Who’s protecting abusive payday lending? Follow the money.

March 29, 2015

Legislation to rein in payday lenders, who trap some of Kentucky’s most vulnerable people in cycles of debt, died last week in the state Senate, but federal regulators are now stepping up to the plate.

payday-loanSen. Alice Forgy Kerr, a Lexington Republican, sponsored a bill that would limit payday loan interest rates, which can approach 400 percent, to 36 percent, the limit the U.S. Department of Defense sets for loans to military personnel.

The bill was supported by consumer advocates, as well as by both liberal and conservative church groups on moral grounds. But it died in the State and Local Government Committee. Wonder if that had anything to do with the payday lending industry’s campaign contributions to some legislators?

Last Thursday, President Barack Obama and the U.S. Consumer Financial Protection Bureau announced plans for a federal crackdown on payday lenders.

U.S. Rep. Andy Barr, a Lexington Republican who has received several hundred thousand dollars in contributions from financial services companies, issued a press release March 19 about proposed legislation to curb the CFPB’s “reckless regulatory overreaches.”

Looks more like an attempt to muzzle a watchdog that protects citizens from Barr’s corporate benefactors.


If Congress, state won’t raise minimum wage, Lexington should

March 29, 2015

The minimum wage has a big impact on low-wage workers, many of whom must rely on public assistance to make ends meet, as well as the overall economy, which is driven largely by consumer spending.

The $7.25 federal minimum wage hasn’t been raised since 2009. Its value adjusted for inflation has lost more than 25 percent since its peak in 1968.

Congressional Republicans have refused to raise the federal minimum wage. But many states and cities have raised theirs, realizing its importance to both low-wage workers and local economies.

The Democrat-led Kentucky House recently approved a state minimum-wage increase that was rejected by the Republican-led Senate. Louisville’s Metro Council in December approved a gradual minimum-wage increase to $9 over three years, which is being challenged in court.

Urban County Council member Jennifer Mossotti has proposed gradually raising Lexington’s minimum wage to $10.10 an hour by July 2017 and tying future increases to the consumer price index. The proposal also would gradually raise the $2.13 minimum wage for tipped workers, who haven’t seen an increase since 1991, to $3.09 over three years.

Council members are unlikely to consider the issue before June. But when they do, Jason Bailey, director of the Kentucky Center for Economic Policy, has put together a good report about the low-wage Lexington workers who would be affected.

Among the highlights: An increase would directly lift wages for about 20 percent of Lexington workers, 90 percent of whom are older than 20 and 30 percent of whom are 35 and older. Fifty-seven percent are women, 54 percent work full-time and 26 percent have children at home. Read the full report at: Kypolicy.org.

Businesses usually oppose minimum-wage increases — if not the very idea of a minimum wage — saying that increasing labor costs forces them to put people out of work and raise prices. Studies have generally shown those effects to be negligible, and the economic impact to be positive.

A minimum-wage increase is long overdue. If federal and state officials won’t do it, Lexington should join other cities and states that are.


Land-use decisions in rural Fayette County require delicate balance

March 28, 2015

BooneCreekBurgess Carey rides a zip line at his controversial canopy tour, which city officials shut down. The dispute prompted a three-year examination of ways to add more public recreation and tourism opportunities in rural Fayette County which is ongoing. Photo by Tom Eblen

 

A tightly managed, three-year effort to expand public recreation and tourism opportunities in rural Fayette County started coming unwound Thursday as the Planning Commission prepared to vote on it.

Several commission members expressed concern that the proposed zoning ordinance text amendment, or ZOTA, which they and the Urban County Council must approve, would be too restrictive.

They started offering amendments, then put off the matter for more discussion until May 21 and a possible vote May 28. The delay was wise, because these complex zoning decisions have implications far beyond recreation.

The challenge with the ZOTA is striking the right balance of private property rights, public access and the long-term preservation of horse farms, other agriculture and an environmentally sensitive landscape that the World Monuments Fund has recognized as one of the most special and endangered places on earth.

It is important to note that the ZOTA wouldn’t change rules about what property owners can do on their land for their own enjoyment. It affects only new public recreation and tourism-related land uses, both commercial and non-profit.

Part of the problem with the ZOTA process has been that it grew out of a nasty dispute between Burgess Carey and some of his neighbors in the Boone Creek area off old Richmond Road.

Carey has a permit to operate a private fishing club on his property in Boone Creek Gorge. But he expanded it into a public canopy tour business, in which people toured the gorge from treetop platforms using zip lines and suspension bridges.

Neighbors opposed the business, and city officials shut it down.

Carey’s aggressiveness antagonized officials and made it easy for opponents to brand him an outlaw rather than debate the merits of having a canopy tour on Boone Creek. That’s a shame, because it is a well-designed, well-located facility that the public should be able to enjoy.

The Boone Creek dispute prompted the ZOTA process and made it contentious from the beginning. One result was that the city task force created to study the issue wasn’t as open as it should have been to public participation and diverse viewpoints. Hence, last week’s Planning Commission fireworks.

Suburban sprawl is incompatible with animal agriculture, especially high-strung racehorses. Development takes the Inner Bluegrass region’s valuable agricultural soils out of production.

That is why Lexington in 1958 became the first U.S. city to create an urban growth boundary. Without it and other rural land-use restrictions, horses and farms could have been crowded out of Fayette County years ago.

Farmers are understandably concerned about any nearby commercial development. But some other people think it is unfair for traditional agriculture to have a monopoly on rural land use.

The balancing act gets even more complicated in the environmentally sensitive and ruggedly beautiful land along the Kentucky River Palisades. It is an ideal place for low-impact outdoor recreation and environmental education. But most public access is restricted to the city’s Raven Run Nature Sanctuary.

Preserving these natural areas is complicated, because they need constant care to stop the spread of invasive plant species, especially bush honeysuckle and wintercreeper euonymus, which choke out native vegetation. It is a huge problem.

Much of the land along the river is owned by people dedicated to its care and preservation. Many spend a lot of money and effort fighting invasive species.

But, as a matter of public policy, it is risky for Lexington to count on landowners’ wealth and good intentions forever. It makes sense to give them some business opportunities to help pay for conservation, especially since much of this land is not suitable for traditional agriculture.

Most Fayette County rural land is zoned “agriculture rural.” The ZOTA proposal would create a new “agriculture natural” zoning option along the river with some different permitted uses.

Much of the debate about the ZOTA’s treatment of both zones is about what land uses should be “primary” by right and which should be “conditional,” requiring approval by the city Board of Adjustment. The conditional use process allows for more site-specific regulation, but it can be cumbersome for landowners.

Carey’s lawyer, John Park, who lives on adjacent property along Boone Creek, points out that poor farming practices in that area can be more environmentally destructive than some commercial and recreational uses. But state law gives farmers a lot of freedom from local zoning regulations.

One criticism of the ZOTA proposal — and other parts of Lexington’s zoning code, as well — is that in trying to regulate every conceivable land use to keep “bad” things from happening, the rules aren’t flexible enough to allow “good” things to happen.

These are complicated issues with a lot of good people and good points of view on all sides. More frank and open discussion is needed to reach something close to a community consensus.

Increasing public access to rural recreation and tourism is important, both for Lexington’s economy and quality of life. But it also is necessary for preservation.

People protect what they love. Finding more ways for people to connect with this irreplaceable landscape and agrarian-equine culture will nurture that love.


Interesting tidbits buried in annual Kentucky economic report

March 22, 2015

When the University of Kentucky’s Gatton College of Business publishes its annual Kentucky Economic Report, most people just pay attention to the front of the book, which predicts whether the state’s economy will rise or fall, and by how much.

But I think the rest of the book is more interesting. It is filled with great bits of information that not only tell us about the economy, but offer some clues about the state of Kentucky society, too.

Here are a few gleanings from the 2015 report, published last month by Christopher Bollinger, director of the college’s Center for Business and Economic Research:

CBER■ Kentucky’s landscape may be mostly rural, but its economy is all about cities. The “golden triangle” bounded by Lexington, Louisville and Cincinnati contains half the state’s population, 59 percent of the jobs and 54 percent of the businesses.

■ Wages in metro counties in 2012, the most recent figures available, were 29 percent higher than in “mostly rural” counties and 20 percent higher than in “somewhat rural” counties.

■ How can rural counties improve wage rates? The report offers advice from Mark Drabenstott, director of the Center for the Study of Rural America: encourage home-grown entrepreneurs, “think and act regionally” and find a new economic niche in high-value, knowledge-based industries that leverage the region’s strengths.

■ If you feel like you haven’t had a raise in years, you are probably right. Kentucky’s average weekly wage, when adjusted for inflation, is about the same as it was in the first quarter of 2007.

■ Kentucky’s poor and lower middle-classes have gotten 4.4 percent poorer since the late 1970s, while the state’s middle class has lost 7.5 percent in inflation-adjusted household income. Upper middle-class Kentuckians have seen household income rise 7.7 percent, while the richest 10 percent have seen a rise 16.7 percent. All segments of Kentuckians did much worse than their peers nationally.

