Rand Avenue renovations add to North Limestone renaissance

April 19, 2015

150416RandAve0008Real estate entrepreneur Rock Daniels has been buying, renovating and reselling former rental houses in the first block of Rand Avenue. His contractors are basically rebuilding many of the century-old bungalows, which were structurally sound and have nice architectural detals, but had badly deteriorated after years as rental units.   Photo by Tom Eblen

 

First it was downtown mansions. Then East Lexington bungalows. Now, North Lexington cottages. The popularity of in-town living has brought another wave to Lexington’s home renovation market.

With most of the antebellum houses and Victorian mansions redone and selling for more than $500,000, a good business has developed in complete renovations of homes built a century ago for working-class families.

The wave that started in neighborhoods such as Hollywood, Kenwick and Mentelle has washed up North Limestone.

150408RandAve0022Rock Daniels, a real estate agent who twice ran unsuccessfully for the Urban County Council, is buying and virtually rebuilding early 1900s houses in the first block of Rand Avenue, just north of Duncan Park, as well as some houses on nearby streets.

Laurella Lederer was doing the same thing before him. Having redone much of Johnson Avenue, she is now working on the second block of Rand.

Broken Fork Design has redone several houses and multi-family units, including the Fifth and Lime Flats. It was a much-needed renovation of an apartment complex built after the 1963 demolition of Thorn Hill, a circa 1812 mansion where Vice President John C. Breckinridge was born.

Chad Needham, who redid the old Spalding’s Bakery at East Sixth and North Limestone and the building that now houses North Lime Coffee & Donuts across from it, has done several other houses and commercial buildings in the area.

Needham’s most recent project is especially impressive: an early 1800s house at the corner of North Limestone and West Fifth Street that became commercial space long ago and had fallen into terrible shape. Beautifully renovated, it now houses Fleet Street Hair Shoppe.

Rand Avenue, created in 1892, still has most of its original houses. A notable exception is No. 264, a vacant lot since about 2001. It was the childhood home of Elizabeth Hardwick (1916-2007), whose father was a plumbing contractor.

Hardwick left Lexington for New York in 1939 and became a famous fiction writer, essayist and critic, a founder of the New York Review of Books and wife of poet Robert Lowell. She was recently inducted into the Kentucky Writers Hall of Fame.

Since the 1980s, though, Rand Avenue has largely been rental property. Broken Fork did one of the first renovations there — the house where the Spalding family started frying their famous donuts in 1929.

Daniels, who lives in the Hollywood neighborhood, saw Rand Avenue as a promising area for young professionals who wanted to live near downtown, wanted a house and yard rather than a condo, but couldn’t afford larger renovated houses.

The first house he renovated sold in November for $182,500. He is now doing nine more on Rand, three of which are already under contract, two to medical school residents and one to a physical therapist, he said.

Daniels showed me through one of them, a circa 1910 frame cottage with about 1,200 square feet. It had been a rental house for years. He bought it for $36,000, is investing about $80,000 in renovation and hopes to sell it for about $165,000. His nearby renovated houses are priced around $145,000.

With each house, his contractors install a new roof, take the house down to the studs and make any needed structural improvements. They preserve what historic fabric they can. But except for restored heart-pine floors, most things will be new: windows, wiring, plumbing, heating and air, insulation, kitchens and siding on the non-brick houses.

Many houses have small interior coal chimneys that can’t be reused. They are removed for a more open floor plan, but the bricks are reused for walks.

“We try to save and repurpose as much as possible,” said Daniels, who grew up in a National Register historic house in Bristol, Tenn.

Daniels wants to buy all of the rental houses he can on the street, he said, but none that are owner-occupied. In fact, he said, he has offered to make improvements on those houses at cost.

He will soon be building a new porch for homeowner Janice Hamilton and her husband. She has lived there since 1981 and likes what is happening on her street.

“When I first moved here it was a lot of older people, most of them homeowners,” Hamilton said. “And then a lot of them died out and it became rental property. So it became a little this and that.

“Now I’m glad to see it coming back to the way it used to be,” she said. “A lot of people give Rand Avenue a bad rap. We had some bad tenants years ago. But it’s quiet, it’s close to town. Everybody looks out for each other. I’m looking forward to new homeowners.”

Daniels sees a lot more potential for restoring North Lexington neighborhoods.

