21C Museum Hotel is expected to open in late 2015 after renovation is completed on the century-old First National Building, right. But the old Fayette County Courthouse, left, will be one of Lexington’s biggest redevelopment challenges. Photo by Tom Eblen
As a recent economic study notes, Kentucky’s economy is really nine very different regional economies that reflect a national trend: urban areas are doing well, but rural areas are struggling.
Lexington and Louisville together accounted for 45 percent of the state’s job growth over the past five years, according to a study by economist Paul Coomes for the Kentucky Chamber of Commerce.
That means Central Kentucky this year should continue to capitalize on several sources of momentum, including manufacturing growth, entrepreneurship and urban redevelopment, as well as Lexington’s growing reputation as a good place to live, work and visit.
The biggest manufacturing news this year is likely to be Toyota’s new Lexus assembly line. When the $531 million Georgetown plant expansion is finished late this year, 600 additional workers will make 50,000 Lexus 350 ES cars a year, in addition to the current Camrys, Avalons and Venzas.
But as manufacturing becomes more automated, the demand for higher-skilled workers increases. “Having a skilled work force is going to be a huge factor” in future growth, said Bob Quick, president of Commerce Lexington.
Central Kentucky continues to see an influx of workers and professionals from elsewhere. That is helping to fuel not only manufacturing, but business and professional services and entrepreneurial efforts, Quick said.
That also is good news for Lexington’s urban redevelopment initiatives, which finally seem to be hitting their stride. While the public’s attention was focused in recent years on the long-stalled CentrePointe project, a lot of good things were happening.
Victorian Square was renovated and rebranded as The Square, breathing new life into the downtown retail-restaurant development. This year will be a test of whether that concept can succeed.
A lot of small-scale urban redevelopment has been happening in places such as the Jefferson Street restaurant corridor, whose latest addition is the Apiary; the East End; National Avenue; South Limestone and North Limestone areas.
This could be a big year for the Newtown Pike corridor between downtown and the new Bluegrass Community and Technical College campus. Developers of Thistle Station, a proposed 16-story apartment building, hope to begin construction this year and open in fall 2016.
While the Rupp Arena and convention center reconstruction have been put on hold, city officials continue to move forward on Town Branch Commons, an innovative plan to create a linear park downtown that could attract new development.
“You’re seeing a deeper bench for the strategy of downtown,” Quick said. “Even when the Rupp piece didn’t work, we didn’t lose our downtown vision.”
Late this year, the 21C Museum Hotel should open after an extensive renovation of Lexington’s first skyscraper, the century-old First National Building.
But 21C is across the street from downtown’s biggest redevelopment challenge: the old Fayette County Courthouse. It was shuttered in 2012 because of lead contamination and structural problems from years of neglect. Officials this year need to come up with a plan for renovating and reusing this landmark.
The Breeder’s Cup at Keeneland Oct. 30-31 could pump $50 million into the local economy. It also should provide an incentive to finish a variety of projects, just as the Alltech FEI World Equestrian Games did in 2010.
Kentucky’s biggest trouble spot is Eastern Kentucky, where the coal industry is in permanent decline. Will the Shaping Our Appalachian Region initiative this year create jobs in Eastern Kentucky, or just more talk?
Dave Adkisson, president of the Kentucky Chamber of Commerce, said everyone also will be watching to see how Ft. Knox and Ft. Campbell fare as the military downsizes after long, costly wars in Afghanistan and Iraq.
Adkisson thinks Kentucky exports will remain strong. One of the fastest-growing exports is likely to continue to be bourbon whiskey, which is enjoying global popularity.
But international trade has been both a blessing and curse. The Kentucky Center for Economic Policy estimates that 41,100 jobs have been lost in the state since 2001 because of America’s growing trade deficit with China.
Will Congress and the president finally address China’s currency manipulation and other unfair trade practices? Or will new global export agreements now in the works simply ship more Kentucky jobs overseas?
One of the biggest issues facing every Kentucky region is the lack of real wage and per-capita income growth, which is below the national average and a drag on the economy. House Democrats have talked about raising the state’s minimum wage this year, but business groups and Republicans oppose it.