■ Kentucky’s earned income per-capita relative to the national average increased steadily from 1960 to 1977 and peaked at 80 percent. But it has fallen since 1977 and is now at 75.4 percent, ranking Kentucky 46th among the states.

■ Lexington and Louisville have seen steady employment gains since 2010 or early 2011 and have returned to or exceeded their pre-recession highs.

■ The disappearance of family farms isn’t news, but the report has some interesting statistics. Kentucky has roughly one-third the number of farms it had in 1950 and the average farm size has doubled. Kentucky lost 8,196 farms during the 2007-2012 recession, the largest decrease of any state. Most of that decline was likely farms going “idle” rather than being developed, the report said.

■ There has been a marked increase in value-added farm products such as jams, salsa, wine and jerky. The production of value-added foods, adjusted for inflation, has risen from $3.34 billion in 1993 to $5.1 billion in 2011.

■ While tobacco has declined sharply, the value of the state’s other major crops — corn, soybeans, hay and wheat — has improved considerably. The most dramatic growth has been in poultry. Broilers (chickens raised for food) are now Kentucky’s most-valuable farm commodity; chicken eggs are 10th and farm chickens are 12th.

■ What Kentucky industry sector has lost the most jobs in the past 25 years? If you guessed coal, you’re wrong. Kentucky in 2013 had 45,000 fewer manufacturing jobs than it did in 1990, a 16 percent decline. The sector that gained the most jobs was educational and health services: 103,700 more people work in those areas, a 67 percent increase.

■ There were 364,000 more Kentuckians employed in 2013 than in 1990, a 25 percent increase, beating the population increase of 19 percent. About 95,400 Kentuckians work for companies that are majority foreign owned.

■ In various measures of “community strength,” Kentucky is on par or better than the national average. Crime rates are lower. Kentuckians tend to trust their neighbors more. They report higher levels of “emotional support and life satisfaction.” But they give less to charity and volunteer less than the national average.

There’s more good stuff in the 2015 Kentucky Annual Economic Report. To download a full copy, click this link.


Workshop offers businesses ideas for saving green by going green

March 15, 2015

Businesses are taking more interest in environmental sustainability, and not just because it is popular with customers and good for the planet. It also can help their bottom line.

Bluegrass Greensource, a non-profit organization that works to promote sustainability in 18 Central Kentucky counties, expects a good crowd March 20 for its sixth annual awareness workshop, Go Green, Save Green.

“The workshop is designed to give you ways to save money,” said Schuyler Warren, the Lexington-based organization’s outreach specialist. “It’s not just about doing it because it’s the right thing to do. It’s a smart business decision.”

BGGreenPosterThe full-day workshop, which about 100 people attended last year, features speakers on a variety of topics, such as improving energy efficiency, storm water management, recycling and waste reduction and sustainable construction and landscaping.

It will include information about grants available to help cover the cost of some sustainability efforts.

Because the workshop is sponsored by Lexington-Fayette Urban County Government, the cost of attending is only $25 for adults and $5 for students, which includes a “zero waste” breakfast and lunch from Dupree Catering and a drink ticket for a social event afterward at Blue Stallion Brewery. (Day-of registration is $40.)

For registration and more information, go to: Bggreensource.org.

“This workshop is a great way to get inspired,” Warren said. “You can get some ideas, and then we can work with you to implement those things.”

The focus of this year’s workshop is energy efficiency, where the costs of improvements can be recouped through lower utility bills. There also will be a presentation by people who have been working on some remarkable energy-saving projects as part of West Liberty’s reconstruction from a devastating tornado three years ago.

Other speakers will focus on less-obvious topics, such as how companies can make it easier for employees to bicycle to work. That reduces traffic, pollution and oil consumption for society, but it also can help businesses cut absenteeism and health care costs by helping employees become more physically fit.

The workshop will be at the new campus of Bluegrass Community and Technical College on Newtown Pike. Included are tours of BCTC’s LEED-certified classroom building and nearby Lexmark facilities.

Last year’s workshop inspired Good Foods Co-op on Southland Drive to plan a renovation of its parking lot this summer to incorporate permeable paving, said Rob Walker, a store manager.

The new paving should help solve the parking lot’s storm water drainage issues, Walker said, as well as help protect Wolf Run Creek, which runs behind the store and has been the focus of extensive neighborhood efforts to improve water quality.

“That’s going to be a great improvement,” he said, adding that the store also is looking at money-saving strategies with energy-efficient lighting he learned about. “It’s an excellent workshop.”

Katie Pentecost, a landscape architect with Integrated Engineering, said last year’s workshop gave her new information about sustainability grants, which some of her clients have been able to get for their construction projects.

“I got way more out of it than I ever thought I would,” she said.

The workshop is part of a city-sponsored program called Live Green Lexington, which includes free year-around consulting services in Fayette County provided by Bluegrass Greensource.

But Bluegrass Greensource doesn’t just work with businesses, and it doesn’t just work in Fayette County.

For example, the organization has a series of workshops from April to June for residents of Clark, Scott, Woodford, Jessamine, Madison and Bourbon counties to help them learn how to install low-maintenance “rain gardens” to handle storm water runoff. The workshops are free, and residents of those counties may be eligible for $250 grants to purchase native plants for their rain gardens.

“The goal is to put a lot of options on your radar,” Warren said. “Things change so fast. I’m a sustainability professional, and every year there are a couple of new things for me that I didn’t know about.”


New MACED president says timing right for new ideas in E. Ky.

March 14, 2015

Peter Hille first came to Eastern Kentucky the day after he graduated from high school. He and other members of his Missouri church youth group piled into vans and drove to Breathitt County to run a summer camp for kids.

“I had this image in my head, probably from watching CBS documentaries on the War on Poverty, that Appalachia was black and white,” he said. “I got down here, and, of course, it was green.

“It was the first week in June,” he said. “You know how the mountains are the first week in June: fireflies all over the hillsides and locusts singing. I thought, I love this place!”

Hille, 59, has nurtured that love for more than four decades, and he is now in a unique position to express it: as the new president of the Mountain Association for Community Economic Development, a non-profit organization based in Berea that works throughout southern Appalachia.

Hille, a graduate of Swarthmore College in Pennsylvania, moved to Eastern Kentucky in 1977 and spent more than a dozen years as a woodworker, cabinetmaker and home builder. It gave him an appreciation for the challenges so many Appalachians face.

“They know this is where they want to be,” he said. “But it’s real challenging to figure out how to earn a living.”

150315PeterHilleHille got into community work and spent 22 years at Berea College’s Brushy Fork Institute, which develops community leaders.

He served nine years on MACED’s board and was chairman until he joined the staff three years ago as executive vice president. He was named president last month, succeeding Justin Maxson, who left after 13 years to become executive director of the Mary Reynolds Babcock Foundation in Winston-Salem, N.C.

Hille is currently chair of the Eastern Kentucky Leadership Foundation, a board member of the Central Appalachian Institute for Research and Development and an advisory board member for the Institute for Rural Journalism. In the 1990s, he was facilitator for the Kentucky Appalachian Task Force.

“I do feel like everything I’ve done up to this point has been leading up to this,” said Hille, who lives with his wife, artist Debra Hille, in a passive solar house on a wooded farm near Berea.

Founded in 1976, MACED has become a respected voice in discussions about Appalachia’s economic transition. It promotes enterprise development, renewable energy and sustainable forestry. MACED also has become an influential source of public policy research through its Kentucky Center for Economic Policy.

“We are at such an exciting time in Eastern Kentucky,” Hille said. “The challenges are as great as they’ve always been, but I think we’ve got some opportunities now that we haven’t always had.”

Perhaps the biggest opportunity, Hille said, is the bipartisan Shaping Our Appalachian Region initiative launched by Gov. Steve Beshear and U.S. Rep. Hal Rogers in 2013.

“It is the kind of clarion call for unity that we so badly need in the region,” he said.

Another opportunity is the Obama administration’s proposal to release $1 billion in Abandoned Mine Lands funds for environmental reclamation and economic development in mining regions.

“We would have to scramble to figure out how to make good use of that money,” he said. “But I think there are a lot of ways to do it.”

While coal will continue to be important to Eastern Kentucky for decades, it will never be what it was, Beshear and Rogers have said. That acknowledgment creates an opening for new and creative thinking, Hille said.

More emphasis should be put on developing renewable energy sources and focusing on energy efficiency. MACED has worked on home energy-saving retrofits for years.

“However much we can scale that up, that is money that is invested in the region, that stays in the region, that is paid back from the savings in the region,” he said.

But the biggest goals should be creating more entrepreneurs and businesses in Eastern Kentucky, and attracting more investment capital. Hille thinks the place to start is by looking at the region’s needs, such as better housing and health care.