“Of course, we’re looking for what the next Rand Avenue is going to be,” he said. “There are so many people who want to move downtown.”

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


NoLi CDC gets $550,000 grant to turn bus station into public market

March 31, 2015

NoLiRichard Young, left, and Kris Nonn of the North Limestone Community Development Corp. stand in front of the former bus station near the corner of North Limestone Street and West Loudon Avenue that the NoLiCDC hopes to acquire from LexTran and turn into a community market.  Photo by Tom Eblen

 

The nonprofit North Limestone Community Development Corp. will get a $550,000 grant to help turn a former Greyhound bus station into a public market and local food hub focused on the surrounding neighborhood.

The John S. and James L. Knight Foundation is announcing the grant Tuesday as part of its first Knight Cities Challenge.

The foundation split $5 million among 32 projects it thinks can attract talent, improve economic opportunity and increase civic engagement in 12 of the 26 cities where the Knight ­brothers once owned newspapers, ­including the Lexington Herald-Leader. Winners were chosen from 125 finalists culled from 7,000 proposals.

The goal of the NoLi CDC project is to make locally grown food more available in the low-income neighborhood, which has been experiencing a renaissance in recent years with an influx of young, entrepreneurial and community-minded residents.

The market also would provide stalls and shared ­infrastructure for “makers” and other entrepreneurs in the neighborhood who want to start businesses, said Richard Young and Kris Nonn, the NoLi CDC’s two staff members.

The NoLi CDC has shown the potential for a public market in the neighborhood by sponsoring a monthly Night Market on the lower block of Bryan Avenue, between West Loudon and North Limestone.

Several thousand people came out to each of the festival-like markets last year, and about half the merchants and vendors were from the neighborhood. The first Night Market of 2015 will be 7 to 10 p.m. Friday.

Bahia Ramos, a program director with the Miami-based Knight Foundation, said she “really had a blast” when she attended a Night Market last year.

“There was such a diverse cross-section of people, and a genuine outpouring of good energy and creativity,” she said. “We wanted to be a catalyst to help grow that out.”

The NoLi CDC’s focus has been creating entrepreneurial opportunities for people to live and work in the North Limestone corridor.

Another of its projects is the York Street “makers spaces” — renovated 1920s shotgun houses where makers can live and work. That project, which is applying for a new type of city zoning, received a major grant last year from ArtPlace America, which focuses on encouraging “creative placemaking” in communities.

NoLi CDC hopes to put its public market and food hub in a huge Art Deco building on West Loudon Avenue, a block from the Night Market site. The only problem is that it doesn’t own the vacant building, which has nearly 104,000 square feet on 2.4 acres.

Built in 1928, it was the headquarters of Southeast Greyhound Lines until 1960. The building is now owned by the Lexington Transit Authority, which wanted to demolish it for a new headquarters. Lextran later decided to build a facility nearby, and the old building has been added to the National Register of Historic Places.

Lextran officials wrote a letter supporting the NoLi CDC’s grant application. Lextran plans to solicit sealed bids for the building within six months, spokeswoman Jill Barnett said

Acquiring and then renovating the building, which will cost several million dollars, are some of the challenges to be overcome, Young and Nonn said. But the Knight grant will give them working capital to get the project started.

Multi-tenant public markets have been very successful in many cities, Young said, noting such examples as Findlay Market in Cincinnati and Mercado La Paloma in Los Angeles.

“A lot of times you hear people talk about starting a business as ‘taking the plunge,'” Nonn said. “This would mitigate the risk associated with that” by providing shared facilities, a shopper base and other support services.

Theoretically, these projects would allow a neighborhood resident to start a business in his or her home, graduate to a market stall and eventually grow enough to have a shop in the neighborhood.

Young and Nonn worked closely with Ashton Potter, the city’s new local food coordinator, to make plans for the public market to also serve as an aggregation, processing and sales point for Central Kentucky farmers. It would include a commercial kitchen that entrepreneurs could rent to test or produce food products.

“This building that is going to be coming up for sale can go to a use that is incredibly beneficial for the neighborhood,” Young said. “Lifting the access barrier to entrepreneurial activity is something that’s really important.”


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.


