Lexington one of six ‘university cities’; can it take advantage of it?

October 18, 2015
Mayor Jim Gray, right, greeted University of Kentucky President Eli Capilouto at a Lexington Forum luncheon on Jan. 24, 2012. Photo by Pablo Alcala.

Mayor Jim Gray, right, greeted University of Kentucky President Eli Capilouto at a Lexington Forum luncheon on Jan. 24, 2012. Photo by Pablo Alcala.


Lexington has been a college town for more than 200 years. But when Scott Shapiro, a top aide to Mayor Jim Gray, was benchmarking local data against other cities recently, he discovered something interesting: Lexington was one of six U.S. cities whose numbers place them in a unique category.

This group, which he calls “university cities,” have distinct characteristics that make them different from smaller college towns or major cities with big research universities. And those characteristics translate into big economic development opportunities in the 21st century’s knowledge-based economy.

“This is one of those ah-ha moments,” Gray said of the analysis.

So, how can Lexington capitalize on this insight? We’ll get to that in a moment.

First, let’s see what Shapiro discovered about university cities, which he defined as metropolitan areas of between 250,000 and 1 million people with students making up at least 10 percent of the population.

Each city has a diversified economy closely tied to a major urban research university. In addition to Lexington, the cities are Madison, Wis.; Ann Arbor, Mich.; Fort Collins, Colo.; Durham-Chapel Hill, N.C.; and Lincoln, Neb.

Each city has an abundance of attributes that naturally come with universities, including educated people, talent, openness to new ideas, innovation, entrepreneurialism and a lot of arts and culture.

These cities seem to have more of these attributes than college towns, in short, because they are big enough that many students can stay after graduation rather than moving on to find economic opportunity.

But unlike major cities with universities, these six university cities have a lower cost of living, less crime and, in many ways, a higher quality of life.

Shapiro’s analysis found, for example, that 42 percent of adults age 25 and older in university cities have at least a bachelor’s degree, compared to 29 percent nationwide.

High education levels seemed to have a big influence on productivity and wages. When adjusted for the cost of living, Shapiro found that the median annual salary in university cities is only about $700 below that of the nation’s 15 largest cities.

Unemployment rates from 2009 to 2013 averaged 6.3 percent in university cities, compared with 8.7 percent in other similar-sized cities and 8.8 percent in the nation’s largest 15 cities.

Business starts averaged 16.3 percent higher in university cities than in similar-sized cities, and only slightly below the rate for the nation’s largest cities. The number of non-profit organizations, which often drive social entrepreneurship and improve quality of life, was almost double that of similar-sized cities.

University cities are much safer. Violent crime averaged 36 percent lower in the six university cities than in similar-size cities and 40 percent lower than in the nation’s 15 largest cities.

And university cities are more fun. They have 47.2 percent more arts, recreation and entertainment places per thousand residents than the average of similar-size cities. And while they average fewer cultural assets than the 15 largest cities, they have more of them per thousand residents — 25.7 percent more.

One key attribute of a university city is being the “right” size to balance economic opportunity, cost of living and quality of life. And therein lies a danger. While Austin is what many university cities aspire to become, the Texas capital has lost some luster as housing costs and traffic headaches have risen.

Shapiro has started a blog (Universitycities.org) to share news and ideas about university cities, and he is talking with the University of Kentucky about hosting a national symposium on the topic next year.

This subject isn’t just of interest to academics; it has a lot of practical application.

Lexington’s mayor sees the university city model as an important lens through which to view many things, from business recruiting efforts and workforce-development strategies to land-use planning and infrastructure investment.

“I think it helps us in the sorting and filtering process,” Gray said. “When you know who you are, you have a better chance of getting where you want to go.”

For one thing, he said, it shows that Lexington’s economic development strategy should be mainly built around leveraging assets that grow out of the presence of UK, Transylvania University and other education centers.

It also underscores the importance of making sure affordable housing is available and traffic doesn’t get out of control. It means Lexington should nurture cultural institutions and other quality-of-life infrastructure that talented, educated people and the companies that want to hire them look for in a city.

The next step, Gray said, is to benchmark Lexington’s data against the five other university cities to assess strengths and weaknesses.

“I think we’re poised for exploiting the knowledge economy in a better way than the industrial cities have been,” Gray said. “It’s a question of how do you really take advantage of that.”

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.”

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

January 11, 2015



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.

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.”

Eastern Kentucky jobs outlook: health care and more broadband

August 11, 2014

crouch1Ron Crouch is the director of research and statistics for the Education and Workforce Development Cabinet in Frankfort. He says a growing health care industry in Eastern Kentucky should help offset jobs lost to coal’s decline. Photo by Mark Mahan


There is more talk than usual about the need to create jobs and a more diverse economy in Eastern Kentucky because of the coal industry’s decline.

It made me wonder: what are the latest trends? For some answers, I called Ron Crouch, director of research and statistics for the Education and Workforce Development Cabinet. He previously headed the Kentucky State Data Center for two decades and is better than anyone I know at analyzing this sort of information.

People are alarmed because coal-industry employment in Eastern Kentucky has dropped to about 7,300 — half what it was five years ago. Coal-mining jobs have been important to the region because they pay well: about $65,000 a year.

President Barack Obama’s critics have blamed stricter environmental regulations for the sudden drop in coal employment. But the biggest factors have been cheap natural gas and the fact that Eastern Kentucky’s best coal seams have been depleted over the past century; the coal that is left is more costly (and environmentally damaging) to mine.

But Crouch notes that coal employment in Eastern Kentucky has been declining steadily for more than six decades — even accounting for periodic booms and busts — mainly because of mechanization. Coal production peaked in 1990, but coal employment peaked in 1950, when there were 67,000 miners.

Some Eastern Kentucky leaders have pursued manufacturing as a source of new jobs. But Crouch says the long-term prospects for manufacturing aren’t too good, either, also because of automation.

“Manufacturing is coming back to the United States, but not necessarily manufacturing jobs,” he said. “We’re producing far more goods, but with far fewer workers.”

Still, Crouch sees hopeful signs for Eastern Kentucky.

While the region still lags the state in college degrees, high school graduation rates have improved significantly, as have the number of people completing other levels of training between high school and a bachelor’s degree. Many new, good-paying jobs are for people with that level of education.

Those areas include health care as well as professional, scientific and technical services. Some of these jobs pay well. For example, the number of registered nursing jobs, which pay about $55,000, is growing significantly.

Eastern Kentucky’s health care industry should see big growth in coming years. One reason is demographics. Baby Boomers are now entering their 60s and 70s and will require more health services. Another reason is the Affordable Care Act.

“You’re going to see a huge increase in the number of people in East Kentucky who have health insurance,” Crouch said.

Because Eastern Kentucky families are smaller than in the past, there will be less pressure for young people to leave.

“You now have a population with more people in their 40s, 50s and 60s than in their teens and 20s,” Crouch said. “If those young people can get the education and training they need after high school, there will be jobs for them in East Kentucky.”

But many of the growing economic sectors in the region, such as health care, have traditionally been dominated by women, while shrinking sectors, such as mining and manufacturing, have been mostly male. In some Eastern Kentucky counties, women now have higher employment rates than men.

“The good news is the economy has been transitioning to a broader economy,” Crouch said. “But how do you transition a population of males who have been involved in mining and manufacturing to jobs in professional, technical services and food services and health care, which have largely been female?”

Crouch said improving broadband service in Eastern Kentucky, which has the state’s poorest connections to the Internet, is vital.

“That would accelerate the growth in higher-skilled jobs,” he said.