“All of those needs represent economic development opportunities,” he said. “What are the opportunities to meet those needs in the region? Or is the first step in health care getting in the car and driving to Lexington?”

Another focus should be on regional assets, such as forested mountains that could be sustainably managed for long-term jobs in timber, forest products, agriculture and tourism. “We haven’t invested in enough possibilities,” he said.

Part of the challenge is changing century-old attitudes about work.

“Instead of trying to find somebody to give you a job, it’s about creating a job for yourself,” he said. “It’s about feeding that entrepreneurial spirit in young people, and then creating the entrepreneurial ecosystem that is going to support those budding entrepreneurs and encourage them to stay here.”

When a region is economically distressed, it means markets are broken in fundamental ways. Government and non-profit assistance may be needed to fix them. But long-term success will only come with the development of strong markets and capital within Eastern Kentucky.

“With economic development, you’ve always got to ask, ‘Where does the investment come from? What kind of jobs are being created?'” Hille said. “In the long run, if we’re only creating jobs and we’re not building assets, if we’re not creating durable capital in the region, if we’re not building sustainable businesses and industries, then outside investments may or may not serve the needs of our communities.”


On the hot seat with redistricting, Alan Stein ignores the noise

March 3, 2015

When I first heard that Alan Stein had agreed to chair the Fayette County Public Schools’ redistricting committee, I thought: Has he lost his mind?

“That’s what everybody says,” Stein said with a laugh. “To some degree that is still a question being asked, mostly by me.”

Stein, a business consultant who brought minor-league baseball to Lexington, is one of the most civic-minded people I know. He championed a school tax increase. He helped revive Big Brothers Big Sisters of the Bluegrass. He is Commerce Lexington’s chair-elect.

But few tasks are as complicated and thankless as redrawing school boundaries. No matter what happens, somebody will be angry.

Redistricting is an emotional issue, because it affects children’s futures and parents’ home values. It can bring out ugly issues of race, class and selfishness. Even at its best, it involves change, and nobody likes change.

The year-long process is coming to a close, so I sat down with Stein this week to talk about it.

In the past, Fayette County school officials redrew boundaries and then sought public comment. This time, the school board appointed a 24-member citizens committee to study the issues and make recommendations.

SteinAlthough school boundaries must be redrawn every few years because of changing population and demographics, this redistricting was prompted by the planned construction of several new schools.

The school board gave the committee a list of guiding principles to consider. “They’re all over the place, and they’re contradictory,” Stein said.

The committee decided to focus on a few of them: minimize disruption; try to keep neighborhoods together and kids close to home; and achieve more balance in race and income among schools when possible.

One thing the committee did not consider was how redistricting would affect individual property values. “For us, it’s a zero-sum game district-wide,” he said.

Parents want their children to attend high-performing schools, rather than low-performing schools. Knowing what makes the difference is not rocket science, Stein said. It comes down to school leadership, parent involvement and resources.

“All of these issues of performance in schools have virtually nothing to do with race,” Stein said. “It’s about poverty. It’s how involved can the parents be, how involved do they choose to be and what resources can they bring to the table.”

Stein cites the example of Ashland Elementary, which was one of the district’s worst-performing schools in the 1990s. Earlier this year, one ranking service rated it as Kentucky’s best public elementary school.

Previous redistricting increased the affluence of its student population somewhat. But the main reasons for Ashland’s turnaround were a good principal and faculty and neighborhood parents who decided to send their kids there and get involved.

“It’s a good example of what can happen,” Stein said. “Every school in our district has the opportunity to be successful.”

Still, poverty is a big issue, and it is getting worse. A decade ago, 27 percent of Fayette students were eligible for free or reduced lunch. Now, it is 54 percent. By 2020, it is projected to be 60 percent.

“We’re losing the middle class,” Stein said. “The income inequality in America is just obscene. It’s obscene to me, and I’m one of the rich guys.”

Some of Lexington’s deepest poverty pockets are in minority neighborhoods.

“Most people would be extraordinarily surprised to learn how segregated, unfortunately, Lexington is,” he said. “You can see it starkly on our maps.”

Stein is proud of how transparent the redistricting process has been, with four listening sessions, dozens of always-open meetings and more than 1,000 written comments from the public.

He thinks this redistricting will achieve good results: less overcrowding at many schools, more kids at schools close to their homes and fewer split-up neighborhoods.

When final lines are drawn, Stein estimates that only 4,000 to 7,000 of the district’s 40,000 students will change schools, and about 2,300 of those will be going to the new schools.

“We’re not going to be as successful as I personally would like us to be in terms of attaining a balance in socio-economic diversity,” he said. “But we’re going to be a heck of a lot better than what we were.”

Stein expects the committee to recommend moving some special academic programs from one school to another to attract affluent families and improve socio-economic diversity.

Parents in some neighborhoods have been especially vocal in the process.

“All of these neighborhoods print up colored T-shirts to show solidarity or whatever; it’s almost comical,” Stein said. “I wish I had started a T-shirt business.

“But we can’t pay attention to the noise. It’s going to be there no matter what we do. You just say let’s try to do what’s right for all 40,000 kids as best we can.”


UK Venture Challenge helps college entrepreneurs refine their ideas

March 1, 2015

150228UKVenture0178Mark Manczyk explained his idea for re.3, a company that would sell sustainable consumer goods, Saturday at the UK Venture Challenge. His presentation won first prize, a $1,500 scholarship, and he will go on to the next level of competition.  The second-place winner was Phillip Gordon, below. Photos by Tom Eblen

 

It takes more than a good idea to create a successful business. But the best way for an entrepreneur to start is to make his or her idea as good as it can be.

That is the focus of the University of Kentucky’s Venture Challenge, a competition for student entrepreneurs. The fourth annual challenge was held Saturday morning at the William T. Young Library auditorium.

Ten teams pitched business ideas to a panel of three judges, who chose three winners to share $3,000 in scholarship prizes. The first- and second-place finishers advanced to regional and state competitions sponsored by the Kentucky Cabinet for Economic Development.

“It’s a great exercise, because learning how to develop ideas is so important,” said Randall Stevens, a Lexington technology entrepreneur who was one of the judges.

“Rarely is your first idea the one that’s going to make it.”

Judging with Stevens were Shirie Hawkins, director of UK’s Bluegrass Small Business Development Center, and George Ward, executive director of UK’s Coldstream Research Campus.

The winner, who received a $1,500 scholarship, was architecture student Mark Manczyk, 23, of Taylor Mill. He pitched his idea for a company called re.3.

150228UKVenture0030The company would sell consumer products with short use cycles — such as non-prescription sunglasses and iPhone cases — that are made by environmentally sustainable methods. The added touch would be that once a product had outlived its usefulness, the company would take it back for recycling.

The judges liked his idea because it was a creative approach to an issue that consumers are increasingly concerned about.

“It’s all about ‘Can you build that brand?'” Stevens told Manczyk, suggesting that he consider a “subscription club” sales model to better engage customers for repeat purchases.

“I think that was a fantastic idea,” Manczyk said afterward, because it could help create a customer community. “It’s about rethinking recycling: the object is in some ways less important than the idea of being able to continually recycle and reuse.”

The second-place winner’s business idea also came from a personal passion, which developed after Phillip Gordon was pickpocketed in Spain. Gordon wants to create Nomad Apparel, a line of travel clothing with a zippered and radio-frequency-protected pocket for safeguarding credit cards and other valuables.

Gordon, 22, from Louisville, has designed jeans with a special secure pocket. He wore a prototype to his presentation, which got high marks from the judges.

“It really gave me an opportunity to hone my presentation skills and public speaking,” Gordon said of the Venture Challenge.

Taylor Deskins and Jessica Shelton pitched an idea for a stock market-themed bar in downtown Lexington, where drink prices would fluctuate throughout the night to engage patrons. They had seen a similar place in Spain.

After they presented, Stevens suggested that rather than open their own bar, they first develop and market the concept to existing bars to use perhaps once a week, as a way to gauge the concept’s popularity with less investment.

Maged Saeed and Alexander Hamilton pitched The Bar Hop, a smartphone app that would leverage social media data to help users decide which bar to go to based on how many of their friends were there and the ratio of men and women in the place.

The students also envisioned tie-ins with ride services, such as Uber and Lyft, and functions for buying drinks. The judges thought it was a creative idea, but was trying to do too many things. Focus on the core idea, they said, and build from there.

Afterward, Saeed and Hamilton spent some time talking with Ward, whose business career has focused on the hospitality industry. He had several suggestions for rethinking their app to increase its likelihood of success.

Warren Nash, director of UK’s Von Allmen Center for Entrepreneurship, pointed over to them and smiled.

“That’s what I like,” he said. “Watching the after-discussions, talking about how do you get there, how do you make the connections.”

