Welcome to the July 20 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
The Louisville Convention and Visitors Bureau has signed an exclusive three-year deal with ad and marketing firm Bandy Carroll Hellige, making it the CVB’s agency of record and signaling a new emphasis from the city’s biggest booster on getting its message out. The deal marks the first time in more than a decade that the CVB has settled its work with a single agency.
Stacey Yates, vice president of marketing for the CVB, said her organization’s marketing budget has ramped up of late and will be $4.1 million for the upcoming fiscal year, versus $2.5 million five years ago. (The CVB’s total annual budget, funded mostly through a tax on hotel rooms, is $18 million.) This expanded budget allows the CVB to make a big push for Louisville to attract both more convention business — which it plans to ramp up over the next two years — and make inroads into attracting more tourists of every stripe.
As the CVB prepared this new effort, officials there realized they wanted one agency to do the work for the sake of a unified presentation.
“We want it all to look like cousins of the same family,” Yates said.
Matt Kamer, a partner and director of public relations at BCH, said the firm has worked with the CVB on multiple campaigns before, including the launch of Louisville’s Urban Bourbon Trail and CulinaryLouisville.com, to promote the city’s restaurant scene.
“We have been tasked with digital marketing and communications programs for their leisure and business convention business,” Kamer said. He added that BCH will also manage the CVB’s social media presence, digital strategy, and create all print pieces and marketing brochures.
The CVB expects BCH to market Louisville across many fronts, first and foremost as a bigger convention hub — tying in with the upgrade work being done to the downtown convention center — but also as a hot spot for bourbon tourism, culinary tourism, family travel and LGBT travel. The CVB just launched its new “Say I Do In Lou” campaign, by Red7e, to attract same-sex couples to the city.
Kamer said the deal comes at a time of major new investment in downtown hotels, distilleries and other big infrastructure projects, which make it a good time to be in the promotion business.
BCH won the contract after a competitive pitch process in June. Several Louisville firms competed, creating mock-up presentations of how they would present an arts and cultural weekend in Louisville. The other firms were Red7e, Scoppechio, New West and Sheehy.
Bringing the Internet to public housing
The federal Department of Housing and Urban Development announced last week it is partnering with various companies to provide free or heavily discounted high-speed Internet service to residents of public housing in 27 cities and a tribal nation. Going above and beyond as it often does, Google said the same day it would provide its Fiber service free in the four cities where it operates — Nashville, Durham, Atlanta and Kansas City — that are also part of the HUD program.
We’ve kept an eye on Internet-access initiatives big and small, as well as the ongoing saga of Louisville officials’ efforts to land Fiber here, so the news piqued our attention. At a time when Metro is radically reforming the city’s public housing — razing barracks-style warehouses for the poor and replacing them with mixed-income communities — the effort to provide a critical resource to low-income residents comes at an opportune time.
Tim Barry, executive director of the Louisville Metro Housing Authority, agrees. His agency applied for the new HUD program, called ConnectHome, but was passed over this round.
“There’s certainly a need, no question about it,” he told IL.
The agency manages 2,617 public housing units in seven complexes, the biggest of which is Beecher Terrace in Russell, as well as hundreds of scattered sites across the county and the public units in HOPE VI developments Park DuValle, Liberty Green and Sheppard Square. With the exception of those three, the infrastructure in Louisville’s public housing stock is dated. The newer HOPE VI buildings are hardwired for high-speed Internet, but residents of the older facilities often have to rely on common areas, where free WiFi is provided in some of the buildings.
Roughly half of low-income families in the U.S. lack Internet access, which can be a stumbling block to finding employment and prevent kids from accessing parts of their education, whether it’s homework, study materials or online interaction with teachers and classmates. In Louisville, officials have begun efforts to provide free WiFi at community centers in low-income neighborhoods. But there hasn’t been a comprehensive effort to provide better Internet access in low-income communities — largely because it takes funding that isn’t there.
“In reality, we need it all,” said Ted Smith, Metro’s chief of civic innovation.
Barry said the Housing Authority is seeking to partner with Internet Service Providers to possibly subsidize Internet for residents of public housing, as well as to improve the quality of the current service.
“We’re looking at extending that service — obviously Beecher because it’s in play, we may not do that now,” Barry said, referencing a federally funded program to reimagine the future of Beecher Terrace. “But the other ones we’re looking to provide better connectivity and service to people.”
