• Look for the proposed downtown bridge to become a resurgent issue. The opposition got new life after the New York Times architecture critic lambasted the city over the proposal. Then, DC.StreetsBlog.org piled on with a post stating Louisville is “on the verge of taking a giant step backward,” adding to the Spaghetti Junction madness with a new bridge and the attendant ramps and overpasses. Broken Sidewalk blogger/architect/urban advocate Branden Klayko is the focus on the DC.StreetsBlog post.
Interstate-65 “is going to be a 12-lane highway going through Main Street,” said Klayko. “It will have eight full-size shoulders — about 300 feet, plus or minus, of elevated highway. It’s almost a whole block.”
We hear some people very close to Greg Fischer have been trying to get a meeting with the mayor in a last-ditch effort to sway him on the downtown bridge.
• After its bleak second-quarter earnings report, we heard Humana would cut its workforce in Louisville. Which hasn’t happened as far as we know. What we know for certain is that the Louisville-based health insurer/health care provider is continuing to add jobs in Cincinnati. The Hamilton Journal News reported yesterday Humana officials announced they would create 200 new jobs in the Greater Cincinnati area during the next three months, bringing the company’s total employment in the region to 2,200 by early 2013! The jobs are all at Ohio-based RightSource, Humana’s mailorder pharmacy service, which Humana officials created in 2008.
From the story:
This is the third major local employment announcement from Humana in the last five years as the Fortune 80 Company has grown its national membership. By early 2013, Humana will have grown from less than 800 employees at one location to 2,200 employees at three locations in the Greater Cincinnati area.
By comparison, Humana’s total Louisville workforce has hovered around 11,000 people since 2009, the second-largest Louisville employer behind UPS. Oddly, Humana announced the same number of RightSource new hires one year ago – 200 – in the same facilities.
Briefer than brief Monday Business Briefing briefs:
• We keep hearing Kindred cancelled a board of directors meeting recently, or moved it out of town. LOTS of talk about where the Louisville-based long-term/acute care hospital chain is headed. Insiders say all the talk about tort reform is beside the point.
• Architects/engineers QK4 will move to the MedCenter/Facility One building– or whatever it is – on Baxter Avenue below Phoenix Hill from Glassworks effective Oct. 29.
• More oblique tips coming about, “Keep your ears open for info on Beam/Maker’s Mark consolidating operations on Main Street.” We chased the Beam-moves-to-Louisville-from-Chicago rumor for months, but got a denial from Beam execs. Then they moved most of their back office operations here! Beam now has about 1,000 employees in Kentucky, but still no HQ.