bill gatton`s generous spirit

Transcription

BANKING AND WEALTH MANAGEMENT
The
Lane Report
K E N T U C K Y ’ S B U S I N E S S N E W S S O U RC E F O R 2 7 Y E A R S
M A RC H 2 0 1 2
®
$4.50
BILL GATTON’S
GENEROUS SPIRIT
lanereport.com
Man behind UK’s business school, WKU’s academy
is ‘investing’ fruits of 7 decades of success into education
Page 32
LANE ONE-ON-ONE:
GARY RANSDELL
President, Western
Kentucky University
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Lane Report
The
MARCH
2012
Kentucky’s Business News Source For 27 Years
Volume 27 Number 3
26 PARTLY SUNNY, BUT KEEP
AN EYE ON THOSE CLOUDS
Banks and businesses have improved balance sheets
and see 2012 building on improvements seen in 2011
Banking and Wealth Management Outlook –
Forecast for 2012 is for clearing financial skies,
barring bad news from abroad, say leaders
in Kentucky.
32 COVER STORY
BILL GATTON’S GENEROUS SPIRIT
Man behind UK’s business school and WKU’s academy is
‘investing’ fruits of seven decades of success into education
36 FINDING A VENTURE ‘ANGEL’
Accounting sector foresees rising demand
for business services and expects firm mergers
39 MAJOR VERDICTS AND SETTLEMENTS
Kentucky courts clarify contract law-tort law claims,
LLC capital calls, bank-borrower responsibilities.
In business cases, Kentucky courts clarify contract law-tort
law claims, LLC capital calls and bank-borrower responsibility
42 REACHING KENTUCKY’S UNBANKED
With education, 600,000-plus households could avoid fees
and be ready when U.S. agencies go to direct deposit in 2013
44 MORE INTEREST IN BUSINESS LOANS
Commercial and industrial lending went up 10 percent in 2011
and is rising as those with strong balance sheets invest
Commercial lending activity is picking up in
Kentucky and expected to continue improving.
Departments
4
Perspective
24
The Lane List
6
Fast Lane
46
Transportation
16
Interstate Lane
47
Opinion
17
Kentucky Intelligencer
48
Spotlight on the Arts
18
On the Boards
49
Exploring Kentucky
19
Corporate Moves
50
Passing Lane
20
Lane One-on-One:
Dr. Gary Ransdell
52
Kentucky People
On the Cover
Carol Martin “Bill” Gatton is a Western
Kentucky native and University of Kentucky graduate who has lived in East Tennessee the past 45 years. Having achieved
success as a car dealer and banker, he is
now “investing” in education as a major
donor to the UK Gatton School of Business and Economics, the WKU Gatton
Academy, the school of pharmacy at East
Tennessee State University and more.
(Lane Report staff photo illustration)
President,
Western Kentucky University
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MARCH 2012
CAUTION:
DANGER AHEAD
Arrangement with Mexico is
a symptom of bigger problems
BY PAT FREIBERT
T
RADE agreements should benefit
all parties. Favoritism to one or
another party is not a good or fair
agreement. Regulatory favoritism is
unfair at the onset.
Don’t look now but Mexican trucks are
running our roads. Despite years of opposition from the American people and
repeated negative votes by Congress, the
current administration has proceeded full
steam ahead with this initiative. The first
Mexican trucks began crossing the border
into Texas in October.
The idea of allowing Mexican trucks
unrestricted access to American highways, without the regulatory requirements that apply to domestic haulers,
was originally conceived by the Clinton
administration as part of the NAFTA
trade agreement with Mexico. After the
Clinton and Bush administrations failed
to convince Americans and the Congress to move ahead on this matter, the
present White House avoided the democratic approach altogether. Instead,
U.S. Transportation Secretary Ray
LaHood quietly traveled to Mexico City
last July 6 and signed, without approval
by Congress, an agreement with Mexico
allowing its trucks unfettered U.S.
access. The agreement makes no mention that Mexican trucks should be subject to the same standards imposed on
American trucks.
A federal agency, Federal Motor Carrier Safety Administration, immediately
granted “Permanent Operating Authority,” meaning these trucks will not have
to be inspected each time they cross
into the United States. Further, Mexican trucks will be given, courtesy of U.S.
taxpayers, electronic onboard recorders
with global positioning. U.S. truckers
must install this equipment also, but at
their own expense. American taxpayers
must also pay for replacing old mufflers
on Mexican trucks, while American
truckers must buy their own.
Larger domestic trucking firms may
be able to absorb the costs of some of
the new regulations, but independent
domestic truckers will be hard hit by
new requirements. Jobs will be lost if
the independents cannot afford to buy
new rigs that comply.
The signed agreement requires the
United States to accept Mexican commercial driver licenses even though Mexico has no valid system of driver licensing,
drug testing, training, brake standards or
safety inspection. The chatter in Washington is all about U.S. joblessness, environmental challenges, fuel efficiency, air
quality and green jobs. These issues seem
to carry no importance where this Mexican truck issue is concerned. Federal
spending and debt don’t seem to matter
here either.
The Mexican agreement promises to
allow U.S. trucks to drive in Mexico.
American truckers cannot reasonably
take advantage of this reciprocity since
they would be targets for the drug cartels in northern Mexico. The U.S. government is advising Americans not to
travel across that border.
At a Senate hearing, former Transportation Secretary Mary Peters acknowledged that U.S. officials routinely checked
“proficient in English” for Mexican drivers who could only answer questions and
identify road signs in Spanish.
While trade with our neighbors in
North America is important to our economy, bypassing Congress and failing to
achieve the consent of the governed is an
unwelcome pattern of operation. The
way this issue has been handled is a symptom of powerful centralized government
acting outside the Constitution.
Too much power in the hands of
Washington officials usurps individual
liberty. Our forefathers developed a
Constitution to strictly limit the powers
of centralized government and guarantee liberty. Throughout America’s history, our greatest leaders cautioned that
without vigilance, liberty can be lost.
Kentuckian Henry Clay, one of
America’s most distinguished statesmen, explained in 1829 the proper
order between the people and the government: “Government is a trust, and
the officers of the government are trustees; and both the trust and the trustees
are created for the benefit of the people.” Sometimes, modern public officials get this axiom backwards.
As Americans, we should be paying
attention to what our elected officials
do and not what they say. Our nation
needs our attention as it indulges in a
government spending orgy and incurs
unsustainable debt. Government by
executive fiat is not democratic. ■
Pat Freibert is a former Kentucky state
representative from Lexington. She can
be reached at [email protected].
LANEREPORT.COM • THE LANE REPORT
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FAST LANE
A compilation of economic news from across Kentucky
LOUISVILLE: NEW GE MANUFACTURING PLANT CREATES
100 NEW JOBS, WITH HUNDREDS MORE STILL TO COME
G
GE/Businesswire photo
E Appliances has invested $38
million in a new facility at its
Appliance Park manufacturing
complex that represents the first new
product line to open there since 1957.
The revitalized facility, which employs
approximately 100 employees, is the first
milestone in GE’s commitment to invest
a total of $1 billion – $800 million of
which is to be invested in Louisville – and
create more than 1,300 new jobs in the
United States by 2014.
GE’S GeoSpring hybrid electric water heater is
“The journey we started in 2009 to
designed to provide hot water in the same quantity
get to this day has been an inspirational
as a typical 50-gallon water heater while using less
one,” said GE Appliances President and
than half the energy to produce it.
CEO Charles “Chip” Blankenship. “To
reverse decades of outsourcing by bringing new, industry-leading products and jobs back
to the U.S. takes tremendous cooperation, imagination, courage and plain hard work by
a lot of people. I want to thank our local union, our employees, government and company officials for having and executing a vision that is bringing these jobs to Appliance
Park and creating a bright future for our business.”
Lean manufacturing and a more competitive wage structure for new employees led to
the selection of Louisville as the production site for the new water heater instead of China,
where an earlier version of the product was made. GE says that not only can the new product now be made more competitively in the United States, but the GeoSpring Hybrid
Water Heater, developed by the Louisville team, has an enhanced feature set, offers better
performance with greater energy savings and will be more affordable for consumers.
State and local governments also supported putting the new GeoSpring in Louisville with up to $17 million in incentives to design and build the new energy-efficient
facility and other investments that the company will make at Appliance Park during
the next several years. According to The (Louisville) Courier-Journal, GE officials also
confirmed that they are interviewing 300 new hires in Louisville for the launch of a
$180 million production line that will manufacture a redesigned bottom-freezer
refrigerator. Production on that line is expected to begin later this month.
STATE: U.S. POSTAL SERVICE CONSOLIDATION ELIMINATES
PROCESSING AT EIGHT KY PLANTS, CANCELS 190 JOBS
E
6
USPS photo
IGHT Kentucky facilities will be affected by
the recent announcement that the United
States Postal Service will be consolidating its mail processing facilities in an effort to
reduce operating expenses.
The Kentucky facilities slated to close as a
result of the consolidations are located in Bowling Green, Campton, Elizabethtown, Hazard,
Lexington, London, Paducah and Somerset. A
total of 190 jobs will be eliminated as a result of
Since 2006, the postal service has seen a 25
the consolidations.
Work at the facilities that are scheduled to percent decline in first-class mail volume.
close will be moved to other processing centers
in Louisville; Evansville, Ind.; Knoxville and Nashville, Tenn.
The postal system said the changes are “a necessary part of a larger comprehensive plan developed … to reduce operating costs by $20 million by 2015 and return
the organization to profitability.”
In a statement announcing the consolidations, the USPS said it is “in the midst of a
financial crisis due to the combined effects of the economic recession, increased use of
electronic communications, and an obligation to prefund retiree health benefits.”
The postal service said that since 2006, first-class mail volume has rapidly
declined, resulting in a mail mix that generates far less revenue that it costs to sustain postal operations.
MARCH 2012
LAWRENCEBURG: $44 MILLION
WILD TURKEY EXPANSION
WILL CREATE 62 NEW JOBS
G
RUPPO Campari, the owners of
Wild Turkey Distillery in Lawrenceburg, has announced plans
to build a new $44 million packaging
facility that will create 62 new jobs.
“This is a major milestone for the
Wild Turkey distillery and two of Gruppo
Campari’s biggest growth engines,” said
Bob Kunze-Concewitz, CEO of Gruppo
Campari. “This gives us the ownership of
the full production process for our Wild
Turkey brands – from distilling to aging
to bottling – all in one location, while
also housing the packaging of our largest U.S.-based brand, SKYY Vodka.
Slated to open in fall of 2013, the
new packaging facility is designed to
initially handle up to 4 million nineliter cases of product
annually and company
officials said it will have
the capacity to support the
company’s North American packaging platform
well into the future.
Wild Turkey traces its
roots to the 1800s, when a
wholesale grocer, Austin
Nichols Co., began specializing in bourbon made
by the Ripy family in Lawrenceburg. In 1980, French
spirits company PernodR i c a r d bought Austin
Nichols and opened Wild
Turkey bourbon to an international
exporting network. In 2009, PernodRicard sold Austin Nichols and the Wild
Turkey brand to Gruppo Campari,
which has been steadily investing in the
brand and the distillery. In 2011, the company unveiled a $50
million expansion at the distillery, more
than doubling the plant’s production
capabilities, and has opened multiple
new barrel warehouses over the past several years.
To encourage the investment and
job growth in Lawrenceburg, the Kentucky Economic Development Finance
Authority has preliminarily approved
the company for tax incentives up to $2
million through the Kentucky Business
Investment program. The per formance-based incentive allows a company to recoup a portion of its
investment over the term of the agreement through corporate income tax
credits and wage assessments by meeting job and investment targets.
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FAST LANE
BUSINESS BRIEFS
LOUISVILLE: HOLIDAY WORLD OWNERS
TO REOPEN KY KINGDOM NEXT YEAR
COVINGTON
■ Plaza Recovery, an accounts receivable management company, has
acquired Covington collection agency ACB American and plans to add
up to 250 new jobs in Northern Kentucky. The company, which is the
result of a merger between New York City-based Plaza Associates and
ACB American, is investing $2.5 million to add 18,000 s.f. to the existing
25,000-s.f. Covington facility to accommodate the expanded work force.
Both companies were formed in 1962, but Plaza Associates concentrated
on the financial sector and ACB focused on medical debt collections. The
combined company will operate as Plaza Recovery for its financial sector
clients, but will do business as ACB Recovery for its medical client base.
A
DANVILLE
■ Ephraim McDowell Health has opened a new specialty center to
house its cardiology, vascular and pulmonology practices. It will also be
the new home of the Commonwealth Neuroscience Center.
ELIZABETHTOWN
■ First Federal Savings Bank of Elizabethtown
Inc. has signed a definitive agreement to sell four
southern Indiana banking offices to First Savings
Bank, a Clarksville, Ind.-based institution. First Federal executives said the sale will allow the company to better focus on its
18 Kentucky branches and meet the company’s financial goals. The
purchase price represents a 3.65 percent premium based on the actual
level of deposits at closing, which were $99.7 million as of Dec. 31, 2011.
Mazak photo
FLORENCE
■ Mazak Corp., a Florence-based
company that designs and manufactures machine tool solutions, is investing $6.1 million to expand its Midwest
regional headquarters and technology
center in the Chicago area. Paul
Hemmer Co., a construction management company headquartered in
Fort Mitchell, Ky., is handling the project, which is due to be complete this
spring. The Illinois expansion is the most recent in a string of expansion
projects for Mazak: The company built a technology center in Houston in
2010 and last year launched a $9 million production expansion at its manufacturing campus in Florence, Ky., to meet customer demand.
FORT THOMAS
■ St. Elizabeth Healthcare has entered into a partnership with Select
Medical to offer long-term acute care at St. Elizabeth Fort Thomas.
Called Select Specialty Hospital - Northern Kentucky, the 33-bed
facility will provide highly specialized care for the most critical and
complex medical and surgical conditions. St. Elizabeth Healthcare
operates six facilities throughout Northern Kentucky.
FRANKFORT
■ Frankfort Regional Medical Center has broken ground on an $8.4
million project to expand and improve its emergency department. The
new emergency department will cover 19,500 s.f. and will include 28
private rooms with bedside registration and a new 64-slice CT scanner.
Construction is slated to be complete by mid-2013.
FRANKLIN
■ The Kentucky Horse Racing Commission has
approved the addition of 75 more Instant Racing
machines for Kentucky Downs. The track’s first
200 Instant Racing machines, which allow bettors to
place wagers on past races, were installed last September. As of Jan. 31,
Instant Racing wagering totaled more than $40 million, with Kentucky
Downs’ portion amounting to $2.9 million. The track plans to use that
money to bolster purses for its live-racing season in September.
HEBRON
■ Free wi-fi access is now available at all ticketing, baggage claim and
gate areas at the Cincinnati/Northern Kentucky International Airport. In addition, the airport has launched a new mobile website that is
set up like a mobile app to provide flight tracking, driving directions
and parking information, as well as links to hotels, airport dining,
ground transportation and special fare deals. The mobile site is available at cvgairport.com.
8
MARCH 2012
company formed by the
owners of the Holiday
World and Splashin’
Safari theme park in Santa
Claus, Ind., has signed a lease
agreement with the Kentucky
State Fair Board for the former
Kentucky Kingdom property
and hopes to have the amusement park up and running in
time for the 2013 season.
Kentucky Kingdom, which
sits on 57.26 acres at the Ken- Kentucky Kingdom closed in 2009
tucky Exposition Center, was amid owner Six Flags’ bankruptcy
closed in 2009 in the midst of filing. The new owners hope to
Six Flags Entertainment hire more than 800 workers and
Corp.’s bankruptcy filing. The have the park operational again
Kentucky State Fair Board has by May 2013.
been working since then to secure a new operator, with the
goal of reopening the park in time for the 2013 season.
Bluegrass Boardwalk Inc. was formed specifically with
the purpose of negotiating an agreement for the Kentucky
Kingdom property with the fair board. The company is comprised of four members of the Koch family, which has owned
and operated Holiday World (originally called Santa Claus
Land) since it opened in the 1940s. The partnership
includes Holiday World President Dan Koch; his sister Natalie Koch; their cousin Kathy Kamp; and her husband,
Michael Kamp, who is a general manager at Holiday World.
Dan, Natalie and Kathy are grandchildren of Holiday
World’s founder, Louis J. Koch.
Bluegrass Boardwalk plans to invest $15 million to $20
million to reopen the park in May 2013 and anticipates hiring 800 seasonal workers and 25 full-time employees.
“We’re bringing our business model of exceptional safety,
cleanliness, friendliness and value for families,” said Natalie
Koch. “That means free soft drinks, free sunscreen and free
use of inner tubes.”
BOWLING GREEN: HOLLEY ACCELERATES
OPERATIONS, PLANS TO ADD 136 JOBS
W
ARREN County-based Holley Performance Products is investing $7.7 million to expand its operations in Bowling Green.
Plans call for the addition of another product line, building a new warehouse and refurbishing existing facilities.
The expansion will result in
the addition of 136 new positions.
Established in 1903, Holley
Per formance Products has
become a leading manufacturer of fuel systems for high
performance vehicles, including NASCAR. The company’s
corporate headquarters moved from Michigan to Bowling
Green in 1992 but the company has had a presence with a
facility in the city since 1953. Holley currently employs more
than 250 workers in Bowling Green.
To encourage the investment and job growth in Bowling
Green, the Kentucky Economic Development Finance
Authority (KEDFA) preliminarily approved the company for
tax incentives up to $3 million through the Kentucky Business Investment program.
3/9/12 12:28 PM
E
NTREPRENEURIAL companies in the Bluegrass
region had a record year in 2011, attracting $69.9 million in venture funding according to an annual survey
by the Lexington Venture Club.
In addition, 279 jobs were created with an average fulltime salary of $65,651 by the 78 Central Kentucky early stage
companies that took part in the survey.
Venture funding, including angel and venture capital
investments, increased 7.5 percent and is at an all-time high
since the first Lexington Venture Club survey in 2003.
“This is a testament of what we can accomplish when faculty
entrepreneurs, local entrepreneurs, UK, Commerce Lexington,
LFUCG and the state work together,” said Dean Harvey, executive
director of the Von Allmen Center for Entrepreneurship. A total of 780 people were employed last year, both fulltime and part-time, according to the companies participating in the survey, which are primarily in the biotechnology
and healthcare, advanced manufacturing, IT and software,
and business services sectors. The companies also reported a
total $127.2 million in total revenue.
The Lexington Venture Club was founded in 2002 to bring
entrepreneurs, investors and service providers together to
share new business opportunities. It is co-managed and cofounded by Commerce Lexington and the University of Kentucky Von Allmen Center for Entrepreneurship and Lexington
Innovation & Commercialization Center in the UK Office for
Commercialization & Economic Development.
BUSINESS BRIEFS
HENDERSON
■ The 4 Star Industrial Park located on the Henderson-Webster County
line has been approved as foreign-trade zone, a designation that allows both
domestic and foreign commercial merchandise to receive the same customs
treatment it would receive if it were outside the commerce of the United
States. The designation is designed to lower the costs for U.S. companies
that are engaged in international trade. The foreign-trade zone will encompass nearly 800 acres in the park, which is adjacent to I-69 and rail access.
LEXINGTON
■ Central Baptist Hospital in Lexington has become the first healthcare
facility in the United States to receive
the American Heart Association
accreditation for acute cardiac care.
The accreditation program recognizes
centers that meet or exceed quality of
care measures for people experiencing
the most severe type of heart attack.
Central Baptist Hospital photo
CENTRAL KY: AREA ENTREPRENEURS DID
WELL IN ’11 IN SPITE OF THE ECONOMY
■ Galls, a Lexington-based marketer and distributor of public safety, first
responder and private security products, has merged with Quartermaster
Inc., a national distributor of public safety products. Quartermaster, headquartered in Cerritos, Calif., has been in operation for more than 37 years
and provides some 100,000 customers with a wide range of uniform and
equipment items. Galls CEO Bob San Julian said, “Quartermaster’s large
customer base will benefit from Galls’ broad product offerings and East
Coast distribution capabilities. In turn, Quartermaster’s highly recognizable
private label brand, long-standing relationships with key suppliers and established West Coast distribution presence will be instrumental as we compete
for customers in the public-safety products sector.” Financial details of the
transaction were not released.
MARCH 2012
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3/9/12 12:28 PM
FAST LANE
LEXINGTON
■ An Idaho-based home-care company has opened its first Kentucky
location in Lexington in response to an increased demand for nonmedical care-giving services for seniors and disabled individuals.
Assisting Hands Home Care offers assistance with personal care,
meal preparation, grocery shopping and errands, light housekeeping,
and monitoring of prescriptions medications, among other services.
Assisting Hands currently has more than 40 franchise operations and
regional developments across the United States.
■ KD Analytical Consulting Inc. is adding more than 7,000 s.f. to its
existing 1,850-s.f. facility at Lexington’s Bluegrass Station and plans to
add 15 full-time jobs. Headquartered in Harrisburg, Pa., KD Analytical
provides support, service and training for chemical, biological, radiological and nuclear detection equipment.
■ The Living Arts and Science Center has launched a $5 million
capital campaign to help fund an expansion of the facility’s physical
location as well as its programming. LASC plans to add a 65-seat planetarium/auditorium, a digital arts center, recording studio, a guest artist
studio, a children’s art gallery, a “teaching kitchen” and additional
classroom and meeting space.