But with only two major ISP players in Louisville — Time Warner and AT&T — the pickings are slim. Barry said he also wants to talk with BluegrassNet, a regional ISP, about a partnership, but the concept remains in its infancy.
The effort from HUD to get more public housing residents online comes as the agency conducts a nationwide tough-love experiment designed to push very low-income people receiving government housing assistance into the workforce. Through its Housing Choice Vouchers program, HUD began randomly raising rents and removing subsidies for certain recipients. The deeply misguided thought behind the initiative, according to fair housing advocates, was that taking away assistance — and offering other incentives — would compel the recipient to either find a job or get a better one.
After stiff opposition from housing advocates in Louisville, the Housing Authority backed off its initial plans to participate; now residents can opt out of the program. Cathy Hinko, executive director of the Metropolitan Housing Coalition, said the connectivity initiative is a step in the right direction for HUD and the city, but it also shows that HUD’s approach to pushing low-income public housing residents into the workforce ignores a stark reality.
“It’s very hard for people to get the kind of access they need, and I applaud the Housing Authority for trying to get it,” Hinko said. “It just puts into high relief how little support there is for folks, even with this national premise that people aren’t trying hard enough.” —Stephen George
Where have all the mixed-use apartment buildings gone?
A few months ago, it seemed like the roll of multimillion-dollar investments in Class A apartment space in and around Louisville’s urban core wouldn’t stop.
But as with all things, the roll slowed. And the investment pattern shifted somewhat, after a string of out-of-town investors and developers began buying up major buildings downtown — the Starks Building, The 800 Building, Barrington Place — and setting about big renovation plans.
Despite the quiet, though, a pair of new builds in and around NuLu — totaling close to $100 million in investment — are progressing.
Main & Clay, the 260-unit, $48 million development planned for the northwestern edge of the East Market district, cleared its final planning approval in March. And then … crickets.
Charles Carlisle, principal of Nashville-based Bristol Development Group, tells IL the group is scheduled to close on the properties in the development footprint this week, with environmental abatement at the current buildings to start immediately. He said demolition would follow sometime in August, with construction to begin at the site thereafter.
“Exciting time,” Carlisle wrote in an email.
The latest comes after a protracted conflict with preservationists seeking to block the demolition of four buildings at the site. In a compromise, Bristol agreed to incorporate the facade of 614 E. Washington St. into its final design, along with certain elements of the buildings on the Main Street side, among them the Hyland Glass building.
A mile and a half east, Indianapolis-based Cityscape Residential is clearing the site for Axis Apartments, a 300-unit high-end complex on Lexington Road across from Headliners Music Hall. The $40 million project — at a prime spot of connectivity between Irish Hill and the Highlands to the east, and downtown-NuLu-Butchertown to the west — is set to move later this year.
An official with Cityscape declined to provide further details.
Cityscape is already a player in Louisville: Its 312-unit Apex on Preston opened in January. —SG
Hilliard Lyons pushing advisors to fee-based compensation: Last June, Hilliard Lyons, the River City’s biggest locally owned financial advisory and brokerage firm, led a training session for 60 of its branch managers. The goal was to get more of their financial advisers to move to a fee-based compensation model and away from one based on a payment per trade. The session was the first of its kind at Hilliard, but it won’t be the last. Multiple sessions are planned over the next five months for the firm’s 400 advisers.
