Welcome to the Dec. 16 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 at 7 a.m.
As we prepare for our Insiders Meetup this afternoon at Vincenzo’s with green experts Gill Holland, the Godfather of Green, and Nancy Church, Kentucky U.S. Green Building Council executive director, we’ll have multiple topics for discussion.
(Sorry, guys, it was a sellout within about 30 seconds after it was announced last Thursday evening.)
They include a bit of wish-list speculation ….
• Simpsonville, which sits between Kentucky’s No. 1 city (Louisville) and No. 2 city (Lexington) is becoming a huge retail center. Under construction is one of two outlet malls planned, each about 400,000-square-feet of Saks Fifth Avenue, J. Crew and Coach outlet stores. Now here’s the scoop: Sources also tell Monday Business Briefing a number of global retailers are looking in the area, including Swedish furniture giant IKEA.
We didn’t hear back from the Stockholm-based company’s U.S.-based media people. But there are equal reasons to believe the insiders’ whispers … and to discount them. Several insiders told us, “Go there, and you’ll get it.”
So, we went. First point: the Simpsonville exit off Interstate 64 is exactly 24 miles from NuLu. We clocked it. We had no idea how close it is to Louisville.
Second point: The property we heard IKEA acquired, the Shelby County Flea Market, sits just off the interstate, visible to both eastbound and westbound I-64 traffic for about half a mile.
That’s important because in Germany and other European cities such as Strasbourg, France, IKEAs are built on sites visible to traffic on the autobahns and high-speed inter-nation highways.
IKEA executives, according to our sources, require large parcels with at least 30 acres for their giant stores, which average about 350,000 square feet, or 8 acres under roof. Globally, IKEA has been in the expansion mode, announcing a store last week in St. Louis.
In the St. Louis Post-Dispatch story, reporter Kavita Kumar documented how long the site-selection, site-acquisition process takes for globally successful retailers such as IKEA, which is arguably the largest retailer in the world:
The Swedish retailer began scouting locations in the region in 2004 — well before it launched a search in Kansas City. Over the years, its local real estate broker, Pace Properties, analyzed more than 30 sites and took Ikea executives, including several from Sweden, to some of those places.
Now, a dose of reality. Shelby County Flea Market owner Dana Smith told us neither IKEA nor any agents for any retailers were buying the land, as far as he knew. Smith attributed the rumors “to my competition. They want people to think we’re going away.”
Still, several property owners, who asked not to be identified, with parcels off the I-64 interchange told us the flea market property was in the process of being acquired and redeveloped. But no one we talked with had heard the end-user might be IKEA, or had even heard of the Swedish company.
Finally, we talked to commercial real estate executives who deal with IKEA regularly, and they’re skeptical. IKEA stores in the United States typically are well outside urban centers in towns along the interstates near multiple population centers. The IKEA in West Chester, Ohio, between Cincinnati and Dayton, which opened in 2008, has something of the order of 7 million people within a four-hour drive.
Louisville, Frankfort and Lexington combined total only about 1.7 million in population, though if you tally in the counties around the three cities, the count is 2 million.
We put IKEA on our wish list in a quirky little post in January 2011, “Lacking in Louisville: Landing Nordstrom, Urban Outfitters or Au Bon Pain could be a sweet economic development boost.”
The gist of the post was, retail – to a great extent – defines a city. The more you have, and the better it is, the more talent is willing to come here. Let’s call it the Madison Avenue effect.
Guess what … almost all the retailers on that list are here, now ….
• Remember all the hoopla over the old Azalea Restaurant/Bauer Property on Brownsboro Road? … years of arguing over whether the historic but deteriorated Azalea building, which had its beginnings as a blacksmith, should be preserved. Neighborhood groups weighed in with legal beagles.
The attorney for the Mockingbird Gardens Homeowners Association said at the time any new construction or renovation would have to be executed “with respect for the historical significance of the property.”
Any new construction would have to pay homage to the historical nature of the site as well as complement the surrounding neighborhood, he said. “We’re not willing to compromise the historical significance of the property for just any old thing.”
The Louisville Landmarks Commission approved the projects late last March … and the building was demolished down to the last rotting timber. Now at least part of the plan has fallen through. The MESH Restaurant planned at the site is still a go. But the Azalea/Bauer Tavern building will apparently be replaced with whatever a developer has money to build.
Back in August, Bardenwerper, Talbott & Roberts partner Bill Bardenwerper told us negotiations for a doctors’ office on the site were ongoing. Now, we hear they’re dead, and the ad at right from Grisanti Group seems to be the proof.