Crouch is troubled that many Eastern Kentucky counties have high percentages of working-age people not in the formal labor force. He thinks many are “getting by” in the cash and barter economy, some of which is illegal.

He also is concerned that much of the job growth has been in low-wage service industries. Because the legal minimum wage hasn’t kept pace with inflation, full-time work in many low-wage jobs doesn’t produce a living wage for a family.

“The good news is that East Kentucky is not having a brain drain, despite what people think; it’s having a brain gain,” he said. “But, as the saying goes, we’re halfway home and have a long way to go.”

Lexington, Louisville business people to seek ideas in Charlotte

April 7, 2014

College basketball rivalry aside, Lexington and Louisville are working more cooperatively than ever before. The latest example is the upcoming “leadership visit” to Charlotte by members of Commerce Lexington and Greater Louisville Inc.

More than 200 business and civic leaders from Lexington and Louisville will travel to Charlotte June 1-3 to meet with their counterparts there. It is the second time leaders from Kentucky’s two largest cities have made a joint trip; the first was to Pittsburgh in 2010.

This trip’s emphasis will be regional economic development, said Bob Quick, president of Commerce Lexington.

“Charlotte is a place where a lot of regional initiatives occur,” he said, explaining the choice of destination. “We think there could be some good lessons in how they operate as a region. It’s built into their culture.”

Other potential lessons in Charlotte include workforce development initiatives at Central Piedmont Community College, which has forged partnerships with area industries for technical training, much as Bluegrass Community and Technical College has done with Toyota Motor Manufacturing Co. and others, Quick said.

“They fully grasp what a complete educational system you have to have” to create a growing, dynamic regional economy, Quick said.

Another thing Charlotte has that Lexington and Louisville would like to have: authority to ask voters for a local-option sales tax for specific city improvement projects. Government and business leaders in Lexington and Louisville are generally supportive of such taxing authority, but Kentucky’s rural-dominated General Assembly has consistently balked at granting that authority.

While Lexington and Louisville leaders say they have learned a lot from annual study visits to other cities, they are always quick to point out that every city is different and no city is perfect.

Charlotte, for example, has had some recent leadership problems Lexington and Louisville have been fortunate to avoid. Charlotte Mayor Patrick Cannon was arrested by the FBI in late March on bribery and corruption charges. Undercover agents pretending to be investors say they made almost $50,000 in payoffs to the mayor, a 47-year-old Democrat, in return for his help with the city’s permit and zoning process. An indictment is expected later this month.

Quick said Commerce Lexington and Greater Louisville Inc. have worked closely together on economic initiatives for years. But cooperation between the cities has grown considerably since the 2010 trip to Pittsburgh.

Another big reason for the more cooperative atmosphere, Quick said, is the close personal and working relationship between the cities’ mayors, Jim Gray of Lexington and Greg Fischer of Louisville. Both are Democrats and former chief executives of family-owned businesses.

“It’s unprecedented to have the level of trust we now have between Kentucky’s two largest cities,” Quick said.

The most notable cooperative venture is BEAM, the Bluegrass Economic Advancement Movement. It seeks to foster growth in high-tech manufacturing in both cities and the counties along Interstate 64 between them, primarily through focused recruiting and workforce development efforts.

This marks the 75th year that Lexington chamber leaders have made this annual trip to other cities. And while some good local-improvement ideas and momentum have come from the trips, most people go because it is easily the best local networking opportunity of the year.

Where else can you spend almost three days uninterrupted with the mayor, council members and other top leaders in local government and educational institutions, as well as senior executives of local banks, businesses and nonprofit organizations?

There are still spaces available for those wanting to attend. The cost is $2,200 per person ($200 less if you share a hotel room, and another $300 less if you find your own transportation to and from Charlotte rather than taking one of the chartered jets from Lexington and Louisville.)

Four $1,000 scholarships will be given to “emerging leaders” who want to attend. The deadline for applications was to have been Monday, but it has been extended to April 18.

Scholarship candidates must be ages 21-39 and have demonstrated community involvement, including leadership positions in organizations, said Amy Carrington, Commerce Lexington’s leadership development director.

Registration and more information: Commercelexington.com.


Lexington has come a long way in just a few years

December 2, 2013

Lexington changed a lot between the time I went away to college in 1976 and returned in 1998. But I think it has changed even more profoundly since then.

The earlier changes were mostly physical — vast tracks of rural land turned into subdivisions and strip malls. Recent changes have been more about attitudes.

Kris Kimel, president of the Kentucky Science and Technology Corp., talked about some of those attitudes in his interview with Tom Martin. They discussed how Lexington can attract innovative talent for the 21st-century economy.

Kimel understands the power of innovation and ideas better than anyone I know. If you haven’t read the interview yet, grab a highlighter and mark the attitudes he mentions.

Here are some I noted: Self-starter. Creative problem-solving. Imagination. Tolerance for risk and failure. Embracing diversity.

Lexington isn’t as open to new ideas as it needs to be, but it has made considerable progress. This city is less buttoned-down than it was just a few years ago, and that has made it a much more interesting place to live, work and play.

I don’t know why it happened, but I have a few hunches. One is that technology has empowered more people, making it easier for them to innovate and succeed. At the same time, social media has made it easier for them to connect with one another.

Technology has made the structures of Lexington power and influence younger and more diverse. People feel less pressure to conform, less need to seek “permission.” This is especially true in arts and culture, which are leading indicators of social and economic shifts.

131108Mural0025For example, consider the positive buzz created recently when a Brazilian artist was invited to paint a giant, psychedelic Abe Lincoln mural on a big blank wall downtown. It is an amazing piece of art, sure to become a Lexington icon.

Had that happened a decade or two ago, many of Lexington’s powers-that-be would have scoffed. Most likely, such a mural would never have happened at all.

The mere suggestion of it would have spawned high-level discussions where caution would have outweighed creativity. If anything at all resulted, it would have been a “safe” mural that would neither offend nor inspire anyone — perhaps a pretty field of horses, none of which would be blue.

A Lexington Tattoo Project in the 1990s? No way.

Lexington’s economic creativity can be found in low-rent office space all over town. For example, there are dozens of innovative technology companies such as Cirrus Mio, Medmovie and Float Money, plus biotech firms whose market niches are as hard to understand as their names are to pronounce. There are two tech startup incubators on Main Street, Awesome Inc. and Base 163.

Of course, all innovation isn’t high-tech. Sometimes, it’s simply looking around at what makes a place unique and wonderful and finding new ways to develop and market it. Alltech gets it. So do chef Ouita Michel and the “Kentucky for Kentucky” guys. The once-stodgy bourbon industry has become a hotbed of innovation, and business is booming as a result.

Here’s one of my favorite examples of new Lexington creativity:

Four young entrepreneurs wanted to start a craft brewery. But they didn’t just want to sell beer; they wanted to build community. Their West Sixth Brewery has been wildly successful by breaking all of the old “rules.”

Rather than locate in an affluent suburb, they bought an abandoned 1920s bread factory in a transitional northside neighborhood. An old-style developer would have bulldozed the factory and built a faux-fancy brewpub. Instead, these guys hired Lexington developer Holly Wiedemann, a master at turning old buildings into cool, functional spaces.

The once-abandoned factory, now called The Bread Box, houses West Sixth’s brewery and pub, plus other tenants including artist studios, a nonprofit bicycle shop, a coffee-roaster, a women’s roller derby team and a seafood restaurant.

Smithtown Seafood gets some of its fish from Food Chain, an urban agriculture nonprofit that raises them in tanks in the next room. Brewery waste is fed to the fish and fish waste fertilizes greens grown under artificial lights and served in the restaurant. Win, win, win.