■ Allegiant Air is ending its flight service between Lexington and Las
Vegas, effective April 7. The airline said the changes were due to its
need to use the Boeing 757 aircraft on the company’s new Hawaii
routes. Allegiant will continue to offer air service from Lexington to
Fort Lauderdale, Fort Myers, Orlando and Tampa, Fla.
LEXINGTON/LOUISVILLE
■ H.C. Nutting Co., a Cincinnati-based engineering consulting firm
that has offices in Lexington and Louisville, has changed its name to
Terracon Consultants Inc. HCN joined Terracon in 2007. As Terracon, they will continue to offer geotechnical, environmental, construction materials and facilities services.
LOUISVILLE
■ Megabus, a city-to-city express
bus company that offers fares as
low as $1, is reinstating service to
and from Louisville after withdrawing from the market in 2007.
Effective March 14, the company
will begin daily service between
Louisville and Chicago, Indianapolis and Nashville. Megabus amenities include free wi-fi and at-seat plug-ins for passengers. The company
serves more than 70 cities from six hubs in the United States and Canada.
■ The Kentuckiana Cancer Institute has joined the Norton Cancer
Institute, part of the Norton Healthcare system. The agreement, which
includes nine oncologists, expands the depth and reach of Norton
Healthcare’s regional cancer care options while bringing access to additional services to current KCI patients. KCI provides medical oncology,
hematology and infusion services to some 5,000 patients in the Louisville area and southern Indiana.
■ KFC Corp. has laid off an undisclosed number of
employees from its corporate offices in Louisville. In a
statement released to the press, KFC Senior Director of
Public Relations Karen Sherman said the cuts were part of
a “difficult but necessary decision to reorganize KFC to
reduce cost, maximize efficiencies and better reflect our
current business needs.”
■ The American Independent Business Alliance has selected Louisville as the host city for its fourth annual conference, which will be held
at the Galt House Hotel March 29 to April 1, 2012. More than 250
directors, board members, community organizers and government
officials from North America are expected to attend, along with independent business owners who volunteer for their local organizations.
The mission of the Louisville Independent Business Alliance, which
runs the “Keep Louisville Weird” campaign, is to promote locally owned
businesses and to educate citizens on the value of shopping locally.
10
MARCH 2012
LOUISVILLE: LONG JOHN SILVER’S OPENS
GLOBAL CORPORATE HEADQUARTERS
L
OCAL leaders and company officials gathered
on Feb. 9 for the official
ribbon-cutting ceremony to
unveil Long John Silver’s
new worldwide corporate
headquarters in Louisville.
The new headquarters
will be home to approxi- Lt. Gov. Jerry Abramson addressed a
mately 70 employees and group of state, local and company
represents a $3.8 million leaders for the official opening of
investment.
Long John Silver’s new headquarters
Newly formed LJS Part- in Louisville. Looking on are (l-r)
ners acquired Long John Greater Louisville Inc. Vice President
Silver’s from Louisville- of Economic Development Daryl Snybased YUM! Brands last der, Louisville Mayor Greg Fischer
and LJS Partners President and CEO
D e c e m b e r f o l l o w i n g Mike Kern.
YUM!’s decision to sell
Long John Silver’s and A&W Restaurants to focus on more
aggressive international expansion and improving the U.S.
position of its Taco Bell, Pizza Hut and KFC brands.
YUM! sold Long John Silver’s and A&W to separate buyers, but both have decided to keep their headquarters in
Kentucky, with A&W locating in Lexington and Long John
Silver’s in Louisville.
Long John Silver’s was founded in Lexington in 1969, but
moved its headquarters to Louisville in 2003 when it became
part of YUM! Brands.
The company has grown to become America’s largest quickserve seafood chain with more than 1,300 franchised restaurants and 8,400 employees worldwide. To encourage LJS
Partners to keep the headquarters operation in Kentucky, the
Kentucky Economic Development Finance Authority preliminarily approved LJS Partners for tax incentives up to $1.5 million through the Kentucky Business Investment Program. The
performance-based incentive can be earned over the term of
the agreements through corporate income tax credits and
wage assessments by meeting specific job and wage targets.
Brian Moore, Ky. Office of Creative Services photo
BUSINESS BRIEFS
LOUISVILLE: CHURCHILL DOWNS BETS ON
ATLANTA MULTIMEDIA POKER COMPANY
C
HURCHILL Downs Inc. has acquired the assets of
Bluff Media, an Atlanta-based multimedia poker content, brand and publishing company.
Bluff’s assets include a magazine and its associated online
counterpart; an online database and resource that tracks
and ranks the performance of poker
players and tournaments; and a variety of blogs, forums, and tournament
and player rankings as well as numerous URLs.
In addition to its plans to expand and build upon Bluff’s
current business model, CDI said the acquisition provides
“new business avenues to pursue in the event there is a liberalization of state or federal laws with respect to Internet
poker in the United States.”
Bluff Media is a multimedia poker content, brand and
publishing company, and has never engaged in real money
gaming. Bluff Media’s co-presidents, Eddy Kleid and Eric
Morris, and vice president of online operations, Jeff Markley,
will continue in their current roles.
Terms of the sale were not disclosed.
3/10/12 10:02 AM
WILLIAMSTOWN: DEVELOPER BUYS LAND
FOR $150 MILLION ARK ATTRACTION
A
RK Encounter LLC
has closed on the last
and largest piece of
land needed for the development of a $150 million
Noah’s Ark attraction set on
800 acres in Williamstown.
According to research
cited by Ark Encounter, the
The first phase of the Ark Encounter is
attraction is expected to
expected to open by 2014.
draw more than a million
people in its first year.
In addition, the organization says that the completion of
engineering and architectural work on the ark structure has
revealed that the ark will have a significantly greater guest
capacity than originally anticipated. That finding has eliminated the need to build the surrounding attractions that
were initially projected to accommodate the expected
crowds. As a result, Ark Encounter officials said, the project
will be built in multiple phases over many years and will
reduce the initial construction period and funding requirements. The ark and supporting elements such as interactive
children’s activities, restaurants, live entertainment venues
and shopping areas will open during the first phase, which is
projected to be complete by 2014. Future phases will include
a walled city, the Tower of Babel, a first-century Middle Eastern village, a walk-through aviary, a petting zoo and more.
BUSINESS BRIEFS
LOUISVILLE
■ Jefferson Community and Technical College, Simmons College,
Spalding University and the University of Louisville have joined to
launch the Signature Partnership Education Access Center, a facility to help adult learners work toward a college degree. The center,
which is located at Simmons College, will offer adult learners assistance
with diagnostic testing and advising, choosing a college, applying for
financial aid and preparing for college-level class work.
■ Louisville-based insurance company Neace
Lukens continues to expand with the recent acquisition of Jenkins Insurance Services, a Sellersburg,
Ind.-based employee benefits insurance firm. The
acquisition is part of the company’s strategy to grow
through its partnership with AssuredPartners Inc.,
a Florida company that acquires and invests in property and casualty and
employee benefits brokerage businesses. With the Jenkins acquisition,
Neace Lukens has the opportunity to become more competitive in the
employee benefits sector and broadens its reach in the Indiana market.
Neace Lukens currently operates 22 offices across 11 states and has more
than 600 employees.
■ Louisville’s Office of Globalization is forming new “international
councils” in an effort to better reflect the changing face of the state’s
largest city. “We live in a multicultural world, and must think globally in
order to be competitive,” said Louisville Mayor Greg Fischer. “Louisville
is a diverse city, with more than 75 nationalities represented in its population, and these councils will create a climate for growth by promoting
economic, educational and community initiatives with a global focus.”
Louisville has seen unprecedented growth in its immigrant population
in recent years, with immigrants making up two-thirds of the city’s
population growth within the last decade.
MARCH 2012
11
3/9/12 12:28 PM
FAST LANE
BUSINESS BRIEFS
LOUISVILLE
■ Louisville-based Humana has created a new dental plan designed for
individuals such as retirees and those who are self employed and do not
have access to dental coverage through their employer. The HumanaOne Dental Loyalty Plus Plan focuses on prevention, with 100 percent
coverage for most preventive services and no co-payments.
■ Forty-two employees of The (Louisville) Courier-Journal newspaper
have been offered voluntary buyouts as part of parent company Gannett
Co. Inc.’s effort to reduce staffing throughout its U.S. Community Publishing division in the face of declining revenues. According to The Courier-Journal, those eligible for the buyouts work in editorial, the newsroom,
building maintenance, finance and computer services. To qualify for the
buyout, employees have to be 56 or older and have at least 20 years of service. A maximum of 20 offers will be accepted. The paper has experienced
a number of layoffs in recent years, but the voluntary buyout is the first
offered by the company since 2008.
■ Brown-Forman Cooperage, a subsidiary of BrownForman Corp., is opening a
new mill in Stevenson, Ala., that will produce the white-oak stave and
heading material used for whiskey barrels. Brown-Forman has seen
continued growth of its Jack Daniel’s family of brands and is expanding its supply chain capacity to help meet growing production demand.
When fully operational, the north Alabama mill will employ more than
30 people. Brown-Forman Cooperage currently operates mills in Jackson, Ohio, and Clifton, Tenn.
■ Cabela’s Inc., a well-known retail company that specializes in hunting,
fishing, camping and related outdoor merchandise, has announced plans
to open a new 88,000-.s.f. store in near Interstates 265 and 71 in Louisville
that will employ some 200 full- and part-time employees. Construction is
expected to begin this summer, with the official opening to take place in
spring 2013. The store will be Cabela’s first in Kentucky.
■ Kentucky Trailer has expanded its capacity to produce motorsports
race transporters with a new 240,000-s.f. production facility in Louisville
that enables the company to design, build and produce complete race
transporters to customers’ exact specifications. The expansion comes just
one year after the company expanded its custom paint and graphic application capacity with a new 85,000-s.f. paint and reconditioning plant.
■ Rapid enrollment growth in Bellarmine University’s
health science programs has led the school to open a
new 15,400-s.f. facility to house their respiratory therapy
and exercise science programs. Bellarmine’s health science programs have 290 full-time students, a growth of
50 percent since 2008. Dr. Christy Kane, chair of the
respiratory therapy program, said the lab in the Flynn
Building “is a well-designed space that houses fully
updated equipment for breathing simulation, pulmonary function, and
pulmonary support and monitoring.”
■ The National Fastpitch Coaches Association has acquired the
former Crescent Hill Women’s Club facility in Louisville to serve as its
new national headquarters facility. The NFCA, a national nonprofit
organization that hosts clinics, conventions and regional meetings, will
add 12 employees to the full-time staff of eight, who are currently
located in Mississippi, Texas and New Hampshire. All staff members are
expected to relocate to Louisville.
MIDWAY
■ Photizo Group, a Midway research and consulting firm specializing
in the managed print services (MPS) industry, has acquired Lyra
Research for an undisclosed amount. Lyra, headquartered in Newton,
Mass., also provides research and consulting services for the MPS industry. Company executives said that combining the two companies creates
a more comprehensive line of market intelligence and consulting services to the imaging industry with little to no overlap. The new organization will continue to operate from existing offices, with headquarters
located in Midway. Photizo founder and CEO Ed Crowley will serve as
CEO of the new entity.
12
MARCH 2012
LOUISVILLE: REPUBLIC RANKED AS THE
BEST-PERFORMING BANK IN THE U.S.
L
OUISVILLE-based Republic Bancorp has been identified as the best-performing bank in the United States
based on financial performance and level of capital in a
listing compiled by Bank Director magazine.
In the first-quarter 2012 edition
of the magazine, Republic Bancorp
was rated No. 1 based on a combined ranking of two financial metrics: core return on tangible
common equity (ROTCE) and the ratio of average tangible
common equity (TCE) to tangible assets. Data was collected
by the New York-based investment banking firm Sandler
O’Neill + Partners from 484 publicly traded U.S. banks
from July 1, 2009 through June 30, 2011.
According to Bank Director Editor Jack Milligan, “banks
with a higher capital ratio are making better use of its
shareholders’ money. In the good old days, when banks
were able to operate with significantly more leverage than
they can today, it was much easier to post ROEs (return on
equity) in the high teens and even low twenties. Attaining
that level of performance today is a truer test of a bank’s
strategy, business model and the operating skill of its management team.”
Republic Bancorp CEO Steve Trager said
that Republic’s high TCE ratio is central to its
business strategy.
“We pump a lot of earnings back into the
business,” Trager said. “We don’t pay high dividends. We want to manage Republic Bancorp
for the long term. It’s nice to know that we can
Steve Trager
pursue opportunity without depending on
others to raise capital, because raising capital
when you need it is tough.”
Last month, Republic expanded into Tennessee with the
acquisition of Tennessee Commerce Bank, a banking
institution that was closed down by the Tennessee Department of Financial Institutions in late January. In addition to
assuming approximately $1 billion of the TCB deposits,
Republic purchased approximately $122 million of loans
and other real estate owned for $65 million. TCB’s only
office, located in Franklin, Tenn., will continue to operate
under the TCB name as a division of Republic.
The acquisition brings the Republic’s total number of banking centers to 43, with locations in Kentucky, Indiana, Ohio and
Tennessee. The company also operates Tax Refund Solutions, a nationwide tax refund loan and check provider.
STATE: KENTUCKY’S ANNUAL JOBLESS
RATE FALLS TO 9.5 PERCENT IN 2011
K
ENTUCKY’S annual unemployment rate declined to
9.5 percent in 2011 from 10.2 percent in 2010, while
nonfarm employment gained 21,200 jobs, according to
the Kentucky Office of Employment and Training. The U.S.
annual unemployment rate fell to 8.9 percent in 2011 from
9.6 percent in 2010.
“In 2011, the Kentucky economy clearly made strides in
recovering from the recession. All three components of
Kentucky’s labor force made significant shifts in the right
direction: the civilian labor force expanded, employment
went up and the number of unemployed declined by more
than 13,000,” said Manoj Shanker, an economist with OET.
3/9/12 12:28 PM
LEXINGTON: EXOMEDICINE INSTITUTE
LAUNCHES ZERO-GRAVITY RESEARCH
T
HE Exomedicine Institute has formed international
exomedicine research groups to establish medical
research and commercialization targets in 10 initial
disease and health areas, including infectious diseases,
Alzheimer’s, oncology, neurology, aging, stem cells, diabetes,
immunology/autoimmune disorders, regenerative medicine
and cardiology.
The Lexington-based institute is a newly formed enterprise to pursue work in the emerging field of exomedicine,
which is the study and exploration of medical solutions in
the zero gravity environment of space to promote benefits to
human health on Earth.
“By acquiring a deeper understanding of the influences
of microgravity on the dynamics of living systems and disease
processes we may be able to help solve some of today’s most
important and vexing medical challenges,” said Kris Kimel,
chair of the Institute.
Each group will be comprised of three experts who will
spend four to six months developing a strategic white
paper detailing areas of high promise, potential impact
and commercialization in each respective field. The purpose is to target research investigations to be conducted on
the U.S. National Lab aboard the International Space
Station that have the highest potential to show promising
results in therapies and medical treatments on Earth. The
groups’ first papers are expected in the summer of 2012.
BUSINESS BRIEFS
NICHOLASVILLE
■ Christian
Care Communities and The
Joseph Group
have teamed to
develop a new
$30 million independent living
and assisted living community
set on 20 acres
near the Jessamine/Fayette County line. The concept for Ashgrove Woods targets
baby boomers who are caring for aging parents and want a community
that accommodates their lifestyle while also offering assisted living,
adult day care and memory care for their parents. The first homes in
the development are already under construction and are scheduled to
be complete by summer. The assisted-living complex is slated to be finished by the spring of 2013. When complete, the complex will employ
approximately 150 full-time professional and service employees. Louisville-based Christian Cares Communities currently has programs and
developments in eight Kentucky communities.
OWENSBORO
■ Southern Star Central Gas Pipeline plans to expand in Owensboro
with the construction of a second facility to accommodate expansion of its
headquarters operations. The $5.3 million project will add up to 20 new jobs
to the existing 167-member work force over the next several years. Southern
Star operates an interstate natural gas transmission and storage system spanning approximately 6,000 miles and serves customers in seven states. The
expansion project is expected to be complete by the end of the year.
MARCH 2012
13
3/9/12 12:28 PM
FAST LANE
BUSINESS BRIEFS
PADUCAH
■ The H.T. Hackney Co., a wholesale distribution company, has
opened a new 166,261-s.f. distribution facility in Paducah and plans to
add 40 new jobs as part of the $15 million expansion. Headquartered in
Knoxville, Tenn., H.T. Hackney is one of the largest wholesale distributors in the United States, with 30 supply centers serving more than
20,000 retail customers in 22 states. The company currently employs
117 full-time workers in Paducah.
ROWAN COUNTY
■ The Morgan, Menifee and Rowan County Regional Industrial
Authority is moving forward with plans to erect a 48,320-s.f. speculative
building in the John Will Stacy MMRC Regional Business Park. The new
$1.3 million building, which is expected to be complete by mid-summer, has been designed to accommodate an additional 100,000 s.f., if
needed.
SPRINGFIELD
■ St. Catharine College has begun construction on an $8 million
facility that will house the Emily W. Hundley Library and Center for
Graduate Studies. The facility is slated for completion in early 2013.
WINCHESTER
■ The board of directors of Delta Natural Gas Co. Inc. has announced
a two-for-one stock split of the corporation’s issued and outstanding
common stock for shareholders of record as of April 17, 2012. The
Winchester-based company provides natural gas to approximately
37,000 customers in 23 Kentucky counties.
STATE
■ Daviess, Warren and Woodford counties have been certified as Kentucky’s first-ever Work Ready Communities, and Russell County has
achieved Work Ready Community in Progress status. The new certification program from the Kentucky Workforce Investment Board and the
Kentucky Education and Workforce Development Cabinet assures
employers that a local workforce has the talent and skills necessary to
staff existing jobs and to master the innovative technologies new jobs
will require.
Kentucky Department of Travel photo
■ The Kentucky Vineyard
Society has received
$515,000 in state agricultural development funds to
maintain the Viticulture
Extension and Research
Program through fiscal
year 2014. The project will
help provide growers and
wine makers with a variety
of technical assistance services and a portion of the
project is directed toward
new and novice producers who need education in production and marketing. One objective of the project includes instituting a voluntary
wine assurance control program to set standards for well-made wines
that will ultimately expand the industry through increased public confidence in the quality of Kentucky wines. Another objective is to decrease
the need for out-of-state sourcing by establishing a statewide system to
connect local growers to wineries.
News Submissions Welcome
To submit news and photographs for publication in Fast
Lane, please mail information to: The Lane Report, 201 East
Main Street, 14th Floor, Lexington, KY 40507-2003 or send via
e-mail to [email protected].
Color photographs are preferred, either in standard form or digital. For digital photographs, a resolution of 300 dpi is required, formatted in either jpeg or tif.
14
MARCH 2012
STATE: KY OFFERS GRANTS TO SMALL
BUSINESSES TO INCREASE EXPORTS
K
ENTUCKY’S Cabinet
Kentucky Export
for Economic DevelFacts and Figures
• Kentucky exports totaled
opment is now accept$19.3 billion in 2010.
ing applications from
• Kentucky ranks 19th in the
Kentucky small businesses for
nation in total exports.
grant money made available
• Kentucky’s total exports
through the State Trade and
have increased by 101 perExport Promotion (STEP).
cent from 2000 to 2010.
The grant program is
• Kentucky’s 2010 exports
added approximately $4.7
part of a three-year trade
billion to the commonand export promotion pilot
wealth’s direct state gross
initiative authorized by the
domestic product and
Small Business Administradirectly created 47,000 jobs.
tion Act of 2010, which aims
• Manufactured goods
to increase the number of
accounted for more than
small businesses that
96 percent of all Kentucky
exports in 2010.
export, as well as to increase
• Transportation equipment,
the value of exports for
chemicals, machinery, and
companies that are curcomputer and electronic
rently doing so.
products accounted for
“By taking part in this
72.2 percent of Kentucky’s
initiative, more and more
2010 exports.
Kentucky companies will be
• Canada, the United Kingdom, Mexico, Japan, Gerable to grow their capacity,
man, Brazil and the
increase productivity and
Netherlands are Kentucky’s
ultimately sell more of their
top export markets.
services and goods abroad,”
Gov. Steve Beshear said.
Successful grant applicants will be able to utilize the funds to
perform market research, identify international customers,
participate in trade shows, and even translate websites and marketing materials. Grants are available to Kentucky companies
with fewer than 500 employees that meet revenue requirements set by the Small Business Administration.
Funding for the initiative expires in September. For more
information on the STEP grant, visit kyexports.com and
click on “assistance.”
RICHMOND: EKU JOINS INITIATIVE TO
GROW REGION’S FORENSICS INDUSTRY
E
ASTERN Kentucky University has joined with more
than a dozen of the region’s top forensics organizations, businesses and leaders to establish the Tennessee Valley Corridor Forensics Initiative, a group that is
working to build, expand and strengthen the forensic science industry and use the region as a national example.
“From nuclear to cyber forensics, to food safety and water
treatment, the forensics industry touches nearly every aspect
of our lives, yet most people only think of forensics as fingerprinting and DNA testing like they’ve seen on TV,” said Dr.
Eric Abelquist, executive vice president of Oak Ridge Associated Universities. “In fact, we have a wide variety of growing forensics capabilities and opportunities right here in our
region that we can turn into more jobs and new careers if we
work together to take full advantage of them.”