The question, of course, is, whatever happened to the agreement to replicate the Azalea/Ye Old Livery Stable design? Is that dead? And what if someone wants to build a Rite Aid drugstore on the property, which was the original leverage pain point to negotiate the Azalea building away? An idea that had neighbors up in arms.
• Louisville, as we all know, is a restaurant town, with multiple chefs running thriving, nationally renowned culinary landmarks, including Dean Corbett’s restaurants, most notably An American Place, Ton Brothers at Basa, La Coop and Doc Crow’s, Edward Lee at 610 Magnolia, and Anthony Lamas at Seviche. And on and on.
Could Louisville also be evolving very quietly into a restaurant technology town? We hear a largish local restaurant technology company – already an industry player – is on the verge of a Louisville-based test.
That test involves their newest app aimed at indie restaurants and small chains. Essentially, the goal is to be the tech leader for the entire industry, which already has major national players.
To understand the allure of a Louisville-based company owning both spaces – big chains and indies – you have to understand the restaurant industry is in the midst of a tech revolution just as other industries are turning high-tech to gain efficiencies and rationalize process. Everything from customer management to food prep and inventory management.
We hear this company, who asked not to be identified by name, will roll out several new products at an upcoming regional restaurant event.
Local restaurateurs are being approached as we post … More about how this will all be monetized as we get permission to release development and test details.
• Our econ-dev sources tipped us off last week about Cafe Press founder Fred Durham buying one of the former Preston Street shoe stores east of the new Nucleus building. There, he’s planning Durham Labs. Apparently, former Glow Touch marketing director Weston Hagan has joined Durham in the enterprise. We don’t know exactly what they’re up to, but we’d wager it will be cool!
• Here’s a bit of a mystery: Homebase Homecare, a company that created software for the long-term care industry, was apparently based in Louisville at one time. Though we never heard of it. Three weeks ago, the Hearst Corp., the New York City-based publishing giant, bought it. That announcement triggered several emails telling us about the sale – though the accounts we saw said Homebase Homecare is headquartered in Dallas.
Then we got this email:
Homecare Homebase was just sold for 9 figures, per WSJ. Their IT group is in Prospect, and nobody has ever known about them. Years ago they realized that GLI was what it was, and they just went dark. Now looks like they’re gone. Loads of talent in that building. Louisville’s usual suspects never even knew what we had.
So, we started researching, and a Dallas-based executive named April Anthony apparently started the company.
From a 2012 Dallas Business Journal story:
Homecare Homebase is a software technology that serves the home care and hospice industry. When we first started the company, we couldn’t find technology that we liked. We developed the technology in house, and then spun it off in 2001. We have 105 clients, and 23 million visits are processed annually through the Homecare Homebase system. This year, we should do $55 million in revenue, up from $46 million last year.
We did find a clue indicating as late as last year, Homecare Homebase was in Prospect and trying to fill 12 tech jobs listed on Glassdoor … jobs requiring serious qualifications and experience.
So, was Homecare Homebase unable to find talent here? We hope someone will give us the final clue to solve this mystery.
• Beginning next month, Courier-Journal’s McLean, Va.-based parent company Gannett Co. Inc. will be adding 12 to 14 pages of USA Today stories each day to the C-J and its other 34 large-market dailies.
Gannett has been testing the program, dubbed the Butterfly Project, since October at four papers, including the Indianapolis Star. According to Gannett Blog’s Jim Hopkins, a former C-J business reporter, this is about pumping up USA Today circ, which has faded badly. By incorporating USA Today into local papers, Gannett increases its national NYTimes/WSJ competitor’s circulation by about 1.5 million readers during the week and 2.5 million readers on Sundays, Hopkins wrote this week.
The Butterfly Project also bolsters local page count. The move comes after Gannett reported a 40-percent revenue decline for the third quarter 2013. Newspaper revenue decreased 3.6 percent as print advertising revenue fell 5.9 percent, a little more than average for Gannett since 2008.
Overall, Gannett reported a profit of about $80 million for the quarter, down 40 percent from $133.1 million for the third quarter 2012 after Olympics and national political campaign revenue went away.
Monday Business Briefing (sort of brief) briefs:
• U of L Physicians-Pediatrics has opened a pediatric multi-specialty office in Brownsboro Crossings. The new practice is in Norton Medical Plaza II, across from Kosair Children’s Medical Center-Brownsboro.
