FAST LANE - June 2000

LOUISVILLE
Ironmax.com Pumps Up Bankroll with Local Capital

Ironmax.com, a young Louisville e-commerce company, has received a $10 million investment from a consortium led by CMGI Inc. and including three Louisville area venture capitalists.

The company, founded by Steve Paradis one year ago after he sold his interests in Resco Rents and Brandeis Machinery, is a Web portal for business-to-business construction equipment sales. Ironmax.com will use the investment to improve its Web site, retain 70 new employees, and move its offices to the Hurtsbourne Green corporate campus.

CMGI will be the lead investor in the company, with an undisclosed ownership stake. CMGI is the owner of Web portal Alta Vista and has invested in 65 Web firms through its CMGI@Ventures affiliate. Also participating in Ironmax.com are Chrysalis Ventures, Iceberg Ventures, and Prosperitas Investment Partners, all based in Louisville.

Ironmax is just one of several Louisville companies making a splash in the Net space, among them Construction Zone. com, eMazing.com and TechRepublic. The company is also the first investment by Prosperitas, which raised $11.8 million in private equity in 1999. The VC firm has applied to the U.S. Small Business Administration to be licensed as a small business investment company (SBIC). When approved, the SBA will match the company's fund on a two-for-one basis, creating a nearly $36 million fund. Its principals are R. Gene Smith, John Greenebaum and Steve Bing.

LOUISVILLE
Controversial Crossmann Pulls Out of Louisville

CrossmaNn Communities Inc., of Indianapolis, one of the nation's largest homebuilders, has ceased operations in the Louisville area.

During its three years in Louisville, Crossmann developed nine local subdivisions and built individual homes in other developers' projects. Its activities made it Jefferson County's largest homebuilder in 1998. The publicly traded company focused on single-family homes in the $90,000 to $200,000 price range.

Despite its success, Crossmann faced serious questions about its quality. The Mount Washington City Council refused to issue further building permits until the company completed sidewalks in one project. The Courier-Journal reported that several homebuyers had filed complaints against the company with the Attorney General's office and the Louisville-Jefferson County Planning Commission repeatedly denied a rezoning request for a proposed subdivision in far eastern Jefferson County. Furthermore, Crossmann was not admitted as a member of the local homebuilders association.

STATE
Tobacco Withdrawal Pains Continue to Ail Farmers

According to an updated report from the Kentucky Long-Term Policy Research Center, taking into account burley quota cuts over the past three years a well as unemployment, the economies of the following 15 counties are in particular jeopardy: Robertson, Monroe, Green, Elliott, Owsley, Bath, Nicholas, Lewis, Cumberland, Metcalfe, Hart, Bracken, Owen, Fleming and Morgan. Officials from the center identified regional economic development initiatives as holding the most promise for reviving these areas.

According to the Associated Press, burley production for 1999 sank nine percent, and half of the yield went into surplus pools. The quota cut was 28.9 percent, which combined with the regional drought to cut Kentucky's burley total from 416 million pounds in 1998 to 380.1 million pounds in 1999, valued at $722.2 million. That amount represented a full 68 percent of the total burley belt output of 555.2 million pounds, which was also down, by only five percent.

Perhaps the most striking figure: While only 12 percent of all burley belt tobacco went into surplus pools in 1998, a full 42 percent did so in 1999, including 46.6 percent in Kentucky. The pools receive the tobacco when bidders fail to go a penny per pound higher than the federal support price. This year's quota cut is a whopping 45 percent, due in part to the amount of product already in the pools. Such reductions have caused many farmers to drastically scale back their spring tobacco-setting totals.

LOUISVILLE
Inner City Businesses Honored for Community Commitment

Three Louisville businesses have been recognized for their successful commitments to the central part of that city by being named to the Inner City 100, a listing of the country's fastest-growing inner city companies.

Recognized by Inc. Magazine and the Initiative for a Competitive Inner City were Axxis Inc., for the second time, MedVenture Technology Corporation and the Fischer Group. The three companies ranked 16th, 21st and 56th, respectively, for five-year growth. Axxis provides staging for corporate events, MedVenture develops and manufactures medical devices and The Fischer Group manufactures energy-efficient panels for new home construction.