The forensics initiative was recently highlighted as a
model economic development initiative in a Global Corporate
Xpansion article entitled “Workforce Initiatives to Keep U.S.
in a Leadership Position,” and in “The Buzz” on Business
Xpansion Journal’s website.
EKU’s forensic science program, established in 1974, is
one of the oldest such programs in the country.
3/9/12 12:28 PM
MARCH 2012
15
3/9/12 12:28 PM
INTERSTATE LANE
Business news from Indiana, Ohio, Tennessee and West Virginia
BUSINESS BRIEFS
INDIANA
■ The regional law firm of Bingham
Greenebaum Doll LLP has
expanded with the addition of new
offices in Evansville and Vincennes,
Ind. The new Vincennes location is
the second location there for the firm.
OHIO
■ JPMorgan Chase plans to add 350 jobs in the Columbus, Ohio, area
over the next five years. When the new wave of hiring is complete,
Chase will have added more than 6,000 new jobs and 1 million s.f. of
real estate in central Ohio since the 2004 merger of Bank One and
JPMorgan Chase.
■ Acura has announced that its
new NSX sports car will be manufactured in central Ohio and a
team from the Ohio Center of
Honda R&D Americas in Raymond, Ohio, will lead the continued design and development
of the new vehicle. Honda, Acura’s parent company, currently
operates auto assembly operations in Marysville and East Liberty, Ohio, but Honda officials
said the Acura sports car will be
built nearby at a separate manufacturing site. The company also operates an engine plant in Anna,
Ohio, and produces automatic transmissions in Russells Point, Ohio.
The company has not yet said if additional workers will be hired for the
NSX production. Honda currently employs more than 13,500 Ohioans.
TENNESSEE
■ HCA, a Nashville-based provider of healthcare services, plans to build
a new data center in Antioch, Tenn., and will also be expanding its
existing information technology locations in the Nashville area. The
project represents a total investment of more than $200 million and the
creation of approximately 155 IT jobs within the next five years.
■ Nissan and Daimler are partnering to produce Mercedes-Benz
four-cylinder gasoline engines together at Nissan’s powertrain assembly
plant in Decherd, Tenn. The collaboration marks the first production
of Mercedes-Benz engines in the North America Free Trade region.
The Tennessee plant’s strategic location and logistics links ensure a
direct supply of engines starting in 2014 for the Mercedes-Benz C-Class,
built at Daimler’s vehicle plant in Tuscaloosa, Ala. Production in
Decherd will begin in 2014. The companies have not released information on the amount being invested in the project or the potential number of jobs being created.
■ Eastman Chemical
Co. has announced
plans to acquire Solutia,
a company that produces performance materials and specialty chemicals,
in a transaction valued at $4.7 billion. Eastman CEO Jim Rogers said the
acquisition will broaden the geographic reach into emerging areas, particularly the Asian Pacific area, for the Kingsport, Tenn.-based company.
■ Eagle Bend Manufacturing Inc. is investing $64 million to expand
its automotive parts plant in Clinton, Tenn. The company, a division of
Magna International Inc., plans to add 188 new jobs to its existing
600-member work force as a result of the expansion.
WEST VIRGINIA
■ Baker Hughes, one of the world’s largest oilfield service companies,
plans to build a new $40 million center outside Bridgeport, W. Va., that
will consolidate two existing facilities into one significantly larger center. The consolidation will preserve more than 200 existing West Virginia jobs and is expected to create an estimated 275 new jobs in the
coming years.
16
MARCH 2012
INDIANA: TOYOTA ADDING 400 JOBS TO
INCREASE HIGHLANDER PRODUCTION
T
oyota Motor Manufacturing Indiana
Inc. has announced
plans to expand its operations in Princeton, Ind.,
and expects to add approximately 400 new jobs by
next year.
The company will invest
$400 million total, with
$131 million going directly
to the Princeton plant to
consolidate Toyota’s High- Toyota is consolidating production of
lander mid-size SUV pro- its popular Highlander SUV at its
Princeton, Ind., manufacturing plant.
duction there. Production,
which will include both
hybrid and export versions of the Highlander, is expected to
begin in late 2013 with annual production volume expected
to increase by approximately 50,000 units at TMMI.
TMMI currently employs 4,800 associates who build the
Highlander, Sequoia full-size SUV and Sienna minivan.
The hiring of new manufacturing employees will coincide
with facility and machinery upgrades.
“This project allows for better utilization of the Indiana
plant, and will help Toyota capitalize on the improving
North American and global auto market,” said Steve St.
Angelo, executive vice president of Toyota Motor Engineering & Manufacturing North America Inc. “In addition
to new jobs at the Indiana plant, this project will increase
opportunities and jobs for our North American supply base.”
The Indiana Economic Development Corporation
offered Toyota Motor Manufacturing Indiana Inc. up to $2.7
million in conditional tax credits and up to $200,000 in
training grants based on the company’s job creation plans.
OHIO: P&G TO ELIMINATE 5,700 JOBS AS
PART OF $10B COST-CUTTING EFFORTS
C
INCINNATI-based Procter & Gamble plans to cut a
total of 5,700 non-manufacturing jobs by the middle
of next year as part of a cost-reduction strategy to
achieve $10 billion in savings by 2015.
P&G, which owns well-known brands such as Tide, Charmin and Gillette, has struggled with rising costs of raw materials and has seen negligible sales growth in either the
United States or Europe.
In addition to the job cuts, the
company also plans to reduce television advertising and utilize less expensive packaging for its goods.
The jobs to be eliminated include 1,600 jobs that the
company had already announced would be cut through an
early retirement program. The remaining 4,100 jobs will
come from the company’s marketing, product design, logistics and research departments through a combination of
layoffs and attrition.
The cuts do not include 1,700 jobs that will move over to
The Kellogg Co. as part of that company’s recent $2.7 billion cash purchase of P&G’s Pringles chip brand.
Last April, P&G announced plans to sell the Pringles
brand to Diamond Foods, but that agreement ended up
being mutually terminated.
3/9/12 1:13 PM
KENTUCKY INTELLIGENCER®
A sampling of economic development data
MARCH 2012
17
3/9/12 1:13 PM
ON THE BOARDS
Kentuckians named to organizational leadership roles
AMERICAN CHAMBER OF
COMMERCE EXECUTIVES
■ Steve Stevens, president
and CEO of the Northern
Kentucky Chamber of Commerce, has been elected a
trustee of the American
Chamber of Commerce Executives (ACCE) Benefit Trust,
ACCE’s insurance and retireSteve
ment plan.
Stevens
ASSOCIATED GENERAL
CONTRACTORS OF KENTUCKY
■ Steve Summers, executive vice president
of Lexington-based Gray Construction, has
been elected president of the Associated General Contractors of Kentucky.
CHRISTIAN CARE COMMUNITIES
■ Christian Care Communities, a Louisville-based provider
of housing and long-term care
for older adults, has
announced its board of directors officers for 2012: Chair –
Alan C. Parsons, human
capital consultant and attorney,
Louisville; Vice Chair – Marie Alan
Smart, Alzheimer’s family care Parsons
specialist, University of Kentucky, Lexington;
Secretary – Audrey Powell, executive director of
community services, Ephraim McDowell
Regional Medial Center, Danville; Treasurer –
Frank Farris, partner, Mountjoy Chilton Medley,
Louisville; Ex-Officio Member – Scott Coburn,
senior minister, Northside Christian Church,
Georgetown. New members elected to the board
include Dr. Susan Jones, professor in the
School of Nursing at Western Kentucky University, Bowling Green; and Rev. Wayne Bell, president emeritus of the Lexington Theological
Seminary, Lexington.
COMMUNITY TRUST BANCORP INC.
■ J. Mark
Campbell
and Crit Luallen have been
appointed to
Community
Trust Bancorp
Inc.’s board of
J. Mark
d i r e c t o r s . Crit
Campbell
Luallen has Luallen
been in public service for more than 30 years and
most recently served as Kentucky’s state auditor
from 2003 to 2011. Campbell is a shareholder in
the Marshall Resources and Cambrian Coal
Group and also works in sales for Pevler Coal
Sales Co. Inc.
HOSPICE OF THE BLUEGRASS
■ Hospice of the Bluegrass has
announced its board officers
for 2012: Chair - Woodford
Webb, the Webb Companies;
Vice Chair - Mark Nabity,
Grayhawk LLC; Treasurer Jen Shah, Dean Dorton Allen
Ford, PLLC; and Secretary Eric Frankl, Blue Grass Air- Woodford
port. New to the board are Webb
Bruce Brooks, Farmers Bank
& Capital Trust Company (retired) and Dr. J.D.
Miller, Appalachian Regional Healthcare. 18
MARCH 2012
INDUSTRIAL SERVICES
OF AMERICA INC.
■ Timothy J. Hazlett and David T. Russell
have been named to the board of directors of
Industrial Services of America Inc., a Louisville
company that buys, processes and sells metal
and other recyclable commodities. Hazlett is
president and director of Brown & Williamson
Holdings Inc., president and director of British
American Tobacco (Brands) Inc. and founder
of Hazlett Corporate Counsel PLLC. Russell is
associate professor of insurance and finance
and director of the Center for Risk and Insurance at California State University, Northridge.
KENTUCKY
ASSOCIATION OF
CONVENTION &
VISITORS BUREAUS
■ Mary Hammond, executive director of the Paducah
McCracken County Convention & Visitors Bureau, has Mary
been elected as the 2012 pres- Hammond
ident of the Kentucky Association of Convention & Visitors Bureaus.
KET FOUNDATION INC./
KENTUCKY AUTHORITY
FOR EDUCATIONAL TELEVISION
■ Felicia Cumings Smith, associate commissioner for the Kentucky Department of Education’s Office of Next Generation Learners, has
been named to the KET Foundation Inc.
Board and the Kentucky Authority for Educational Television.
KENTUCKY BOARD OF NURSING
■ Gov. Steve Beshear has appointed the following individuals to the state’s board of nursing:
Jimmy T. Isenberg, Glasgow; Nicholas E.
Hammonds, Morehead; Makeda Harris, Louisville; and Kelly R. Jenkins, Waverly.
KENTUCKY CHAMBER OF COMMERCE
■ Franklin K. Jelsma has
been named to the board of
directors of the Kentucky
Chamber of Commerce.
Jelsma is a partner in the law
firm of Wyatt, Tarrant &
Combs LLP.
Franklin
KENTUCKY FILM
K. Jelsma
COMMISSION
■ Actor Josh Hopkins has been appointed to
serve on the Kentucky Film Commission.
KENTUCKY FINANCIAL
INSTITUTIONS BOARD
■ Joseph P. Roberts and James Dale Sights
have been named to the Kentucky Financial
Institutions Board. Roberts is an agent with Roberts Insurance, Lexington. Sights is president of
The Bank of Henderson.
LEADERSHIP KENTUCKY INC.
■ Leadership Kentucky, a statewide leadership development organization, has
announced its 2012 board of directors: Chair
- Jim Conn, Commercial Door & Hardware,
Paducah; Immediate Past Chair - Jim Miller,
Sullivan, Mountjoy, Stainback & Miller PSC,
Owensboro; Chair-Elect - Tim Rutledge,
Brown-Forman Corp., Louisville; Secretary Deborah Moessner, Anthem Blue Cross
Blue Shield, Louisville; Treasurer - Lytle
Thomas, Heritage Bank, Burlington; Finance
Chair - Charles Beach III, Peoples Exchange
Bank, Beattyville. Members: Regina Jackson, English, Lucas, Priest & Owsley LLP,
Bowling Green; Barbara Dickens, Louisville
Water Co., Louisville; Dan Bork, Lexmark
International Inc., Lexington; Rob Samuels, Maker’s Mark Distillery, Louisville; Mary
Michael Corbett, Norton Healthcare, Louisville; Elmer K. Whitaker, Whitaker Bank
Corp. of Kentucky; Luther Deaton, Central
Bank & Trust Co. Lexington and Kentucky
Chamber of Commerce Chair; Rich Alloo,
Toyota Motor Engineering & Manufacturing
NA, Erlanger; Jeffrey Bringardner, Humana
Inc., Louisville; Lisle Cheatham, City of
Greensburg, Greensburg; Rick DuBose,
Western Kentucky University, Bowling Green;
Sandra K. Dunahoo, Nesbitt Engineering
Inc., Lexington; Mark Gillming, Messer Construction Co., Louisville; Mark Giuffre’,
United Parcel Service, Louisville; Tyson Gorman, Wyatt, Tarrant & Combs LLP, Louisville;
Teresa Hail, D.C. Trimble Inc., Somerset;
Pam Helton, Kentuckians for Better Transportation, Louisville; Rob Lauber, Yum!
Brands Inc., Louisville; David Ledford,
Boneal Inc., Means; Rick Leeper, West Bank
LLC, Gilbertsville; John Malloy, LG&E-KU,
Louisville; Marc Mathews, Transylvania University, Lexington; Darrell Maynard, Eastern
Telephone & Technologies, Pikeville; David
McFaddin, AT&T, Richmond; Francis
O ’ Har a, Scott County Public Schools,
Georgetown; Gov. Paul E. Patton, University
of Pikeville, Pikeville; Keith Riley, Peel &
Holland Inc., Benton; Neil Thornbury, T. J.
Samson Community Hospital, Glasgow;
Michael Williams, Blue Grass Energy, Nicholasville; Ranie Wohnhas, Kentucky Power
Co. (AEP), Frankfort; Angela Woodward,
Elizabethtown Community & Technical College, Elizabethtown; Claire Alagia, Bittners
LLC, Louisville; Jackie L. Banahan, Jackie
L. Banahan DMD, Lexington; Barton Darrell, Warren County Board of Education,
Bowling Green; Judy “JJ” Jackson, University of Kentucky, Lexington; and Jeffery Taylor, Tennessee Valley Authority, Hopkinsville.
PUBLIC RELATIONS
SOCIETY OF AMERICA
■ The Thoroughbred Chapter
of the Public Relations Society
of America has elected its officers and directors for 2012:
President – David Kitchen,
United Way of the Bluegrass;
President-Elect – Brant
Welch, Fifth Third Bank; Past
President – Ryan Worthen, David
Kentucky Employers’ Mutual Kitchen
Insurance; Secretary – Amity Brannock, American Association of Equine Practitioners; Treasurer – Jennifer McGuire, Guthrie/Mayes
Public Relations. Directors-at-Large: Lauren
Greathouse, Moroch; Mary Hemlepp, Mary
Hemlepp Public Relations; and Amanda
Palmer, Kentucky Housing Corp. New Directorat-Large candidates: Tom Harris, University of
Kentucky; Tim Hill, Hill Communications; and
Katelyn Rademacher, Preston Osborne. Cliff
Feltham, Kentucky Utilities, is the national
assembly delegate.
3/9/12 1:13 PM
CORPORATE MOVES
New leadership for Kentucky businesses
BANKING
■ First Security Inc., the
bank holding
company for
First Security
Bank of
Owensboro,
Michael F.
Wanda
has promoted
Beckwith
Mayer
M i c h a e l F.
Beckwith to executive vice president and chief
financial officer for both the bank and the holding company. Wanda Mayer has been
appointed vice president-loan operations for
First Security Bank.
■ Michele Terry has joined the Bank of Lexington as assistant vice president-lending.
■ John L. Pendergrass has joined Farmers
Capital Bank Corp. in Frankfort as vice president of special assets. J. Bradford “Brad”
Southworth has been named assistant vice
president-internal audit.
CONSTRUCTION
■ Randall Vaughn has been promoted to vice
president of architecture at Lexington-based
Gray Construction.
EDUCATION
■ The University of Louisville has announced
the following appointments: Monica Ann
Shaw has been named associate dean for
medical education at the University of Louisville School of Medicine, succeeding Ruth
Greenberg, who has been named associate
dean for accreditation. Jill Suttles has been
named associated dean for faculty affairs, suc-
Monica
Ann Shaw
Jill
Suttles
W. Daniel
Cogan
ceeding Tracy Eells, who has become vice
provost for faculty personnel. W. Daniel
Cogan has been named assistant dean for
continuing health sciences education. Cogan
succeeds Sharon Whitmer,
who has retired.
EQUINE
■ Kristin Warfield has been
named to the new post of vice
president-partnerships for
Churchill Downs Racetrack in
Louisville.
Kristin
Warfield
GOVERNMENT
■ Derek Paulsen, Ph.D. has been named as
Lexington’s first commissioner of planning.
■ Joslyn Olinger Glover has been appointed
executive director for administrative services
for Kentucky’s Department of Juvenile Justice.
HEALTHCARE
■ C. Maurice Snook as
joined the University of Louisville Health Sciences Center
as associate vice president for
health affairs finance and
administration.
C. Maurice
INSURANCE
■ Tim McClain has been Snook
named president-government and other business for Louisville-based Humana Inc. Orie Mullen has been selected to lead Humana Military
Healthcare Services, succeeding current
Humana Military Healthcare Services CEO
Dave Baker, who has announced plans to retire.
MEDIA
■ Willie Sawyers, publisher of The (London)
Sentinel-Echo has been named regional publisher with oversight of both the London
paper and The (Corbin) Times-Tribune. Sawyer
succeeds former Times-Tribune publisher Rob
McCullough, who has been named publisher
of The (Somerset) Commonwealth-Journal.
DEPARTURES
■ Janie Miller, secretary of Kentucky’s Cabinet for Health and Family Services, has
resigned to pursue other opportunities.
■ Len Heller, vice president of the University of Kentucky’s Office for Commercialization and Economic Development, retired
from the position effective March 1.
■ Dr. Edward C. Halperin has resigned
from his position as dean of the University
of Louisville School of Medicine to become
chief executive officer and chancellor for
health affairs at New York Medical College
and provost for biomedical affairs and
Touro College and University System.
UTILITIES
■ Linda Bridwell has been named manager
of rates and regulation for Kentucky American Water.
OTHER
■ Beth Avey has been named executive director of the Regional Leadership Coalition, a bistate, non-partisan organization of leaders in
the Greater Louisville/Southern Indiana.
■ Trish Dever has been named public relations director of The International SPA Association, which is headquartered in Lexington.
■ James C. Baughman Jr. has been
appointed chief executive officer of Office
Suites PLUS, a Lexington-based office suite
provider. Brian Tucker has been appointed
vice president of operations support for the
company. Tena Adams has been named
appointed vice president and controller.
■ Greg Hoover has been named president
and chief executive officer of Louisville-based
A. Arnold World Class Relocation.
■ Keith Trawick has been named chief information officer for Urban Active Fitness, a Lexington-based fitness chain.
MARCH 2012
19
3/9/12 1:13 PM
LANE ONE-ON-ONE
Kentucky’s leaders express their opinions
Dr. Gary Ransdell
Dr. Gary Ransdell has served as president of
Western Kentucky University since 1997.
Under his leadership, WKU has been the
fastest growing university in the state for 14
consecutive years, with enrollment swelling
from 14,500 to 21,000. In addition, the university is in the process of a complete
rebuilding of its campus. Ransdell is a graduate of WKU and earned his doctor of education degree from Indiana University.
Prior to returning to Bowling Green as
president of WKU, Ransdell served as director of alumni relations at Southern Methodist University and vice president for
administration and advancement at Clemson University. He has also played an active
role in the community, serving on the
board of directors of the Bowling Green
Area Chamber of Commerce, the Intermodel Transportation Authority of South
Central Kentucky and the Warren County
United Way Campaign.
‘THERE’S A LOT OF
MAGIC IN BOWLING GREEN’
President Gary Ransdell outlines how Western Kentucky University
partners with government and business to benefit the community
BY ED LANE
Ed Lane: You became pr esident of
Western Kentucky University in 1997
and your employment contract has been
extended several times by the university’s Board of Regents. What do you consider to have been significant events or
initiatives during your 15 years of ser vice to and leadership of the university?
Gary Ransdell: I’m in my 15th year. Jim
Votruba at Northern Kentucky University was hired about four months
before me. Jim is retiring this year and
that kind of scares me because it makes
me think, what am I doing wrong? Why
am I not near that moment? I’m a
much younger person than Jim
Votruba; I’m years younger (big smile).
Jim and I are great friends and I’m
envious of him.
A couple years ago the board and I
worked out an agreement for 10 more
years. Well, I still run into people today
that say 10 more years; that’s great. I
have to remind people that the contract
extension was a couple of years ago
when we said 10 more years. I am in for
the long term and could not be having
more fun; the job is very satisfying.
You asked me a question that makes
it a little hard for me to be modest, but I
would answer that in different ways.
First: attitude. The board challenged
me in 1997 to lead a transformation in
20
MARCH 2012
every aspect. The campus was tired and
needed to be rebuilt. Our academic
programs were complacent. In fact,
complacent is probably a good word to
describe the entire university. It hadn’t
grown much in numbers or dollars. Our
ambitions were modest, and I think at
that time WKU was satisfied being a
good regional university.
Fortunately, we had a Board of
Regents that wanted no part of that.
Nor did I. As an alumnus who had been
on an 18-year road trip with Southern
Methodist University and then at Clemson University as a vice president, I was
interested in coming back to WKU, but
only if I had a board that was as aggressive, bold and aspirational as I was. And
that was the case.
The first and perhaps most important thing was raising the sights of the
institution, changing the attitude, creating an entrepreneurial spirit and understanding that nobody works for anybody
else; we all work with each other. What
are we capable of becoming? And how
do we chart a course to achieve it? Fortunately the faculty, administration,
board and an alumni population all
said, it’s about time – let’s go for it.
