Welcome to the June 8 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
As speculation continued to swirl last week about the potential sale of Humana, city and state officials were apparently as far outside the loop as us. Multiple sources told IL the company’s top brass aren’t saying much of anything, even as Mayor Greg Fischer and Gov. Steve Beshear have indicated they’re doing all they can to keep lines of communication open with the Fortune 500 company.
That’s not exactly a surprise. Which is to say this is serious.
A spokesman for Fischer declined to comment directly for this story, instead referring us to the mayor’s May 29 comments in which he said he had reached out to CEO Bruce Broussard directly and that his team was in contact with Humana’s. A spokeswoman for Beshear didn’t respond to a request for comment for this story.
Humana employees have been asked to keep cool heads amid the chatter. According to sources inside the company, mid-level managers have instructed their teams to conduct all business and ongoing projects as usual. The company’s human resources departments countered IL’s previous reporting that there was a hiring freeze last week, saying instead the company is trying to manage administrative costs. But try as they might, management is having a hard time keeping the gossip from bubbling — even on the inside.
Meanwhile, outsiders’ theories about what might happen abound. As of Friday, Aetna — which, at $9 billion bigger than Humana and in need of a good Medicare business, has been a prominent potential suitor — was threatening to leave its home base of Connecticut after the state legislature voted to raise corporate taxes there. Aetna’s tax burden would rise 27 percent, prompting the company to issue this statement: “Elected leaders have failed to address the state’s budget obligation responsibly. But it’s Connecticut’s businesses and residents that will pay the price.”
So if Aetna is the buyer, then maybe Louisville can convince the company to move its operation here — with incentives, of course, perhaps tied to pricing of the 1.6 million square feet of real estate Humana already holds here. In other words, move your operations here at a discount, and enjoy the goodwill your new acquisition holds in Louisville.
We ran that theory by GLI President and CEO Kent Oyler at last week’s PRG Investments symposium on economic development, and he said it’s plausible that Louisville would be seriously competitive in bringing an HQ here. That was before Connecticut raised taxes on corporate entities there.
Another theory is that Humana merges with Aetna or possibly Cigna, which is much closer to its size. In that scenario, our sources say, city and state officials and economic development leaders like GLI would most assuredly make a play to land the ensuing hydra-headed headquarters.
Of course, Humana could also be the one pursuing a merger. Its revenues climbed by 17 percent last year, and its Medicare Advantage business — despite government cutbacks in payments — has surged in recent years.
Finally, there was a late entry in the rumor race last week, with the Indianapolis Star reporting that Indy-based Anthem was looking for a new dance partner, possibly Humana. That company is about 25 percent bigger than Humana by market share, and as the Star reported, it has been exploring ways to strengthen its Medicare business.
New rule will require developers to notify neighbors of projects early
This one’s sure to cause a few conflicts.
The Metro Planning Commission on Thursday approved a change to its rules to require developers to notify nearby property owners within 17 days of filing a pre-application for a new development. The early notification requirement, which takes effect Aug. 1, will apply to neighbors immediately adjacent to a proposed development and those next-door to them.
Attorney Stephen Porter has been lobbying the commission to adopt the early notification system for a decade, since he successfully challenged a ruling that initial development plans filed with Metro government were confidential. And although such plans have been public record since, he said there was no way to know whether a pre-application for a development had been filed until public hearings on a project began.
“The idea is to have the public know as soon as the government knows what some developer is proposing to do with a piece of land in their neighborhood,” he told IL.
Here’s where the potential conflict enters, according to the developers IL talked with about it. Projects often evolve over time and might end up looking considerably different from their first iterations. The tool, while empowering to neighbors, could cause confrontations before plans are ironed out. It could also have a chilling effect for developers eyeing neighborhoods that are traditionally vocal about new projects.
The flip side, one developer said, is that early exploration and discussion might help keep a person or company from sinking too much money into a project before figuring out it’s not going to be the right fit.
Former candidate for state representative opens business: There is life after politics. Ashley Miller, the former candidate for state representative from Louisville who lost to Rep. Phil Moffett, opened Athena Health & Wellness, a boutique firm that provides both traditional and alternative wellness and reproductive care for women, on June 1. Miller, a women’s health nurse practitioner, formed the business — located on Lyndon Lane — with partner Carrie Thenon. “We envisioned a boutique-style health center focused on the wellness of mind, body and spirit — offering routine gynecology and chronic disease management, but also adding in-house acupuncture, nutrition services and life coaching,” Miller told IL. “We wanted to be able to take our time and focus on the complete needs of each individual patient and become a partner and resource for them along life’s journey.”
