Welcome to the May 12 Monday Business Briefing.
This is your private business intelligence briefing with Insider Louisville staff and contributors vetting tips collected during the past few days, hours and minutes before we post.
A reminder: This afternoon we’ll host Kentucky Kingdom’s Marty Cogan from 4:30 p.m.-to-6 p.m. at Doc Crow’s Southern Smokehouse and Raw Bar, 127 W. Main St. downtown.
Marty will update us on the park’s opening on May 24 and tell us what it’s like to screen 7,000 people for 1,000 positions at the $50 million renovated, expanded theme and water park. The event is free, and you can get your tickets here.
This is the déjà vu all over again edition of Monday Business Briefing. Last August, the University of Louisville and Norton Healthcare went to war over who should control Kosair Children’s Hospital downtown.
Last Thursday, Kosair accused erstwhile ally Norton of refusing to account for how millions in Kosair donations are spent, misusing the Kosair name and charging Kosair Charities more for procedures than the actual billings, then keeping the difference.
This is not the MBB we thought we’d be bringing you today for one reason: There is no simple “good guys v. bad guys” narrative to crystallize the issue.
In yet another very public battle between nonprofits – supposedly civic-minded community assets – it’s difficult to know if there even are any good guys because so much is going on behind the scenes, just as with the U of L v. Norton feud that erupted last August.
Machiavelli had nothing on Louisville healthcare executives, who seem to be increasingly willing to indulge in bitter public battles that – in the long run – do little for their public images. In the end, the Kosair Charities v. Norton suit may be a side show to the larger issues between U of L and Norton, a feud that’s been going on for years.
• The Kosair Charities v. Norton Healthcare showdown came out of nowhere Thursday night, scooped by Dr. Peter Hasselbacher at the Kentucky Health Policy Institute. Here’s what insiders are telling us about the broader dynamic of Kosair Charities v. Norton.
Friends and foes of Norton agree on one point: All this connects back to U of L, where executives last year accused Norton of conspiring via a joint management agreement with their University of Kentucky counterparts. Taking Norton’s place as the affiliate for Kosair Children’s Hospital would instantly render moot U of L’s suit against Norton over Kosair, which is still in Franklin Circuit Court. Though it would do little to solve U of L’s costly indigent care problems.
Lately, say our sources, U of L has been courting Kosair Charities, hosting Kosair officials at the Kentucky Oaks and at the Kentucky Derby. U of L officials say, “So what?” Kosair Charities gives U of L substantial annual funding.
The official statement for U of L:
Kosair Charities has been partners with the University for 90 years. They, historically are one of our Top 5 donors. In fact they have donated about $31 million to the campaign for pediatric causes such as cancer, heart disease, neglect and abuse and most recently paralysis.
As you would expect from any organization, we’re proud to entertain and continue the close relationships with our top donors.
With the Kosair Charities/Norton suit, U of L potentially gets a new lease on life at Kosair Children’s Hospital because Kosair Charities officials are asking the courts to rule whether they can break that affiliation with Norton, which dates back to 1981.
U of L and Norton went to war last August over Kosair Children’s Hospital. The perception at U of L was Norton wanted to cut U of L out of the lucrative pediatric specialties practices at the downtown Kosair Children’s Hospital. At the time, Dr. David Dunn, executive vice president for Health Affairs at U of L and the No. 3 ranking executive, stated:
The consequences of Norton’s actions run far deeper than pediatrics, threatening the very existence of all of UofL’s educational and training programs at the Health Sciences Center.
In another statement released to IL and other media, Dunn stated:
Norton’s secretive actions are a blatant attempt to create a virtual monopoly for themselves in high-end, lucrative neonatal care. This end run will bankrupt the UofL Department of Pediatrics and threaten the viability of the entire UofL School of Medicine.
When we queried our insiders about last Thursday’s developments, their take was more nuanced. U of L executives would simply like to secure millions in funding Norton has promised them while continuing to be the principal faculty at Kosair Children’s Hospital. U of L must keep its pediatric hospital, which is crucial its medical school not losing its accreditation. Last year, as U of L and Norton moved toward legal action, Norton officials stated they would honor $27 million in payments to U of L.
If those things get done, there wouldn’t be much left to argue about, sources said.
Only trouble is, Norton officials are still fuming over a November 2012 operating agreement between Catholic Health Charities and U of L – the agreement that created KentuckyOne Health – that Norton executives say gives CHI the right to take over pediatrics.
Noted a source:
…. UofL is like the Keystone Cops, they keep shooting themselves and this dispute is an example of that…they allowed CHI to negotiate the kids hospital provision in the deal with no intention of ever doing that … and didn’t consider what was a very foreseeable result. To further make that point, the CHI deal itself is nearing disaster as well.
Why is this potentially a big deal? Because thousands of Louisvillians give generously each year to support Kosair Charities, U of L and Norton. Big money for battling legal teams is likely not how they envision their money being spent.