In addition, Charles Johnson, founder and president of another local inner-city icon, Active Transportation Systems, will be one of three recognized nationally for 'significant long-term achievements in minority business development' by the National Minority Supplier Development Council. Johnson's new-car and truck hauling company, which he founded 15 years ago, had 1999 sales of $360 million and employed 3,000.

HAZARD
New Hal Rogers Center to Train Rural Law Enforcement Personnel

Officials announced in April that the city of Hazard will be home to a new $4.3 million training center for rural police departments. The facility ‹ the Hal Rogers Center ‹ should be ready in about a year and will include an 800-plus-seat auditorium. Just as the medical community has used telemedicine in rural areas, the training center will exploit the latest in technology and distance learning tools and will operate with a $2 million annual budget. The center will be part of the National Law Enforcement and Corrections Technology Centers system, which has four other facilities that concentrate on such topics as forensic technology and surveillance.

BOWLING GREEN
Inter-Modal Park Plans Include Replacement Airport, Industrial Park

The Board of Directors of the Inter-Modal Transportation Authority (ITA) has approved site selection for the Kentucky TriModal Transpark project, to be located on 6,600 acres northeast of Bowling Green, between Plum Springs and Oakland. Work will now proceed on environmental assessment and master planning. Plans call for a small replacement airport to be a major part of the facility, along with development of a 1,200-acre industrial park. A report from Wilbur Smith Associates predicts approximately 2,500 new jobs will be created at the park by 2010 (five years after its projected opening). Approval and funding will now be sought from the FAA.

LEXINGTON
Keeneland Library Adds to the Wealth with Daily Racing Form Archives

The Daily Racing Form has donated its complete archives to the Keeneland library.

'We recognize that Keeneland has the world's preeminent Thoroughbred library,' said Daily Racing Form president Charles Hayward. 'It's a natural repository for this archival material.'

In other Keeneland news, the April two-year-olds in training sale sold 123 horses for a total of $18,515,000, down just $45,000 from the total sales for the same number of animals last year. Meanwhile, the spring meet tallied $24,933,838 in total wagering, $9,277,360 in purses, and 15-day attendance of 202,464.

LOUISVILLE
Plans for Two Sites Will Broaden City's Development

Two holes in Louisville's development fabric may be filled by unrelated projects. First, the Metropolitan Sewer District paid $4.6 million for a 200,000-s.f. building and a 25-acre site in Commerce Center to consolidate its laboratory and maintenance operations. The announcement means that 300 jobs will move to the West End in the commerce park created from the vacant Algonquin Shopping Center. The new facility will be within walking distance of the new Park DuValle housing development project.

Also, Barrister Commercial Group plans to spend $16 million to build a six-story office building and 143-room hotel at the intersection of Interstate 71 and Zorn Avenue, adjacent to an existing hotel in an area that was under water in 1997.

LOUISVILLE
SHPS Drops Option on Louisville Site, Fenley Picks Up the Ball

SHPS Inc., touted one year ago as a source of 3,500 high-paying professional jobs, has failed to exercise its option to acquire a 28-acre site in Eastpoint Business Center. Apparently the company will not be relocating its headquarters to the Louisville area.

Greater Louisville, Inc., once credited with bringing SHPS to Louisville, did not include the supposed 3,500 jobs 'gained' in its annual report on job creation released in January.

Fenley Real Estate bought the 28-acre parcel in the burgeoning center in Anchorage when SHPS passed on it. Fenley immediately announced plans to develop a $35 million office complex for undisclosed tenants.

STATE
Winn-Dixie and Dairy Mart Slash Jobs, Close Stores in Restructuring Effort

Among recent cuts by supermarket company Winn-Dixie were the closing of 22 of 85 Midwest Division stores in Kentucky, Indiana, Ohio and Tennessee, as well as a division office employing 60 people in Louisville. The company will close a total of 114 of its 1,189 stores across the country, and lay off about eight percent of its 132,000-person workforce. Officials cited competition from 'big boxes' as well as convenience chains as one reason for the restructuring effort, which is expected to save the company $400 million. The move follows the recent sale of 74 stores in Oklahoma and Texas to The Kroger Company.

Meanwhile, one of those convenience chains is experiencing problems of its own. Dairy Mart, which operates stores in seven states, will close 246 of its 601 stores and cut 70 jobs as it seeks its niche with shops that sell gasoline.