First, we completely eliminated the
word “regional” from our vocabulary.
WKU is all about national prominence,
and consequently we set our sights
accordingly. WKU’s vision today is driving its strategic plan to be a “leading
American university with international
reach,” making sure WKU’s academic
programs were relevant, timely and
market driven. A “leading university”
can be measured in a lot of ways. WKU
tracks 15 to 20 measures to validate that
the vision is being achieved. A big part
of the vision is three words – “with international reach” – and what WKU is
doing internationally.
Next, from a physical standpoint,
WKU had to rebuild the campus. It was
tired, with a lot of deferred maintenance. Not much had been invested in
the campus since I was a student during
the late 1960s and early 1970s. WKU
had only built one academic building
since 1976. When I started, our residence halls were just deplorable. A
major challenge was restoring a sense of
place, pleasantness, comfort and quality. WKU has invested about a half billion dollars in construction since 1998.
I’m proud of that.
The investments have been very entrepreneurial. Only about 20 percent of the
funding has come from the state; the rest
has come from private sources, the federal
government, entrepreneurial balance
sheet recapitalization, and partnerships
with the city and county governments.
The third would be financial: WKU
had to change its financial profile. We
immediately embarked, from 1998 to
2003, on what ended up being a $102
million capital campaign. This spring
and summer, WKU will achieve its $200
million capital campaign goal. The
endowment has grown from $14 million
to about $120 million; it’s recovered
from the 2008-2010 recession. Our cash
flow has gone from $2 million a year to
about $20 million a year.
WKU is becoming much more
focused, structured, organized and
aggressive in research grants and contracts. WKU was doing pretty well with
direct appropriations and earmarks at
the federal level – right up until those
went away. That set us back a little bit,
because earmarks were driving a lot of
WKU’s research and quality-of-life initiatives across this region.
Initially, tuition at WKU was underpriced within its market. We were very
aggressive with tuition for six or eight
years in a row and even had a couple of
mid-year tuition increases to do strategic things. That window has passed, and
WKU’s tuition is now stable and equitably priced within the marketplace in
Kentucky and surrounding states. The
decisions on pricing have served the
university well.
3/9/12 1:13 PM
EL: WKU prepares a strategic guide that
sets goals and per formance standards.
The 2010-2012 guide said, “The r evenue goals of the 2007-2012 strategic
plan had been r endered moot by the
global recession. The intent of this
abbreviated strategic plan is to allow the
university to measure the realities heading into the 2010-2012 biennium. The
three primary priorities of the 20102012 plan focuses on academic quality ,
efficiency and sustainability, and physical plant impr ovement.” Could you
comment on how the university has progressed in these areas?
GR: Between 1998 and 2008, WKU had
a very corporate-like strategic planning
model – very data driven: Everything
had to have a precisely identified outcome that WKU could measure. Our
team would update the guide every
three to five years and each year prepare a report card that stated how WKU
was doing. In 2008, WKU approved a
pretty aggressive five-year plan, and
things were rocking along pretty good
in fall 2008 until November/December.
That’s when I learned how the word
recession was spelled.
All of a sudden WKU got a call from
Gov. Steve Beshear saying we are going
to have to cut budgets. It’s been downhill ever since, and WKU had to take
$10 million out of its budgets. The budget cut WKU is currently dealing with is
another $5 million. The financial
underpinning of the strategic plan
WKU rolled out in 2008 had become
moot. WKU achieved most of the goals
in the 2008 plan but without the financial strength of state appropriations and
an anticipated tuition strategy.
What I did in 2010 was to call a “halftime.” I said let’s pause, catch our
breath, take stock of things, and continue to do strategic initiatives that are
opportunistic. Now, we’ve charged out
for the second half. The strategic plan
that WKU is creating right now has the
entire campus engaged, and we’ll roll it
out this coming August.
EL: WKU is an innovator in on-campus
student housing. Could you comment on
the financial model that has worked well
for WKU, as well as any ar eas in which
future enhancements could be made?
GR: WKU was the first university in the
state to renovate a state building using a
general obligation bond issued by a
county. A municipality actually financed
the improvement – it was a Bowling
Green city bond.
WKU’s residence halls in 1997 were
deplorable and probably the university’s
most pressing physical problem. As the
University of Kentucky is doing right
now, WKU was not going to solve the
problem in the conventional way by renovating one residence hall at a time.
Renovating buildings is a long process.
WKU had 17 residence halls.
In a nutshell, WKU is doing what UK
is doing, except there are no middle
men. WKU keeps every penny of the
profit and reinvests it right back into
those properties and continues to do so
to this day. WKU didn’t go to a private
sector company to do it; it created a
501(c)(3) not-for-profit corporation,
Student Life Foundation. I appointed
an eight-person board and continue to
appoint that board.
WKU sold its residence halls to SLF;
WKU had $22 million in outstanding
debt on those buildings, plus they
needed to be renovated. So, the first
thing the SLF did was issue a $65 million tax-free bond pledged against revenues from those beds. SLF signed an
agreement for the university to manage
the properties. It’s an invisible transaction to the students – the students pay
their housing fees; the fees come to our
offices; all that money is transferred to
the Student Life Foundation. SLF has
done all the construction, managed
every renovation, and is now paying
cash for new beds. With such a good
business model, WKU has been able to
keep the pricing of student rentals in
the middle of the pack of Kentucky universities because it is not paying a middle man and there’s no profit margin.
All 17 buildings are now renovated.
Moody’s bond rating is not a factor
since SLF is a completely different foundation and bought WKU’s properties.
The first $22 million SLF spent was to
pay WKU for the properties and the balance of the bond proceeds was reinvested in renovations. It’s been an
incredible plan.
WKU had to obtain legislative authorization because it sold WKU’s property.
It took a lot of trips to Frankfort and a
leap of faith because, at the time, I was
not a known entity and the concept was
entrepreneurial, appeared to be risky,
and had never before been done on a
public university campus in America.
What made us think WKU could do it? I
said, “Because it’s a sound business
plan.” I don’t mind taking risk if the
reward-risk ratio is good.
EL: Warren County, the City of Bowling
Green and WKU have been using tax
increment financing (TIF) funds to revitalize the central business district and
the WKU campus. How well has the TIF
worked for the university?
GR: The name of the Bowling Green
TIF is WKU Gateway to Downtown Bowl-
Gary A. Ransdell Hall, a $35 million, 120,000-s.f.
LEED Gold certified building at Western Kentucky
University, houses the College of Education and
Behavioral Science.
ing Green. That’s what the city, county
and WKU took to the General Assembly
to get this TIF and the $150 million
threshold spend by 2014. Mayor Bruce
Wilkerson (and former mayors), County
Judge-Executive Mike Buchanon, the
Bowling Green Chamber of Commerce
and I work very well together. There’s a
lot of magic in Bowling Green right now
– teamwork and cohesion, vision and
“sure we can do that!” kind of attitude.
A WKU alumni and conference center
is being built and is privately funded. The
rest of block 12 includes a parking garage,
and it’s being wrapped in apartment-style
student housing. A university police station will be located on the ground floor of
the parking garage, and we’re planning
retail space, a coffee shop, a fresh market
and a bookstore. We’re talking with a
developer right now – it’s not a done deal
– on that same site for a hotel that would
connect to the alumni center. All of these
initiatives are university driven. WKU will
not own these facilities but will lease
them. The net rental cash flows will make
the TIF work. The parking garage won’t
generate revenue.
WKU will move its entire School of
Nursing into a new medical center
building. This TIF project will allow the
School of Nursing to double its enrollment as well as accommodate the doctor of physical therapy degree program.
Employment demand in healthcare
allows this business plan to work, and
the cost of the facilities is being incorporated into the tuition pricing structure.
EL: U.S. Sen. Rand Paul is a resident of
Bowling Green. What is your r elationship with Kentucky’s junior senator?
GR: I did not know Rand before he ran
for office, even though he was a member of the medical community in Bowling Green. When he decided to run for
the Senate, I called and said, “Let’s get
together; we need to know each other.”
He laughed and said, “Yes, we do.” We
had a two-hour lunch about half way
through his campaign and have since
become great friends. He comes to
WKU ballgames and last year, before he
played in the congressional baseball
game, he came down and had batting
practice in our facility.
MARCH 2012
21
3/10/12 10:03 AM
LANE ONE-ON-ONE
WKU President Gary Ransdell with artwork
in his office that includes caricatures of all
the university’s presidents.
EL: Many university presidents have significant issues arise when overseeing the
athletic program. Could you comment on
your oversight of WKU athletics?
GR: Any president who’s going to stay in
his or her job over an extended period of
time has to understand the importance of
maintaining a close working relationship
with the athletic program.
The president who understands the
athletic program, appreciates the values it
brings, tracks it and can deal with a crunch
before it becomes an issue or a controversy, can stay out of trouble. But the minute a president starts ignoring it or
discounting its value is when an athletic
program can become problematic. WKU
has a rich athletic history. For me to downgrade athletics would be a major mistake
and would never be accepted by our
alumni population, if not our faculty, staff
and students. I love watching our students
compete – student athletes included.
EL: How has WKU enr ollment progressed in the last decade, and what is
your expectation for future growth?
GR: As WKU improved its campus and
facilities and recruited more highly credentialed faculty, it also built a world-class
honors college. WKU became the destination point for students and especially
the very good students. The applicant
pool has increased from 7,000 to 14,000
over the last 14 years, and our enrollment
has gone from 14,500 to 21,000 over that
period of time. So we’re doing a lot of
things right. People want to be a part of
WKU and enjoy its traditions and academic quality. Enrollment strategy is all a
part of WKU’s transformation.
WKU has regional campuses in
Owensboro, Elizabethtown and Glasgow
with about 5,000 students enrolled on
those three sites. Approximately 14,000
undergraduate students and 2,000 gradu22
MARCH 2012
ate students are on the main
campus.
WKU’s budget (over this
same period of time) has gone
from $130 million to $385 million. State appropriations have
gone from $60 million to $70
million – that’s with about a
half dozen budget increases
and about 10 or 12 budget cuts
over that period of time. State
appropriations have gone from
51 percent of the WKU budget
when I started this job to 18.6
percent today
WKU must continue to grow
modestly. I don’t want to be in
this job if enrollment declines because
that multiplies financial variables by taking money out of the budget.
EL: The Carol Martin Gatton Academy
of Math and Sciences opened at WKU in
2007. How does this program help high
school students?
GR: The Gatton Academy is driving academic quality on this campus. WKU has
for 30 years had the only center for
gifted studies in Kentucky higher education. WKU partnered with Duke University and the Duke Talent Identification
Program that identifies seventh- and
eighth-graders who scored in the 90th
percentile on ACT tests. These students
are recognized on campus then WKU
has summer programming for gifted
and talented students. When the Gatton
Academy was conceived, WKU wanted
to create a destination point for Kentucky’s best high school juniors and
seniors to enroll in a live-in academy
and to receive their junior and senior
year courses in our classrooms with faculty and students engaged in undergraduate research, studying abroad and
doing all the things our best undergraduates do. Fortunately, WKU went to
Frankfort when funding was possible
and the state appropriated $2.8 million
recurring to fund the academy. The
base appropriation covers the student’s
scholarship, housing, room and board,
books, tuition, spending money.
Bill Gatton made a gift of $4 million
(See cover story, page 32) and WKU
named the academy for Bill Gatton. When
students come to the academy, they know
they’ll graduate in two years with 60 hours
of college credit, basically combining the
freshman and sophomore years of college
with their junior and senior years of high
school; the high school students are taking
freshman and sophomore university
courses. These students are typically an
anomaly in their high school. Sometimes
they are ostracized or get into trouble,
some may drop out because they don’t
have peers and they are bored. Most public
schools and sometimes private schools
don’t meet their needs, but if you surround these students with their peers and
put them in a tenured faculty honors
course in physics, they are off the charts.
Bill Gatton is not on the WKU board;
he is a good friend and a visionary who
understood what the academy could
become. And now, after four years, the
Gatton Academy, according to Newsweek,
is the fifth leading public high school in
America and in U.S. News & World Report
it’s No. 6.
EL: Bowling Green and Warren County’s
combined population now exceeds
113,000, making it a top urban area in Kentucky. What initiatives helped the commu nity grow 23 percent in the past decade?
GR: The visionary leadership in this community and the passionate drive to
improve both economic opportunities and
the quality of life. I would like to think that
WKU is one of the major drivers in both
economic and population growth in the
county. WKU has grown from 1,000
employees to 2,300 employees and 14,500
students to 21,000 students. That helps
swell the population of our community.
About a half billion dollars a year of economic impact is pumped into the local
economy because most of WKU’s budget is
spent locally. And when you add students
into the community, they spend money
above and beyond what it takes for tuition,
housing and food.
EL: There’s been a number of people
from foreign countries moving to Bowl ing Green. How does that program work?
GR: Bowling Green has a diverse population and is a very embracing community.
It is a tolerant community and maybe a
bit unusual for a Southern town of its
size, but that’s just evolved. Again, the
university has largely been behind that
embracement and tolerance because university faculty and staff are a little more
open-minded on social matters and a little less rigid on matters that may have
plagued this nation and the South over
time. WKU embraces international reach
in its strategic plan and recruits students
and faculty here from around the world.
EL: Do you have a closing comment?
GR: I have the best job in the world. People are having fun, there’s great confidence, and the WKU spirit is as much
about the heart as it is about the head. And
that is the philosophy I want our graduates
to take with them when they leave. ■
Ed Lane ([email protected])
is chief executive of Lane Consultants,
Inc. and publisher of The Lane Report.
3/9/12 1:13 PM
MARCH 2012
23
3/9/12 12:47 PM
THE LANE LIST
LARGEST KENTUCKY BANKS
Ranked by Market Share
INSTITUTION NAME (KY HEADQUARTERS)
DEPOSITS (THOUSANDS)
KY OFFICER
KY OFFICES
PHONE
MARKET SHARE
WEBSITE
PNC Bank National Association (Louisville)135
9.32%
$6,438,227
(502) 581-7081 pnc.com
Head of Kentucky Operations: Chuck Denny
Fifth Third Bank (Louisville)
1077.13%
$4,922,854
(502) 562-5300
53.com
Fifth Third Kentucky President & CEO: Tom Partridge
JPMorgan Chase Bank (Louisville )
65
6.52%
$4,504,398
(502) 566-2002
chase.com
Kentucky Market President: Paul Costel
Branch Banking & Trust Co. (Louisville)89
5.62%
$3,878,155
(502) 562-5401
bbandt.com
Group/State President: Hoyt Almond
US Bank National Association (Paducah)
127
4.95%
$3,415,820
(270) 575-5238
usbank.com
Kentucky Market President: Bill Jones
Community Trust Bank Inc. (Pikeville)70 3.42%
$2,360,904
(606) 432-1414
ctbi.com
Chairman, President & CEO: Jean Hale
Republic Bank & Trust Co. (Louisville)
35
2.50%
$1,724,192
(502) 584-3600 republicbank.com
Chairman & CEO: Steve Trager
Central Bank &Trust Co. (Lexington)23 2.33%
$1,610,178 (859) 253-6017 centralbank.com
Chairman, President & CEO: Luther Deaton Jr.
PBI Bank (Louisville)
19
2.10%
$1,452,070 (502) 499-4800 pbibank.com
President & CEO: Maria Bouvette
Bank Of Kentucky Inc. (Crestview Hills)
31
1.96%
$1,355,766
(859) 372-9740
bankofky.com
President & CEO: Robert Sapp
Stock Yards Bank & Trust Co. (Louisville)20
1.83%
$1,265,238
(502) 625-1790
syb.com
President & CEO: David P. Heintzman
Whitaker Bank (Lexington)
39
1.81%
$1,252,328
(859) 543-4000
whitakerbank.com
President & CEO: Tom Hinkebein
First Federal Savings Bank of Elizabethtown (Elizabethtown)
18
1.47%
$1,018,059
(270) 765-2131
ffsbky.com
President: Greg Schreacke
Independence Bank Of Kentucky (Owensboro)
20
1.25%
$860,382
(270) 686-1776
1776bank.com
CEO: Chris Reid
Traditional Bank Inc. (Mount Sterling)
12
1.24%
$855,218
(859) 498-0414
traditionalbank.com
President: William Averson
Forcht Bank National Association (Lexington)
34
1.14%
$789,061 (859) 264-2265
forchtbankky.com
President & CEO: Tucker Ballinger
Regions Bank (Paducah)
16
1.14%
$785,315
(270) 441-1269
regions.com
Market President: Barry Smith
Heritage Bank (Burlington)
11
0.98%
$675,040
(859) 586-9200
heritagebank-ky.com
President & CEO: H. Lytle Thomas
Commonwealth Bank & Trust Co. (Louisville)
16
0.94%
$650,205
(502) 259-2160
cbandt.com
Chairman & CEO: Ann Wells
Old National Bank (Louisville)
170.93%
$641,612
(502) 540-7300
oldnational.com
Region Chief Executive Officer: Dennis P. Heishman
Farmers Bank & Capital Trust Co. (Frankfort)
9
0.82%
$569,214
(502) 227-1600
farmersbankky.com
CEO & President: Lloyd C. Hillard Jr.
First Southern National Bank (Stanford)
22
0.80%
$551,727
(866) 602-3762 fsnb.net
President and Chairman: Jess Correll
Monticello Banking Co. (Monticello)
12
0.79%
$548,902
(606) 348-8411
bankatmbc.com
CEO: Mack Butler
Kentucky Bank (Paris)
14
0.75%
$517,530
(859) 987-1795
kybank.com
President: Louis Prichard
Citizens Union Bank Shelbyville (Shelbyville)
16
0.71%
$493,297
(866) 633-4450
cubbank.com
Interrim CEO: Darryl Traylor
Source: FDIC
24
MARCH 2012
3/9/12 12:47 PM
MARCH 2012
25
3/9/12 12:47 PM
BANKING & WEALTH MANAGEMENT OUTLOOK
Partly Sunny, But Keep
an Eye on Those Clouds
facturing base, the commonwealth also
stands to benefit disproportionately
from the recent trends of “reshoring,”
the return of manufacturing jobs to the
United States from production previously outsourced abroad.”
Banks and businesses have improved balance sheets
and see 2012 building on improvements seen in 2011
BY LANE REPORT STAFF
K
E NTUCKY bankers and
investment advisers generally see 2012 as a year of continuing slow improvement
in the economy. Many companies have improved their balance
sheets, and some are building significant
reserves. But bankers are working harder
for their net margins in today’s tougher
regulatory environment. Customer service is viewed increasingly as a primary
competitive battlefield.
The general buzz being heard from
customers and the business community is
becoming increasingly positive but still
tentative. The dark days of 2008 and 2009
left a deeply cautious mood. Meanwhile,
the tenuous state of the European economy, concerns about federal government
finances and a possible spike in oil prices
that could dampen or reverse U.S. job
growth are worrisome clouds that continue to linger on the horizon.
26
MARCH 2012
Wealth managers expect equities
markets to rise modestly in 2012, and
believe homework in selecting individual companies to invest in could be well
rewarded. Bond market profits, however, will be rarer.
“When we look back at
2011, we started to see
some confidence building in the economy. We
view 2012 as a year with
similar economic results
but with greater confiTom
dence in the future.
Partridge
Growth may be restrained
President &
as households continue
CEO
Fifth Third
to rebuild their balance
Bank Kentucky sheets, but the renewed
faith in the economy will
support better investment trends. Kentucky will participate in the improving
national picture. With our strong manu-
“Chase continues to see
very positive growth in the
fundamental measures we
track. In 2011, U.S. deposits were up $25 billion,
and we added 200-plus
branches and 3,800 new
Paul Costel
bankers. Our commercial
Kentucky
banking achieved record
Market
revenues of $6.4 billion
President
and net income of $2.4
Chase
billion. Chase had a seventh consecutive quarter of growth in
loans to mid-sized businesses and more
loan demand from small business, which
should help job growth. Credit quality
continued to be strong. Continued jobs
improvement will help stabilize the housing market; in December, the Kentucky
unemployment rate dropped to a threeyear low of 9.1 percent. Household formation has been half its normal level
since the Great Recession, but economists say it will come back with job creation. Housing is very affordable as
prices and mortgage rates have fallen,
and growth in population and employment should help stimulate demand.”
“The corporations we
deal with in Kentucky
have built cash over the
last three years or so, and
are anxious to employ
that money. We’re starting to see them do that
Hoyt
now, making investments
Almond
in additional equipment,
Regional
inventory and some perPresident,
Western
sonnel. There will be
Kentucky
more loan demand and
region
lending by banks. Banks
BB&T
also have built capital
and have recapitalized over the last
three years and are looking for revenue
in the form of loans, their No. 1 revenue source. It’s encouraging.”
Continued on page 28
3/9/12 12:47 PM
MARCH 2012
27
3/9/12 12:47 PM
Continued from page 26
“U.S. Bank achieved loan
growth this past year in all
sectors: commercial, small
business and consumer.
We continue to see businesses and individuals
select financial companies
William
that have a strong balance
J. Jones
sheet, offer value pricing,
Division
an array of capabilities
manager,
South-East
and various delivery chanCommunity
nels such as Internet and
Banking
mobile banking. This
U.S. Bank
‘flight to quality’ has benefited U.S. Bank. Prospects for 2012 call
for continued steady improvement in the
economy with interest rates remaining
low, and housing and unemployment
improving slowly. Many individuals seem
to be on the sidelines right now, waiting
to see the outcome of the federal election
and the direction our government is
going to take on taxes, regulatory oversight, deficit and other critical issues.”