The Bread Box is an example of innovative talent in action, and it creates the kind of community where innovative, talented people can see there is opportunity to realize their own dreams.  

Governor’s Scholars alumni hope to create powerful network

September 10, 2013

Randall Stevens was a shy kid from Pikeville when he was chosen for the second class of the Kentucky Governor’s Scholars Program in the summer of 1984. It literally changed his life.

“I think I became me in those five weeks of that program,” Stevens said. “It’s a huge confidence builder. It’s a social awakening with an academic background that really develops leadership.”

The experience inspired Stevens to study computers and architecture at the University of Kentucky, he said. Since then, Stevens has created several software programs and the companies to produce and market them. He also started Base 163, an incubator work space for Lexington technology entrepreneurs.


Randall Stevens

Stevens has met many other Governor’s Scholars over the years whose experiences were similar to his. That got him thinking about the potential of an alumni network, both for the former scholars and for Kentucky’s future.

He recently helped start the Governor’s Scholars Program Alumni Association, which will have its first gathering Sept. 27 and 28 at the Kentucky Center in downtown Louisville. The event is affiliated with the annual Idea Festival there that week.

Speakers at the event include several former scholars: U.S. Rep. Thomas Massie, a Republican who represents Northern Kentucky; Drew Curtis, founder of the online humor site Fark.com; Jeff Fugate, president of Lexington’s Downtown Development Authority; and Rebecca Self, founder of FoodChain, an urban-agriculture nonprofit in Lexington.

Former scholars interested in attending the event or becoming affiliated with the alumni group can get more information at Facebook.com/gspsync or GSPsync.tumblr.com, or by email at gspsync@gmail.com.

The Governor’s Scholars Program began in 1983, with 230 rising high school seniors from across Kentucky who were brought together on Centre College’s campus in Danville for a summer enrichment program. The program is the oldest of its kind in the nation. This summer, about 1,100 students participated on three college campuses.

Scholars are chosen through a competitive process. The program is free to them and is financed by state government and private donors. Governor’s Scholars are eligible for big-dollar scholarships at virtually all of Kentucky’s public and private colleges and universities.

Stevens figures that there are now 25,349 Governor’s Scholars Alumni with three decades of accomplishments, life experiences and personal networks that could have enormous value. Simply publicizing what other former scholars are doing could spark ideas and create job opportunities.

The idea of the Governor’s Scholars Program was to keep Kentucky’s “best and brightest” from leaving the state. Surveys show that about half of all scholars now live here. But Stevens and others think that original goal was too narrow.

gsplogo“It’s not good to try to keep them in Kentucky,” he said. “Just keep them connected to Kentucky.”

For one thing, Stevens said, when scholars leave Kentucky to achieve their dreams, they can end up in good positions to help future scholars achieve theirs.

Former scholar Darlene Hunt of Lebanon Junction went to Britain, Chicago and Los Angeles on her way to becoming a successful actress, producer and television writer. Matt Cutts of Morehead went on from UK to earn a doctorate in computer science from North Carolina and is now a top executive at Google.

“Having a Matt Cutts at Google is better for the network than if he had stayed here,” Stevens said.

Also, he said, Kentuckians often have a habit of achieving success elsewhere and moving back to home, bringing back knowledge and sometimes jobs and investment capital.

Some high-profile examples include Alan Hawse, a top executive with Cypress Semiconductor, whose move back from California led to creation of a technology development center in downtown Lexington. Self, the FoodChain founder, and her husband, Ben, moved back to Lexington from Boston after a company he helped start ran President Barack Obama’s 2008 online campaign. He and three partners then started West Sixth Brewing Co.

“The network is more valuable than just having people here,” Stevens said. The oldest scholars are now reaching mid-career and rising to positions of wealth and influence, he said. “The real power could be what happens when they do want to come back.”

Execution will be key to success of downtown management district

September 9, 2013


There are more than 1,200 downtown management districts in cities across the country. New York City has made extensive use of them to transform parts of the metropolis, such as this area of Midtown Manhattan, which was photographed in April. Photo by Tom Eblen


The revitalization of downtown Lexington has made a lot of progress in recent years, but there has been a missing link: a well-funded private partnership to take up where city services leave off.

The Downtown Lexington Corp. hopes to fix that. The organization last week started a petition drive among property owners to ask the Urban County Council to create a downtown management district.

Such districts, which have been effective in many other cities, work like a suburban homeowner’s association. Property owners pay an annual assessment that goes to provide amenities and services above and beyond what city government provides.

Lexington’s proposed downtown management district would include 373 properties with 223 owners and a total taxable value of almost $280 million. The proposed assessment would be $1 for each $1,000 of assessed tax value; so the owner of a $3 million office building would pay $3,000 a year, while the owner of a $300,000 home would pay $300.

How that money was spent would be determined by a board of downtown property owners and tenants. Proposed uses include streetscape improvements, better “wayfinding” signage, more marketing and the hiring of “ambassadors” to walk the streets to help visitors and improve safety and security.

State law requires the petition to get support from at least 33 percent of property owners whose holdings total at least 51 percent of property values. But DLC President Renee Jackson said she won’t take the petition to council unless it has support from at least half of the affected property owners.

Even if approved, the management district would have to be reauthorized after five years, and a majority of property owners could vote to disband it at any time.

Since New Orleans created the first management district in 1974, more than 1,200 have sprung up across the country. From a regional perspective, Lexington is late to the party. Louisville’s downtown management district was organized in 1991, Knoxville’s in 1993, Nashville’s in 1994 and Cincinnati’s in 1997.

Louisville’s district, the only one in Kentucky, has worked well.

“The focus on clean and safe in the downtown district has allowed the center city to be managed in a way that is similar to the suburban shopping center,” said Bill Weyland, a major downtown Louisville developer whose projects have included the Louisville Slugger Museum & Factory and the Glassworks building.

“It is important for downtowns, which have numerous property owners, to have management districts so that there can be uniform center city services that rival the single-owner competitors in the suburbs,” Weyland added.

I saw the potential of a management district firsthand when I worked in downtown Atlanta between 1988 and 1998. The Atlanta Downtown Improvement District, created in 1995, made a big difference.

No American city has made more extensive use of management districts than New York, which now has 67 of what it calls business-improvement districts that pump $100 million a year into amenities and services. As a frequent visitor to New York over the years, the impact they have had is stunning.

When I was there in April, the pocket parks along Broadway in Midtown Manhattan were clean and beautiful. Tulips, jonquils and hyacinths were everywhere, as were the people enjoying those public spaces. Many of Gotham’s once-mean streets are now family-friendly.

One dramatic transformation is Bryant Park, on 42nd Street behind the New York Public Library. Once a hangout for drug dealers, the park is now a beautiful and popular oasis that has attracted a lot of new private commercial development. The park is managed by Bryant Park Corp., which is funded and overseen by area property owners.

A Lexington downtown management district is a low-risk proposal with the potential to do a lot of good. But it is no silver bullet.

For one thing, the proposed assessment would raise less than $300,000 a year, which really isn’t much money. The district’s board would have to pay close attention to priorities, management and follow-up, while taking care not to duplicate existing efforts by others.

Downtown property owners should get behind this plan, but with the knowledge that leadership and execution will make or break it. Sadly, that is where so many of Lexington’s civic improvement projects sputter and die.




Downtown Lexington Management District public meetings

What: Public information meetings to discuss a proposed taxing district downtown

When: 9 a.m. Sept. 9; 4 p.m. Sept. 12; noon Sept. 13; and 4 p.m. Sept. 16

Where: Central Bank seventh-floor training center, 300 W. Vine St.