HENDERSON
Collaboration Lauded as Another Multi-County Park Opens Out West

Like the five-county EastPark Industrial Park across the state in Ashland, the new Four Star Industrial Park near Henderson will be a collaborative effort among Webster, Henderson, McLean and Union counties. 'The future success of economic development efforts will rely on approaches that rise above political boundaries and help regions, not just individual communities,' said Governor Paul Patton at the opening ceremonies for the 900-acre park. Funds totaling $5.1 million have been approved for use in developing the park. All funds come from the Local Government Economic Development Fund (LGEDF), an agency created in 1992 to provide grants from coal severance tax revenues to coal-producting counties looking to diversify their economies.

ASHLAND
Highway Information Easy to Find on the Information Highway

Boyd County businessman David E. Carter has launched a new web site for cross-country travelers called Interstate4U. com. The site, backed by Nigerian oilman Vincent O. Ebuh (whom Carter met at Harvard Business School) will offer information about every interstate exit and roadside attraction in the United States. Ebuh has pledged up to $2 million to back the project's continued development.

LOUISVILLE
Ford and UAW Share Labor-Management Award for Second Time

Once a facility in severe decline, the Kentucky Truck Plant has rebounded in both productivity and morale, a renaissance that has earned the facility the seventh annual Labor-Management Award from the University of Louisville.

The award is shared equally by Ford Motor Company and Local 862 of the United Auto Workers. It is the second such award for both; the two groups were also honored in 1994 with the first U of L Labor-Management Award for their cooperative efforts at the Louisville Assembly plant, south of Louisville International Airport.

The truck plant, in Eastern Jefferson County, produces Ford's F-series trucks and the Excursion sport utility vehicle. Employment has increased by 5,000, to 6,500, since 1993 when management and the union signed an operating agreement that allowed flexibility while protecting jobs.

LYNCH
Aquaculture Taking Root in Eastern Kentucky

More than two dozen abandoned mine and industrial sites have been identified by local development officials as possible sites for cold water fish hatchery operations, including an old U.S. Steel machine shop, now filled with five huge tanks. State agriculture officials have been promoting the idea of aquaculture, which currently brings in $1 million a year in Kentucky and is expected to double its revenues within the next decade. Projects involving catfish, trout and shrimp are active throughout the state, as communities formerly dependent on mining or tobacco operations seek to diversify their economies. Eastern Kentucky efforts are backed by a consortium of interested parties, led by Paul Pratt, Southeast Community College's dean of community and business development.

STATE
Block Grant Competition Begins for Kentucky's Local Governments

Cities and counties across the state have begun the application process for $32.9 million in HUD Community Development Block Grants. Grant ceilings vary from a quarter of a million to one million dollars. The breakdown of the funds is as follows:

2000 CDBG Grant Money

LOUISVILLE
Study Reveals Opportunities and Attitudes in Louisville Job Market

According to a report entitled, 'The Louisville Metropolitan Region: How is it viewed by the rest of Kentucky?,' while 57 percent of responding Kentuckians felt good about school and employment opportunities in Louisville, 48 percent of that segment had little or no interest in moving there. The report was sponsored by Greater Louisville Inc. and Metropolitan College.

Paul Schulte, president of Horizon Research International, and Paul Coomes, a professor of economics at University of Louisville, conducted a study of the Greater Louisville workforce for the Workforce Investment Board of Louisville and Jefferson County. They found a total of 13,400 job openings with an average salary level of $37,000. Skilled trades and information technology topped the list with the greatest number of openings.

According to Greater Louisville, Inc., the UPS Hub 2000 expansion is projected to create 6,000 new UPS jobs and an estimated 8,000 jobs in related businesses.The areas population has increased by more than six percent since 1990, according to University of Louisville research, and that growth is projected to continue for the next two decades.

Business Briefs
A Compilation of Statewide Business and Economic News

STATE

• According to the Administrative Office of the U.S. Courts, 128 million individuals and almost 39,000 businesses filed for bankruptcy in 1999. This figure has declined 8.5 percent from 1998, when 1.44 million people and 44,000 businesses sought protection in federal courts.

• The Commercial Service unit of the U.S. Department of Commerce has launched www.usatrade.gov, an e-commerce tool designed to help small and medium-sized companies navigate the world of global business. According to Commerce Secretary William Daley, the number of small businesses that export has tripled over the past decade, comprising nearly one-third of the nation's total exports. But 63 percent of those small businesses only send their goods to one market. The website will feature a virtual trade show, 'E-Expo USA,' as well as free market research, webcasts and trade leads.