It won’t be cheap, but Lexington must renovate old courthouse

March 24, 2015

141231Downtown0070The old Fayette County Courthouse. Photo by Tom Eblen

 

Remember the old TV commercials for Fram oil filters? An actor dressed as an auto mechanic would explain how a costly repair could have been prevented with regular oil changes.

His punch line: “You can pay me now, or you can pay me later.”

Those ads came to mind as I read the report about all that is wrong with the old Fayette County Courthouse and what must be done to fix it. The building is well into “pay me later” status, and any further procrastination will make things worse.

Lexington’s EOP Architects and Preservation Design Partnership of Philadelphia spent six months cataloging decades of serious abuse and neglect of an iconic building that has defined the center of Lexington for more than a century.

This Richardsonian Romanesque temple of limestone, completed in 1900, symbolized the idea that public buildings should be beautiful as well as functional. It had a 105-foot-tall rotunda with a bronze-plated staircase paved in white marble. The dome was illuminated by then-new electric lights, and the cupola was crowned with a large racehorse weathervane.

But by 1930, growing Fayette County government needed more office space. Rather than branch out to annexes, more and more was crammed into the courthouse. The ultimate architectural insult came in 1960-61, when the rotunda was filled in and most of the elegant interior gutted to add elevators and more office space.

Building updates were ill-conceived. Little was spent on maintenance. The weathervane, damaged by a storm, was taken down in 1981.

The courts moved out in 2000 to new buildings two blocks away. The old courthouse was handed off to the Lexington History Museum and left to leak and crumble. Concerns about lead paint contamination prompted its closure in 2012.

The old courthouse is just one example of how Lexington squandered a rich architectural inheritance. For decades, “out with the old, in with the new” was city leaders’ motto. Much of the new was poorly designed and cheaply built.

There were many short-sighted demolitions, such as Union Station and the Post Office on Main Street, plus “modernizations” that now look ridiculous. New schools and office buildings were often cheap imitations of contemporary architecture. The city allowed many handsome buildings to be razed for parking lots.

There also was a lot of “demolition by neglect”, a trend that sadly continues at such places as the 1870 Odd Fellow’s Temple that most recently housed Bellini’s restaurant. It’s no wonder, since the old courthouse such a visible example.

Mayor Jim Gray deserves credit for trying to change things. The Downtown Development Authority and its consultants have put together an excellent, no-nonsense plan for a public-private partnership to renovate the old courthouse as a visitors’ center, public events venue and commercial space.

The cost of fixing and upgrading the building for new uses won’t be cheap: about $38 million, although about $11 million could come from historic preservation tax credits.

But what other choice do we have? The old courthouse is a black hole in an increasingly vibrant downtown that will soon include a 21C Museum Hotel in the restored First National building.

The consultants’ report says the old courthouse is basically sound structurally, but the damage so severe that a purely commercial restoration isn’t feasible.

That means city leaders must finally face up to their responsibility, just as they had to do when the U.S. Environmental Protection Agency forced the city to fix long-inadequate sewer systems that were polluting neighborhoods and streams.

Fortunately, many Urban County Council members have expressed support for restoring the old courthouse. They recognize it as an investment in Lexington’s future. But you can bet some will vote “no” to try to score political points, just as three members did on the necessary sewer rate increase recently.

After all, what’s the alternative? Tear down the old courthouse? Imagine the bad publicity that would bring Lexington, especially after city officials in 2008 allowed the Webb Companies to destroy an entire block nearby to create a storage pit for idle construction cranes.

Demolition of the old courthouse would tell tourists that the “city of horses and history” doesn’t really care about its history. And it would tell potential residents and economic development prospects that Lexington is too cheap and short-sighted to care for its assets or invest in its future.

I think most Lexington leaders are smart enough to bite the bullet and do the right thing here. And if they are really smart, they also will make other investments to avoid big taxpayer liabilities in the future. As the old courthouse and EPA consent degree have painfully demonstrated, “pay me later” is rarely a wise choice.


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.


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.”


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.


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.


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.


Gray is right to focus on Town Branch Commons, old courthouse

January 20, 2015

141231Downtown0070Finding a way to renovate the old Fayette County Courthouse, which has been shuttered since 2012, is one of Mayor Jim Gray’s priorities for 2015. Photo by Tom Eblen 

 

Mayor Jim Gray set the right tone in the first State of the City Address of his second term. After four years of getting Lexington’s fiscal house in order, he said, it is time to make critical investments for the future.