Learn more: Dlmdonline.com




When cutting back on welfare, don’t forget corporate welfare

December 8, 2012

When a poor person gets a government handout, it’s called welfare. When a rich corporation gets one, it’s called an economic development incentive.

With local, state and federal government budgets tighter than ever, social programs are getting a hard look. But what about corporate welfare?

The New York Times started a good conversation last week with a three-part investigative series called the United States of Subsidies. Reporter Louise Story spent 10 months analyzing corporate tax breaks, gifts and other incentives in all 50 states, which she figured add up to at least $80 billion in annual taxpayer subsidies to business.

Business subsidies have mushroomed since the 1980s, when automakers started pitting states against one another to host new assembly plants. The strategy worked so well that other industries demanded freebies, too.

A big reason corporate welfare has flourished is that politicians love being able to announce lots of new jobs coming to their area. (They often are out of office when those jobs never materialize or leave for another state offering better incentives.)

From a national perspective, it is a zero-sum game. State and local incentives do little or nothing to grow the national economy; they just determine where in the nation the growth will occur.

But it’s more insidious than that. Incentives redirect billions of tax dollars to corporate bottom lines instead of to improving education, health, safety, infrastructure and making other public investments that will create genuine, long-term economic development.

The Times website (Nytimes.com) has state-by-state breakdowns of incentives and a searchable database of recipients. It shows that the nation’s biggest business incentive Santa is high-growth, low-wage, high-poverty Texas, at $19 billion a year. West Virginia and Oklahoma give up incentives equal to one-third of their budgets.

The Times calculates Kentucky’s annual incentives at $1.41 billion — about 15 percent of the state budget, or $324 per Kentuckian. Those include $264 million in personal income tax credits; $108 million in sales tax refunds, exemptions and discounts; and $69.2 million in corporate income tax reductions, credits or rebates.

The Times reports that most Kentucky incentives, $569 million worth, go to mining, oil and gas industries — no surprise there, given their political clout. That is followed by $341 million for agriculture and $180 million to manufacturers.

As is true nationally, some of the biggest Kentucky incentive recipients in recent years were automakers: $307 million for Ford; $83.8 million for Toyota and $10 million for General Motors. Given their high wages and large supplier networks, those might be good investments.

But the big head-scratcher in the Times’ database was $94.1 million in incentives to Tyson Foods from 1995-2009 for a low-wage chicken-processing plant in Henderson County. Is that the kind of economic development Kentucky taxpayers should be subsidizing?

While the Times’ report is impressive in its national scope, there has long been debate about the value of incentives. The Herald-Leader published an investigative series in 2005 that questioned the value of many Kentucky tax breaks and other giveaways. The report resulted in some improved accountability, but did little to stem the flow of tax money into corporate pockets.

A state-commissioned study issued this summer came up with incentive figures smaller than the Times reported, but still pretty staggering: $1.29 billion between 2001 and 2010. The report said 577 companies took incentives to locate 55,173 jobs in Kentucky at a cost to taxpayers of $23,385 per job.

The incentive system favors large corporations over small businesses — often the employers who are already in a community and aren’t looking to leave. Officials have responded by coming up with some incentives for them, too, which just further drains government coffers.

How do we stop this racket, where cities and states compete to steal jobs from one another? It would be great if Congress could pass a law, but it probably can’t. Still, with about 20 percent of state and local government budgets coming from federal dollars, somebody needs to be looking out for the national interest.

Taxpayers should demand reform of these corporate welfare systems, just as they did social welfare systems in the 1990s. But it won’t be easy. Corporations employ more lobbyists and make more campaign donations than poor people do.

Lexington, Louisville partnership makes sense

August 15, 2011
Mayors Greg Fischer, left, of Louisville and Jim Gray of Lexington. Photo by Mark Cornelison

Mayors Greg Fischer, left, of Louisville and Jim Gray of Lexington announce the project in Louisville last Thursday. Photo by Mark Cornelison

LOUISVILLE — The Bluegrass Economic Advancement Movement was announced Thursday with all the fanfare that two cities’ business leaders could muster.

A furry University of Louisville cardinal mascot escorted Lexington Mayor Jim Gray to the stage of a Galt House ballroom as a furry University of Kentucky wildcat did the same for Louisville Mayor Greg Fischer. More than 1,000 people from both cities applauded, and a marching band played the Superman movie fanfare, symbolizing the goal of creating a super-region for advanced manufacturing.

The hype might have been goofy, but the ideas behind the effort and the process for achieving it could be an economic game- changer, not only for Louisville and Lexington, but for the entire state.

Brookings, the public- policy think tank, chose Lexington-Louisville as one of seven regions where it will work with business, government and educational leaders to develop a plan for regional economic development. The idea is to focus on business sectors that already are strong and have potential to become major players in international trade.

Brookings thinks regions, rather than individual cities, are the economic powerhouses of the future, especially as the world becomes more urbanized. More than half the world’s population now lives in urban areas, up from 30 percent in 1950 and 2 percent in 1800. By 2030, it could be 60 percent.

Kentucky mirrors the trend. More than 55 percent of Kentuckians live in urban areas, which account for 72 percent of the gross state product of $50.5 billion a year. More than 2 million of Kentucky’s 4.3 million people live in the 27 counties that make up the Louisville- Lexington region, which includes Elizabethtown. Metro Louisville accounts for 31 percent of gross state product; metro Lexington, 14.2 percent.

Fischer got the ball rolling with Brookings. A review of 11 previous economic studies quickly identified advanced manufacturing as an area for focus. Manufacturing employs 65,000 people, or 11 percent of the work force, in metro Louisville, and 30,000, or 8 percent of the work force, in metro Lexington.

The biggest manufacturing niche is the auto industry, with the Toyota assembly plant in Georgetown, two Ford assembly plants in Louisville and suppliers across the state.

Manufacturing jobs were key to creating the American middle class a century ago, and it is no coincidence that the middle class has declined as manufacturing has moved overseas. But some of that high-end manufacturing is moving back to the United States, and Kentucky has the potential to attract it, Fischer said.

“This is a can-do region with enormous assets,” said Amy Liu of Brookings. “We think there’s a real opportunity to succeed here.”

So what could make this different from so many well-intentioned but marginally successful economic development efforts in Kentucky? Several things.

Brookings brings a level of expertise to which Kentucky has rarely had access. The institution is donating its services, valued at about $750,000. Kentuckians are providing about $250,000 in support services and expertise, which will be paid for with private donations.

Fischer and Gray — two new mayors with similar entrepreneurial backgrounds and political outlooks — are powering the initiative. Sports entrepreneur Jim Host will chair the effort. Host is one of Kentucky’s most capable leaders — a drill sergeant with a strong record of getting things done in both cities. His most recent accomplishment: building the KFC Yum Center in downtown Louisville.

Host will lead a 15- to 20-member committee the mayors will appoint soon. And if the mayors are smart, two of those appointments will be the presidents of UK and U of L, which will be vital to this effort’s success.

The committee will develop a specific business plan to be announced by the end of 2012. The key to execution will be forming partnerships among government, industry and education groups. The public may offer suggestions at Facebook.com/bluegrassmovement.

Beyond the goal, though, this cooperative effort could be a big deal for Kentucky. That is because Louisville and Lexington — cities only 70 miles apart but long separated by cultural differences and sports rivalries — will be working more closely than ever before.

The effort also will focus statewide attention on the economic importance of the Louisville and Lexington metro areas. After all, 40 cents of every tax dollar generated in Louisville goes to the rest of the state, as does 23 cents of every Lexington tax dollar, Host noted. When the cities succeed, the whole state benefits.