Sponsors of the UK Venture Challenge include UK’s Gatton College of Business and Economics and Innovation Network for Entrepreneurial Thinking, as well as the Bluegrass Business Development Partnership, a collaboration of UK, Commerce Lexington and the Lexington-Fayette Urban County Government.

Click on each image to see larger photo and read caption:


In fight over payday lending abuses, it’s churches vs. almighty dollar

February 22, 2015

I love free enterprise, but I believe there is a special place in hell for business people who exploit the poor and vulnerable and politicians who enable them.

A good example is the payday lending industry.

A diverse coalition of Kentuckians, including conservative and liberal religious leaders, plan to gather Tuesday at the state Capitol to urge lawmakers to pass bipartisan legislation limiting the interest and fees on short-term payday loans to an annualized rate of 36 percent.

That is still high compared to normal borrowing costs. But it would be a big improvement over the 400 percent or more that payday lenders can now charge customers.

Photo illustration by Charles Bertram

Photo illustration by Charles Bertram

These two-week loans of $500 or less are designed to help working people cover expenses until their next paycheck. But studies show three-fourths of these loans are renewed or turned into new loans, sometimes trapping borrowers in an endless cycle of debt.

Payday lending emerged as an industry in the 1990s. With about 20,000 storefronts, plus online sites, payday lenders made $40.3 billion in loans and collected $7.4 billion in revenues in 2010, according to the Consumer Federation of America.

Kentucky is one of 32 states that allow triple-digit interest rates on payday loans. The state’s 781 payday lending stores in 2010 made $995.7 million in loans averaging $350 each, according to the Center for Responsible Lending.

Payday lenders collect at least $121 million a year in interest and fees from some of Kentucky’s poorest people, according to the Kentucky Coalition for Responsible Lending. Most profits go out of state — or farther. Advance America, one of Kentucky’s largest payday lenders, is owned by Mexico’s Grupo Elektra.

The Defense Department has limited the interest that can be charged to military personnel at 36 percent, as the Kentucky legislation seeks to do for everyone. Kentucky has put a few restrictions on payday lenders in recent years, but meaningful reform has always been blocked by legislators with lame excuses.

This year’s bill is sponsored by Sen. Alice Forgy Kerr, a Lexington Republican, and co-sponsored by three Senate Democrats, Reginald Thomas of Lexington, Gerald Neal of Louisville and Dennis Parrett of Elizabethtown. Gov. Steve Beshear has supported the interest rate cap since 2009.

Tuesday’s rally is organized by the Kentucky Coalition for Responsible Lending, an impressive list of 89 organizations, including 33 faith groups. Members include statewide associations of Roman Catholics, Baptists, Jews, Presbyterians, Methodists, Episcopalians and Disciples of Christ.

Many of these faith groups disagree on other issues. But the Bible’s Old and New Testaments are clear about the sin of “usury” — charging excessive (or, according to some verses, any) interest on loans to people in need.

With this level of religious support, you would think the bill would be a cinch. But there is a higher power at work: the almighty dollar. Payday lenders spent more than $151,000 last year lobbying legislators and gave them tens of thousands of dollars in campaign contributions.

Legislators who have blocked this bill over the years have had many excuses: there is a demand for payday loans; people with bad credit have few alternatives; it’s free enterprise.

But the truth is there are alternatives, and poor people in the 18 states with double-digit interest caps have found them. Some credit unions, banks and community organizations have small loan programs for low-income people.

There could be more alternatives, too, if Congress would consider ideas such as allowing the Post Office to offer basic financial services, as is done in other countries, or giving poor people an advance on their earned income tax credit.

A bigger-picture solution, of course, would be to raise the minimum wage and rethink trickle-down economic policies that have decimated the middle class and widened the wealth gap to historic levels. But don’t hold your breath for that.

An additional excuse for legislative inaction this year is that Kentucky should wait to see what Congress and federal regulators do. The Consumer Finance Protection Bureau has begun a belated crackdown on payday lending practices.

But only Congress can cap rates at the federal level, and there is little chance of that from the business-friendly Republican majority. Rep. Andy Barr, a Lexington Republican, has been a shameless ally of payday lenders and other financial services companies, which contributed more than $700,000 to his re-election campaign.

I wish the consumer protection advocates and religious leaders good luck Tuesday, but they will need to make many more trips to Frankfort. I just hope they follow the money and keep a good list of which politicians are helping payday lenders prey on Kentucky’s poor and vulnerable — a list they will share widely at election time.


Amid infill construction, how do we help ‘little guys’ already there?

February 15, 2015

150212Downtown0005The Lexington Parking Authority last week created four temporary street parking spaces and a loading zone to help F‡ilte Irish Imports and other nearby businesses that have been hurt by disruption caused by construction of CentrePointe construction, right, and renovation of 21C Museum Hotel in the background. Photo by Tom Eblen

 

The Great Depression left one-fourth of American workers without jobs in 1933, prompting the new president, Franklin D. Roosevelt, to launch a series of relief efforts known as the New Deal.

When conservatives in Congress balked, arguing that market forces would sort out things in the long run, New Deal architect Harry Hopkins famously replied: “People don’t eat in the long run. They eat every day.”

I have been thinking about that quote since November, when a mutual friend told me that Liza Hendley Betz’s little shop was in trouble.

I have known Betz since soon after she opened Fáilte Irish Imports on South Limestone Street in 2001. She did a good business in Celtic gifts and comfort food for her fellow Irish immigrants until the street in front of her shop was suddenly closed in 2009 for an 11-month reconstruction project.

Betz moved Fáilte (pronounced FALL-cha) a couple of blocks away, next to McCarthy’s Irish Bar. It was a great location until the CentrePointe project turned the block across from them into a massive hole and took away their street parking.

Then, renovation of the 21C Museum Hotel closed Upper Street above their block and constricted Main Street traffic. People started avoiding the mess, and Fáilte’s business suffered.

After I wrote about it, Lexington rallied to save the little shop. Thousands shared my column on social media. Other small businesses such as Bourbon ‘n Toulouse restaurant and the Cup of Common Wealth coffee shop sent their customers to Fáilte. Even the mayor’s staff stopped in for holiday shopping.

“People came out of the woodwork,” Betz said. “It was the best Christmas ever.”

With St. Patrick’s Day approaching, Betz and the owner of McCarthy’s recently asked city and LexPark officials if one of their street’s two lanes could be closed for parking until Upper Street above them reopened. The officials thought it was a great idea. Last week, four metered parking spaces and a loading zone were created.

While I am happy things are working out for Fáilte, there is a bigger issue here worth serious thought and action.

With Lexington’s new focus on infill and redevelopment, the central business district could be a rolling construction zone for years to come. If we are lucky.

That will be great for Lexington in the long run. In the short run, though, specific strategies should be developed to help small shops, restaurants and bars remain open amid the mess and disruption.

Most of these entrepreneurs don’t have deep pockets. But their businesses give downtown its unique character, and it is in Lexington’s best interests to keep them going.

How could Lexington minimize the collateral damage of infill and redevelopment? Several business people and city officials I talked with had good ideas. Among them:

■ When tax-increment financing districts are approved for new development, could some TIF funds be earmarked to help existing businesses during the transition? This help could range from cash compensation to special signage and other promotional help.

■ In addition to temporary parking solutions, might LexTran adjust routes to make it easier for customers to get to affected businesses?

■ Could local media companies offer discounted advertising to affected businesses, perhaps in return for long-term contracts?

■ Could city government appoint a liaison to work with affected business owners, to keep them informed of street closings and other disruptions, trouble-shoot problems and brainstorm ways to make things easier?

■ Could Commerce Lexington, Local First Lexington and other business organizations promote these businesses through social media and other venues?

■ Could the University of Kentucky business school’s faculty and students lend their expertise and advice?

■ Could developers of new projects be better neighbors, involving surrounding businesses in their construction planning process to minimize disruption?

Betz said she and other downtown entrepreneurs are excited about the changes happening around them. They know it will be good for their businesses in the long run — if they can keep eating until then.

“This whole thing has given me new hope,” Betz said. “We just don’t want people to forget about us little guys.”


Plans for East Kentucky future must include repairing coal’s damage

February 10, 2015

130214MountainRally0378 copyHundreds will march to the state Capitol  Thursday for the 10th annual I Love Mountains Day protest of destructive strip-mining, as they did in this 2013 photo. Below, Gov. Steve Beshear and U.S. Rep. Hal Rogers attend the first SOAR summit, Dec. 9, 2013. Photos by Tom Eblen

 

Two large public gatherings are planned in the next week by groups trying to create a brighter future for Eastern Kentucky.

They come from different sides of the “war on coal” debate that has polarized discussion of these issues, but they have more in common than you might think.

The first event, Thursday in Frankfort, is the 10th annual I Love Mountains Day, organized by the citizens’ group Kentuckians For The Commonwealth. (Information and registration: Kftc.org.)