Gray’s strength as mayor has been his ability to tackle previously ignored problems while at the same time articulating an ambitious but sensible vision for Lexington’s future.

The mayor began by ticking off accomplishments, including public safety investments and tens of millions of dollars in cost-savings from restructuring city employee health care and pensions and “value engineering” sewer improvements.

But the heart of his speech was a call to action on two downtown projects that should be high on Lexington’s priority list. He also hinted at a third project, politically sensitive but long overdue.

The first project Gray highlighted is restoring and repurposing the old Fayette County Courthouse, a 115-year-old limestone landmark in the city’s historic center.

When the courts moved to new buildings down the street a dozen years ago, the abused and neglected old courthouse became home to the Lexington History Museum. It was shuttered in 2012 because of lead paint contamination, then officials discovered structural problems.

It is an embarrassment to Lexington to have its most iconic public building uninhabitable. Demolition would be a tragedy. It needs to be restored, but for what?

“The courthouse needs to be imaginative, innovative and functional … a gravitational pull that will attract citizens and visitors,” Gray said.

The mayor wasn’t more specific, but he said an assessment report would be released soon and public meetings would be scheduled in February and March. Gray said he would include funding for the project’s first phase in the budget he submits to the Urban County Council in April.

The best idea I have heard for the old courthouse is to make it Lexington’s version of Chicago’s Water Tower or Boston’s Faneuil Hall — a gathering place for locals and the spot where tourists start their visit to Lexington.

Such a plan could bring back a smaller history museum, as well as rotating exhibits to entice people to visit attractions such as the UK Art Museum and the Headley-Whitney Museum. Distillery and horse farm tours could leave from there, bringing visitors back to the bars and restaurants around Cheapside.

The second project Gray touted — and promised initial funding for in his budget — is Town Branch Commons. It is a brilliant plan to create a linear chain of small parks downtown along the historic path of Town Branch Creek.

Since the creek was buried nearly a century ago, and the railroad tracks beside it pulled up in the 1960s, much of the spine of downtown between Main and Vine streets has been a concrete jungle of parking lots and wasted space.

Turning some of that space into small parks should make downtown more inviting and attract valuable commercial development. The plan will require private as well as public money. It would be built in phases, likely starting with the city-owned parking lot behind the Kentucky Theatre.

“We also need to make plans for the Government Center, a historic building that is costing us far too much to operate and repairs,” Gray said.

The late Foster Pettit, the first mayor of Lexington’s merged city-county government, once told me that moving city offices into the old Lafayette Hotel in the 1970s was always viewed as a temporary solution.

For at least a decade, officials have mused about selling the old hotel to a developer who could restore its beautiful first and second floors and turn the floors above them into apartments or condos.

Such a deal would create more downtown residents, as well as help pay for more cost-efficient city offices elsewhere. One possibility for those offices would be a new building atop the city-owned Transit Center garage.

The biggest misstep of Gray’s first term was his aborted renovation of Rupp Arena and Lexington Center. It failed largely because University of Kentucky President Eli Capilouto had other priorities, and Gray ignored the obvious signals.

Gray didn’t mention Rupp in Tuesday’s speech, but he went out of his way to offer an olive branch to Capilouto. He sat beside him at lunch, mentioned him twice in his speech and praised UK as “our cultural, intellectual and economic anchor and engine.”

In his first term, Gray set an ambitious course for a better Lexington. The test of the next four years will be his ability to bring people together to make it happen.


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.”


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

January 11, 2015

ark3

 

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.


Urban-rural divide will challenge Kentucky economy in 2015

January 5, 2015

141231Downtown0113b21C 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.


Want to improve the economy? Narrow the growing wealth gap

December 21, 2014

Many politicians and business executives like to complain about the slowness and fragility of the economic recovery. Then they push policies to keep it that way — or make it worse.

What they don’t seem to understand is that the best way to improve the economy is to put more money in the pockets of average people who will spend it.

Instead, these politicians and executives oppose raising the minimum wage, which has been $7.25 an hour since 2009 and losing ground to inflation for decades. A low minimum wage keeps wages just above it depressed, too.

Then there are the perversely misnamed “right to work” laws. Their real purpose is to weaken what is left of labor unions so that big business, which already seems to have bought control of government with campaign contributions, has nobody to challenge its power.