“We see improvement in
national and local economic conditions. However, some business sectors,
particularly coal and natural gas, are negatively
impacted by low demand,
Jean R. Hale low prices and the regulaChairman,
tory environment. As with
President
the downturn, economic
and CEO
improvement varies by
Community
community, as it does by
Trust Bancorp
Inc.
state. Kentucky is weathering weak conditions better
than many states. Increased employment,
small-business activity and improved consumer confidence are necessary to again
have a vibrant economy. Diversity of the
economic base of the geographic areas
Community Trust serves in Kentucky, West
Virginia and Tennessee has allowed us to
continue our history of profitability. We
exceed peer institutions in earnings while
providing a strong dividend to shareholders. This financial strength is allowing us
to seize opportunities as the economy continues its recovery.”
“For 2012, the banking
industry faces formidable
challenges. Regulatory
burdens, while wellintended, severely restrict
the industry’s ability to
serve customers. Slow
Steve Trager
economic growth,
Chairman and
reduced loan demand,
CEO
low interest rates, volatile
Republic Bank
markets and restrictive
regulations all play a part in the challenge for bankers. Soundness and sol28
MARCH 2012
vency, balanced with generating returns,
are the industry’s new imperatives. This
challenging environment makes it difficult for the smallest banks to profitably
compete. We believe Republic’s size and
strong capital base well positions us to
help our customers and communities
through still difficult times. The industry as a whole needs to return to the
basics: putting the needs of the customers and the communities we serve first.”
“As community bankers,
Traditional Bank has
managed through difficult economic times and
continues to lend money
to businesses and consumers in all our marBill Alverson
kets. We see economic
President
conditions improving.
Traditional
We continue to take our
Bank
customer relationships
very seriously and strive to know our
customers on a personal level so we can
help maximize their growth potential.
As an SBA preferred lender, we are
able to provide quicker responses to
our clients, which allows them to focus
on the more important task of growing
their business.”
“After a four-year contraction, there seems to
be a light at the end of
the tunnel – the tunnel
being 2012. Jobs have
begun a slight rebound
and limited economic
Tom
growth is sur facing.
Hinkebein
Unlike previous recoverPresident
Whitaker Bank ies, this one will be slow
yet hopefully steady. Several problems still could impact the
recovery: European debt, oil price insta-
bility, job creation and our own federal
government debt. Any of these factors
heading south could adversely affect the
recovery. Each relates back to our state
economy, but the most significant factor
for Kentucky is jobs. Whitaker Bank
positioned prior to the downturn as a
safe, sound institution, and financial
performance has been good. In 2011,
we took advantage of technologies to
improve cost effectiveness and meet
today’s consumers’ needs.”
“Kentucky’s economy has
begun to recover slowly
from the recession that
gripped our nation.
Employment has not
improved to any great
extent because companies
Luther
are maximizing existing
Deaton Jr.
workforce productivity.
Chairman,
Unemployment has
President
declined but remains in
and CEO
Central
double digits in many
Bancshares
areas of the state. ConInc.
sumer spending has been
slow to recover, but home
sales are crawling upward finally. Interest
rates should remain at current levels at
least through the end of 2012, which
may help housing more. The banking
industry, and community banks in particular, are working daily with consumer
and business customers to examine
opportunities that will lead to a more
positive economic environment for all
our citizens. To this point, loan demand
has been very soft, along with consumer
confidence. We hear more positive signals from local business owners, but it
remains to be seen if 2012 will be the
‘comeback year.’”
Continued on page 30
3/9/12 12:47 PM
MARCH 2012
29
3/9/12 12:47 PM
Continued from page 28
“Financial institutions of
the FDIC Western Kentucky district rank in the
top 10 percent among performing banks in the
nation. This community
bank core consists of busiChris Reid
ness conservatives who
President and
thrive in a solid agriculture
CEO
and small-business ecoIndependence
Bank
nomic region. Western
Kentucky’s diverse economy of has seen fewer woes than the rest of
the nation, and our regional economy has
generally performed better. Construction
is slow but performing reasonably fair;
companies trimmed overhead early in the
recession. The outlook for the financial
institutions in western Kentucky is good
with very few problem banks. Competition
is brisk; large regional banks are working
to regain market share lost by credit curtailment. Return on equity performance
will be reasonably fair the next few years as
interest margins continue to be squeezed.”
“I am frequently asked
about ‘the future of banking in our community
market,’ which isn’t easy to
answer. My reply is that we
woke up one morning,
looked in the mirror and
Tucker
didn’t like what we saw; we
Ballinger
can’t predict the future,
President
but we can learn from the
Forcht Bank
past. Community banks
are stronger today because of the challenges we’ve overcome and continue to
work through. The regulatory environment is one of the most significant challenges facing community banks, which
are working to ensure regulatory compliance is embedded in daily processes.
Forcht Bank is getting back to the basics,
starting with our customers. Because
banks offer very similar products and services, how we deliver them makes a difference. Our mission is to understand our
customers, team members and community markets to ensure we consistently
exceed expectations.”
“Financial markets have
recovered dramatically
from their lows during the
crisis, although clearly
there are still strains on our
economy resulting from
high unemployment and
Todd P.
continuing housing diffiLowe, CFA
culties. We continue to
President
expect modest returns
Parthenon
from the domestic equity
LLC
markets the next few years;
bond investors will struggle to find ade30
MARCH 2012
Henry E. Lee
President
Taylor County
Bank
quate yields. The finance industry has contracted and consolidated dramatically;
most institutions raised capital and deleveraged their balance sheets as much as possible. This trend is likely to continue
(perhaps mandated by regulators) for
some time. Investment advisors adept at
serious analysis of companies may have
interesting opportunities in the next several years as the fallout continues. Independent advisers’ growth seems likely as
investors seek help structuring portfolios to
best withstand the headwinds that we face.”
“With interest rates
remaining low for the near
future, we will have to work
hard to keep our net margins. People are refinancing loans to take advantage of a lower rate;
the cost of compliance will increase our
expenses. My prediction for our bank
remains strong. We must be proactive to
ask for business. Kentucky banks are
strong and will continue to do well. We all
must understand that we are in retail and
must keep the customer happy.”
“Admittedly, the U.S.
economy endured a tremendous setback with
the financial apocalypse
of 2008, but we have
shown consistent signs of
recover y in 2011 and
Thomas
early in 2012. I expect
P. Hirsch
corporate earnings will
Kentucky
grow a modest amount
Complex
Manager
this year. Balance sheets
Raymond
are actually quite strong
James and
as companies have genAssociates
erated significant cash
and deleveraged. The Federal Reserve
has stated it is committed to keeping
interest rates at a low level. This means
investors who invest in quality companies will be rewarded for the risk they
have taken.”
“Our 2012 outlook is positive. We believe markets
should continue to
improve, driven by growing private-sector employment and corporate
earnings. International
John
unrest, budget deficits
Gardner
and rising interest rates
Senior Vice
are our primar y conPresident Complex
cerns. We are excited
Manager,
about our local market
Bluegrass
share growth. Our goal is
Complex
to become the destinaWells Fargo
tion of choice for KenAdvisors LLC
tucky’s most sophisticated
clients and advisers.” ■
Responses compiled by Kathie Stamps.
3/10/12 10:07 AM
MARCH 2012
31
3/9/12 12:48 PM
COVER STORY
Bill Gatton’s Generous Spirit
Carol Martin “Bill” Gatton has been a well-known
car dealer in East Tennessee for more than 45
years. His began with a Volkswagon dealership
in Owensboro in 1959 and has owned as many
as 10 dealerships at a time.
Man behind UK’s business school and WKU’s academy is
‘investing’ fruits of seven decades of success into education
BY DEBRA GIBSON
W
HERE to begin? When
the subject is Carol
Martin “Bill” Gatton
there isn’t a simple
answer.
There is Gatton’s success with automobile dealerships. This is where his
adult entrepreneurial career officially
began, where “Wild Bill” was created,
and where Gatton earned the capital to
purchase numerous banks.
Gatton’s even greater success in
banking is yet another story. He owned
controlling interest in a succession of
banks, and from 1981 to 2002 he was
chairman of Area Bancshares of Owensboro, the largest bank holding company
headquartered in Kentucky at the time.
Even Gatton’s earliest days growing
up on a farm in western Kentucky bear
mention. Gatton made his first precocious business transaction at age 8 when
he bought six acres of land for $600.
The grade-schooler put the property in
32
MARCH 2012
his older sister’s name since he was too
young to legally pass title, and by age 12
he had doubled his investment – a preview of things to come. On the farm he
also earned the money to pay for college at the University of Kentucky.
There’s a stint in the Army, an MBA
in finance and banking from the Wharton School of Business at the University
of Pennsylvania, and hundreds of television commercials that he said made him
“better known than the U.S. senators
from Tennessee and Virginia.”
Now approaching 80 and still very
active, Gatton’s life focus is on investing.
Don’t look for stock tips, though.
Rather than equities, Gatton has chosen
to invest in the education of others. He
has donated more than $33 million to
educational institutions, plus substantial
gifts of land, and said his goal is to give
back as much as possible of the wealth
he has built up over the arc of a successful life. He is “the” Gatton of the UK
Gatton College of Business and Economics in Lexington and of the Gatton
Academy of Mathematics and Science at
Western Kentucky University in Bowling
Green to name just two of the myriad
educational institutions he has supported financially.
This generous spirit is the first thing
you notice when you meet Gatton. The
morning of a recent Lane Report interview, he is on the 18th floor of UK’s Patterson Office Tower, its sweeping views
of the university beckoning from a wall
of windows.
Gatton had driven 210 miles from his
Kingsport, Tenn., home the previous
day for afternoon and evening meetings
that went until nearly 11 p.m., fulfilling
responsibilities as a UK Board of Trustees member. (He began a six-year term
on the elite panel in 2009.) Committee
meetings had resumed at 8 a.m. – with
Gatton chairing the Investment Committee session – and would flow into the
main session in the afternoon.
Despite an already full schedule, Gatton is willing to talk between meetings. He
offers a quiet smile, a strong handshake
and an attentiveness that would make you
believe he has all the time in the world to
talk about his life and why education is
the focus of his extensive philanthropy.
Learning when to take a risk
But Gatton’s story does not begin here
in the rarified company of UK’s elite.
His story has the humbler beginnings of
many in his generation – on a farm. It
Gatton Farms, just outside Bremen in
Muhlenberg County, has been a family
operation since the 1840s.
3/10/12 11:16 AM
Carol Martin “Bill” Gatton has given more
than $33 million to an array of educational
institutions. The following list was accurate
as of February 2012.
Kentucky
•Kentucky Wesleyan University
•McLean County Board of Education
•McLean County High School
•Muhlenberg County High School
•Sacramento Elementary School
•Transylvania University
•University of Kentucky
•Western Kentucky University
•Western Kentucky University Gatton
Academy of Mathematics and Science
Tennessee
•Bristol Tennessee City Schools
•Sullivan County Schools
•Washington County Schools
•Johnson City Schools
•Tri-Cities Christian School
•Mountain Empire Baptist School
•The Academy at King
•East Tennessee State University College
of Pharmacy
•King College
•Middle Tennessee State University
Virginia
•Bristol, Virginia Public Schools
•Washington County, Virginia Public
Schools
•St. Anne Catholic School
•Sullins Academy
•Appalachian College of Pharmacy
•The University of Virginia at Wise
•Emory & Henry College
•Mountain Mission School
•Oak Hill Academy
•Virginia Intermont College
•Virginia Tech
Others
•Lees McRae College
•University of Pennsylvania
•Junior Achievement of Tennessee
•Junior Achievement of Virginia
•Junior Achievement of Owensboro
was on his father’s 1,700-acre farm outside the tiny western Kentucky community of Bremen that a young Gatton
learned to work hard, a lesson that
served him well.
Gatton Farms, dating to 1840,
remains a going concern, known today
for its Father’s Country Hams brand
launched in the 1950s.
“There was many a morning before
daylight that I would be throwing silage
out of a silo with no roof on it in the sleet
or rain,” Gatton recalled. “I also grew
watermelons and other crops and sold
them on the side of the road. I worked in
tobacco and raised beef cattle and hogs.”
But it was a financial life lesson
learned on that farm that perhaps
served him better. This lesson was in
calculated risk.
“My father missed two opportunities
that would have made him wealthy
because he was afraid to go into debt,”
Gatton said. “He had seen neighbors
lose their farms during the Great
Depression, which made him afraid to
take risks. Each of those two opportunities could have made him millions.”
Gatton also saw another side of calculated risk. His Uncle Charlie (Martin)
was an entrepreneur who became
wealthy in coal, farming, banking and
retail. Martin was an inspiration to the
young boy and helped him realize risk
was an essential part of financial success. Gatton also was aware of the half
dozen or so men in nearby Greenville
who had made millions during the worst
economic time ever, the Great Depression, by operating coal mines.
Those lessons coalesced with Gatton’s
natural temperament: an optimistic, cando spirit that still finds second place
unacceptable. A young man willing to
work both hard and smart emerged.
“In grade school, we all sold garden
seed and magazines to help support the
school,” Gatton said. “I sold more than
all the rest of the students combined
and believed that if I couldn’t sell more
than everyone else combined, then I
had failed.”
That competitiveness also showed up
in high school. Gatton had just transferred to a school in Sacramento, Ky.,
and it needed someone to represent
them in the Future Farmers of America
speech contest. With only a week to prepare, Gatton managed to place fourth
among 16.
“I told myself then that I was going to
win state the next year,” he said. “I did,
and then went on to Eastern Regionals
in Madison, Wis., where I tied with a boy
from Minnesota because my speech was
(penalized for being) 40 seconds too
long. Since we tied, we had to make our
speeches again the next day. It was the
first time I ever had a headache. The
other boy barely beat me. I always
wanted to win.”
Two years later in 1950, Gatton was
elected state FFA president.
By this time, the high schooler
already was an experienced businessman who had made “a good bit of
money.” He used those profits to attend
the University of Kentucky – the only
college the high school valedictorian
was interested in attending.
Preparation and a preview
Agriculture was Gatton’s first major at
UK, a natural since his father and two
older brothers were all successful farmers. By his junior year, however, the
Staff photo
Contributing
to Education
Bill Gatton graduated from the University
of Kentucky in 1954 with a bachelor’s in business
administration, then after two years in the Army
earned an MBA at the University of Pennsylvania’s
Wharton School of Business.
young man had discovered what would
become his lifelong passion: business.
In addition to his classes, Gatton began
working part-time at the nearby L.R.
Cooke Chevrolet/Cadillac dealership
then in downtown Lexington.
“When I sold seven cars in six days, I
thought I’d hit the bottom of Fort
Knox,” Gatton said.
He graduated from UK in 1954 with a
bachelor’s of science in business administration. Two years in the Army followed.
Then, in 1956, at the recommendation of
the dean of what was then the UK College of Commerce, Gatton headed for
the University of Pennsylvania’s prestigious Wharton School of Business.
There he learned a lot more about
calculated risk.
“When I finished graduate school, I
had offers from prestigious companies
in the East,” Gatton said, “and I almost
accepted a few of them, but I really
wanted to go into business for myself. I
knew if a took a job with one of those
firms, I would never leave because the
benefits would be so good.”
Gatton signed on for $300 a month
with Security Trust Co. in Lexington
and started putting into practice what
he had learned at Wharton. In 1959 –
just a year after grad school – Gatton
borrowed $25,000 from his father and
started Bill Gatton Motors Inc. in
Owensboro, a Volkswagen dealership
that was only the third in the state. He
was the youngest Volkswagen dealer in
the nation for a several years.
MARCH 2012
33
3/10/12 10:09 AM
COVER STORY
‘Wild’ Bill Gatton
Part of the genius of successful business people is knowing when to step out the comfort
zone and trust others. Such was the case for
Gatton when he hired advertising guru Jackson Brown (the writer, not the singer) to
create ads for his first car dealership.
Brown came up with “Wild Bill,” a loud,
zany guy who would do most anything to sell a
car. The character was the polar opposite of the
real Gatton, but Gatton recognized a good idea
when he saw it.
“Brown had written a ballad that got a dentist from Memphis elected governor, the first
Republican elected in 65 years,” Gatton said.
“The dentist never even said a word on the
commercials. Whether I liked it or not, I figured I had better try it if he (Jackson Brown)
was able to do that. “Wild Bill” ultimately
became an icon in the community.
Wheels and other deals
Gatton wasn’t just interested in depositing money in a bank, however. He was
interested in owning a bank, and in
1963 he got the chance. Gatton became
director and chairman of the executive
committee of Central Bank & Trust Co.
of Owensboro.
For the next several decades, Gatton
bought and sold controlling interest in
banks in Kentucky and invested in
banks in Tennessee. He purchased car
dealerships in Tennessee, Texas and Alabama. He also ventured into real estate.
In 1965, Gatton sold the Volkswagen
dealership and after some world travel
bought a Chevrolet/Cadillac franchise in
Bristol, Tenn., and moved there – he had
a similar offer in Atlanta but calculated
there’d be much more competition
there. Eventually, Gatton owned 10 dealerships, including Bill Gatton Honda in
Staff photo
“Volkswagen was nothing but Beetles
back then,” Gatton said, “and nobody
really wanted that dealership; no one
thought it would be a success.”
Except Gatton, who accurately calculated the risk – and had the last laugh all
the way to the bank.
Bristol, Tenn., and Howdy Honda in Austin, Texas, which he still owns.
Gatton was even more successful in
banking. From 1981 to 2002, Gatton
served as chairman of the board of Area
Bancshares of Owensboro, the largest
bank holding company in Kentucky during that time. The company, which Gatton and four partners started, acquired
16 Kentucky banks with 65 branch
offices from Harlan to Paducah.
“We went from $100 million in assets
when we bought the first bank to $3 billion in assets,” Gatton said. In March of
2002, he and his partners sold the holding company to BB&T for $340 million.
Gatton is believed to remain the largest
individual stockholder in WinstonSalem, N.C.-based BB&T.
“For years I regretted selling,” Gatton said, “but you couldn’t find a finer
group to sell to than BB&T.”
Giving it all back
Gatton thought about retiring at several
points along the way.
“I said I would retire when I was 30,”
Gatton said. “Then when I was 30, I said
I would retire at 40. At 40, I said 50; and
at 50 I said maybe I would retire at 60.
At 60, I decided I would never retire.”
Instead, Gatton now focuses on supporting education through the foundation he established in 1985. Today, the
foundation has a net worth of approximately $50 million.
In 1995, Gatton gave $14 million to
UK for what is now the Gatton College
of Business and Economics. And he
didn’t stop there.
“Mr. Gatton, with gifts approaching
$20 million, is the single largest donor
in the institution’s history,” said Jay
Blanton, spokesman for UK.
Gatton also donated $4 million to
help form the Carol Martin Gatton
Academy of Mathematics and Science, a
residential program for gifted Kentucky
high school students who are interested
in a career in science, technology, engineering and mathematics.
Besides benefiting its students, the
academy is also a potential boon for
economic development in the state,
since many good-paying jobs require
high-level math and science skills. That
fact is not lost on Gatton.
“He understood the economic development aspect of this,” said Gary Ransdell, president of Western Kentucky
University where the Academy is
located. “Bill recognized that and was
willing to support it.”
Gatton also recognized the need for
a private pharmacy school in East Tennessee and became the largest donor
for what is now the Gatton School of
Bill Gatton, center, chairs an Investment Committee
meeting of the UK Board of Trustees on Feb. 21.
34
MARCH 2012
3/9/12 12:48 PM
Pharmacy at East Tennessee State University. Until the school opened in 2006,
the state’s only pharmacy school was
more than 550 miles away in Memphis,
forcing area students to attend private
schools or pay out-of-state tuition.
He helped save Virginia Intermont
College by donating $1 million and talking a friend into doing likewise. The
school had been placed on probation
because of its financial struggles. Later,
the two friends each donated yet
another $1 million.
In Lexington, Gatton donated the
land for Rosa Parks Elementary School
and the YMCA in Beaumont, as well as
another YMCA near Hamburg that has
yet to be built. He donated money to
build a bridge to connect Liberty Elementary with Hamburg.
The list goes on, and teachers are
often at the top of that list.
Gatton’s sister was a teacher, and he
knew that teachers often have to dip into
their own pockets to provide supplies. He
decided to donate more than $100,000 to
teachers in the Tennessee-Virginia Tri-City
area on three occasions. Last year, he gave
$135,000 to teachers in Bristol, Tenn., in
honor of his sister.
ing example to our students of what it
means to live a life of leadership, meaning and purpose.”
Gatton followed five principles as he
created that life.
“First, you have to be completely
honest,” he said. One of Gatton’s first
acts as the owner of a car dealership was
to stop the common practice, then
legal, of rolling back the odometers of
used cars.
“Second, you have to work hard,” he
continued. “You can’t be afraid of work.
“You have to be logical and have
common sense.
“It is important to have a good education, to be educated about tax laws
and business practices.”
And finally, Gatton said it is wise to
hire people who are smarter than you are.
It has paid off for Gatton, and now
he is paying it forward to the future of
his home states and communities. ■
Debra Gibson is a correspondent for The Lane Report.
She can be reached at [email protected].