In what has become an annual rite, hundreds of people will march to the Capitol steps and urge the governor and General Assembly to stop the coal industry’s most destructive surface-mining practices. And they will be ignored.

Few legislators will come out to hear them. Neither will the governor, nor any candidate for governor who has any chance of being elected. Most politicians think they must be unequivocal “friends of coal” to get elected, regardless of the toll on Kentucky’s land, air, water and public health.

131209SOAR-TE0093 copyThe other event, Monday in Pikeville, is the second summit meeting of Shaping Our Appalachian Region. SOAR is a bipartisan effort to improve life in Eastern Kentucky that was launched in 2013 by Gov. Steve Beshear and U.S. Rep. Hal Rogers. (Information and registration: Soar-ky.org.)

Eastern Kentucky’s coal industry has been eliminating jobs for decades as mines were mechanized, coal reserves depleted and deep mining replaced by “mountaintop removal” and other forms of surface mining.

But the job losses have mounted in recent years because of cheap natural gas, cheaper coal from elsewhere and the Obama administration’s better-late-than-never actions to fight pollution and climate change.

Politicians and business leaders have had to admit that most of Eastern Kentucky’s coal jobs are never coming back, and that new strategies are needed to diversify the economy.

That led to the creation of SOAR, whose 12 working committees have spent the past year conducting more than 100 “listening sessions” throughout the region to hear public comments, gather ideas, assess needs and set priorities.

Strategy Summit attendees will review the committees’ findings and discuss next steps. How those discussions play out could determine whether SOAR can build enough public credibility to make change.

An early criticism of SOAR was that its leadership was drawn almost exclusively from Eastern Kentucky’s power elite. There was little or no representation from coal industry critics or grassroots groups such as KFTC.

The question hanging over SOAR is whether leaders who have done well in Eastern Kentucky’s status quo can be expected to change it. We should get some indication of that Monday, when there will be at least a couple of elephants in the room.

Eastern Kentucky is one of America’s least-healthy places, with high rates of cancer, heart disease, diabetes and drug abuse. Smoking, obesity, poverty, poor eating habits and lack of exercise are to blame for much of it. But not all of it.

One of the biggest concerns citizens expressed in the health committee’s listening sessions was the health effects of surface mining. Scientific studies have increasingly found high rates of cancer, birth defects and other problems in mining areas that can’t be dismissed by other factors. Will SOAR explore that issue, or ignore it?

Another elephant in the room will be President Barack Obama’s Feb. 1 proposal to release $1 billion in abandoned mine land funds to create jobs on environmental cleanup projects.

The long-overdue action could be a huge boost for Eastern Kentucky. But many politicians have reacted cautiously, since it comes from a president they love to hate. This proposal should be a big topic of discussion at the summit. But will it be?

Eastern Kentucky needs many things to have a brighter future: better schools, better infrastructure, less-corrupt politics, more inclusive leadership and a move diverse economy. And, as much as anything, it needs a healthier population and a cleaner environment.

Coal mining has done some good things for Eastern Kentucky over the past century. Although its role will continue to diminish, coal will be an important part of the economy for years to come. But the coal industry’s damage must be reckoned with. The best way to start cleaning up a mess is to stop making it bigger.


New Lexington firm hopes to be link between makers, machines

February 8, 2015

MakeTimeThe MakeTime staff in Lexington. From left: Rick Spencer, Dima Strakovsky, Kasey Hall, founder and CEO Drura Parrish, Steve Adams and Brian Brooks. Photo by Tom Eblen

Suppose your company wants to make something, but you don’t have the equipment. Perhaps you can’t afford to buy it, or the quantity of goods you want to make wouldn’t justify the investment.

On the other hand, suppose your company has manufacturing equipment and staff, but they have blocks of idle time. Would you like to convert downtime into revenue?

That’s the idea behind MakeTime, a new Lexington company that has developed an online platform for matching manufacturers with excess capacity to customers willing to buy it. It is essentially a marketplace for by-the-hour machine time.

“The whole gist is to democratize manufacturing and the whole process of making things,” said Drura Parrish, the company’s Founder and CEO.

“Firms aren’t driving innovation anymore; people are,” he said. “There has to be a next step beyond prototyping so people can at least jump in and try out their ideas.”

MakeTime launched in November, and Parrish expects the company to arrange $2 million worth of gross transactions during its first year.

MakeTime has 14 full-time employees — half of whom are computer programmers in Ukraine; the rest work in Lexington — and Parrish expects to hire 11 more in the coming year.

So far, he said, MakeTime has signed up 80 manufacturing companies with $2 billion worth of capacity and is getting about 10 inquiries a day for buying their services.

I first met Parrish, 38, when he was teaching architecture and digital fabrication at the University of Kentucky’s College of Design. He came there with the former dean, Michael Speaks, from the Southern California Institute of Architecture.

Parrish then started a company, which was recently dissolved, that worked with artists to turn their designs into objects for museum installations around the world. Much of that work was done in an old industrial building on East Third Street, where Parrish also operated a contemporary art gallery called Land of Tomorrow, one purported translation of the Native American word for Kentucky.

Although trained in art and design, Parrish comes from a third-generation manufacturing family in Henderson. His grandfather was a tenant farmer who got into the lumber business, creating what is now Scott Industries.

Parrish said he started doing a sort of pre-Internet version of MakeTime when he was in graduate school.

“I noticed there were a bunch of people with a bunch of machines that sat idle at times, and a bunch of people who wanted to make things and thought they needed to buy equipment,” he said. “I became the literal marketplace. I bought up capacity time and started marketing it.”

Parrish and Dima Strakovsky, who had been a partner in Land of Tomorrow, started developing MakeTime’s online platform, where manufacturers can list their available capacity, clients can list their needs, and they can be quickly matched for jobs. MakeTime’s revenues come from a fee of 15 percent of the transaction amount, paid by the seller.

“Our DNA is still design and art,” Parrish said, noting that many of the company’s employees have design backgrounds, so are trained to be problem-solvers.

Parrish said Lexington is an ideal location for the company, although he couldn’t find enough local software programmers and ended up going overseas for help.

“Within a four-hour ring of Lexington you have just about every manufacturer in the country,” he said. “We’re committed to staying here. The only problem is with programmers.”

Parrish said he has had a lot of help getting started from the Kentucky Science and Technology Corp. and state and local economic development organizations.

But while MakeTime had a couple of Kentucky “angel” investors, much of its startup capital came from New York. Parrish said the shallow pool of local investment capital, and the conservative nature of many local investors, is limiting the ability of entrepreneurs to flourish here.

“It can be hard to believe in the people who are near you,” Parrish said. “But it’s a matter of getting the right resources to grow. The risk of loss is often small, and the potential return is great.”


West Sixth Brewery models “pay it forward” business philosophy

February 1, 2015

When four partners bought the Bread Box building and started West Sixth Brewery nearly four years ago, they said they wanted to do more than make money and good beer. They wanted to make their community a better place to live.

The partners donate 6 percent of profits to charity, plus make other donations and host monthly fundraisers where a different non-profit group receives 6 percent of sales. Last year, the company’s giving totaled about $100,000, partner Ben Self said.

“We expect that to increase significantly” this year, Self said, thanks to a quarterly program built around sales of the newest of West Sixth’s four canned beers, Pay it Forward Cocoa Porter.

pifWest Sixth will present a “big check” Wednesday to GreenHouse17, formerly called the Bluegrass Domestic Violence Program. It is the last of six non-profits getting checks as part of the program launched in September, when Pay it Forward Cocoa Porter began distribution statewide and in Cincinnati.

West Sixth wants to keep GreenHouse17’s award amount a surprise until Wednesday, but partner Brady Barlow said it would be larger than the others. “Lexington is a very thirsty town,” he said.

Other regional awards ranged from $800 to more than $5,000 each in Louisville and Cincinnati. The amounts were based on sales in each region.

The other recipients were Appalshop, the arts and media non-profit in Whitesburg; New Roots of Louisville, which provides fresh produce to needy neighborhoods; Community Action of Southern Kentucky; the Owensboro Humane Society; and Community Matters, which works in Cincinnati’s Lower Price Hill neighborhood.

Here’s how the program works: West Sixth donates 50 cents from each Pay it Forward six-pack, which retails for $9.99, to a non-profit organization “making a difference” in a community where the beer is sold. In all but the Louisville region, West Sixth’s distributors match the donation, for a total of $1 a six-pack.

Each can of Pay it Forward has a website link (Westsixth.com/pif) where customers can nominate a non-profit. Regional winners are selected each quarter by a democratic vote of West Sixth’s 32 employees, so the number of nominations made for each organization doesn’t matter.

Nominations for the first quarter 2015 awards are due Monday, and the brewery staff will meet Tuesday to choose the winners.

There is nothing new about business philanthropy. Most companies do something, some in substantial amounts, depending on their size and profitability.

But West Sixth is an example of a new trend, especially popular among some young entrepreneurs, that has been called Conscious Capitalism. Community responsibility is integral to the business model.