Fee-based advisers are generally paid 1-1.5 percent the amount of assets under management, per client, per year — even if they don’t make a single trade. Commission-based brokers are paid per trade. The general thinking is if a client doesn’t trade much, they’ll do better in a fee-based account and feel more secure their broker is offering advice to benefit them, not reap commissions. About half the branch’s revenues are from commissions, with advisory fees a portion of the other half. The move is part of a larger sea change in the brokerage industry, which is gradually pushing more brokers to go fee-based. Online brokerages have lowered the cost of trades significantly, and many investors do their own trades online. —DS
Former Taco Punk space to become a “chicken-themed restaurant”: Four months after a pair of real estate investors with local ties bought the Empire Theater Building — former home of Taco Punk — in NuLu, renovation work is ongoing. And according to those doing the work, the historic building is slated to be the home of a new “chicken-themed restaurant” from Feast BBQ owner Ryan Rogers, whose second location is a few blocks east on Market Street. The primetime pork purveyor is getting in the hot chicken game, IL has learned, although Rogers declined to comment through a spokesperson. Scott Howe, a commercial real estate broker with Gant Hill & Associates and co-owner of Empire with his wife, Mo McKnight Howe, and Louisville native Patrick Ley, also declined comment. Hot chicken, a Nashville original, has migrated to Louisville lately, with two spots — Joella’s Hot Chicken on Frankfort Avenue and Joe & Larry’s Chicken Shack in Butchertown — announcing in the past few months. —SG
Yum CEO says China turnaround “taking longer than we would like”: There’s just something about tainted meat scandals that people remember. Ask Greg Creed. The CEO of Louisville’s Yum! Brands struck something approximating a frustrated tone in a recent earnings conference call with analysts, noting that the ongoing Yum turnaround in its capstone China market is on the slow-boat to, well, you know. It’s not every day that a CEO of a public company admits that there’s a big, lingering problem. Yum’s stock took a beating a little over a year ago, when it was revealed one of its China suppliers was using bad meat. The firm’s China restaurants haven’t fully recovered yet; in Yum’s most recent quarterly earnings, their year-over-year China same-store sales were down 10 percent.
Here’s what Creed told analysts on Wednesday: “We have the two strongest brands in China by a wide margin, but frankly the recovery is taking longer than we would like. We need to be more aggressive, more innovative and much more disruptive to … change the business.”
Creed told analysts Yum has an armada of ideas to turn China around, including menu revamps at China KFCs, pushing premium coffees, and rejuvenating the firm’s digital marketing. Of course, all the analysts wanted to talk about was China, so much so that when one asked about something else Creed was grateful: “Thank you for asking a non-China question,” he said. —DS
Barret Avenue strip is going to be OK after all: Le Rack, an upscale consignment boutique, has opened on Barret Ave. in the space vacated by Regalo. As IL reported in April, owner Jen Rosenstein’s father, George, owns most of the properties in the area. The boutique features new and consigned men’s and women’s fashions, accessories and small home goods. Rosenstein has been in the consignment business before, but this is her first store. It’s located at 982 Barret Ave. —Melissa Chipman
Stored Value Solutions no longer for sale, could merge with another firm: IL reported in January that Louisville gift-card giant Stored Value Solutions was being shopped to private equity firms for $600 million. Now it looks like that deal’s off, and SVS owner Comdata is instead looking to merge it with First Data Corp., a payment processor owned by KKR. The news comes after trade pub PE Hub reported that SVS had only fetched buyout offers in the high $400 millions — not enough for Comdata. SVS offers gift cards and manages gift-card programs for retailers around the world. The firm had 130 employees in Louisville as of January. SVS declined additional comment. —DS
New local furniture line: Rework Collective, made up of local artisans and led by the design duo Daniel Fitzgerald and Benjamin Rodman of Infinity Productions commercial design and fabrication studio, will launch a small-batch line of furniture at Sandra Perry’s Honest Home on Aug. 7. Perry is also leading the Collective’s branding and operations. The line features dining tables, occasional tables, an assortment of accent pieces, and seating that uses reclaimed wood and repurposed metal. Honest Home is the only all-green product distributor and showroom within 500 miles of Louisville. Preorders made before Aug. 7 will receive a 20 percent discount. —MC
“Wooden States” Kickstarter surges: Speaking of fine woodworking, we wanted to update you on Louisvillian Ben Aroh’s “Wooden States of America” project, which we recently wrote about here. Aroh’s wooden wall plaques are laced with magnets to hold keys and other small metal objects you’ll probably otherwise lose. As of Friday, his Kickstarter was up to $21,224 — more than four times his goal. And there’s still 20 days to go. —SG
Red e App upgrades with “Shifts”: Red e App, a NuLu-based company that has created a mobile platform for companies to communicate with hourly workers, has introduced a new function to the platform. “Shifts” enables employees to post and swap work shifts in a secure forum. Managers can review and approve or decline requests as needed. Patrick Goodman, Red e App’s chief product officer, said hourly employees often take to Facebook groups to swap shifts with co workers. “With Red e App, the employees are given that private, mobile, real-time forum to find a replacement or pick up an extra shift, and the company and manager are not only in the loop but can also control which changes are accepted or denied,” he said. —MC