“The leverage potential this has, we don’t even know,” Gray said. For example, he noted, Jefferson County school board members invited Fayette County school board members to the announcement luncheon. What might a closer working relationship there lead to?

“Greg and I naturally see alliances as a big deal,” he added. “And in this case, one-plus-one could add up to three, four or five. That’s what all of this really represents.”

Legends’ stadium could have been downtown asset

August 1, 2011

Among the impressive facilities that Commerce Lexington members saw in downtown Greenville, S.C., during their visit in June was Fluor Field at West End.

The 5,700-seat baseball stadium was built in 2006 for the Boston Red Sox’s Class A affiliate, The Greenville Drive. Modeled after Boston’s Fenway Park, the charming ballpark helps give downtown Greenville a vibrant, urban feel.

It left some Kentuckians wondering: Did downtown Lexington miss an opportunity when the Lexington Legends’ stadium was built on North Broadway near New Circle Road?

“It would have been a great boon to downtown,” said Legends founder Alan Stein. “But we couldn’t get any cooperation from the city council or the state.”

Stein is a top executive with the company that owns and manages several minor-league teams, including the Legends. Long before all of that, though, he spent 15 years trying to bring minor-league baseball to Lexington. He commissioned plans for a stadium in the Cox Street lot beside Rupp Arena. He looked at property at Pine Street and South Broadway.

“There was never any question in my mind that it was supposed to be an urban ballpark,” he said. “Our whole concept was, ‘While we’re doing this, let’s help downtown Lexington.’ ”

Building a ballpark for the Class AA team that Stein wanted to start would have required government help — city-owned land or government-issued construction bonds that could be repaid with stadium revenues or hospitality taxes. The Urban County Council and many other people in Lexington were against that.

Many professional sports facilities are built with public help, but some economists argue that they are not good investments. Minor-league baseball stadiums have a better track record, though, because they are less expensive than other facilities and have more frequent games that are played in the afternoon, as well as the evening. That means more economic impact for surrounding businesses.

“When it became a private deal, there was no downtown land available,” Stein said. “Either everything was owned by the government or was just way too expensive.” He also downsized his ambitions to Class A to cut costs.

Stein identified 17 sites around Central Kentucky — including free land offered in Woodford, Scott and Jessamine counties — but chose the 30-acre North Broadway site, 2 miles north of Main Street, because he wanted to be as close to downtown as possible.

The Legends began play in 2001 in a $25 million, privately financed stadium, now called Whitaker Bank Ballpark. Stein said that because pre-sales of tickets were so strong, the stadium was enlarged during construction from 4,000 to 6,000 seats, which means it could handle a Class AA team in the future. “The site we found turned out to be ideal and has worked beautifully,” he said.

But never say never.

Stein is among 50 people now serving on Lexington’s Arena, Arts and Entertainment District Task Force, appointed by Mayor Jim Gray to consider options for redeveloping 46 downtown acres of city-owned land that includes Rupp Arena, Lexington Center and a sea of parking around them.

“Now the question is — and I get asked this in every speech I make — would you rather have been downtown, or did it work out where it is?” Stein said. “It depends on which hat I’m wearing.

“We have made literally tens of millions of dollars on this project that we wouldn’t have made had it been a public-private partnership,” Stein said. “But as someone who really cares about the development of Lexington, I think it was a huge missed opportunity. It would have made a big difference in the economic history of the past 15 years in downtown.”

Would the Legends ever consider moving downtown? After all, the Whitaker Bank Ballpark property is much more valuable now, after a decade of booming growth on Lexington’s north side and more to come with the new Bluegrass Community and Technical College campus.

“If somebody were interested in buying that from us and then participating in building a new stadium downtown, we would look at that,” Stein said. “Those are a lot of ifs. But I’m always open to a deal.”

Kiplinger is the latest magazine to rank Lexington

July 25, 2011

For those of you keeping up with all of the magazine rankings for best and worst cities for this and that, Kiplinger, the respected personal finance magazine, has published a new list.

Kiplinger lists Lexington as No. 6 in among best cities to live in terms of value. Kiplinger said it worked with Kevin Stolarick, research director at the Martin Prosperity Institute, to analyze metro areas according to economic environment, cost of living and quality of life. Kiplinger said it then sent a staff reporter to each city to help determine the final rankings among the top 10.

Here are the rankings. For more information, visit Kiplinger’s web site.

1. Omaha

2. Charlotte

3. Nashville

4. Colorado Springs

5. Knoxville

6. Lexington

7. Little Rock

8. Wichita

9. Cedar Rapids

10. Cincinnati

(Tip: Mark Turner of Commerce Lexington)

What are rankings worth? Depends how you use them

July 10, 2011

How can Lexington be both the nation’s most sedentary city and the fourth-best city for business and careers? Those seemingly contradictory rankings came out recently in Men’s Health and Forbes magazines.

The laziness award from Men’s Health — that peerless monthly guide to flatter abs and better sex — gave people a good laugh at Lexington’s expense. I didn’t hear the news for several days; I was with a large group of Central Kentucky friends in Virginia, where we were bicycling 300 miles up and down mountains.

When I returned home, I also discovered that Forbes had ranked Lexington No. 4 in its annual Best Places for Business list, up from 9th last year. (Louisville ranked No. 14.)

I don’t put much stock in magazine rankings, which are designed mostly to draw attention to magazines. But people love lists, no matter how suspect they seem. The good rankings give us something to brag about; the bad ones, something to fuss about — or think about.

The slap from Men’s Health was another reminder that Kentuckians need to adopt healthier lifestyles. One more reminder came last week, when two public health groups reported that nearly one-third of all Kentuckians are obese, making this the nation’s sixth-fattest state.

Maybe the drumbeat will persuade more Kentuckians to give up smoking, cut back on fatty foods and sugary drinks, and get more exercise. Lexington lags many cities when it comes to bicycle lanes, trails and a pedestrian-friendly environment that allows physical activity to be part of everyday life. But recent improvements show that when facilities are built, Lexingtonians will use them.

Forbes said it arrived at its list by weighing a series of metrics, including job and income growth, cost, quality of life and educational attainment. Lexington ranked higher than all of the cities that Commerce Lexington members have visited in recent years to gather improvement ideas: Greenville, S.C., was No. 60; Pittsburgh, No. 69; Madison, Wis., No. 63; Austin, Texas, No. 7; Boulder, Colo., No. 44; and Oklahoma City, Okla., No. 28.

Most Commerce Lexington trips have focused on downtown development and quality-of-life improvements — important factors in long-term economic vitality. All of the cities visited have offered good ideas for Lexington. But as last month’s trip to Greenville showed, Lexington has more going for it than we often assume.

Some Lexington businessmen — impressed by Greenville’s success in recruiting industry — were quick to tout South Carolina’s low-tax, low-regulation, anti-union environment. But economic statistics show a more complicated picture.

Before Forbes ranked Lexington a whopping 56 places above Greenville, I was looking through the “regional economic scorecard” that Clemson University economists compile for Greenville’s leaders.

Greenville considers Lexington one of its “peer” cities, and our metropolitan area outperformed theirs in almost every measure on the scorecard: work-force education, cost of living, knowledge workers, innovative activity and capacity, entrepreneurial environment, employment diversity and high-wage employment opportunities.

Even more telling, Lexington leads Greenville in per-capita income, perhaps the best measure of economic health. (Still, both places trail the national average, and the gaps have widened in recent years. That is neither a healthy sign nor an argument for “business-friendly” low wages.)