Yum! is on a hiring blitz for KFC refresh: Sometimes a good story is right under your nose. In a post on our sister product, Insider Talent, Yum! Brands announced late last week it is hiring “a slew” of architects and construction and development managers to help execute its renovation of more than 3,000 of its 4,350 KFC franchises nationwide. The hiring blitz comes three weeks after KFC announced its massive rebranding effort, led by SNL alum Darrell Hammond doing his best Colonel Sanders impression. A key part of that $185 million effort is playing up the Colonel at franchises with new exterior and interior designs featuring his visage. (If you want to see one, the flagship is at the corner of Taylorsville Road and Breckinridge Lane.) The company plans to have the store renovations wrapped by the end of 2017.
Florida developer back for even more: We told you in April that Hudson Holdings, the developer of historic properties that plans to renovate the Starks Building, is eyeing another project at the Republic Building, which went on the market about a year ago for $3.45 million. That’s not a done deal by any stretch, but sources tell IL the company has been in town looking at other historic properties in the area, too. Most of Hudson’s business is in rehabilitating and repurposing historically designated structures. We see why they like it here.
City lands biggest retailer of aftermarket Harley-Davidson parts and accessories: J&P Cycles is moving its warehouse operation from Iowa to Louisville, the company announced late last week. Metro government sources tell us the company doesn’t have a location locked down, but J&P will be here this week looking. The company is a subsidiary of Motorsport Aftermarket Group of Oregon. That company owns Motorcycle Superstore on Industry Road. Zach Parham, GM at J&P, told The (Anamosa, Iowa) Gazette that the company picked Louisville for the city’s logistics prowess. “In fact, we can cover 71 percent of our customers in one to two days from Louisville,” Parham said. No word on how many warehouse jobs will accompany the move; J&P has about 125 employees between its warehouse and administrative HQ in Iowa.
U of L trustee joins U.S. Treasury: Stephen Campbell, a member of the University of Louisville’s board of trustees, has taken a job as counselor in domestic finance at the U.S. Treasury, a spokesperson at the department confirmed to IL on Friday. He started the role June 1 and “will cover a broad range of domestic finance policy matters,” the spokesperson said. Campbell had been an investment banker at Lazard Ltd. At U of L, Campbell has helped lead an effort to strengthen the board’s oversight and governance functions.
Beyond Zero inks deal with manufacturer: The Louisville-based inventor of an icemaker that will freeze liquor — yep, you read that right — has cut a deal with Winston Industries, a food-service equipment manufacturer also based here, to build its product line. Said line is slated to include a single-serving maker, storage device, and automatic dispenser for the booze cubes. Founder Jason Sherman said in a release he wants to create ice machines that “elevate the beverage experience.” Could be a new kind of bourbon ball on the horizon.
New restaurant coming to West Market?: If you’re a downtowner, you might’ve noticed the recent construction inside the former TC’s Sandwich Shop on West Market near Fifth. Market Square Partners, an investor group, owns that and much of the rest of the corner. The group is gutting the former TC’s — which it bought for $217,500 in late 2013 — and outfitting it for a to-be-determined restaurant, per partner and Peritus CEO Tim Mulloy. The group also plans to renovate the facade once it finalizes a tenant.
Aspen Dental opening practice in South End: This one got our attention not for the fact that the Syracuse-based company is opening a practice on Outer Loop later this week, but because of its reasoning. Jefferson County has been designated a “dental desert” by the U.S. Department of Health and Human Services, meaning there’s not only a shortage of providers but a lack of options for those who can’t afford regular cleanings and other dental services. The company, which takes patients without insurance, has 12 locations in the state, where 57 of 120 counties are HHS dental deserts. U of L School of Dentistry grad Dr. Lindsey Graves will head the new office.
Tom+Chee near U of L campus closes: No more gooey goodness at Cardinal Towne. Fancy-grilled-cheese-and-soup chain Tom+Chee, which is based in Cincinnati, has closed up shop in the university-affiliated shopping center, just on the edge of U of L’s main campus. The franchise is owned by the corporate HQ, who didn’t return a request for comment late last week.