‘A life of leadership, meaning and purpose’
“I just get a good feeling giving to worthwhile charitable endeavors related to
education,” Gatton said. “It goes back to
the old story about giving someone a
fish dinner or teaching them to fish. If
you teach them to fish, they can feed
themselves for a lifetime. That’s what
education is all about.”
That attitude earns him high praise
from many around him, including UK’s
President Eli Capilouto.
“Bill Gatton, quite simply, has spent
most of his adult life devoted to the university, finding profoundly important
ways to make this institution better for
more young Kentuckians,” Capilouto
said. “As a donor, he has sought to give
in ways that have transformed our College of Business and Economics. As a
board member, he has provided wise
counsel to me and others as we have
worked together to find new and creative ways to continue to honor what I
call The Kentucky Promise. He is a shin-
The ‘Bill’ of Carol Martin Gatton
There is no William in his name, so many
wonder where the “Bill” comes from.
Some guess that it is from the “Wild Bill”
ads Gatton ran beginning with his first car
dealership. But it actually came from his
childhood. Although Gatton’s father and
one brother both had William in their
names, they both went by their given
name of Charles, and it was Carol Martin
who was nicknamed Bill as a child.
MARCH 2012
35
3/9/12 12:48 PM
ENTREPRENEURSHIP
several companies each round. The
Vogt Award is a program of the Community Foundation of Louisville and EnterpriseCorp, the enterprise development
arm of Greater Louisville Inc. Application is made online at vogtawards.com/
Homepage/home.htm.
Most entrepreneurs discover ThinkKentucky.com, where the state Cabinet
for Economic Development provides
information on a variety of resources.
There also is a recent report detailing
how state funds supporting startups
have been used in recent years.
Finding a
Venture ‘Angel’
Accounting sector foresees rising demand
for business services and expects firm mergers
BY DAWN MARIE YANKEELOV
E
VERY entrepreneur has that
one moment when the idea
has crystallized into a fledging business, with partners,
staff and a product or service
– and now the treasure hunt is on. The
entrepreneur must find OPM, other
people’s money, and probably government-backed resources to support
efforts to rapidly build the business for
revenue generation.
If not, he or she faces what is called
“The Valley of Death,” a negative cash
flow and no additional capital to continue despite the brilliance of the idea.
In Kentucky, there are certain paths
through federal and state programs
that can be useful to gather successive
stages of financial support. This
depends on the type of business, and it
depends on “angel” investors, who will
take a look at business plans individually or en masse through a group presentation. Finding these people can be
difficult, unless you have been down
the path before.
First Stop: Kentucky Science & Technology Corp.’s website, kstc.com.
36
MARCH 2012
The frequent first stop is often
through funds and programs administered and overseen by the Kentucky Science and Technology Corp., including its
$30,000 grant program for entrepreneurial tech startups as well as matching funds
for companies further along. For example, KSTC’s Start-Up Kentucky focuses on
fledgling companies, providing seed capital and creating business strategies to
encourage success; it works in collaboration with Kentucky colleges and universities, which nowadays all have research
commercialization initiatives.
Start-Up Kentucky utilizes three
funds: Kentucky New Energy Ventures,
Rural Innovation Fund (not Jefferson
County, but many rural Kentucky counties) and The Kentucky Enterprise Fund
provide seed stage capital for high-tech
startup companies across the state.
There is also the annual Vogt Award
competition in Louisville. The result of
a $5 million endowment left in 1999 by
the late inventor and entrepreneur
Henry Vogt Heuser, the Vogt Invention
and Innovation Award offers $250,000
each year; funds often are pieced out to
Public programs target technology
The first stop in Kentucky for government-backed funding is the CED’s
Department of Commercialization and
Innovation program, which began supporting technology-based entrepreneurs and early stage companies in
2002. The ICC program has helped
entrepreneurs create nearly 3,400 jobs
since it began in 2002. For example, in
fiscal 2009, the program operated with a
$2.1 million budget and generated $9.8
million in incremental income tax revenue for Kentucky.
Additionally, 200 new jobs were created in 2009 by the SBIR-STTR Matching Funds programs. (The acronyms
stand for Small Business Innovation
Research and for Small Business Technology Transfer.) Innovative start-ups
that garner money from federal assistance program may also get matching
SBIR-STTR dollars, with Kentucky the
only state offering a 100 percent match
of federal awards.
The High-Tech Pools Fund produced
another 950 new jobs. The independent
nonprofit Commonwealth Seed Capital
Fund resulted in 61.5 more.
The separate but similarly named Kentucky Seed Capital Fund, launched in
2005 with more than $5 million, invests in
early-stage Kentucky or Louisville metropolitan area-based businesses that specialize in biomedical and healthcare services,
medical-device development and healthcare information technology.
The Kentucky New Energy Ventures
Fund provides seed stage capital to
develop and commercialize alternative
fuel and renewable energy products, pro-
Who Has ‘Wings’?
An angel investor or angel is an affluent
individual who provides capital for a business start-up, usually in exchange for convertib le deb t o r o w ners hi p equi ty.
Increasing numbers of these investors
organize themselves into angel groups or
angel networks to share research and pool
their investment capital
3/9/12 12:48 PM
cesses and services in Kentucky. KNEV
Fund awards grants of $30,000, and it
makes investments ranging from $250,000
to over $750,000. Qualified companies
must be Kentucky-based and KNEV
money used for business development
activities. StartupKentucky.com has information and funding guidelines.
The Kentucky Science and Engineering Foundation was created by the Kentucky Innovation Act of 2000 to invest in
research and development activity to
promote innovation, and new product
development and commercialization. It
oversees four funds: Research and
Development Excellence Program
(RDE); Kentucky Commercialization
Fund Program (KCF); Kentucky SBIR/
STTR Phase Zero and Phase Double
Zero Program (PZ/DZ); and Kentucky
SBIR/STTR Matching Funds Program.
Outside of the specifically targeted
fund programs from Kentucky’s Cabinet
for Economic Development office,
KSTC, KSEF and the Vogt Awards, private “angel” investors are key to start-up
financing. Angels are high-net-worth
individuals who, either alone or within a
group, provide their own money as
investment capital to entrepreneurs,
usually at the seed and early stages.
Angel investments typically target
sectors considered to have high growth
potential such as biotechnology, life sciences, research, information technology
and, more recently, alternative ‘green’
energy-related companies tied to sustainability projects.
Angel investors engage in high-risk
investments because they are looking
for high returns. In addition to financial
investment, “angels” often provide consulting advice, business expertise and
additional connections to help fledgling
companies grow.
“When pre-revenue, the entrepreneur needs to bear in mind that angel
investors will not give money to people
they don’t know,” explained Mark
Crane, himself a serial entrepreneur
and the current Entrepreneur-in-Residence at the University of Louisville.
As an angel investor, he sits on several boards, including Louisville-based
Enterprise Angels, which he founded
with others about four years ago. Enterprise Angels now has 49 members, and
is a model for other angel groups.
One of those is Innovation Angels,
across the river from Louisville in southern Indiana. Larry Mand started it nine
months ago after seeing the success of
Enterprise Angels and its infrastructure.
“Angel groups in the state should
grow in numbers,” Crane said, “because
they are not competitors with each
other and are set up to build an ecosystem that supports job growth.”
Wisconsin, by comparison, has 60 to
70 angel groups, Crane said, so Kentucky has lots more organizing to do.
He named several others groups for
entrepreneurs to pursue in Kentucky:
Bluegrass Angels in Central Kentucky led
forward by Dean Harvey; and Queen City
Angels, out of Northern Kentucky. The
Anchorage Angels in Louisville, led by
Greg Chapman, also are often mentioned.
The Louisville Angel Investor Network (louisvilleangelnetwork.weebly.
com/) led by Tom McMahon, uses a
special Gust software (gust.com) that
allows for deal-sharing reviews and a
path to apply to the Enterprise Angels –
and sometimes to the angel groups in
Cincinnati and Lexington.
While the industry-standard funding
application software allows for sharing
to other angel networks across the country, Bobby Ferrari, executive director of
G r e a t e r L o u i s v i l l e I n c . ’s E n t e rpriseCorp, indicated that this is rarely
MARCH 2012
37
3/9/12 12:48 PM
ENTREPRENEURSHIP
successful. An entrepreneur needs a
champion in that remote market to get
backing, he said.
Louisville does support neighboring
cities, also including those in Ohio,
such as Cleveland, and has some reciprocity in looking at deals through
angel networks.
“One of the significant advancements in our area’s entrepreneurial ecosystem is that we have organized and
formalized processes to get funding,”
said Ferrari.
A number of individual investors in
the state choose to review deals mostly
on their own but sometimes in groups
for certain higher levels of investment.
One such individual is Michael Stinson, who started his career as a sales
executive at Business First, then made his
money in temporary staffing. He continues to look at deals at the individualbusiness-plan level and as part of groups
such as Evermore Investments, a private
equity firm, that do later-stage investing.
Evermore seeks to invest in post-revenue-developing companies that have
focused and committed management
teams open to working with a capital
partner. Such commitments can be
$2-$3 million or more for new busi-
38
MARCH 2012
nesses that are posting revenue and
looking to raise later-stage funding.
Other such funding firms in Louisville
include Chrysalis Ventures, Blue Equity,
Pattco Ventures and Alliance Group.
At least two other groups in Louisville are expected to form in 2012,
according to Ferrari of GLI’s EnterpriseCorp., which also operates an
office of the state ICC.
Personal relationships important
An accredited angel investor – loosely
defined as someone with a net worth
over $1 million not including their
home, or $250,000-plus income for the
last two years – may choose to invest from
$10,000 up to $350,000 in a startup based
on knowing the founder, and appreciating and embracing the company’s mission after a thorough review of the
business plan and an executive summary,
including financial projections.
Angels tend to be interested in certain industries they know or understand, and may require that the business
have some patentable, or at least protectable, technology associated with it,
which adds to profitability possibilities.
The existing Kentucky Investment
Fund Act program now offers a 40 per-
The Five Stages of Financing
In general, the venture capital financing process can be distinguished into five stages:
• The Seed stage
• The Start-up stage
• The Second stage
• The Third stage
• The Bridge/Pre-public stage
cent tax credit to funds with a minimum
of $500,000. (thinkkentucky.com/
kyedc/pdfs/kifa.pdf)
Since 1980, nearly all net job creation
in the U.S. economy has come from firms
less than five years old, according to a
Kaufmann Foundation report in 2009. In
most years, without new and young companies, net job creation for the overall
economy would be negative, according to
the same statistics.
The first group of investors in most
startups remains “friends and family,”
Crane said. “It takes time, often months, to
build relationships with high-net worth
individuals you don’t know well and show
them you are bankable. Once you do, that
individual is generally a lead to others as
he or she champions the deal.” ■
Dawn Marie Yankeelov is a correspondent for The Lane
Report. She can be reached at [email protected].
3/9/12 12:48 PM
BUSINESS LAW
Major Verdicts
and Settlements
it does not have a contract, there is no
direct avenue for recovery – though
the buyer might sue an entity with
which it does have a contract, such as a
supplier or installer.
While the result and effect of the
economic loss rule may appear unduly
harsh, it is the law now in a majority of
states. It has been widely adopted on
the public policy basis that where parties have a contract pertaining to a
commercial purchase and sale, their
disputes pertaining to the subject of
the contract are best addressed by reference to the contract and contract
law, and not tort law.
Cincinnati Insurance Co. v. Motorists
Mutual Insurance Co., 306 S.W.3d 69
(Ky. 2011)
In this case, the Kentucky Supreme
Court addressed the question of whether
a claim of faulty workmanship in construction qualifies as an “occurrence” for
purposes of triggering coverage under a
commercial general liability (“CGL”)
policy. Adhering the majority rule across
the country and the underlying public
policy, the court found that faulty workmanship is not an “occurrence” because
to find that something in the nature of
an accident occurred in the event of
faulty workmanship would, in effect, be
to transform the CGL policy into a performance bond or guarantee.
In business cases, Kentucky courts clarify contract law-tort
law claims, LLC capital calls and bank-borrower responsibility
BY DAVID COHEN
W
HETHER in good or
bad economic times, the
evolving state of the law
presents unique challenges for Kentucky
businesses large and small. Commonwealth courts (at both the trial and appellate level) have lately addressed a wide
variety of issues that may be of interest to,
and affect, Kentucky business owners.
The following cases may not have caught
your attention, but nevertheless may
impact on how your business operates,
now and in times to come:
Insurance
Giddings & Lewis Inc. vs. Industrial Risk
Insurers Inc., 348 S.W.3d 729 (Ky. 2011)
A series of decisions stretching back to
1990 hinted at this result, and in Giddings, the Kentucky Supreme Court
confirmed Kentucky’s adoption of the
economic loss rule, in the context of the
failure of a custom-manufactured piece
of manufacturing equipment.
The rule provides that a commercial
buyer of a product cannot recover in tort
for purely economic losses if the product
fails. Thus, while the buyer retains its tort
claims for non-economic losses (like damages for personal injury or for harm to
property other than the product), economic losses can be redressed only
through claims sounding in contract.
As a practical matter, what this
means is that if a commercial party suffers only economic losses and these
losses are caused by a party with which
Business organizations
Racing Investment Fund 2000 LLC v.
Clay Ward Agency Inc., 320 S.W.2d 654
(Ky. 2010)
This case addresses the issue of when
(and if) the manager of a limited liability company that has a written operating
agreement providing for capital calls
can be compelled to make such a call.
During the course of litigation, the LLC
and the insurance agency entered into
an agreed judgment for the collection
of unpaid insurance premiums and the
LLC (which was in dissolution) partially
satisfied the judgment from its funds on
hand. The agency took the position that
the LLC’s manager could compel the
company’s members to make a final
capital contribution to satisfy the
remainder of the judgment.
While the lower courts concurred,
the Kentucky Supreme Court adamantly
disagreed. The court found that the
entire purpose of a limited liability
entity such as an LLC is to shield the
members from personal liability for
obligations of the company, and that
absent some express indication that the
members had agreed to be personally
liable, no capital call could be compelled merely to satisfy the judgment
against the company.
MARCH 2012
39
3/9/12 12:48 PM
LEGAL SERVICES
Banking
Branch Banking and Trust Co. v.
Thompson, 2011 WL 255149
(Ky. App. 2011) (unpublished)
An all-too-common situation in current
economic conditions is a work-out effort
by a commercial lender with a non-performing borrower who is striving to cure
a default. In Thompson, the borrower
(a commercial real estate investor)
alleged that his loan officer made
numerous representations about various means to cure the default, none of
which the bank ever acted upon but
which the borrower relied upon to his
detriment. This resulted in a severalmillion-dollar fraud verdict at trial,
including a substantial award of punitive damages.
In vacating the award, the Kentucky
Supreme Court noted that the borrower’s testimony supported a finding that
at the time the key representations were
allegedly made by the bank, he already
did not trust the bank and believed they
were lying to him about principal attributes of the banking relationship.
Therefore, any reliance by the borrower
on the representations (a key element
of fraud) was not reasonable.
Thompson is instructive for all parties to a banking relationship because it
serves to remind lenders that all disclosures must be truthful and accurate; and
borrowers that they must always act to
protect their own interest and not
merely rely upon the lender to do so.
Government relations/
procurement
Laurel Construction Co. v. Paintsville
Utility Commission, 336 S.W.3d 903
(Ky. App. 2011)
This case presents the unique situation
of a procurement contract that was
properly awarded to the high bidder.
The Commission, a municipal utility
operating in Johnson and Lawrence
Counties, solicited bids for a water tank.
Laurel Construction submitted the
lower of two bids presented, but the
other bidder was awarded the contract.
Laurel Construction challenged the
award as contrary to Kentucky’s Model
Procurement Code.
In affirming a summary judgment
dismissing the claim, the Court of
Appeals noted that the code applies to
local governments only when they affirmatively adopt it and neither the Paintsville Utility Commission nor the City of
Paintsville had done so. Therefore, as a
disappointed bidder, Laurel Construction had no ability to make a challenge
under the code.
The court further found that
because of differences in the types of
tanks bid, the commission’s decision to
40
MARCH 2012
Jefferson County
Judicial Center
accept the high bid did not violate contract law principles.
with Snyder and awarded him damages
of $8.46 million.
Employment
In 2010 and 2011, the Jefferson Circuit
Court was the site of a series of significant
jury awards in employment law cases:
Oliver v. Hilliard Lyons
Robert Oliver headed investment banking at Hilliard Lyons in Louisville for
roughly 10 years. In 1998, when Hilliard
Lyons was purchased by PNC Financial,
Oliver was offered a $275,000 retention
bonus, to be paid in back-loaded
increasing shares over five years. Oliver
asserted that he bypassed other employment opportunities in reliance on
receiving the bonus. In 2001, Oliver was
terminated, and never received the bulk
of the money. In the lawsuit, he claimed
that Hilliard Lyons had manufactured a
performance-based reason to terminate
him, to avoid paying the remaining
bonus. He sought $238,333 and prevailed at trial. The case has been heavily
litigated at the appellate level and
remains before the Court of Appeals.
Snyder v. EPI Corporation
John Snyder served as CEO of Louisville-based nursing home operator EPI
for 32 years. During negotiations to sell
the company, Snyder (a 19 percent
shareholder) objected to a proposed
deal on the basis that the assets were
being under valued. When Snyder
refused to acquiesce to the board’s
demand to proceed with transaction, he
was fired. In the lawsuit, he sought lost
wages of three times his annual salary
(totaling $900,000) along with an
unpaid bonus representing 6 percent of
the pre-tax profits on the sale (amounting to roughly $7.3 million). EPI
asserted that Snyder committed knowing malfeasance by opposing the sale
and failing to obey the board and that
he was terminated in accordance with a
corresponding provision of his employment contract. A Louisville jury sided
Banker v. University of Louisville
Mary Banker was a college track star and
joined the coaching staff at Louisville in
2007. While coaching both the men’s
and women’s track team, she encountered an allegedly hostile work environLANEREPORT.COM • THE LANE REPORT
3/10/12 10:15 AM
ment replete with sexist language and
innuendo, and disparate job duties compared to her male counterparts. When
Banker complained, she received poor
evaluations and her contract was not
renewed. She sued the university on
grounds of sexual harassment and retaliation. The jury returned a mixed verdict,
denying the hostile work environment
claim but awarding damages for retaliation of $300,000 for emotional distress
and $71,875 for lost wages. The case
remains before the Court of Appeals.
Boyle v. Ohio Valley Aluminum
Michael Boyle joined Ohio Valley in
2008, signing a contract providing for a
$300,000 annual salary and clearly specifying grounds for termination (with liquidated damages for termination
without cause of 18 months’ salary).
Boyle was terminated after one year, for
missing budget goals, a ground for termination with cause under the contract.
He sued, offering proof at trial that the
parent company to Ohio Valley had in
fact attempted to remove several highly
compensated executives solely as a costsavings. The jury awarded Boyle the full
amount of liquidated damages, in the
amount of $750,000.
Another case, from federal court in
Bowling Green, similarly provides that
employers must be cautious in end-ofemployment-relationship dealings:
Thompson v. Quorum Health Resources LLC
Mark Thompson served as CEO of
the Monroe County Hospital but was
actually employed by Quorum Health.
During his employment, he developed a
concern as to possible Medicare fraud at
the hospital and filed a qui tam claim in
federal court. After learning that
Thompson was the qui tam relater, it
fired him on the basis that although he
had suspected misconduct as early as
1999, he did not report it until 2004, in
contravention of his contract. Being
that he was fired a month after the qui
tam suit was unsealed, Thompson sued
Quorum Health for retaliation.
Ironically, Quorum Health defended
on the basis that Thompson had himself
engaged in actionable conduct, by failing
to report the possible fraud each year
starting in 1999. A federal jury disagreed
and awarded Thompson more than
$400,000 for back pay, $70,000 in front
pay and $30,000 for emotional distress. In
addition, by statute the back pay was subject to being doubled. The total verdict
was in excess of $900,000. The case was
appealed and remains pending before
the Sixth Circuit Court of Appeals. ■
David Cohen is an attorney with
McBrayer McGinnis Leslie & Kirkland.
MARCH 2012
41
3/9/12 12:48 PM
BANKING SERVICES
Reaching Kentucky’s Unbanked
With education, 600,000-plus households could avoid fees
and be ready when U.S. agencies go to direct deposit in 2013
BY GARY WOLLENHAUPT
F
OR about one in three Kentuckians, walking into a bank
is a rare experience. There’s a
push on, though, to change
that before the federal government phases out paper benefits
checks in 2013.
Kentucky ranks fourth in the nation
in its rate of unbanked and underbanked populations, with 11.9 percent
unbanked and another 23.7 percent
underbanked, according to a 2009 study
by the Federal Deposit Insurance Corp.
(FDIC). The situation is often more critical in rural areas that have fewer
42
MARCH 2012
resources and fewer financial institutions than urban areas.
People considered “unbanked” do
not have an account at a federally
insured institution. “Underbanked”
people may have an account but also
use alternative financial services such as
non-bank money orders or check cashing, payday loans, rent-to-own agreements and pawnshops.
Lack of a traditional banking relationship will be more of problem for many
low-income people beginning May 1,
2013, when Medicare, Medicaid, Social
Security and other federal benefits must
be directly deposited into a bank or delivered on a pre-paid stored value card, similar to a debit card. The end of printed
checks that must be enveloped and mailed
will be a big cost savings for Washginton.