Economists in both South Carolina and Kentucky say one of the main keys to long-term economic prosperity is education. Still, many business and political leaders find it easier to fuss about taxes, regulation and unions than to make significant, long-term investments in education.

What lessons should we draw from economic comparisons? In a nutshell, Lexington should more aggressively build on its strengths and focus on initiatives that will promote long-term, broad-based economic prosperity.

And what about all of those magazine lists? Be neither discouraged nor deluded; just consider them tools. Brag about the Forbes ranking — it might bring in some business — and use the Men’s Health ranking to rally support for mending our unhealthy ways.

Lexington is neither as good nor as bad as others say we are. But if we are smart, we will use both the praise and criticism to get better.

Will Lexington leaders act on Greenville’s lessons?

June 19, 2011
Knox White, left, the mayor of Greenville, S.C., leads a group of people from the Commerce Lexington across the Falls Bridge, a suspension pedestrian bridge that replaced an ugly highway bridge over a waterfall that has become a city park. Photo by Tom Eblen

Greenville Mayor Knox White, left, leads a group from Commerce Lexington across Falls Bridge, a suspension pedestrian bridge that replaced a highway bridge over a waterfall that has become a city park. Photo by Tom Eblen

One of the most valuable things about Commerce Lexington’s annual “leadership visit” is that it brings together nearly 200 people who spend three days looking at Lexington’s strengths and weaknesses through the lens of another city.

Last week’s trip to Greenville, S.C., was my fourth, and I found it the most useful. Perhaps that was because Greenville’s relative size, assets and challenges are more similar to Lexington’s than are those in Pittsburgh, Madison or Austin.

In many respects, Lexington is better than all of those cities. It was easy to sense some of Greenville’s shortcomings, despite city leaders’ positive spin. But the point of the trip was to learn from what they do better than we do.

The primary lesson was that beautiful, high-quality urban development can improve both quality of life and economic vitality. Since the 1970s, Greenville has transformed an ugly, car-choked downtown into a garden spot where people want to live, work and play. Economic prosperity has followed.

Greenville is more politically and socially conservative than Lexington, and much of what city leaders did was controversial. But they did it, and it worked.

The city transformed a Main Street the size of Lexington’s from a sun-baked, four-lane highway into a pleasant two-lane, two-way gathering place. It is shaded by big trees and filled with shops, restaurants, sidewalk dining and plenty of parking in diagonal street spaces and artfully disguised garages. A neglected riverfront and waterfall became a gorgeous public park surrounded by new development.

Downtown is now beautiful, inviting, unique to Greenville — and twice as big as it was. Old buildings have been restored and adapted to new uses. Contemporary mixed-use developments have been built and are successful. There are a variety of performance halls, sports venues and museums. The renaissance is growing in all directions, and nearby towns are emulating it.

What can Lexington learn from Greenville? Here were my takeaways:

Articulate a simple vision that almost everyone can embrace. That is different from launching a task force or commissioning a detailed study that will gather dust on a shelf. Simply agree on a vision such as this: Lexington’s urban and suburban spaces should be worthy of the beautifully unique countryside that surrounds them.

Leaders must lead. As the Lexingtonians saw in Greenville, that means taking risks, working together and figuring out creative ways to accomplish goals. It means entrepreneurial partnerships among government, business and nonprofits. It also means inclusive, transparent planning and long-term strategies.

Demand excellence. Greenville raised the bar for downtown development with design guidelines and an architectural review process. Developers know they must meet high standards — and that city officials will work with them to overcome obstacles to mutual success.

Remember when the developer who wanted to build a one-story, suburban-style CVS drugstore on Lexington’s Main Street said the retailer wouldn’t do better? Well, a two-story, urban-style CVS is under construction on Greenville’s Main Street. When finished, it will look like it has always been there.

I asked Mayor Knox White to explain Greenville’s redevelopment vision in a nutshell. “Downtown is all about the walking experience,” he said. “The architectural guidelines, the landscaping, everything. It’s a religion with us.”

Build on success. Greenville’s revitalization was an intentional, long-term process. Partnerships were formed to create world-class anchor projects and beautiful public spaces that would attract private investment around them. Civic leaders were not afraid to dream big and take risks.

Greenville leaders said they always have a “next big thing” on the horizon. Lexington achieved much during the three years before last fall’s Alltech FEI World Equestrian Games. We need a “next big thing” on which to focus.

This is a time of great opportunity for Lexington. Over the next couple of decades, Lexington will redevelop three huge tracts of urban land: the 46 acres around the Civic Center and Rupp Arena; the adjacent Distillery District; and the area surrounding the new Bluegrass Community and Technical College campus at the old Eastern State Hospital site.

Greenville shows what can be done, and the visitors from Lexington left talking like converts at a tent revival. But as we all know, even the most sincere believers can backslide when distracted.

Will Lexington stop being satisfied with good enough and try for great? Can those who went to Greenville help articulate a clear vision for Lexington and mobilize the community behind it? Will our leaders lead?

Click on each thumbnail to see complete photo:

Lexington leaders give Greenville a second look

June 15, 2011

This is the week each year when Commerce Lexington takes several dozen business and civic leaders to another city for three days of networking and brainstorming about how to improve Lexington.

Nearly 200 people are leaving on chartered jets Wednesday morning for Greenville, the largest city in the Upstate region of South Carolina. Although a much smaller city than Lexington, Greenville is the center of a metro area with 172,000 more people.

The annual “leadership visit” went to Greenville in 1995, but Commerce Lexington thought the city was worth a second look. Greenville has continued to prosper, thanks to smart economic development, good urban planning and successful public-private partnerships.

The city that once called itself “textile capital of the world” is now home to a mix of companies, many from Europe, including BMW and Michelin. A big part of Greenville’s strategy was revitalizing its urban core and improving the quality of life.

“They focused on what makes the city unique and special,” said Lexington Mayor Jim Gray, whose family-owned construction company helped build BMW’s facilities there. “It’s become a city that reaches out globally, not a big city but a city with a modern, cosmopolitan sense.”

Greenville’s downtown revitalization was sparked in the 1970s by a mayor who immigrated from Austria. He thought a beautiful, pedestrian-friendly European approach was a good antidote to the car-centric, asphalt-everywhere path that had contributed to urban decay.

That meant downsizing some streets, adding trees, restoring old buildings and removing a highway bridge over a neglected gulch of the Reedy River. The river was cleaned, the gulch transformed into a park and the four-lane bridge replaced by a unique pedestrian bridge.

“They have reclaimed that whole space, and it has had an amazing effect on the downtown,” said Jeanne Gang, the renowned Chicago architect whom Dudley Webb recently hired to redesign the stalled CentrePointe project in downtown Lexington. “They have an amazing set of beautiful urban elements that they’ve done over time.”

Gang’s firm, Studio Gang Architects, is completing designs for two signature projects in Greenville: Reedy Square and the Blue Wall Center.

Reedy Square will be the “town square” that Greenville hasn’t had, plus a showcase for regional attractions and culture. “It’s both a place for the locals to go hang out and a place that turns visitors on to what all there is to do in the Upstate,” Gang said.

Blue Wall Center, a 175-acre area at the foot of the Blue Ridge Mountains, will have a visitors center, gardens and trails for people to get a taste of the local mountains. “We’ve been calling it speed-dating with nature,” Gang said. “It’s both a landscape and a building that work together to be this kind of visitor destination.”

Lexington can learn some things from Greenville, but how much of that learning will be converted into action? That is a frequent criticism of these trips — at least by people who don’t go on them.