• Sources have forwarded us a 2012 document that seems to suggest Kosair Charities and Norton were near an agreement on fundraising, and the use of the Kosair name by Norton two years ago.
But it also suggests rival fundraising disputes, not Norton accounting for how Kosair funds are used, is the driver in this dispute. In essence, who has the right to raise money in the name of Louisville’s children. The email to Robert Azar, Norton system vice president and chief legal officer, from Norbert Arrington, Kosair Charities’ attorney, states that Kosair believes Norton raised money improperly in the name of Kosair Children’s Hospital Foundation, demanding an audit of all Norton fundraising.
Arrington also proposes a way to avoid an audit of Kosair’s donations to Norton. Yet he also raises the possibility – two years ago – that Norton and Kosair might both wish to end their affiliation agreement. More on that this morning.
• With all that out of the way, some good news for Our Fair City. Were are now a football town. No, not that football. Real football played by every other nation on the planet.
Multiple sources told us this weekend to look for a big announcement June 3 or 4 at Slugger Field about Louisville’s new pro soccer team. As we reported back in January, owners of Orlando City Soccer Club, a United Soccer Leagues (USL) team from Florida, met with potential Louisville investors – as well as Mayor Greg Fischer – to discuss moving the team here.
Well, $1 million is committed by investors, and the deal is done, with the coach coming to town this week.
From our No. 1 soccer source:
Team valuation $3 million; fans will own a 1/120th share for $25,000, making us the only USL team with a fan share, which is expected to be fully raised by next week and a second is already being contemplated. Loads of terms still TBD. I believe a fan share price will be $250. You can buy an unlimited number of $250s. You get one vote per $250 share up to a maximum four votes per fan-share owner.
The Coopers, Louisville’s cosmopolitan pro soccer supporters are leveraging a substantial fan database that includes 1,500-plus Louisvillians who said they’d buy a season ticket. Here we go…
• More good news for the downtown landlords. Sources say Commonwealth Bank of Australia is moving into the 21st floor in Aegon Center. The renovation work is ongoing, according to a source.
Technically, the tenant is First State Investments, CBA’s asset management subsidiary. First State has $167.5 billion in assets under management, according to the CBA website.
Other sources sent us copies of Louisville job postings for the Sydney-based financial giant, which has operations in the United States, Europe and Asia.
From the job posting for manager – investment operations:
The role of Global Transaction Services is to provide full support to Fund Managers for all products traded, with key areas being trade matching and notification, failed trade management, futures margining, data integrity, central clearing, collateral management and investigations along with a number of ad-hoc tasks and projects related to the trade life cycle and reconciliation process.
The Manager will be responsible for daily oversight and monitoring of operational support tasks through adherence to documented controls and processes. The Manager will assist development of a small team of experienced Middle Office Analysts, ensuring that all team members are fully cross-trained in all Global Transaction support tasks and ensure that all Human Resource requirements are met and imbedded within the team.
CBA/First State got approval for $500,000 in tax incentives under the Kentucky Business Investment program. First State’s investment is projected to be $2 million with 19 jobs paying an average of about $132,000 per year in salary. Not bad.
This follows our scoop last week that several other large firms including TranzAct are looking at the Central Business district, or moving in, with the likelihood of hundreds of new jobs downtown.
• Speaking of downtown vacancies, look for a large amount of the excess space at Greater Louisville Inc. to be offered to entrepreneurs as co-working space. They should take it, because it’s some of the most luxe office space in town after a recent $600,000 renovation of two floors of the Finley building at Seventh and Main streets next to the Bristol Bar and Grille. And of course, GLI staff has dropped to about 30 people from 50 this time last year. We told you in January they have some fabulous chairs, but no butts to put in them ….
• Speaking of space, The Foundation for a Health Kentucky is about to debut its (c) space project. (We’re assuming the name is a play on 501(c) non-profit IRS catergoris for non-profits.) According to the FHA website, this is an effort to bring together similar and complimentary people and nonprofit organizations working to improve the health and quality of life of Kentuckians.
The (c) open house is scheduled for 4 p.m. to 7 p.m. Monday, May 19. The address is 1640 Lyndon Farm Court, Suite 100.
Here are the details:
- Located in 5,000 square feet of co-working space, at 1640 Lyndon Farm Court in Eastern Jefferson County, Kentucky.
- Private offices, hot desks, project and collaboration spaces. Amenities include: free parking, break room, small conference room, wireless, telephone, storage, multi-tenant computer server and backup system, visitor reception, and use of the Foundation’s Conference Facility and AV/video conferencing technology.
- RSVP to Alexa Kerley or call 502-326-2583 or toll free 877-326-2583.
• Our sources say Humana may take over the events space/banquet hall on the second floor of Vincenzo’s, leaving the posh restaurant – one of our favorites – at Fourth and Market streets with far less space . No word yet from either party.