Welcome to the Christmas Eve 2012 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 as with Insider Louisville’s daily reporting.
But as always, we’ve made multiple calls on these tips, which come from sources who are not merely insiders, but who have direct knowledge of the deals.
As the Lears, Gulfstreams and Pilatus PC-12s (plural, “Pilati”?) took off last week, winging their ways toward Vail, Cabo and St. Barts, we swore we’d give Monday Business Briefing the day off today. Alas, it was not to be.
Last week, we probably had more tantalizing leads than ever before in IL’s two-year existence, only a few of which did we verify sufficient to include here.
First and foremost, if you hear commercial real estate brokers humming “It’s the Most Wonderful Time of the Year” quietly to themselves, chances are they’re not thinking solely about Christmas or Chanukah. They’re fantasizing about all the post-Great Recession opportunities popping up. As we reported last week, TRIO Commercial Property and Gant Hill & Associates will be toasting 2012 after closing the $19.5 million sale of the Prospect Village Shopping Center last week.
We have a feeling that’s just the beginning.
• We’re getting more and more tips about the building at 811 W. Main St., as a possible third urban bourbon distillery. The building on the west side of the Sons of the American Revolution complex (the Michter’s distillery building is on the east) is prime tourist-destination real estate, situated directly across from the Louisville Slugger Museum/bat factory. Multiple sources have confirmed the building sold earlier this month, but documents haven’t been posted in the Jefferson County Property Valuation Administrator’s website. An informed source told us he was at Maker’s Mark last week and tried to talk with Beam executives from Chicago about Louisville plans, but those execs demurred. On Friday, we had a conversation with Paula Erickson at Beam, which is becoming a weekly ritual. Erickson said as far as she knows, neither Beam nor a Beam agent bought the building. But asked to say categorically that Beam’s not interested, Erickson said, “Well, never say never. But if there was a plan, I’d be in the loop. And I haven’t heard anything.” We called the Pagano family, whose C & P Real Estate is listed in PVA records as the building’s owner of record, but they did not return calls for comment. On this same topic, we hear the Brown-Forman heirs funding the Whiskey Row project have decided on an urban bourbon visitor center project, though details are sketchy. Will it promote Woodford Reserve? Old Forester? Early Times? Southern Comfort? All of the above? Or will it debut a new B-F brand?
• In the course of chatting with insiders, we found out another strategic property is in play. The Hunt Tractor property at 1000 E. Market St., at the eastern edge of NuLu, may be redeveloped. The heavy equipment company lost its Case franchise. Now, we hear the Hunt family is entertaining multiple proposals for new uses. About now, you’re saying, “Well, isn’t everyone in neutral, waiting to see what happens with the federal budget negotiations?” Most of the people we talked to about the Fiscal Cliff either have lost faith in both the president and the congress, or have total faith the Republicans and Democrats MUST resolve the tax hikes/spending cuts dilemma to stave off another recession.
• What is a sore point with our insiders is the money being thrown at companies to relocate five miles to Louisville from New Albany. A story in last week’s Courier-Journal revealed that Indatus (formerly Planet Telecom) was awarded more than $2 million in loan guarantees to relocate to the former Bridges & Smith paint production building at 118 E. Main St. Indatus partners plan to spend $7 million to renovate the building and to create 20 new jobs. We reported last winter that Indatus had finally overcome a year’s worth of hurdles on the renovation of its future Main Street headquarters, including issues with Metropolitan Sewer District. What we didn’t realize was how much money state and local governments are putting up, kind of galling when you consider Insider Louisville and all other startups have to hustle the private sector to get one thin dime. And we’re the job creators. Well, we’re not the only people thinking this. In the past, there was an agreement between Kentucky and Indiana not use incentives to lure companies within the metropolitan area, said a former econ-dev official. The reason? No new jobs are created. “If I have a good job in a New Albany company, and it moves to Louisville, I’m just going to drive a little farther to work.” (The one exception for offering incentives in the old days when the company considering a move out of the area.) Here’s what Indatus got for making their employees driver farther, courtesy of your tax dollars:
• A $1 million loan guarantee from Kentucky state government
• A $700,000 low-interest loan from the Louisville Downtown Development Corp., a private-public partnership
• A $400,000 low-interest, forgivable loan from the Metropolitan Business Development Corp., part of Louisville-Jefferson County Metro government
One especially annoying paragraph in the CJ story, according to our econ-dev source: “Beshear got a laugh when noting (Indatus is) coming to Kentucky ‘from some other state across the river.'” Funny. Almost as funny as when the Fischer Administration was pushing last February to give The Cordish Companies almost $1 million to move The Learning House two blocks into Fourth Street Live.