Commerce Lexington President Bob Quick said there has been action. For example, Lexington’s Thursday Night Live and Minority Business Development programs began with ideas from the 1995 Greenville trip. “Sometimes it takes years for things to come together,” he said.

Last year, Commerce Lexington went to Pittsburgh with Greater Louisville Inc. The most popular idea from Pittsburgh — replicating Bill Strickland’s Manchester Bidwell program for inspiring and teaching job skills to young people — has been stalled by the weak economy, Quick said.

But many of Manchester Bidwell’s concepts will be used in the Fayette County Public Schools’ new agri-science vocational program, which begins this fall on Leestown Road. “Some of the things that we’re going to be doing are very similar to what Strickland is doing,” outgoing Superintendent Stu Silberman said.

Quick said the biggest benefit from last year’s trip has been stronger relationships among leaders in Lexington and Louisville, which has led to more cooperation on common issues and economic development initiatives.

Networking is always the biggest benefit of these trips. Sometimes it takes getting away from work and the patterns of everyday life to build new relationships that will help turn good ideas into successful action.

Follow the trip on Twitter

I will be posting updates from the trip on Twitter. Follow me here.

High-priced economic development ‘experts’ no substitute for local knowledge, vision, leadership

March 6, 2011

It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness.

That is how Charles Dickens might have started a report about Lexington’s potential for economic development, just as he began his classic novel A Tale of Two Cities.

That is how I might have started such a report, too, if I were the consultant being paid $150,000 by the city and Commerce Lexington. If you are going to recycle language, you might as well borrow from the best.

Last year, after then-Vice Mayor Jim Gray and others complained that the city’s strategic plan for economic development had not been updated in years, Commerce Lexington and the city hired AngelouEconomics of Austin, Texas, to conduct a local market study and develop a plan.

Commerce Lexington scheduled a public unveiling of Angelou’s final report for March 18, but that has been postponed. Instead, now-Mayor Gray has summoned the head of the consulting firm, Angelos Angelou, to meet with him Monday morning. Angelou has some explaining to do.

That is because Ben Self, a Lexington technology entrepreneur, read a final draft of AngelouEconomics’ report and discovered that large passages had been cut-and-pasted from previous reports done for other cities. He detailed examples in a post Thursday morning on the blog of ProgressLex, a new grass-roots civic group.

Since the report appears to be half recycled, Self wrote, AngelouEconomics should refund half its $150,000 cost. Angelou Economics staffers initially defended the report, but by Thursday night, Angelou had fallen on his sword.

Angelou apologized for the lapse, which he said was the result of a staffer’s personal problems. But, he said, “There is no excuse or rationalization of what has happened.” Angelou asked for two or three weeks to rewrite the report personally to make sure it addresses Lexington’s specific conditions and needs.

Angelou must now scramble to try to restore his firm’s credibility. But there is a bigger lesson here for Lexington.

This should be a wake-up call about the way Lexington deals with economic development, just as the CentrePointe fiasco was a wake-up call about the way Lexington handles downtown development.

The business world is awash in consultants. Some provide valuable services. But others are little more than a crutch for leaders who are afraid to lead and are willing to pay so-called experts big money to say what everyone already knows. Too often, hiring a consultant is a way of creating the illusion of action while avoiding real work and responsibility.

I am no economic development expert, so I will leave it to others to assess AngelouEconomics’ final work and decide whether taxpayers are owed a refund. But the “recycled” draft report didn’t tell me much about Lexington and its challenges and opportunities that I didn’t already know.

I didn’t find the report’s recommendations any better than those of two economic development transition teams Gray commissioned after he was elected mayor. Those were researched and written by local business people; they cost taxpayers nothing.

The point here is that consultants can sometimes provide good information, analysis, perspective and advice. But they are no substitute for leadership. If Lexington’s leaders trust consultants from Texas more than their own judgment, we are in trouble.

The previous mayor, Jim Newberry, basically outsourced the city’s economic development function to Commerce Lexington, which gets about a half-million dollars a year in public money to do the work. It may have been a smart move then, because Newberry, a lawyer, didn’t have an economic development background.

But it makes less sense now. Gray has worked on economic development for decades, both in civic roles and as an executive with his family’s construction company, which specializes in building industrial plants. Commerce Lexington can play a valuable supporting role, but the mayor and the Urban County Council should lead.

These are, indeed, the best and worst of times for Lexington. Business conditions have been tough lately, but it is obvious that Central Kentucky has enormous potential to succeed in the 21st-century economy.

Lexington must harness its own brainpower to develop smart economic development strategies, and then make them happen. We need more wisdom and less foolishness.

Advice for Kentucky from business guru Saul Kaplan

February 14, 2011

Wait for others to do it, and it won’t get done. That old saying might not have the same ring to it as “United we stand, divided we fall,” but it could just as easily be Kentucky’s motto.

Increasingly, technology- enabled entrepreneurs are taking a different path. Rather than waiting for big companies, government or established organizations to figure out how to build a 21st-century economy in Kentucky, they’re trying to do it themselves.

They received some encouragement last week from one of the nation’s popular entrepreneurship gurus, Saul Kaplan of the Business Innovation Factory in Providence, R.I.

During a whirlwind 28-hour trip, Kaplan met with city and business leaders in Lexington and Louisville. He talked to entrepreneurs and business students in both cities, and to some who drove in from as far away as Cleveland, Columbus, Pittsburgh and West Virginia.

Kaplan created the non-profit Business Innovation Factory in 2005 as a laboratory for entrepreneurs working on “areas of high social impact,” such as health care, education and energy. Before that, he was a strategy consultant in the health care industry and executive director of the Rhode Island Economic Development Corp.

Kaplan’s trip to Kentucky was organized by Eric Patrick Marr of The Lexenomics Group, a non-profit economic development organization. Kaplan donated his time, and Randall Stevens of the Lexington business incubator Base 163 paid for his travel.

“The visit was fantastic,” Kaplan told me as he was leaving to fly home Tuesday. “I was pleasantly surprised by the momentum here. There’s definitely the makings of a very entrepreneur-oriented economy.”

Kaplan’s message was that innovation and entrepreneurship must be central to any economic development strategy. And like any consultant, he loves buzzwords. His favorites are: connect, inspire and transform.

“You need to get innovators from across all the silos in your community to communicate and collaborate more effectively,” he said. The next step is inspiring creative people with stories of successful entrepreneurs. Finally, he said, dramatic transformation is required to create a robust, sustainable economy and address many of society’s biggest challenges.

“Incremental change isn’t going to create the economic future that this community wants and needs,” he said. “How can you turn your community into a real-world lab oratory, a place that celebrates experimentation, where people are willing and able to try new things, to try new ideas … to determine what works and what doesn’t work?”

Elder care in Kentucky is one area ripe for innovative problem solving and entrepreneurship, Kaplan noted. The state has an aging population and a growing health care infrastructure. Plus, Louisville is home to the nation’s largest elder-care companies.

“We know that the majority of the elder population want to age in place in their own homes with dignity, but the system wasn’t designed that way,” he said. “How can we create a new set of solutions and new approaches to do that? Those solutions could create new jobs and businesses.”

Kaplan said he sees several assets Kentucky can build on. First, the Lexington-Louisville-Northern Kentucky region is big enough to have a critical mass of important assets, but it isn’t too big.

Second, he said, “It has incredible quality of place. I could see it the minute I left the airport. And quality of place is the best asset any community can have. Everything should be viewed through the lens of how do we enhance and protect that quality of place, and at the same time figure out how to unleash entrepreneurial innovation.”