Conscious Capitalism acknowledges that businesses have an impact on and a responsibility to their communities and the environment. It is about serving all stakeholders, not just shareholders. That means three bottom lines, rather than just one: profits, people, planet.

“For us, that means everything from being environmentally sustainable to using local ingredients whenever possible and supporting the organizations doing great work in the communities we’re a part of,” Self said.

The partners’ philosophy extends beyond their core beer business, which is housed in the Bread Box, an 90,000-square-foot 1890s building at the corner of West Sixth and Jefferson Streets that used to be a Rainbo Bread factory.

In addition to the brewery and taproom, the Bread Box houses shared office space for non-profit organizations; artist studios; Broke Spoke, a non-profit community bicycle shop; and FoodChain, an urban agriculture non-profit.

There also are several like-minded businesses there: Smithtown Seafood restaurant; Magic Beans coffee roasters; and Bluegrass Distillers. The building also houses a women’s roller derby league.

Self said the company’s business model isn’t just about altruism: it is also good for business.

“I think there’s no doubt” that community involvement has boosted sales, Self said. “I don’t think we’re bashful about that. And by making a situation that can be a win for the community organization as well as the business, it’s something that can be done longer term.”

West Sixth’s sales have risen from 2,000 barrels in 2012 to 7,000 in 2013 and 11,000 last year. The company plans to add canned seasonal beers this year.

“Kentucky has been really supportive of us from the beginning,” Self said.

West Sixth plans to continue reinvesting in that support.

“If you take care of your community,” Barlow said, “your community will take care of you.”


With Lexington’s downtown on the rise, time to plan for more

January 27, 2015

jeffstHuge crowds came to the Jefferson Street Soiree last fall, underscoring the popularity of a downtown restaurant district that barely existed in 2007. Photo by Matt Goins

 

What a difference a decade makes, and it has barely been eight years.

The Downtown Development Authority has started seeking public comment for a 10-year update of Lexington’s 2007 Downtown Master Plan, which seeks to influence a wider urban area than just the central business district.

Jeff Fugate, who took over the DDA three years ago after Harold Tate retired, started the process Monday by bringing together more than a dozen members of the last report’s steering committee, or their successors.

Fugate’s presentation offered a striking reminder of how much has changed since 2007 — specifically, what a more vibrant, interesting and desirable place downtown Lexington has become. Not that it doesn’t have a long way to go.

Perhaps the biggest difference is public attitudes. Why? For one thing, Fugate said, nightly concerts and events during the 2010 Alltech FEI World Equestrian Games made people start thinking of downtown as a place to gather and have fun.

That was reinforced by a city ordinance allowing sidewalk dining, which made downtown restaurants more popular and profitable. There are now 112 restaurants and bars downtown. That includes the Jefferson Street and Short Street restaurant districts, which barely existed in 2007.

Cheapside has blossomed as a gathering space since the plaza was rebuilt to include Fifth Third Pavilion. That also created a better home for the Lexington Farmers Market, which has grown significantly.

The University of Kentucky, Bluegrass Community and Technical College and Transylvania University have all launched major expansions in and around downtown.

And much of Lexington’s growing high-tech business sector is located downtown, one of many indications of demographic shifts that favor urban over suburban areas.

Several of the 2007 plan’s recommendations have started happening, such as denser land use (Euclid Avenue Kroger), more attractive entrance corridors (Isaac Murphy Art Garden, South Limestone streetscape), and having the Lexington Parking Authority take over and improve city-owned garages.

A total of 93 acres has been rezoned for mixed-use development, opening the way for projects such as the Bread Box, National Avenue and the Distillery District.

Another master plan recommendation called for more housing downtown. That has been slow because of the 2008 economic crisis, but the recovery has sparked several proposals, including Thistle Station on Newtown Pike and residential units in mixed-use buildings planned along Midland Avenue. Plus, UK and Transylvania are building a lot of new student housing.

Sidewalk and intersection improvements have made things better for pedestrians, and many bicycle lanes have been added. The Legacy Trail and the expansion of Town Branch Trail should be completed this year.

The Town Branch Commons proposal would create more green space and address recommendations for improving Vine Street and the Rupp Arena area, which has benefitted from the redesign of Triangle Park and renovations to the Hilton and The (Victorian) Square.

In December, the $41 million 21C Museum Hotel is to open in the old First National Building, a great adaptive reuse of an historic building.

“But there needs to be more about historic preservation,” steering committee member Bill Johnston said. “We didn’t have enough in the last (plan) and we lost some important buildings.”

He was referring to the CentrePointe project, which wiped out a block of buildings dating as far back as 1826. They have been replaced by a hole where a parking garage is supposed to be and two huge cranes, which were erected six weeks ago but have yet to do any work.

CentrePointe showed how little legal protection there was — or still is — for downtown’s iconic old buildings.

The 2007 plan recommended form-based building guidelines. A lengthy task force process has developed downtown design guidelines, but the Urban County Council has yet to debate and adopt them. Like the 2007 plan’s recommendation for returning one-way streets to two-way traffic, design guidelines are politically sensitive.

Steering committee members highlighted several things a master plan update should cover. In addition to historic preservation, they included affordable housing, better garbage solutions than rows of “herbies,” better parking policies, more bicycle/pedestrian infrastructure and more street trees.

If you have ideas, send them to the Downtown Development Authority at info@lexingtondda.com or 101 East Vine St., Suite 100, Lexington, KY 40507.


Development holds promise for downtown Lexington’s eastern edge

January 26, 2015

MidlandPart of the proposed development area along Midland Avenue. Photo by Charles Bertram. 

 

Plans for about $50 million of mixed-use development along Midland Avenue from East Third Street to south of Main Street could reshape downtown’s eastern edge, a strip of land that has long been searching for a new purpose.

Until the 1960s, what is now Midland Avenue carried trains instead of cars. It was a major collection of railroad tracks, flanked by freight depots, industrial buildings, auto repair shops and lumber yards.

The Herald-Leader building replaced a century-old lumber yard on the east side of the tracks, and the Triangle Foundation created Thoroughbred Park to clean up the west side. Still, much of the surrounding land remained vacant or under-utilized.

mapLast month, four property owners got together and won unanimous Urban County Council approval to create a tax-increment financing district that could provide $17 million in taxpayer support for new public infrastructure in the area.

The proposed TIF district is now pending before the Kentucky Economic Development Finance Authority. If approved, some of that infrastructure money also could eventually benefit three public parks in the district: Thoroughbred, Charles Young and the new Isaac Murphy Art Garden.

The plans also would include a pedestrian and bicycle trail along Midland Avenue that would help form the eastern end of the proposed Town Branch Commons.

The Commons would be a string of small parks along the historic path of long-buried Town Branch, a creek that flows beneath downtown from a spring under the Jif peanut butter plant on Winchester Road to Rupp Arena, where it resurfaces.

Developer Phil Holoubek owns the south end of the TIF district, a triangular plot where Main and Vine streets meet that has been an eyesore since a former bank building was demolished. Plans to build a suburban-style drugstore there were wisely abandoned.

Holoubek

Developer Phil Holoubek

Holoubek thinks he has finally found a way to build an attractive, urban-style development on the difficult lot, which sits atop the Town Branch culvert and a major utility junction. His building would have 54 apartments on three floors above 17,000 square feet of street-level retail space.

“It’s like a giant Tetris game,” he said. “But we’re getting it figured out.”

The Lexington Parking Authority has agreed to invest $2.8 million for a three-story, 160-space garage on the site, providing much-needed public parking for the east side of downtown. Holoubek is donating the very point of the lot to the city for Town Branch Commons.

Land north of Thoroughbred Park is owned by former vice mayor Mike Scanlon and his ex-wife, Missy Scanlon. Plans call for it to become offices, retail space and townhouses or apartments overlooking Thoroughbred Park.

The most sensitive part of the plan is the northern section, which adjoins the East End neighborhood along East Third Street. It is mostly owned by Community Ventures Corp., a non-profit that works to improve low-income communities.

Kevin Smith of Community Ventures Corp.

Kevin Smith of Community Ventures Corp.

After extensive meetings with East End residents, Community Ventures has proposed a mixed-use development on 2.75 acres at the corner of Midland and East Third, where it already has one building. The development would include pedestrian-friendly retail space at reduced rents for local businesses, with apartments above.

The property is adjacent to the Charles Young Center and park, which the city recently spent $500,000 improving. TIF district land west of the park is being eyed for affordable housing development.

Holoubek said the entire project is a good mix of commercial development and job-creating community improvement, which has been conceived with a lot of input from neighborhood residents.

Some of those residents remain wary. “It’s just a plan to help promote gentrification and make the colonization of the East End easier,” Corey Dunn said.

But Billie Mallory, an East End activist, said most people in the area are cautiously optimistic the development will benefit the East End, which lost half its population and much of its prosperity as society integrated and families moved to the suburbs.