Add to that efforts to repeal Kentucky’s “prevailing wage” law, which would cut the pay of working men and women who build public construction projects.

The biggest drag on the economy — and perhaps the biggest threat to America’s long-term prosperity — is the widening wealth gap between the haves and have-nots. Narrowing the gap is in everyone’s best interest, whether they realize it or not.

The prevailing-wage law became a flashpoint last week at a state legislative meeting. The law is designed so that public construction projects pay wages that reflect those in the local community. But as so much of the construction industry has become non-union, critics argue that the law puts too much emphasis on higher union wages.

The Legislative Research Commission compiled a report showing that construction workers on state projects earned $8 an hour more than those on private projects. Workers on 12 school district projects earned $11.37 an hour more.

But critics objected to the analysis, saying it looked only at labor costs, not total project costs. Might more skilled, better-paid workers complete projects faster and better? Besides, higher wages help strengthen local communities.

The irony is that most of the legislators who think construction workers are overpaid have little to say about the sometimes obscene compensation policies at state government’s highest levels.

Kentucky’s public pension systems are among the most under-funded and least transparent in the nation, yet they provide rich benefits for part-time legislators and other high-ranking officials smart enough to game the system.

And then there is the case of the Kentucky Community and Technical College System president, long the nation’s highest-paid community college leader. He recently retired with a $300,000 handshake.

Warren County’s Fiscal Court last week approved Kentucky’s first county “right to work” ordinance, although it is unclear if it is legal under state law.

Republican legislators and chambers of commerce would like to make Kentucky a “right to work” state. That would make Kentucky more “friendly” to companies that want to come here and pay low wages. Studies show right-to-work states often do have faster job growth — as well as lower overall wages and higher poverty rates.

Since Congressional Democrats failed to overcome Republican opposition to raising the federal minimum wage, a statewide minimum-wage increase has been proposed by Democrats in the Kentucky General Assembly. Last Thursday, Louisville’s City Council raised the local minimum wage to $9 by 2017 on a 16-9 party-line vote.

Predictably, business groups and right-wing activists argue that would cause huge job losses — even though it has never happened with previous minimum-wage increases.

Since Ronald Reagan was elected president in 1980, economic policies and trends have largely been based on “trickle-down” economic theory — the notion that if the rich get richer, everyone else will prosper, too. Trouble is, it hasn’t worked that way.

Wealth inequality in the United States is now higher than at any point since the 1920s. The vast majority of all income growth is going to the rich. Corporate profits and the stock market are at record highs. But average workers are losing ground, and the overall economy remains sluggish.

This is a global problem, too, prompting Pope Francis to take up the issue last year in a papal statement worthy of a few amens.

“Some people continue to defend trickle-down theories, which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world,” the Roman Catholic Church’s leader wrote. “This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power.”


Chevy Chase entrepreneurs plan Small Business Saturday event

November 23, 2014

141120ChevyChase-TE0044High Street Fly, a clothing boutique, is one of several new shops in Chevy Chase. Below, Danielle Montague, owner of MonTea specialty tea shop, helped organize the area’s Small Business Saturday event on Nov. 29. Photos by Tom Eblen

 

The holiday shopping frenzy begins this week, and local business owners want you to remember Small Business Saturday between Black Friday and Cyber Monday.

This day is about supporting locally owned businesses so more of your money stays in your community. It is about finding goods and services you never find in big-box stores. And it is about helping to keep your town unique and interesting, rather than letting it become just another generic link in the national retail chains.

One of Central Kentucky’s biggest Small Business Saturday events Nov. 29 is being planned by the Chevy Chase Business Owners Association. While some of its activities will last all day, most will be between 4 p.m. and 7 p.m.

Participating shops will have refreshments and a “candy-cane pull” for discount coupons at other neighborhood stores. The association also is working with American Express, which offers a special discount through its Small Business Saturday program. (More information: Americanexpress.com.)

141119ChevyChase-TE0021Chevy Chase merchants are organizing a coat drive for Lexington Rescue Mission and a store window-decorating contest in which customers can vote. Free carriage rides will be offered in front of John’s New Classic Shoes on South Ashland Avenue.

“Santa will be making visits, and we’re working on carolers,” said Danielle Montague, an association leader and owner of MonTea, a specialty tea shop.