In advance of that change, efforts
across the state have begun to improve
access to traditional financial services
for Kentucky’s 208,000 unbanked
households and 415,000 underbanked
households.
“It will force folks to
have to set up direct
deposit, and they will
have to be in a position
to be able to do that,”
said Ian Mooers, director of the Center for
E c o n o m i c D e v e l o p - Ian Mooers,
ment, Entrepreneurship Director,
Center for
and Technology Center Economic
a t E a stern Ken tuc ky Development,
University.
EntrepreneurFor residents receiv- ship and Teching state benefits, the nology Center,
Cabinet for Health and EKU
Family Services delivers
benefits through an Electronic Benefits
Transfer (EBT) card and direct deposit
as well as paper checks.
“Unbanked clients generally get
checks and likely pay a check cashing
fee at banks or other check cashing entities,” said Jill Midkiff, a spokesperson
for the Cabinet.
Without access to the traditional banking system, in which checks and debit
cards are used to pay bills and make purchases, people gravitate toward payday
lenders and check-cashing stores. They
pay fees for money orders to pay bills and
exorbitant interest rates to borrow money
to make it to the next paycheck. Over a
lifetime of working, a person may pay up
to $40,000 in money order and check
cashing fees alone, according to the
National League of Cities.
The problem can be generational,
EKU’s Mooers noted, as families pass on
their bad financial habits. Also, the checkcashing operations can be aggressive in
their marketing.
“They’ll pull up a trailer to a coal
mine or factory on payday and get people to cash their checks as they come
out the door,” Mooers said.
Bank On programs
To address the problems of predatory
financial services and prepare people
for the change in benefits delivery,
some cities in Kentucky are launching
3/10/12 10:16 AM
Bank On programs. Bank On is a
national program that started in San
Francisco in 2004 to help give people
access to the traditional banking system
by providing financial literacy education. There are Bank On programs in
Henderson, Louisville, Madisonville
and Owensboro, with another preparing to launch in Ashland.
People who attend the training
receive a Second Chance Certificate,
which the participating financial institutions have agreed to accept as proof of
education. The institutions allow program participants to open up basic
checking and savings accounts.
Ashland program
In Ashland, April Perry,
CEO of Kentucky Farmers Bank, and her husband, Don, a senior vice
president with the bank,
are spearheading the
effort to establish the first April Perry,
CEO, Kentucky
Bank On program in the Farmers Bank
Appalachian region. It’s
also the first initiative in a
rural area, and the first
started by the local banking community rather
than a government entity.
The United Way of
Northeast Kentucky has Don Perry
signed to help administer Senior Vice
the program that will President,
cover Boyd, Carter, Elliott, Kentucky
Greenup and Lawrence Farmers Bank
counties. So far, 20 financial institutions
and a number of other non-profit agencies, businesses and local governments
have signed on to support the program.
The launch is scheduled for July 1,
when the financial education programs
will be available to the public and the Bank
On accounts will be offered at participating institutions. The initiative will use the
“Money Matter$” financial literacy curriculum developed by the Kentucky Community and Technical College System.
The key to success so far has been
the involvement of the United Way,
April Perry said.
“You have to have
the social service agencies involved and the
United Way touches all 40
those groups,” she said.
Perry recruited 16
banks and four credit 30
unions in the area to
participate in the Bank
On program. The second-chance program 20
makes the program palatable to the financial
institutions that are tak- 10
ing risks in offering
accounts to individuals
that often have a poor 0
track record in managing their money.
“This education will
hopefully get these
people back on track
and more knowledgeable about how to manage their
finances,” Don Perry said.
The Perrys acknowledged that the
traditional banking system has not
reached out to the unbanked population in the past. “People are intimidated by banks, and they worry about
fees and having access to their money,”
April Perry said. “In addition, they may
be barred from opening an account if
they have had financial problems in
the past.” The BankOn program makes
banking simple and the Money
Matter$ education gives people a
second chance.”
The goal, April Perry said, is to “get
these people back into the banking system to where their money starts working
for them rather than against them.”
Louisville program
In July 2010 the city of Louisville
launched a Bank On program designed
to deliver financial education and
improve access for the unbanked population of about 50,000 people in the
area. In the first year, the organization
helped residents open nearly 6,000
bank accounts with 11 participating
financial institutions, according to Tina
Lentz, executive administrator
of community service and reviWhy people don’t have bank accounts
talization with Louisville Metro
1. Don’t have enough money to need one
Human Services.
2. Don’t write enough checks
3. High minimum balance requirements
Those accounts had an
4. Lack of desire
average monthly balance of
5. Don’t feel comfortable or welcome at a bank
$842, translating to $5 million
in deposits. More than 90 perWhy do people leave the banking system?
cent of those new accounts
1. Service charges
were still open at the end of
2. Minimum balance requirements
the program’s first year. Over3. Overdraft fees
all about 100 financial institutions, non-profit agencies,
Source: FDIC National Survey of Unbanked
and Underbanked Households, 2009
government entities and businesses partner with the effort.
“We bring employers and larger
businesses into the group by educating
them that a financially stressed
employee is a nonproductive employee,”
Lentz said.
For 2012, the group
has exceeded its goal of
500 financial education
participants, and plans to
open 7,500 new bank Tina Lentz,
accounts. Increasing the Executive
Administrator,
number of people with Community
bank accounts also helps Service and
with economic develop- Revitalization,
ment efforts. The records Louisville
of savings and expendi- Metro Human
tures can then be used in Services
market research for
locating businesses.
“Without the paper trail of payment
card usage and bank transactions, it’s
hard to convince a business to move
into an area even though you know that
neighborhood spends a lot of money on
goods and services,” she said.
Adam Hall, assistant
vice president with Fifth
Third Bank in Louisville,
said what makes the Bank
On program appealing to
the financial institutions is
the education aspect. “We
know a client that may Adam Hall,
have had challenges man- Assistant Vice
a g i n g t h e i r p e r s o n a l President, Fifth
Third Bank,
finances in the past has Louisville
gone through a comprehensive overview so we’re
not setting them up to make the same
mistakes again,” he said. ■
Gary Wollenhaupt is a correspondent for The Lane
Report. He can be reached at [email protected].
MARCH 2012
43
3/10/12 10:26 AM
BANKING SERVICES
More Interest
in Business Loans
Commercial and industrial lending went up 10 percent in 2011
and is rising as those with strong balance sheets invest
BY MARK GREEN
K
ENTUCKY commercial lending activity increased in
2011, reflecting slowly but
steadily improving business
fundamentals working out
of the lingering effects of the 2008
financial crisis and resulting recession.
Commonwealth business lending likely
tracked the 10 percent increase nationwide last year, and expectations are for
an even better 2012.
Banks and experts who monitor
finance generally believe business lending
will expand further in Kentucky this year,
despite tougher bank lending standards
and a strict regulatory environment.
The optimistic expectations change,
they said, if an external economic problem such as European sovereign debt
defaults, creating a follow-on financial
crisis, or the price of oil generating
44
MARCH 2012
record gasoline prices that drain U.S.
consumer’s confidence levels.
“I think business is
really good,” said Chuck
Denny, Kentucky president of PNC Bank,
which has the most
branches and largest
share of deposits in the
state. “As I look at our Chuck Denny,
business line in commer- Kentucky
cial lending and in busi- President,
ness lending, even in PNC Bank
commercial construction, all of our business areas are up.
They were up in ’11, and we’ve started
out really strong in ‘12.”
PNC saw “pretty steady” business
through last year, including “some real
strong months the last half of the year,”
Denny said. PNC has 135 Kentucky
branches in most of the state, including
Louisville, Northern Kentucky, Lexington, Bowling Green, Owensboro and up
and down I-65 and I-75.
“About the economy and markets in
Kentucky,” he said, “I see strength. I see
optimism. I see investment. I see modest
expansion.”
Fifth Third Bank is second largest in
the state by deposit market share.
“We are up double digits in our commercial and
industrial lending,” said
Mike Ash, the bank’s city
president for Lexington
and senior vice president
for commercial lending.
Most of that borrow- Tom Partridge,
ing is being done by Kentucky
larger companies with President/CEO,
Fifth Third
strong financial posi- Bank
tions, said Tom Partridge, Fifth Third’s
Kentucky president/
CEO. He described a distinct difference between
recent business and borrowing activity by large
companies with at least Mike Ash,
$50 million in annual Senior VP
sales compared to mid- Commerical
market and smaller com- Lending, Fifth
panies with sales of $20 Third Bank
million and less.
“For large companies, they are
clearly taking advantage of the market
to make investments, to do things for
their business, to make investments,” he
said. “They have a lot of liquidity and a
lot of balance sheet strength.”
Mid-market and smaller companies
are not borrowing as much. They remain
far more cautious to take on risk, to borrow and spend on a new project, and to
hire employees, Partridge said.
“They continue to hoard cash and to
pay down debt,” Partridge said.
Fifth Third “has a lot of money available to lend,” Ash said. While the bank
definitely sees more lending opportunities among larger companies, there is not a
focus on them to the
exclusion of others.
“ We ’ r e t a l k i n g t o
everybody,” Ash said.
“Bank lending has
rebounded. It has taken Don
awhile,” said Don Mul- Mullineaux,
lineaux, a University of Professor of
Kentucky professor who Finance and
h o l d s t h e d u P o n t Management,
UK Gatton
Endowed Chair in Bank- School of
ing and Financial Ser- Business and
v i c e s i n t h e G a t t o n Economics
College of Business and
Economics. “The area that has
rebounded has been business lending.”
3/9/12 12:48 PM
National statistics indicated 10 percent growth in business lending during
the past four quarters, Mullineaux said.
(State-level statistics on lending are not
available.) Meanwhile, construction
loans have been down for 14 consecutive quarters and aren’t expected to
rebuild their numbers soon, he said.
Banks aren’t critics of regulatory environment
Since the financial crisis struck in fall
2008, multiple factors have combined to
keep lending and economic growth at
low levels, even after the official end of
recession in late 2009.
“Banks had well above historic levels
of losses in a typical recession,” Mullineaux said.
Bankers raised lending standards,
which is a natural reaction. Regulators at
the Federal Reserve, the U.S. Comptroller
of the Currency and the FDIC also
increased banks’ capital reserve requirements because of the loan losses – many a
result of subprime mortgages and loans
for construction projects linked to an overheated residential and commercial real
estate market. Although Kentucky’s economy and banks did not participate in the
excesses as significantly as elsewhere, the
impact was significant.
The bar for loan-qualification standards moved higher at the same time
many potential borrowers’ credit ratings
were falling drastically because they not
only had less cash on hand, but the
value of their equity and other collateral
had declined.
One frustrating result: The recession’s official end was mid-2009, but a
leaner-operating U.S. economy has had
an extended period of high productivity
but low growth. Large, established well-
Realty Research.indd 1
managed corporations have amassed
profits and are well-qualified for loans
but have neither needed nor wanted to
borrow because broader economic
activity and near-term prospects did not
warrant it. Medium and smaller companies and small businesses that have
wanted and needed to borrow lacked
the balance sheets to qualify.
There has been much speculation
that banking regulators and new laws,
especially the federal Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010, have overcompensated
and curtailed lending, acting as a brake
on economic activity just when growth
was needed most. However, Kentucky
bankers are not big critics of the regulators, and Mullineaux said Dodd-Frank
has no direct effect on lending.
“I’m hearing a lot about DoddFrank,” Mullineaux said. “But there is
virtually no tie to bank lending.”
In fact, only about a fourth of the
rules to implement Dodd-Frank goals
have been written and approved, Mullineaux said.
“The areas that we are trying to regulate are incredibly complex,” he said. “It
is extraordinarily difficult for regulators
to formulate the rules because of how
complex the issues are.”
Mullineaux said it is difficult to judge in
real time whether banking regulators are
overzealous. He did note that the recent
period has been an ironic one in which
Federal Reserve Chairman Ben Bernanke
is publicly encouraging increased bank
lending, but front-line regulators “are
more strict in tone than those at the top.”
Partridge said criticism of banking
regulators is at least partly unfair. Their
tougher line is “a natural outcome of
the downturn.” Meanwhile, regulators
take hits for not being tough enough
before the economic crisis. He credits
the recent difficult lending environment primarily to natural motivations
and processes.
It is unrealistic to expect regulators
to tighten the screws when the economy
is good or to be lenient when it is bad.
“The fact is that the trough was so
big this time, it’s taking longer for
underwriting standards to move in the
other direction,” Partridge said.
According to the most recent statistics at fdic.gov, the rate of noncurrent
commercial and industrial loans for all
U.S. banks was 1.47 percent for the
third quarter of 2011. That is a 46 percent drop from a year earlier.
At Mount Sterlingbased Traditional Bank,
which operates in five central Kentucky counties
and holds the No. 5 position in the Lexington
market, President Bill
Alverson said new regula- Bill Alverson,
tory requirements have President,
been a challenge for Traditional
Bank
banks and Traditional has
had to add staff especially
to keep up and comply with them.
Economic and lending activity has
been “moving slowly,” Alverson said, but
there has been a noticeable increase in
inquiries by potential borrowers regarding commercial property purchases.
That has not translated into sales, but
inevitably such activity does correlate
into deals, he said. ■
Mark Green is editorial director of The Lane Report.
He can be reached at [email protected].
3/10/12 11:18 AM
MARCH 2012
45
3/10/12 11:19 AM
TRANSPORTATION
The I-64 Sherman Minton Bridge between
Louisville and New Albany, Ind., reopened
Feb. 17 after having been closed to traffic
since Sept. 9, 2011.
‘SHERMAGEDDON’ ENDS EARLY
Businesses see immediate impact when I-64 bridge reopens
BY AMANDA ARNOLD
B
USINESSES in nearby southern
Indiana welcomed Greater Louisville customers back Feb. 17 when
the I-64 Sherman Minton Bridge over
the Ohio River reopened, restoring a
key commercial artery that had been
severed since Sept. 9 due to infrastructure issues.
New Albany, Ind., hadn’t been fully
disconnected from the bulk of the Louisville market thanks to two other bridges
five miles upstream, but the reopening
ended five-plus months of “Shermageddon” and horrendous traffic jams involving thousands of commuters.
Valla Ann Bolovschak, New Albany
resident and owner of the The Admiral
Buckle Inn, was first to cross the bridge
just before midnight as part of a celebration and fundraiser.
“Tears were streaming down. It was a
surreal moment,” Bolovschak said.
“Everyone was yelling, ‘Cross that
bridge! Cross that bridge!’ ”
The nonprofit Brandon House, a
free counseling service for southern
Indiana youth, was beneficiary of an
auction that sold numbered T-shirts to
bidders interested in being first across
the bridge. The reopening netted Brandon House several thousand dollars and
brought the beginning of a return to
normal for New Albany businesses.
At Horseshoe Southern Indiana
casino, located in Elizabeth, about 15
minutes from downtown New Albany,
business was back to normal almost
46
MARCH 2012
immediately. In fact,
Andy Matheis, director of
marketing operations for
Horseshoe, said he saw
more cars than usual
driving towards the
casino when he left at 1 Andy Matheis,
a.m. Feb. 18.
Director of
“ I t i s d e f i n i t e l y Marketing,
encouraging to see that Horseshoe
within the short time Southern
period,” Matheis said. Indiana
Business was up 15 percent the first weekend. “It was the best
weekend in attendance since February
2011.”
Louisville’s Hall Contracting completed work under its $13.9 million
contract to reinforce weight-bearing
beams along the two-level span’s lower
deck ahead of a March 1 deadline,
which is expected to
earn the company a $1.3
million bonus.
Money well spent, in
the view of businesses in
New Albany’s downtown
and suburbs.
“It affected us in an Sam Anderson,
adverse way,” said Sam Owner, Sam’s
A n d e r s o n , o w n e r o f Food and
Sam’s Food and Spirits. Spirits
“The traffic would back
up on the side roads, and the cars
couldn’t get into our parking lot. We’re
hoping they haven’t changed their buying habits, but our sales are up.”
He lost lunch and after-work business,
carryout orders and catering work in Louisville, but had noticed business improving
less than a week after the re-opening.
Anderson did more one-on-one marketing during the bridge closure.
“We did more one-on-one emails to
stay in contact (with customers). We
reached out as best we could. You never
know what to do until you go through
it,” said Anderson, who also has a
Floyd’s Knob, Ind., location.
“I’m proud of the way
New Albanians have
faced this struggle,”
Mayor Jeff Gahan said,
“and I’m grateful for the
people who have taken
this opportunity to reconnect with our downtown Jeff Gahan,
and rediscover what New Mayor,
New Albany
Albany has to offer.”
Management at the
New Albanian Brewing Co., which has a
location in New Albany’s suburbs and one
downtown known as Bank Street Brewhouse, used the slowdown to do some
renovations. The Brewhouse enclosed
and heated an outdoor dining area and
will soon open a beer garden. The chef
tweaked the menu, upgraded the wine list
and started a successful Sunday brunch.
There has been a “tremendous”
increase in business since Feb. 17.
“Last Saturday, we were absolutely
over-run. At Sunday brunch, we sold out
of everything,” said Mark Prince, Brewhouse general manager. “It really
exceeded our expectations – and I hope
it gets better – but we knew it would.”
Sales are up throughout New Albany,
downtown sidewalks have been busy, and
stores and restaurants have been full.
Toast on Market, sister restaurant to
Toast on Main in Louisville also
reported improvement.
“Weekdays stay the same because
people who eat here, work here,” said
Lisa Wepf, co-owner. “The Saturday and
Sunday crowd has been busy. We have
had a lot from Louisville and different
areas coming in. When our location in
Louisville gets full, they send people
over here, and last weekend we saw a lot
of faces from our Louisville store.”
Brendon Zebroski, Evansville, Ind.,
resident and sales representative for
Crossroad Vintners who travels to New
Albany and Clarksville once a week, said
Shermangeddon had impacted his job.
“During the first week (of bridge closure), it probably added another two
hours in my day,” Zebroski said. The
reopening “makes my job a lot less
stressful and simplifies my day.” ■
Amanda Arnold is a correspondent for The Lane
3/9/12 12:49 PM
OPINION
ACADEMIC HYPOCRISY
It’s time for those in higher education to walk the walk
BY THOMAS SOWELL
I
T is fascinating to see people accusing
others of things that they themselves
are doing, especially when their own
sins are worse.
Academics love to say that businesses
are not paying enough to people who
work for them. But where in business
are there people who are paid absolutely nothing for strenuous work that
involves risks to their health?
In academia, that situation is common. It is called college football. How
often have you watched a big-time college football game without seeing someone limping off the field or being
carried off the field?
College athletes are not to be paid
because this is an “amateur” sport. But
football coaches are not only paid, they
are often paid higher salaries than the
presidents of their own universities.
Some make over a million dollars a year.
Academics also like to accuse businesses of consumer fraud. There is indeed
fraud in business, as in every other aspect
of human life – including academia.
When my academic career began, half
a century ago, I read up on the academic
market and discovered that there was a
chronic oversupply of people trained to
be historians. There were not nearly
enough academic posts available for people who had spent years acquiring Ph.D.s
in history, and the few openings that there
were for new Ph.D.s paid the kind of sala-
ries you could get for doing work requiring a lot less education.
My own pay as a beginning instructor in
economics was not high but it was certainly
higher than that for beginning historians.
Now, 50 years later, there is a long
feature article in the Feb. 17 issue of
The Chronicle of Higher Education on the
chronic oversupply of historians. Worse
yet, leading university history departments are resisting demands that they
keep track of what happens to their
students after they get their Ph.D.s –
and inform prospective Ph.D.s of what
the market is like.
If any business operated this way, selling
customers something that was very costly in
time and money, and which the sellers
knew in advance was almost certain to disappoint their expectations, academics
would be bursting with indignation – and
demanding full disclosure to the customers, if not criminal prosecutions.
But The Chronicle of Higher Education
reports “faculty resistance” to collecting
and publishing information on what
happens to a university’s history Ph.D.s
after they leave the ivy-covered walls
with high hopes and low prospects.
At a number of big-name universities
– Northwestern, Brown and the University of North Carolina’s flagship campus
at Chapel Hill – at least one-fourth of
their 2010 history Ph.D.s are either
unemployed or their fate is unknown.
At Brown University, for example, 38
percent of their 2010 Ph.D.s are in that
category, compared to only 25 percent
who have tenure-track appointments.
For people not familiar with academia, a tenure-track appointment does
not mean that the appointee has tenure, but only that the job is one where a
tenure decision will have to be made at
some point under the “up or out system.” At leading universities, far more
are put out than move up.
There are also faculty appointments
that are strictly for the time being – lecturers, adjunct professors or visiting professors. Half the 2010 Ph.D.s from Duke
University and the University of Pennsylvania have these kinds of appointments,
which essentially lead nowhere. They are
sometimes called “gypsy faculty.”
Finally, there are Ph.D.s who are on
postdoctoral fellowships, often at the
expense of the taxpayers. They are paid
to continue on campus, essentially as
students, after getting their doctorates.
More than one-fourth of the 2010
Ph.D.s from Rutgers, Johns Hopkins
and Harvard are in this category.
At least these universities release such
statistics. A history professor at Rutgers
University who has studied such things
says: “If you look at some of the numbers
published on department websites, they
range from dishonest to incompetent.”