The East End has been on the upswing since the Lyric Theatre, at East Third Street and Elm Tree Lane, was restored, the Isaac Murphy Art Garden project began and the Lexington Market, a former convenience store at East Third and Race streets, was improved to include much-needed fresh food for the area.

“Third street is our main street,” Mallory said. “I would like to see whatever goes along Third Street benefit the residents.”

Mallory said Community Ventures has always been a good partner for the neighborhood, “so we’ll just have to see. We can’t do anything but trust them.”

Click here to read Tom Martin’s Q&A with developer Phil Holoubeck and Kevin Smith of Community Ventures Corp. about their proposed Midland Avenue project.


Lexington starting to see the benefits of urban redevelopment

January 25, 2015

krogerThe new Euclid Avenue Kroger. Photo by Mark Cornelison

 

It was a great week for “infill and redevelopment,” the popular Lexington catchphrase that is easier to say than do.

First, The New York Times made my little neighborhood look positively hip.

A Travel section story told how Walker Properties and other entrepreneurs are transforming National Avenue, a once-seedy collection of industrial buildings, into “the kind of walkable, shoppable district that is not common in a Southern city of this size.”

The Times made special note of National Provisions, a sophisticated food and drink complex that Lexington native Andrea Sims and her French husband, Krim Boughalem, created in a vacant soft-drink bottling plant.

Lexington often gets press for basketball, horses and bourbon. (And donuts; last year, the Times featured another of my neighborhood’s culinary treasures, Spalding’s Bakery.) But seeing the national media hold up this city as a model for urban revitalization may be a first.

The news got even better Thursday, when Kroger opened its new Euclid Avenue store. It is the best-looking Kroger I have ever seen, and a departure from the suburban big-box model that dominates the grocery industry.

Tailored to its increasingly urban setting, the building welcomes pedestrians and cyclists as well as people arriving in cars. With limited space for a parking lot, Kroger hid more parking on the roof, easily accessible via escalators and elevators.

Although it is almost three times larger than the suburban-style box it replaced, the building minimizes its mass and respects the street. There is a lot of glass, chrome and natural light. The walls have murals by local artists. The extensive grocery selection includes two locally owned restaurant food carts, another first for Kroger.

Neither National Avenue nor the new Kroger happened by accident. They were the result of good planning, hard work, community engagement and leadership by city officials and businesspeople.

Much like the owners of the Bread Box on West Sixth Street, developer Greg Walker has a community-focused vision for National Avenue, and he has found local business and non-profit tenants who share that vision.

Walker worked with city planners on mixed-use zoning that emulates the way cities used to be. You know, before mid-20th century planning philosophies sucked the life out of cities, making them better places for cars than people.

National Avenue’s success also has been made possible by renewal of the nearby Mentelle, Kenwick and Bell Court neighborhoods. They had fallen out of fashion and into decline after Lexington’s suburban building boom began in the 1950s.

Recently, though, these neighborhoods have become hot properties. They’re likely to get hotter, especially since Niche.com, a national online ranking company, last week named Ashland Elementary as the best public primary school in Kentucky.

People once again appreciate these neighborhoods’ walkability and close proximity to downtown, the style and craftsmanship of their old houses and the sociability of front porches, small parks and neighborhood stores and restaurants.

The new Kroger responds well to its neighborhood, which has been getting denser both because of the popularity of in-town living and growth of the nearby University of Kentucky campus.

But without good leadership and community engagement, the new store wouldn’t have turned out nearly as well.

When the grocer first announced plans to replace the Euclid Avenue store, nearby residents pushed back against a “Fort Kroger” big box. Mayor Jim Gray made it clear that a well-designed, urban-style store would be required. As Kroger spokesman Tim McGurk put it, “Mayor Gray gave us good advice throughout the process.”

Gray put Kroger in touch with Lexington architect Graham Pohl, who worked with the company to significantly improve the new store’s design. The effort has paid off, both for the city and for Kroger.

“Based on customer reaction, I can see us repeating” such things as the murals and food carts at other Kroger stores, McGurk said. “It really puts a sense of the local community in the store.”

Lexington leaders like to talk about infill and redevelopment because they see it as the best way to preserve precious farmland. But it is more than that.

Yes, infill and redevelopment can be harder, more complicated and more expensive than green-field suburban development. It often requires creative zoning and financing. It takes leadership and risk. It demands a commitment to excellence, as well as communication with existing neighborhood residents who may fear increasing population density, traffic or simply change.

But these two examples, and others in places such as North Limestone Street, Davis Bottom and Alexandria Drive, show that infill and redevelopment is not just the right thing to do. It can be the best thing to do.


The Breakout Games offers ‘escapism’ for fun, teambuilding

January 18, 2015

15013BreakoutGames-TE0161Breakout Games players Matt Hogg, left, Jon Wicks, center, and Zach Milford figured out a clue while trying to solve a series of puzzles that would allow them to “escape” from the Derby Room as part of a simulation game.  The games are designed to be fun and promote teamwork and problem-solving skills.  Photos by Tom Eblen 

 

With a storyline straight out of a low-budget movie, you and a few friends, family members or colleagues are locked in a room — and maybe even handcuffed and blindfolded.

Can you find clues, solve puzzles and work together well enough to figure out how to escape? And can you do it in 60 minutes, with a digital wall clock ticking down each second?

That’s the premise behind The Breakout Games, a new entertainment business that opened last month in a rented industrial building at 306 North Ashland Ave. For $20 each, the company promises an hour of fun, team-building and mental challenge. (More information: Breakoutlexington.com.)

The company has rooms with two themes from which teams try to break out. One is called the Kidnapping, in which players, blindfolded and handcuffed to a bed frame, must figure out how to free themselves, turn on the lights and decipher a series of codes that will open the door.

The other game is the Derby Heist, in which players try to figure out how to recover the Kentucky Derby trophy, rose blanket and $2 million purse from the home of a crooked veterinarian. A third room, called Casino Royale, will open soon.

Two groups of local entrepreneurs started the business after seeing similar attractions in other U.S. cities, Europe and Asia. When they discovered they were getting ready to open competing facilities, they pooled their resources.

“We decided it would be a fun business to try,” said Jeremiah Sizemore, who with some of the partners also owns Orange Leaf yogurt stores in Lexington. “We’ve always been interested in bringing new things to Kentucky.”

Last week, I stopped by to watch two teams play the Breakout Games.

“It was awesome!” said Matt Hogg, who knows a thing or two about role-playing. He spent several years as a costumed football and basketball mascot for the University of Kentucky and the Washington Wizards.

Hogg and four co-workers from Remix Education, a Lexington educational entertainment company he started, polished their teamwork by playing the Derby Heist. Perhaps because they were used to working together, they broke out with nine minutes to spare — one of the fastest times yet.

“I had done the kidnapping room before, and I loved the difference between the two,” Jon Wicks said. “Just because you’re good at one doesn’t mean you’re good at the other.”

Curt Vernon’s favorite part was “the moment when you figure something out and it clicks. It’s cool because that happens over and over again.”

Across the hall, a group of UK international students ran out of time before escaping from the kidnapping room, but they came close.

“It really makes you work as a team,” said Viabhav Chitkara. “It tests how well you can work as a group with your friends.”

Sizemore said the eight partners have about $50,000 invested in the business so far, and they plan to build more rooms in an adjacent space.

Last weekend, the facility hosted 15 groups, he said, and it has been slow but steady on weekdays. Most teams, of three-to-eight players, have been groups of friends, family members and co-workers using it as a team-building exercise.

“It’s a good fit for different ages,” Sizemore said. “We’ve had 12 and 13-year-olds in there and grandparents, too. Everybody in the group has something to contribute.”

Sizemore said the games are safe. The rooms aren’t really locked, and the handcuffs used in the kidnapping room are easily removed. Staff members watch each game via TV monitors in the control room, looking for any problems.

Teams can ask the control room staff for clues. But after three clues, each additional one costs the team a minute off its allotted hour.

Sizemore said the most successful teams have been those that are aggressive and trust one another to divide the clues and puzzles into small groups, rather than everyone try to work on everything.

The first two game scenarios were developed by two of the business partners, Audra Cryder and Aaron Martinez. Constantly tweaking those scenarios and developing new ones will be key to getting repeat business, Sizemore said.

“We hope it will turn into a successful business someday,” Sizemore said. “But it’s not there yet.”

Click on each image to see larger picture and read caption:


Robert F. Kennedy Jr.: clean environment is good economic policy.

January 17, 2015

KennedyRobert F. Kennedy Jr. speaks at Transylvania. Photo by Mark Mahan.

 

It was a breath of fresh air, especially after an election in which Kentucky politicians of both parties competed to see who could be the biggest sock puppet for the coal industry.

Robert F. Kennedy Jr. spoke at Transylvania University on Wednesday about “Green Capitalism: Why Environmental Policy Equals Good Business Policy.”