Chevy Chase was built between the 1920s and 1960s on land that had been part of statesman Henry Clay’s Ashland estate. Developer Henry Clay Simpson named the area for the Maryland golf club, where he was a member. One of Lexington’s first “suburban” shopping districts was built to serve the neighborhood.

“We were the original Hamburg,” Montague said with a smile. “We have just about everything here, and it’s walkable.”

The Chevy Chase business district has had a tough year, with months of reconstruction on Euclid Avenue and controversy over a rowdy bar the city shut down in September. But there has been a lot of good news, too.

The business district has been gaining popularity, as a variety of stores, including The Morris Book Shop, Worlds Apart and Donut Days, came in from the suburbs to join longtime businesses such as Farmer’s Jewelers and Chevy Chase Hardware. Several new stores have opened this year, including two in the past few weeks.

Ann-Michael Rawlings, who has operated Calypso Boutique in the Woodland Triangle for seven years, was at Morris buying a book this summer when she noticed the space beside Chevy Chase Hardware was for rent.

She quickly negotiated a lease, renovated it and opened her second boutique, High Street Fly, which specializes in local-themed T-shirts and vintage cowboy boots.

“I love the convenience of the neighborhood,” Rawlings said. “With the hardware store next door, even a lot of guys come in.”

Online retailer C.C. Prep Clothing & Accessories is owned by Atlantans, but when they chose Lexington as the location for their second store (after Charlottesville, Va.), they wanted to be in Chevy Chase.

“We didn’t really look anywhere else,” said manager Amanda Caldwell, who opened the store Nov. 14. “It’s great to be in an area where they support small businesses.”

Melissa Mautz has certainly found that to be true since opening the Pet Wants store in February. It sells fresh, regionally made dog and cat food, GMO-free chicken feed and American-made pet accessories.

“I knew I wanted to be in Chevy Chase, and business has been awesome,” she said. “We like being a part of this community.”

But like most retailers, Chevy Chase’s business owners know that the holiday season can make or break their year. “We rely heavily on it,” Montague said. “You can make your entire year’s rent in a month.”

Gary Doernberg, who opened Corner Wines five years ago in a tiny space that originally was a 1930s gas station, agrees. His shop specializes in low-priced wine lots from top vineyards, and this is high season for entertaining and gift-giving. But he has found Chevy Chase to be a great place to do business year-around.

“I’ve always loved this location,” Doernberg said. “I’ve been in the wine business, wholesale or retail, for 40 years. This is not the most money I’ve ever made, but it’s the most fun I’ve ever had.”

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Artists must learn business skills to make a living from their art

November 17, 2014

lackyJohn Lackey at his studio at North Limestone and Sixth streets. Photo by Tom Eblen

 

Lexington is starting to become a city where an artist can earn a living, but it requires almost as much focus on business as art.

Successful artists tell me they have had to learn strategy, salesmanship, client management and finance to earn money from their passion. Most of all, they have had to be flexible entrepreneurs, willing to try new things and see where they lead.

I talked about these issues last week with John Lackey, an independent artist in Lexington for a dozen years. Since 2010, he has operated Homegrown Press Studio & Gallery at the corner of Limestone and Sixth streets.

Lackey is best known for his intricate block prints and colorful acrylic paintings of Kentucky landscapes. They are fanciful scenes from nature, filled with swirling clouds and curly trees that almost seem to dance.

But Lackey does a lot more, both out of passion and necessity. He has done logos and other commercial art for businesses, including Alfalfa restaurant, where he once worked, and North Lime Coffee and Donuts, which shares his studio building. He also has produced more than a dozen concert posters for his favorite band, Wilco.

Lackey, this month, was commissioned by Kroger to paint an outside mural for its new Euclid Avenue store. The five interconnected, 12-by-7-foot panels along Marquis Avenue will depict “the trees with the most personality in Woodland Park, with human activity in the background,” he said.

He also is getting into filmmaking, after years of playing with time-lapse and animation photography. Lackey has an Indiegogo.com campaign that runs through Tuesday to raise money for a full-length movie. It will be set in Lexington’s northside and focus on themes of community and sustainability.

Lackey learned figurative art and print-making at the University of Kentucky, but some of his most useful professional skills were acquired during several years of hiatus between his studies, when he worked at lumber yards and car dealerships.