Finally, Kaplan said, the recent elections of Lexington and Louisville mayors with innovative business backgrounds offers a unique opportunity for economic transformation.

“Having spent time with both mayors, I think they get it,” he said. “I think they want to catalyze the kind of entrepreneurial economy and community we’ve talked about here over the past couple of days. If I were living here, I would be optimistic.”

Kaplan said top-down economic development planning — the “bring in the big outside company” incentive strategy that Kentucky has failed at more often than it has succeeded — isn’t the way of the future.

“Bring the entrepreneur and the innovator to the center of the economic development conversation,” he said. “And tie that conversation to solving real social challenges within the community.”

Teams urge Gray to focus on selling Lexington

January 24, 2011

One of the smartest things Jim Gray did after being elected mayor was create diverse transition teams of local citizens to study and make recommendations on key issues facing Lexington.

The team reports, which started coming out late last week, offer the new mayor a great source of free advice. They also could help generate buy-in for initiatives Gray chooses to pursue.

The first reports I wanted to read dealt with economic development and job creation. Those are two of the biggest issues facing Lexington, and they were central themes of Gray’s campaign.

Gray appointed two groups to study economic development. Both were diverse, ranging from economic development professionals and corporate executives to small-business owners and interested citizens.

“I deliberately tried to create an environment where different points of view would be expressed,” Gray said.

After a healthy amount of debate and dissension, the two groups produced very different reports. But there were many common themes. Both said Lexington needs:

■ Better coordination among local economic development groups, and better measurement of results.

■ More effective marketing of Central Kentucky as a place for entrepreneurs.

■ Closer relationships between Lexington and surrounding communities, Louisville and Northern Kentucky, as well as between the city and University of Kentucky.

■ Streamlined bureaucracy to make it easier for businesses to get permits, approvals and information.

The strongest common theme, though, was a call for Gray to focus much of his personal time and attention on economic development.

“The mayor should initiate and drive Lexington’s economic development strategy and execution,” one report said, adding that he should be the “face” of Lexington to the world.

That makes sense. As an executive of family-owned Gray Construction Co., Gray spent more than 30 years working with companies on site selection and business development.

“That’s my DNA — selling and marketing,” Gray said Friday, adding he had spent much of that day meeting with executives from a company, which he declined to name, that is considering moving to Lexington.

One economic development transition team was led by Kim Menke, a Toyota executive and former Commerce Lexington chairman. Its report recommended many traditional strategies, such as a professional marketing campaign and economic incentives.

It suggested the mayor create a small but diverse business advisory board, as well as roundtables of chief executives from small and large local companies to give him advice. Gray said he was already planning such a CEO roundtable and will have an announcement soon.

The other team was led by Alan Hawse, vice president of information technology for California-based Cypress Semiconductor. Its report suggested many less conventional — and less costly — approaches, such as targeted recruitment of successful Kentucky natives and UK graduates elsewhere who might want to move back to Lexington to work, create or expand companies.

That group’s report emphasized the growth potential of several development-related initiatives Gray already supports. Those include full implementation of the Downtown Master Plan, funding infrastructure for the Lexington Distillery District and creation of a “land bank” to encourage redevelopment of blighted urban property.

(It is worth noting, though, that while some members of that team wanted to give the city condemnation power as part of land bank legislation, the mayor is against that. “There are creative paths that don’t require eminent domain,” Gray said.)

That team put especially strong emphasis on Gray using his personal skills to promote economic development: setting vision and strategy, building relationships, cheerleading local entrepreneurs and selling Lexington elsewhere.

“A lot of the things that need to be done are leadership things that Jim could be really good at,” Hawse said.

As mayor, that is perhaps Gray’s biggest opportunity — and challenge.

The reports

Click here to download report from Team 1 (Hawse)

Click here to download report from Team 2 (Menke)

Taking a hard look to see a brighter future

November 20, 2010

VERSAILLES — Woodford County, like a lot of places, is struggling to adapt to a changing economy. How can people there create a more prosperous future while protecting their community’s beauty and quality of life?

Those were the big questions posed one morning earlier this month when community activist Deborah Knittel and the Woodford Coalition, a citizens group, invited more than 100 local leaders to meet in a church’s fellowship hall.

The facilitator was Doug Henton, a California-based consultant who has helped more than 40 communities across the country deal successfully with these issues over the past three decades. Henton is also a native of Woodford County, where his family has lived for two centuries

Doug Henton

The points Henton made, the questions he raised and the research and further discussions he suggested could help other Kentucky communities that are struggling with these issues. In other words, every community.

To an outsider, Woodford County would seem an unlikely place for anxiety. It ranks first among Kentucky counties in per-capita income, is strategically located between Lexington and Frankfort and has some of the Bluegrass’ most beautiful countryside.

But income statistics may be skewed by wealthy landowners. The Thoroughbred industry is in a slump. Tobacco farming is all but gone, and many of the factories that once gave Woodford County workers a middle-class lifestyle have closed. Conflict over growth, development and land-use planning has created deep divisions.

Henton, CEO of Collaborative Economics of San Mateo, Calif., didn’t come home with all of the answers. What he offered were tips for analyzing a community’s strengths, weaknesses and opportunities, with the goal of creating a shared vision for growth.

Long-term economic development isn’t about cheap labor and tax breaks, Henton said. It is about regional collaboration, productivity and continuous innovation. It is about having infrastructure, a skilled workforce and sufficient economic and social capital.

“It’s not just about having assets, but creating networks of people who can make the best use of those assets,” he said. “It’s not just the ingredients, it’s the recipe.”

It also is about quality of life, a hard-to-define combination of environment, resources and social conditions such as inclusiveness. “Economic development today is about where people want to live,” he said. “You can’t have a strong economy without a good community.”

Henton advised Woodford County leaders to assess weaknesses they need to fix and unique strengths — “economic clusters” — they can build on and market to bring money in from elsewhere.

He talked about his work with Sonoma County, Calif., in the early 1980s, which leveraged its wine industry for more tourism and used its beauty and quality of life to attract professionals who could live wherever they chose.

The Woodford County folks quickly got the point: horses, bourbon, scenic beauty, good quality of life. Other assets to build on: good roads, attractive downtowns in Versailles and Midway and educational assets such as Midway College. They even started reeling off names of people who do business all over the world but choose to live in Woodford County.

The discussion also identified things the county lacks: public transportation, motels, a movie theater, enough affordable housing for low-wage workers.

Then talk turned to deeper concerns: fragmented local governments that don’t cooperate enough, a lack of support for entrepreneurs, friction over land-use planning and old debates over private property rights vs. public good.

The people, seated at round tables, were asked to talk among themselves to identify Woodford County’s strengths and weaknesses. As each table reported, you could hear the buzz: what some thought of as strengths, others saw as weaknesses.

As one table’s representative discussed social issues, Larry Blackford, who was there representing a local African-American group, rolled his eyes and leaned over to me. “They’re in denial,” he said.

Nothing was resolved, but I had the sense that this sort of frank and open discussion doesn’t happen very often.

“We need to listen to each other,” said Dan Rosenberg, a Thoroughbred industry consultant. “It’s not a situation of you’re right and you’re wrong. We all have different perspectives.”

Henton urged the group to keep meeting, identify champions to take on specific issues and visualize what they hope to achieve. “It’s about people and relationships,” he said. “The critical point in all of this is trying to define goals for a shared future.”

It was a good first step. But without diverse leadership and buy-in, Knittel fears, the effort could fizzle. “I think good things will come out of this,” she said. “Any conversation is better than the one we haven’t had.”

For any Kentucky community wanting a brighter future, that’s good advice.