Kennedy, 61, son of the slain presidential candidate and nephew of the slain president, is an accomplished environmental lawyer, anti-pollution activist and partner in a renewable-energy investment firm.

Kennedys are like Bushes; most people either love them or hate them on principle, without actually listening to what they say. But this talk was worth listening to, because Kennedy clearly explained our nation’s biggest problem, what could be done to solve it and why that isn’t happening.

Surprisingly, his message had as much appeal for libertarians as liberals. Conservatives could find a lot to agree with, too, if they care about conserving anything besides the status quo.

Kennedy’s main point was that Americans don’t have to choose between a clean environment and a strong economy. In fact, the only way to have a strong economy in the long run is to take care of our nation’s air, water and land.

The best way to do that, he said, is a combination of true democracy and free-market capitalism. Trouble is, polluters have used their money and influence to corrupt the political process and distort free markets.

“You show me a polluter, and I’ll show you a subsidy,” he said. “I’ll show you a fat cat using political clout to escape the discipline of the free market and forcing the public to pay his production costs. That’s all pollution is.”

Kennedy told how he started his environmental career working for commercial fishermen on the Hudson River in New York. Their industry was devastated by General Electric, which for three decades dumped more than a million pounds of cancer-causing PCBs into the Hudson.

“They saw their fishery destroyed, not because they had a bad business model, but because somebody had better lobbyists than they did,” he said.

“One of the things I learned from them was this idea that we’re not protecting the environment so much for the sake of the fishes and the birds; we’re protecting it for our own sake,” he said. “Nature is the infrastructure of our communities.”

Kennedy said we are now seeing a struggle between rich, old-energy industries that create a lot of pollution — coal, oil, gas and nuclear — and new, renewable-energy technologies that are cleaner and increasingly cheaper.

Pollution destroys our natural infrastructure and creates huge public health costs, both in terms of dollars and lives. “It’s a way of loading the costs of our generation’s prosperity onto the backs of our children,” he said.

Fossil fuel industries also receive more than $1 trillion in annual taxpayer subsidies, ranging from direct payments and tax breaks to the huge military presence in the Middle East to secure oil-production assets. Meanwhile, these industries lobby to eliminate the small subsidies offered to encourage alternatives.

If a truly free market forced the oil industry to internalize its costs, gasoline would sell for $12 to $15 a gallon. “You’re already paying that,” he said. “You’re just paying it from a different pocket.”

Kennedy argued for more market-based systems, such as cap-and-trade, to account for the hidden costs of fossil fuels. That would expose their inefficiencies and waste and level the playing field for solar, wind and geothermal.

“You need to devise rules for a marketplace that allows actors in the marketplace to make money by doing good things for the public, rather than forcing them to make money by doing bad things to the public,” he said.

Kennedy likened it to the abolition of slavery in Britain and the United States in the 19th century, a moral decision that helped spark an explosion of innovation in labor-saving technology and wealth that we now know as the Industrial Revolution.

The biggest barrier to renewable energy replacing fossil fuels is the lack of a modern national electric grid, he said. Government investment in that grid would create opportunities for entrepreneurs to flourish, just as previous investments in the Internet, interstate highways, railroads and canals did.

A good way to start would be laws to allow homeowners and businesses to profit, rather than just break even, from electricity they generate with solar panels and wind turbines and sell to utilities.

“It will turn every American into an energy entrepreneur, every home into a power plant, and power this country based on American imagination and effort and innovation,” he predicted.

It also would be good for national security. “A terrorist can blow up one power plant,” Kennedy said, “but he would have a hard time blowing up a million homes.”

Replacing fossil fuels with renewable energy will be complicated. “But it’s not as complicated as going to war in Iraq,” Kennedy said. “It’s something that we can do. We just need the political will.”


Three Lexington projects finalists for $5 million in Knight grants

January 12, 2015

Three Lexington projects are among 126 finalists to share $5 million in grants in the first Knight Cities Challenge, sponsored by the John L. and James S. Knight Foundation.

kcclogo (1)The projects were chosen from among 7,000 submissions by people in the 26 cities, including Lexington, where the Knight brothers once owned newspapers.

The Lexington finalists are:

■ “Fancy Lex,” an event designed to inspire residents to become involved in the city while they enjoy food, music and local products. The idea was submitted by Abigail Shelton for the University of Kentucky’s Citizen Kentucky Honors Class.

■ WorldWall, a giant, all-weather video wall that would allow two-way, real-time interaction between people in Lexington and people elsewhere in the world. The idea was submitted by Dave Anderson.

■ Northside Common Market, which would repurpose the old Southeast Greyhound Lines building at Loudon Avenue and North Limestone as a local fresh-food market and creative business incubator space for local “makers.” The idea was submitted by Richard Young of the North Limestone Community Development Corp.

The bus terminal, built in 1928, was bought by Lextran with the intent of demolishing it to make room for a new terminal. But Lextran changed plans in 2013 after a study determined that the building was eligible for the National Register of Historic Places.

The Knight Cities Challenge is a grant program that the foundation operates with the intent to make the 26 cities “more vibrant places to live and work” by focusing on talent, opportunity and civic engagement. The winning projects will be announced this spring. For more information, go to Knightcities.org.


Ark park fiasco a wakeup call to aim higher with taxpayer incentives

January 11, 2015

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The dispute over tax breaks for a proposed Noah’s Ark theme park is ridiculous on many levels, but it offers a good economic development lesson for Kentucky politicians and taxpayers.

In case you haven’t been following the story, the nonprofit organization Answers in Genesis, which opened the Creation Museum in Boone County in 2007, is trying to build the Ark Encounter attraction in nearby Grant County.

AIG believes in a literal interpretation of the Bible’s creation story that is contrary to both scientific evidence and the views of most Christians. Among other things, AIG’s followers believe the world is only 6,000 years old, and that humans and dinosaurs once lived side-by-side, just as in The Flintstones cartoons.

The Creation Museum drew a lot of tourists — believers and scoffers alike — so AIG announced plans in 2010 to build a big theme park around a 500-foot-long, seven-story-high version of Noah’s Ark.

This time, though, AIG wanted taxpayer subsidies. And it got a lot. But it wants more, even as the project has been scaled back because of fundraising shortfalls.

The city of Williamstown agreed to a 75 percent break on property taxes for 30 years and a $62 million bond issue. The Grant County Industrial Development Authority gave the park $200,000 plus 100 acres of land at a reduced price. The state has promised $11 million in road improvements for the park’s benefit.

The state also agreed to provide $18 million in tourism tax credits, but it withdrew the offer after it became clear that Ark Encounter jobs would go only to people who pass the group’s religious litmus test. You would think state officials could have seen that coming.

Kentucky politicians should never have agreed to these incentives in the first place. And you have to wonder: Would they have done the same for a Wiccan World theme park? Buddha Land? Six Flags over Islam?

AIG has threatened to sue, and it has rented billboards around Kentucky and in New York’s Times Square to wage a holy war of words against what founder Ken Ham calls “secularists” and “intolerant liberal friends” who object to his ministry feeding at the public trough.

The sad thing is, AIG might have a case. It doesn’t help that in 2013, the General Assembly foolishly passed a conservative feel-good law that protects religious groups from vague “burdens” imposed by state government.

So don’t be surprised if AIG — a tax-exempt group with more than $19 million in annual revenue and enough extra cash to rent a billboard in Times Square — argues in court that it is “burdened” by being denied millions more in taxpayer subsidies.

The ark park mess is a symptom of a bigger problem with Kentucky’s economic development strategy. Despite recent reforms, officials aim too low too often. Rather than focusing on high-paying jobs that will move Kentucky forward, they are often happy to subsidize jobs that don’t even pay a living wage.

It is an unfortunate reality that state and local governments must sometimes throw money at corporations to bring jobs to their areas. It has become quite a racket, as companies play cities and states off one another, demanding more and more concessions that shift the burden of public services to everybody else.

Sometimes, such as with the Toyota plant in Georgetown, incentives are good investments. But Kentucky has shelled out money for far more clunkers.

The ark park is a great example of a clunker. It would create mostly low-wage service jobs while reinforcing the stereotype of Kentucky as a state of ignorant people hostile to science.

Think about it this way: For every low-wage job the ark park would create, how many high-wage jobs would be lost because science and technology companies simply write off Kentucky?

But economic development incentives are only part of the problem. Kentucky’s antiquated tax code no longer grows with the economy, and it is riddled with special-interest loopholes that leave far too little public money to meet today’s needs, much less make smart investments for the future.

The ark park fiasco should be a wake-up call for Kentucky politicians to raise their standards.

This state will never become prosperous by spending public money to create low-wage jobs and reinforce negative stereotypes. Prosperity will come only through strategic, long-term investments in high-wage jobs, education, infrastructure, a healthy population, a cleaner environment and a better quality of life.

Everybody say amen.