The office, which was partially funded with a $325,000 WHAS Crusade for Children grant to the University of Louisville Department of Pediatrics, will house seven UofL Physician’s pediatric sub-specialty practices: Acupuncture, Endocrinology, Gastroenterology, Ophthalmology, Neurology, Pulmonology and Sleep Medicine, according to a news release.
The 7,500-square-foot office has 17 exam rooms, two intake rooms, a lab, a procedure room and a large waiting room with a quiet area for anxious children. There is an administrative area as well as space where providers can access electronic medical records and teach UofL medical students and residents.
• Mountjoy Chilton Medley is adding IT consulting and strategy services to its accounting services. The new operation will be led by MCM’s newest principal, Jeff Stringer, former director of Infrastructure & Operations, Information Services at Papa John’s International. (PJ International has long been an IT/tech leader.)
The IT Consulting & Strategy advisory services will include IT security and business risk analysis, vendor review, assessment and selection, strategic project planning for IT initiatives, and disaster recovery planning and advisement.
Stringer spent 17 years at Papa John’s International where he managed computer infrastructure and operations initiatives and multi-million dollar projects, including server and network engineering, point of sale technical integration, systems security and data center operations. He also managed the team that executed all technology procurements for the corporation.
• The city sent out an email late Friday stating eight econ-dev loans totaling $486,660 were approved by the Louisville Metropolitan Business Development Corporation. All were actually pretty interesting … loans to renovate a VFW Post into a pizza restaurant at 1045 Goss Ave. in Germantown.
A $36,660 façade and $10,000 accessibility loan to renovate and expand Highlands Tap Room at 1058 Bardstown Road. A $150,000 gap-financing loan to One Sustainable Method Recycling, 2900 S. 7th St., to upgrade the hospital waste recycler.
But there is one that’s really significant – $80,000 from the Brownfield Revolving Loan Fund to Acquisition LLC to finance remediation at an abandoned LG&E site. The projected site redevelopment is projected to attract a $14 million-plus private investment. This is a big deal … just no one knows it yet. You heard it here first.
• We’ve been tracking this since March. Now, it’s going forward. The Jewish Heritage Fund for Excellence and the Standard Country Club completed the $4.7 million sale/partial lease-back of 150 acres in eastern Jefferson County on Friday. The golf course will stay, but what to do with the rest of the property? A Phase I planning process will focus on the land and facilities not occupied by the golf course, swimming pools, and tennis facilities, according to a news release. The Jewish Heritage Fund for Excellence will convene a special task force by the end of next month to facilitate a community-wide planning process that will help determine optimal future uses.
More as we talk to Jewish Heritage fund chairman Louis Waterman.
• Here’s hoping you are on David Novak’s Christmas list … the YUM! Brands CEO has a little extra jingle this year after cashing in 321,000 shares of the stock a couple of weeks ago. The shares sold at an average price of $74.33, for a total transaction of $23.9 million.
That said, $24 million is quite a bit below his annual withdrawal from his Yum! Brands Christmas savings account. In December 2011, Novak sold 824,574 shares of his mega-fast food chain’s stock at an average of about $58 per share. That was good for a grand total of $47.8 million before the Feds took that 15 percent capital gains bite.
As a grand gesture to Santa’s elves, we came up with a modest list of gifts Mr. Novak could buy his employees, friends and family. Here’s that list.
Ah, the memories!
- The newest and bestest iPads, which cost about $760 = about 63,000 spiffy stocking stuffers!
- Our favorite car (hint, hint), the Ferrari FF four-door, AWD sports car, which retails for about $360,000 = 133. That’s enough to send one to every member of the U.S. Senate, Democrats and Republicans, and still have 33 left in that Anchorage garage.
- The Patek Philippe Sky Moon Tourbillion 5002 watch, a bargain at $1.5 million = 32, though it would be tough to buy this many since Patek Philippe craftsmen only make five or 10 per year. So, you still have enough left over for 150,000 Timexes to hand out at the KFC/Taco Bell in the Fourth Street Live food court to almost everyone in the 40202 ZIP code. Think customer loyalty, Dave!
- We forgot the chick gifts. We think of Hermes for leather goods, clothing, ties and scarves. But this year, they’re offering a gold collier de chien. You are correct … it does mean “dog collar.” But this dazzler actually is a bracelet for $69,500 = about 691 if you throw in a couple of bucks to round it all out. What a surprise when they open this!
- Lastly but certainly not least is an island for sale in the Bahamas we saw listed last week on the Sotheby’s real estate site for $6 million = 8, if you could get your neighbors to let go of theirs so all your family and in-laws can stay close.