But apparently many academics are
too busy pursuing moral crusades in
society at large to look into such things
on their own ivy-covered campuses. ■
Thomas Sowell is a senior fellow
at the Hoover Institution,
Stanford University
MARCH 2012
47
3/9/12 12:49 PM
SPOTLIGHT ON THE ARTS
Southern Kentucky Performing Arts
Center Opens in Bowling Green
S
KyPAC, the Southern Kentucky Performing
Arts Center, is the newest anchor in downtown Bowling Green’s evolution. It is a new
economic hub of Warren County and the surrounding nine counties that make up the Barren
River Development District (BRADD).
An exciting new edition to the Kentucky’s arts
and cultural landscape, the center includes a
1,800-seat multi-purpose theatre, a black box theater, plus a small outdoor amphitheater, art gallery and related rehearsal, banquet and back-of-house spaces.
It will showcase local arts organizations, present major touring attractions and is
uniquely positioned to offer multiple appeals to these communities, according to
SKyPAC Executive Director Tom Tomlinson.
SKyPAC’s visually striking lobby, grand staircase and flexible performance spaces
create an arts town hall for the communities it serves. Integrating with the nine counties’ other business, entertainment and arts-oriented venues, the center offers meeting space for businesses and public entities and can be used as a social venue for
community gatherings, weddings, galas, fundraisers and private parties.
“SKyPAC is much more than a center for art,” Tomlinson said. “It stands proud as the
community’s town hall, a comfortable, beautiful living room and an energetic performance space. These elements in combination promise to serve as a strong economic
driver to attract businesses, accelerate area growth and generate new tourism revenue.”
Kentucky Artist Wins United Nations Award
T
RENT Altman of Louisville was one of
eight artists from around the world whose
work was chosen for the United Nations
Autism Awareness Stamp 2012. Altman’s winning
design is titled “An Abstract Garden II.”
A series of postage stamps by the U.N. Postal
Administration is being launched April 2 to
honor World Autism Awareness Day.
Altman, who has autism, is an award-winning
artist who exhibits nationally in fine art shows
and galleries. He paints expressionistic abstract pieces in acrylics and mixed media
collages on canvas; his work reflects a freedom of expression, movement and energy
through the multiple methods used in applying paint and collage materials.
The stamps will be available at U.N. offices in New York, Geneva and Vienna. The
U.N. Postal Administration expects to print 1 million stamps.
Altman and the other artists are invited to a ceremony at the U.N. Headquarters in New
York, on April 3, 2012. The U.N. Secretary-General Ban Ki-Moon will dedicate the Autism
Awareness stamps at the Autism Speaks Panel discussion, with a reception to follow.
Arts Events Around the State
About Face: Kentucky Artisan
Works Inspired by the Human Face
Kentucky Artisan Center at Berea
9 a.m. - 6 p.m., thru Aug. 26
kentuckyartisancenter.ky.gov (859) 985-5448 Quilts of the Appalachian
East Regional Show
The National Quilt Museum, Paducah
Now thru April 3
quiltmuseum.org
(270) 442-8856
Rhythm Voices:
The Steady Beat of Activism
Lexington Art League
48
MARCH 2012
Now thru April 12
Lexingtonartleague.org
(859) 254-7024
Renoir to Chagall: Paris and the
Allure of Color
The Speed Art Museum, Louisville
Now thru May 6
speedmuseum.org
(502) 634-2700
Mamma Mia!
Paramount Arts Center, Ashland
8:00 p.m., May 9
paramountartscenter.com
(606) 324-3175
The Community Arts Center in Danville,
one of first five cities to gain Kentucky
Cultural District Certification.
Ky. Communities
Receive Cultural
District Certification
B
EREA, Covington, Danville,
Horse Cave and Paducah are the
first five communities to receive
Kentucky Cultural District Certification,
a step toward linking cultural assets and
economic development.
The five cities each were determined
to have recognized, labeled, mixed-use
areas with high concentrations of cultural amenities that attract local residents and visitors alike. The new
certification program under the Kentucky Arts Council is designed to showc a s e e a c h c o m m u n i t y ’s u n i q u e
character and assets.
An independent panel of reviewers
assessed a pool of 26 applicants.
The program encourages community engagement and partnerships to
build vibrant communities through the
arts. Cultural districts can be found in
any type of community, from small and
rural to large and urban, according to
the Arts Council, which will continue
working with others seeking certification, offering technical and planning
assistance throughout the year.
“We applaud the work of all the communities that have gone through the
application process. They have made
major inroads in leveraging their unique
cultural assets,” said Lori Meadows, executive director of the arts council. “We can
see from most of the applications that
substantial partnerships are being formed
among arts and cultural entities, businesses and local governments.”
First lady Jane Beshear and Madeline
Abramson, wife of Lt. Gov. Jerry
Abramson, announced the first designees.
Lori Meadows is executive director
of the Kentucky Arts Council.
3/9/12 12:49 PM
EXPLORING KENTUCKY
Shaker Village photo
Visitors to Shaker Village at Pleasant Hill
can board the Dixie Belle on the Kentucky
River to see some of the property’s 150
bird species.
Whole Lot of Shakin’ Goin’ On
Shaker Village of Pleasant Hill adds new events to celebrate the seasons
BY KATHERINE TANDY BROWN
U
NTIL my first visit to Shaker Village of Pleasant Hill near Harrodsburg, I’d never heard
“shaker” used as a verb. “Shaker your
plate” means to fill it with scrumptious,
natural foods, whole grains, fruits and
fresh-from-the-garden vegetables and
herbs, all prepared in a healthy manner,
just like the Shakers did.
To that concept, I’m adding “Shaker
your calendar,” for in 2012 Shaker Village
has added a slew of new events to its
already impressive list of annual happenings that celebrate each season. You won’t
want to miss them, as attending affords
the opportunity to relax among 34 beautifully restored buildings on 3,000 acres of
preserved central Kentucky farmland.
Familiar favorite events include The
Chamber Music Festival of the Bluegrass in May, the Antique Show and Sale
in June, the August Craft Fair and HarvestFest in September. This year, the
National Historic Landmark heralds
springtime with Breakfast with the
Babies on April 14, 21 and 28.
“Everyone loves baby animals,” says
Aimee Darnell, publicist for Shaker Village, “and this event gives children and
parents the opportunity to get up close
and personal with lambs, chicks, calves and
other new additions to our historic farm.”
The fun begins with a kid-friendly buffet breakfast, followed by meet-the-critters time, then sack races and
three-legged races, tug-o-war, and a
guided hike.
On June 2, take a peek at not-so-visible
nature on an Evening Picnic Cruise to a
blue heron rookery. Recently, while steering the attraction’s 115-passenger riverboat through the towering Kentucky River
palisades, the captain of the Dixie Belle
noticed a rookery of 30 to 40 great blue
heron nests, filled with juveniles and
adults, only visible from the water. On a
new, two-and-a-half-hour tour, you too can
witness this magical spot, and from the
boat’s deck can observe one of the property’s 150-plus species of birds in their
natural habitat.
But that’s not all. Picnic suppers
come fresh from the Shaker Village
kitchen, the source of “shaker your
plate.” Start salivating now. The fare will
be luscious. Bring your appetite…and a
pair of binoculars.
If you’d rather focus on food, tuck in
your napkin for a belly-pleasing dinner
at the Trustees’ Office Dining Room,
then hop aboard the Dixie Belle any
Saturday in June for an evening dessert
cruise that’s sure to include Shaker
lemon pie. If you haven’t yet tasted this
divine offering, rest assured that it’s not
remotely akin to any gloppy, sticky-sweet
meringue creation served at a homecookin’ diner. This treat is tart and lemony and sheer heaven. Lemons were
one of the few foods the Shakers pur-
chased from the outside world, and they
worked wonders with them.
Round off the evening back at the
village lawn listening to regional artists
fill the warm summer air with melody at
the June Firefly Music Series.
Saturday nights in July feature Evening Picnic Cruises down the Kentucky
River with fried chicken and potato
salad. No herons added.
On July 21 and 28, David Larson, an
award-winning James Beard chef who
heads the Shaker Village culinary team,
presents Gifts from the Shaker Garden.
Learn how to transform fresh garden produce into a contemporary meal inspired
by the delicious, wholesome feasts prepared by the Shakers in the 19th century.
After class, stay for an al fresco lunch
made from the morning’s recipes.
On Sept. 8, catch a glimpse of how the
War Between the States affected this
peace-loving community during Troops at
Our Doorstep: The Civil War Marches
Through Shaker Village. Hear the Pleasant Hill Singers perform Music of the
Black Shakers, and watch dramatic presentations of Sister Patsy Roberts Williamson,
an African-American Shaker, and Sister
Mary Settles, the last of the Pleasant Hill
Shakers, describing their lives.
Check online as more activities are
added to the schedule.
Experience the glories of autumn
2012 with two new events. Bring the kids
to Fall on the Farm Weekends every Saturday and Sunday in October, when you
can make apple cider and taste apple
butter made from Shaker Village
orchard fruit, meet farm animals and
pick pumpkins and apples. October Saturdays include Guided Fall Foliage
Hikes that are free for everyone.
Find out specifics on these and other
Shaker Village events at (800) 734-5611
or shakervillageky.org. ■
Katherine Tandy Brown is a correspondent for The Lane
Other Events Around Kentucky
•New Shanghai Circus
The Center for Rural Development,
Somerset
April 20
(606) 677-6000, centertech.com
•Belle of Louisville/Spirit of Jefferson
Thunder over Louisville
401 West River Rd., Louisville
April 21
(866) 832-0011, belleoflouisville.org
•Kentucky Bourbon Festival Sampler
Guthrie Opportunity Center, Bardstown
April 28
(800) 638-4877, kybourbonfestival.com
•Rolex Kentucky Three-Day Event
Kentucky Horse Park, Lexington
April 26-29
(859) 254-8123, rk3de.org
MARCH 2012
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3/9/12 12:49 PM
PASSING LANE
Commentary on Kentucky
Bluegrass Higher Ed Consortium Learning to Work Together
T
WELVE public and private Central Kentucky universities plan to
share information and resources
and coordinate programs in an effort to
improve educational achievement and
economic opportunity for residents of
the region.
The Bluegrass Higher Education
Consortium formed in February
includes Asbury University; Berea College; Bluegrass Community and Technical College; Centre College; Eastern
Kentucky University; Georgetown College; Midway College; Morehead State
University; Kentucky State University;
and the University of Kentucky.
All 12 are regionally accredited, fouryear institutions. Their presidents signed a
charter BHED agreement at the Bluegrass
Tomorrow organization’s annual breakfast
meeting Feb. 29 at Keeneland.
Perhaps the most significant longrange goal is to develop a universitycenter sharing model similar to Oxford
University that is to include faculty
exchanges, academic course sharing,
credits transfer, library sharing and
more. President Bill Crouch of Georgetown College, whose school has an
ongoing relationship with Oxford,
introduced the concept here.
BHEC goals include forming an academic chairs academy; training to credential more college-level teachers;
collaboration with area superintendents,
business leaders and economic development professionals; asset mapping of academic programs and resources; and
collaboration on student professional readiness and international study opportunities.
BHEC also wants to build partnerships with other organizations and educational institutions.
Present Feb. 29 to create the Bluegrass Higher Education Consortium were, left to right, Georgetown College
Assistant to the President Dr. Robin Oldham; Kentucky State University Provost Dr. Mac Stewart; Asbury
University Academic Dean Dr. Bonnie Banker; Midway College Associate Vice President Dr. Johnie Dean;
Transylvania University President Dr. Owen Williams; Sullivan University President Glenn Sullivan;
Morehead State University President Dr. Wayne Andrews; Centre College President Dr. William Roush; Berea
College President Dr. Larry Shinn; Bluegrass Community & Technical College President Dr. Augusta Julian;
University of Kentucky Associate Provost Dr. Michael Mullen; and signing is Eastern Kentucky University
President Dr. Doug Whitlock.
President Doug Whitlock of EKU and
President Augusta Julian of BCTC, both
Bluegrass Tomorrow board members, are
co-chairs of the new consortium.
“The presidents have been talking
about this kind of collaboration for a
long time,” Whitlock said.
Bluegrass Tomorrow’s Innovision
2018 study, released in 2008, had compared Lexington and the Bluegrass to
22 other similar regions with a core flagship university.
“We ranked poorly in six-year graduation rates, college readiness and highschool graduation rates,” Whitlock said.
“We knew we had to do something to begin
to move the needle on those statistics.”
Kentucky in Elite 8 for Industry Activity
K
ENTUCKY ranked eighth in the
nation for new and expanded
industry activity in 2011 by Site Selection magazine’s annual Governor’s Cup
rankings, the state’s best showing ever.
Site Selection ranked states by projects
with either a minimum $1 investment, at
least 50 new jobs or the addition of at least
20,000 s.f. in floor space. Kentucky generated 198 such projects in 2011. In total,
the state had 326 location or expansion
announcements, resulting in 13,230 projected new full-time jobs and capital investment of more than $2.6 billion.
“Kentucky’s eighth-place finish in
our annual Governor’s Cup facilities
50
MARCH 2012
race means its business climate is considered highly desirable by capital investors,” said Mark Arend, editor in chief
of Site Selection. “Gov. (Steve) Beshear,
his business-recruitment team and local
economic developers across the state
are clearly delivering the location solutions companies require.”
Meanwhile, eight Kentucky “micropolitan” areas earned recognition for their
economic development successes. The
Top Micropolitan Ranking includes Danville and Somerset (tied for 13); Glasgow
(21); Paducah (tied for 32); Madisonville,
Corbin, Mount Sterling and Richmond
(tied for 48).
Another realization was that communication among university presidents
mostly regarded funding and other legislative action.
“College presidents rarely communicated with each other about how we
could improve the region academically
and economically,” Julian said. “We also
discussed that there was not enough
communication and collaboration with
business leaders and superintendents.”
Research and surveying conducted
to develop initial goals and objectives
was done with support from the Bluegrass Area Development District and the
Council for Postsecondary Education.
“This ranking shows
Kentucky’s determination
to succeed and grow our
industrial base, despite the
challenges during the
recent economic climate,”
said Gov. Beshear. “Plus,
Larry Hayes,
this
high ranking is even
Secretary,
more impressive when one
Kentucky
considers Kentucky has the
Cabinet for
smallest population of any
Economic
Development state at the top of the list.”
“It’s exciting to see Kentucky communities performing so well in
the micropolitan rankings, where they are
compared to hundreds of areas of similar
size all over the country,” said Kentucky
Cabinet for Economic Development Secretary Larry Hayes.
3/9/12 12:49 PM
O
Heaven Hill Distillery photo
NLY 13 years
old, the Kentucky Bourbon Trail® already is
making its mark as a
quintessential American experience.
CNN International
last month named
visiting the six legendary distilleries on
the tour one of the
10 Classic American
Experiences.
The Bourbon Heritage Center at Heaven Hill Distillery just outside Bardstown.
“To get this type
of recognition further solidifies bourbon as America’s official native spirit,” said Eric Gregory, president of the Kentucky Distillers’ Association. “And there is no better way to experience
all that Kentucky has to offer.”
Created by the KDA in 1999, the Kentucky Bourbon Trail distilleries each offer a
unique and educational experience on crafting the world’s finest bourbon: Four
Roses, Heaven Hill, Jim Beam, Maker’s Mark, Wild Turkey and Woodford Reserve.
Among the other American institutions CNN featured as classically American
were jazz, rodeos and barbecue. Read the CNN article at: cnngo.com/explorations/
escape/usa/10-quintessentialamerican-experiences-406346
“It’s truly an honor for Kentucky bourbon to be mentioned in the same breath as
these iconic elements of American culture,” said Adam Johnson, director of the
KDA’s Kentucky Bourbon Trail program. “From our Sesquicentennial Civil War reenactments to our classic State Fair in Louisville, NASCAR racing at the Kentucky
Speedway and our delicious barbecue – almost all of these classic American experiences can be enjoyed right here in the Bluegrass State.”
UK Center at Forefront of Medical Care
D
OCTORS at the state-of-the-art University of Kentucky Chandler Hospital successfully gave
20-year-old Zack Poe of Maysville, Ky., a SynCardia Total Artificial Heart in early February, then a few
weeks later vastly improved his mobility with the SynCardia Freedom Driver.
Poe, who is waiting on the availability of a permanent
human transplant heart, is the first in Kentucky to use
the wearable power device.
The Freedom Driver weighs 13.5 pounds and is carried
in a small backpack or shoulder bag. It is in trials to
become an approved alternative to the 412-pound
machine that currently is the only FDA approved artificial
heart driver. It could be the dawn of a new day for patients
on heart transplant waiting lists.
This is potentially great news not just for Poe, who is Zack Poe, Kentucky’s first Total
roughly the 25th person in the United States to benefit from Artificial Heart recipient, poses
with the Freedom Driver, a portathis medical advance, but for Kentuckians. It means Ken- ble driver that powers the heart.
tucky doctors and facilities are among the top centers of
excellence nationally, able to provide the most advanced care available. A second Kentuckian already had received a SynCardia Total Artificial Heart as this issue was going to press.
UK surgeons Dr. Charles Hoopes, director of the UK Heart and Lung Transplant
Program and the Mechanical Cardiac Support Program, and Dr. Mark Plunkett, chief
of Cardiothoracic Surgery and the co-director of the Linda and Jack Gill Heart Institute, have both received certification from SynCardia to perform this procedure.
Medical centers undergo a stringent four-part certification process also. Nationally, 29 have been certified.
University of Louisville photo
CNN Names Ky Bourbon Trail
a Top 10 Classic American Experience
Student members of the winning UofL business
school team are, left to right, Zack Pennington,
Joanna Cruz, Keith Starling and Scott Serdoz.
You Say Chia,
UofL Students
Say ‘Cha Ching’
T
O most of us, chia is a fuzzy, green
sprout that grows into a funny
“pet,” or “hair” on a head-shaped
clay container. A group of University of
Louisville business students, however,
see a plant that could become a top Kentucky top agricultural product.
A team of four UofL College of Business MBA students took first place at a
University of Cincinnati business school
competition Feb. 25 for their plan to
develop Kentucky Chia, an edible seed
rich in fiber, antioxidants, protein and
Omega-3 fatty acids that helps prevent two
fatal horse diseases: colic and laminitis.
U.S. horse farmers have difficulty
obtaining chia seeds because they only
grow in the warm climates of South America and Australia. The UofL team’s genetically unique seed, however, can grow in
North America and assures a steady, costeffective supply. The team proposes to
outsource production of its patent-pending seed to U.S. farmers and wholesale the
crop to horse farms and companies that
make feed and dietary supplements.
UofL team members Zack Pennington, Keith Starling, Joanna Cruz and Scott
Serdoz beat out 15 other university teams
at the UC Spirit of Enterprise Graduate
Business Plan Competition. They won
$10,000 and an automatic invite to the
2012 Venture Labs Investment Competition May 2-5 in Austin, Texas.
Last year, another UofL team, TNG
Pharmaceuticals, won the Cincinnati contest for developing FlyVax, a patented
horn fly vaccine for cattle, then became
global Venture Labs champions. They
won nearly $800,000 in prize money and
now they’ve received economic development recruitment pitches.
Good luck to this year’s UofL team.
MARCH 2012
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3/9/12 12:49 PM
KENTUCKY PEOPLE
MORGANTOWN: DELTA FAUCET RECEIVES
GOVERNOR’S SAFETY & HEALTH AWARD
WASHINGTON, D.C.: ROGERS PRESENTED
WITH PUBLIC BROADCASTING AWARD
Kentucky Labor Cabinet Secretary Mark Brown (back row second from right)
visited Delta Faucet Co.’s Morgantown plant last month to present the Delta
employees with the Governor’s Safety and Health Award. The award provides
special recognition for outstanding safety and health performance, and encourages the development of programs designed to reduce and eliminate occupational injuries and illnesses. Delta’s 168 Morgantown employees have worked
more than 500,000 hours without experiencing a lost-time injury or illness.
The Association of Public Television Stations (APTS) presented U.S. Congressman Hal Rogers (R-KY) with the Champion of Public Broadcasting Award last
month during the 2012 APTS Public Media Summit in Washington, D.C. The
award is given to members of Congress and other individuals who safeguard the
ability of local public television stations to provide educational, informational,
cultural and other public services to their communities. Pictured here are, from
left: Pat Butler, president and CEO of APTS; filmmaker Ken Burns; Congressman Hal Rogers; Shae Hopkins, executive director and CEO of KET; Hilma
Prather, Kentucky Authority for Educational Television board member and
APTS trustee; and Julie Schmidt, senior director of external affairs at KET.
PARIS: KENTUCKY BANK UNVEILS PORTRAIT HONORING BUCKNER WOODFORD IV
Kentucky Bank Chairman of the Board Buckner Woodford IV was honored last month at the bank’s board of directors meeting with an official unveiling of his portrait,
painted by Lexington artist Sandy Speagle. Woodford served 31 years as president of the Paris-based bank before becoming chairman of the board. When he retired
from Kentucky Bank in 2009, it ended 121 consecutive years of Woodford family service and an active working career at the bank that spanned 37 years. Pictured at
the unveiling are (left to right) Director Betty J. Long, Director Dr. Woodford Van Meter, Director Proctor Caudill, Chairman Buckner Woodford IV, President and CEO
Louis Prichard, Director Theodore Kuster, Director Ted McClain, Director Edwin Saunier, Director William Arvin and Director Robert Thompson.
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MARCH 2012
3/9/12 12:49 PM
3/9/12 12:02 PM
3/9/12 12:02 PM

bill gatton`s generous spirit

Transcription

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