• Speaking of getting big money from city government, Bill Weyland is getting an $800,000 loan from the Metropolitan Business Development Corp. to clean up the abandoned four-story, 120,000-square-foot LG&E building at Seventh and Ormsby streets on the edge of Old Louisville. Our sources tell us an arts group will be the ultimate user of the building. Weyland didn’t respond to a call for comment. An educated guess: Sources are talking about a visual arts school that would combine the Kentucky School of Art with a new film school. Or Kentucky Shakespeare might be a tenant. With almost three acres under roof, there’s plenty of space.
• Get ready for an immense change in how startups raise money. As we reported back in September, the JOBS Act is about to lift a lot of obstacles to reaching out past family and friends as investors. Well, one Stoof the deans of Louisville’s startup community is organizing a Louisville Equity Crowdfunding Committee in an effort to create a cogent, focused local crowdfunding effort.
From an email from Kent Oyler, who has a long track record in successful ventures:
What’s the next step? Ah. Now it gets interesting. How about buying and selling shares of private companies over the Internet? The Jobs Act, signed by President Obama in April, makes it all legal – and not just for accredited investors, but for everyone. As soon as the SEC releases its guidelines, expected in early 2013, equity crowdfunding –also called crowdfund investing – will provide interesting opportunities for investors and a significant new source of growth capital for entrepreneurs. And that, we hope, will result in additional jobs and a stronger economy. How can we prepare? By forming a Louisville Equity Crowdfunding Committee so that we can become experts on the topic, share our expertise throughout the community, support entrepreneurs and investors who would like to participate in the opportunity and ensure that Louisville achieves a leadership position in this emerging industry.
We hear a meeting is scheduled for January. And we’re in!
Today’s not-quite-brief – though pretty succinct – biz briefings:
• While we’re quick to jump on the zombie banks such as PBI Bank, we’ve been notably slow to acknowledge the banks that made it through the recession without a glitch. Last week, Stock Yards Bank & Trust Co. bought The Bank, Oldham County. Both have performed well. But The Bank, Oldham not only made a substantial profit through the dark days, currently, it has zero loans 90 days or more past due on its balance sheet for the current quarter, as well as the previous quarter. We picked a number of other local bank UBPRs at random, and not one matches that impressive standard.
• The Bring-the-NBA-to-Louisville effort is getting so much momentum we’re being asked not to write about any of the developments. And there are many. What we can say without fear of contradiction is, all the money in the world doesn’t change certain facts. Fact one: Ed Glasscock is key to an NBA team coming to town. Glasscock is both the attorney for the Louisville Arena Authority and chairman of the Finance & Budget Committee of the University of Louisville Athletic Association, Inc. Fact two: Only Glasscock can reach U of L President James Ramsey and Athletic Director Tom Jurich on the topic of U of L officials waiving some of the more onerous stipulations of the incredibly generous lease U of L has as the tenant at KFC Yum! Center. If U of L won’t change those lease terms, talking about bringing an NBA team to play at the downtown arena is merely a mental exercise.
• We’re hearing that an alternative to a Kentucky International Convention Center expansion that would not close Third Street is picking up support. Our sources say more people inside the Fischer Administration are at least talking about a plan an insider pitched us a few weeks ago to build a new convention center on the Third Street site, the former Louisville Water Co. buildings that were going to be the downtown basketball arena, then the never-completed Center City project The Cordish Companies reneged on. Said a source in city government, “We’ve closed downtown streets before, and it was a disaster. No one wants to make that mistake again.”
• Our friends at BEAM Technologies are shipping their data-driven toothbrushes as we speak to beta users, mostly industry types for analysis and testing. The BEAM brushes use a memory chip and a smartphone application via Bluetooth to track brushing habits. So think about this – not too far in the future when your 11-year-old swears he/she brushed his/her teeth, you’ll have verifiable truth, one way or the other. BEAM recently joined RockHealth, a San Francisco seed-round startup incubator.
• Just to get you all the way to the end of the Monday Biz Briefing, we saved the best for last. Sources say Kevin Grangier, who created, then sold CarryOn Communications in Los Angeles, has a new project. When he’s not overseeing his ultra-successful Village Anchor restaurant in Anchorage, he’s starting Label-Conscious Branding, another marketing and branding company. We heard he’s even made some new hires. Interesting that Kevin never seems to sleep. And that he never stumbles, even when he enters a business sector such as restaurants, where he has no real experience. We say, “Good on Kevin.”