“I learned a lot that I still use today when I sold cars,” he said, including negotiating skills and how to read customers.

Lackey spent 14 years as a graphic artist for two Lexington TV stations, where he learned more about art and deadlines. He was then able to begin building an independent art career, thanks to an understanding wife with a steady paycheck.

Early on, he realized the work is a lot like being a home-improvement contractor. Customers who commission work have ideas, but often don’t know exactly what they want. That’s where listening skills and artistry come in.

Lackey said that being willing to try new things has helped him both get jobs and stretch artistically.

“At first, I didn’t do a lot of saying no, because I needed the money, and it pushed me out of my comfort zone,” he said. “It’s good if you have different things you like to do in art.”

The Kentucky Arts Council helped Lackey expose his work to potential clients. After being included in a show at the Governor’s Mansion, he was chosen to create the 2011 prizes for the Governor’s Award in the Arts. The council also helped him get a commission for four seasonal landscape paintings that now hang in the Kentucky Chamber of Commerce’s board room in Frankfort.

Many artists advise against doing free work to get exposure. While Lackey generally agrees, he follows his instinct on some projects where the payoff isn’t obvious.

For example, as a Wilco fan, he engaged others on the band’s website and volunteered to do artwork for a charity event. The band liked it and hired him to create concert posters.

The head of the Clyde’s restaurant chain around Washington, D.C., also is a Wilco fan. He saw Lackey’s posters and hired him to do artwork for the restaurants. The Clyde’s work was seen by Virginia-based Potter’s Craft Cider, which hired him to design its logo and labels. Such jobs can be vital income bridges between fine art projects.

Other free artwork has enriched his life, if not his bank account. Lackey has done more than 60 posters for the Holler Poet’s series at Al’s Bar, across East Sixth Street from his studio, where he occasionally reads his own poetry. Each poster became an opportunity to experiment with new techniques that have improved his work.

“For me, one of the benefits of being an artist is not having to do the same thing twice,” he said. “It keeps your brain regenerating.”


Kentucky development leaders showcase high-tech innovation

September 30, 2014

gamersJason Mize, left, a partner in the Lexington company Really Big Spiders, demonstrated its online game, “Tales from the Strange Universe,” to Jonathan Gay of the Kentucky Innovation Network. Lexington is now a hotbed for electronic game development. Photo by Tom Eblen

 

Who knew Lexington was becoming a hotbed for electronic game development?

That’s exactly why Commerce Lexington and the state Cabinet for Economic Development brought seven freelance journalists here to visit with local game developers at Awesome Inc., the tech business incubator on Main Street.

At a reception Tuesday, they were to meet with other local business leaders, including Carey Smith, CEO of Big Ass Solutions, the giant fan company.

Earlier in the day, some of the journalists toured Northern Kentucky University’s College of Informatics, a new program that focuses on data science applications. Others went to Morehead State University to see the Space Science Center. Later this week, most will be covering the annual Idea Festival in Louisville.

“We just wanted to show them that from small business to big you can do it here in Lexington,” said Gina Greathouse, Commerce Lexington’s senior vice president for economic development.

Lexington has seven full-fledged companies developing electronic and online games and several programmers and artists who work on them part-time, said John Meister. He is a board member of RunJumpDev, a local organization that helps game developers network and promote their products.

Meister also is a partner in one of those companies, Super Soul. After working 10 years as a software engineer, he teamed up with artist Richie Hoagland to develop the Xbox game Compromised in 2012. Their company will soon release Speak Easy, a 1920s-themed fighting game for PlayStation 4.

Meister said game development has been growing in Lexington because many technology workers play games and become interested in making them. Lexington’s low cost of living helps, because it is much cheaper to develop games here than in many other cities with large high-tech communities.

While he wasn’t that interested in gaming, Terry Troy, a Cleveland-based journalist who writes for Scientific American magazine, said he came away from the tour with many story ideas. He was especially impressed by Morehead’s Space Science Center, which has become a national leader in developing small space satellites for research.

“Kentucky is a state of dichotomies; you have the Creation Museum and then over in Morehead is the cutting edge of satellite technology,” Troy said. “I knew there was a lot of innovation in the state, but you just don’t realize how much until you see it. I’m impressed.”