• Kentucky's debt rating was raised from A-plus to AA-minus by Standard and Poor's Investor Services, opening up new opportunities for state bonds, according to the state's Finance and Administration Cabinet.

• The 40-county PRIDE environmental cleanup program founded by Congressman Hal Rogers and Kentucky Natural Resources Secretary General James Bickford is a finalist for the prestigious Silver Anvil award from the Public Relations Society of America. 'We get calls daily from congressional offices, from staff member at natural resources cabinets and from industry planners,' said PRIDE executive director Jeff Speaks. 'The whole effort is something everyone in the region and the entire state of Kentucky can take pride in.'

• According to a study released by the Information Technology Association of America, American companies will create 1.6 million IT jobs by the end of the year, with 35 percent of those located in the Midwest. While the survey covered 700 companies, firms with fewer than 50 employees and government and non-profit agencies were not included in the sample, so the potential job total could be much higher. The ITAAestimates that 10 million people now work in ITjobs in this country, with the tech support category leading the way in job growth.

CAMPBELLSVILLE

• Beginning in the fall, Campbellsville University will offer a two-year, 36-hour MBA degree, with all classes conducted on Saturdays on a trimester basis.

DANVILLE

• Brenda Willoughby of the Constitution Square State Historic Site in Danville was named State Park Gift Shop Retailer of the Year by the Kentucky Retail Federation, a statewide trade association with more than 6,000 members

GEORGETOWN

• Scott County voters rejected a proposal to legalize alcohol sales by a vote of 5,016 to 4,398, with a voter turnout of about 48 percent. A similar measure was also defeated in 1997, though by a much wider margin. Alcohol sales are prohibited in 75 of the state's 120 counties, while 14 counties are 'split,' being dry, but containing cities that allow liquor sales.

• The Toyota plant won its fourth gold award from J.D. Power and Associates since 1990, and was the only plant in North America to win the award this year. The Avalon, Camry and Sienna minivan were all named best in their categories. The company's Fremont, Calif., plant received a silver award, the Cambridge, Ontario, plant received a bronze award, and the company's newest plant, in Princeton, Ind., produces the best full-sized pickup, the Tundra, according to the rankings.

HARRODSBURG

• Serenity International would like to build a 300-acre 'Serenity Village of Kentucky' resort in the Harrodsburg area to host those looking for spiritual and personal enhancement. However, local residents were less than serene regarding the plans, voicing opposition to its location during a meeting of the Greater Harrodsburg/Mercer County Planning and Zoning Commission. Company spokesperson Anne Maloney said the resort ‹ designed to accommodate almost 100 people ‹ would bring in more than $10 million in its first year, and provide 50 jobs and $6 million in construction contracts.

HAWESVILLE

• Southwire Co. has apparently found a buyer for its Hawesville aluminum smelter, which may mean good news for 300 affected union members, out of work since June 1998. The Georgia company, which has been operating the plant despite a two-year-long strike by Local 9423 of the Steelworkers Union, has announced that it has signed a non-binding agreement to sell the smelter for an undisclosed sum to Century Aluminum of Monterey, Calif. Century operates another smelter in Ravenswood, W.Va., where it has an existing agreement with the Steelworkers.

LEXINGTON

• Hammond Communications Group has combined operations with Paradigm Communications Group of Cincinnati. The newly formed firm will be called Hammond Communications Group, owned by The Hoeweler Group of Cincinnati. While Bill Ammerman has been named director of interactive media for the Cincinnati office, Ron Mossotti will serve as president of the new firm, whose capabilities include on location film and video production, interactive media and touch screen kiosk development, computer-generated graphics and animation and e-commerce site design.

• Lexington Herald-Leader editorial cartoonist Joel Pett won a Pulitzer Prize for his work. Pett had been nominated for the award twice before, and has been the paper's first and only editorial cartoonist since 1984. Last year he served as president of the Association of American Editorial Cartoonists.

• AOL announced a three-year agreement with PurchasePro. com, founded by Lexington native Charles 'Junior' Johnson, to develop a B2B e-commerce marketplace. The companies will share transaction and advertising revenue.

• Transylvania University will construct the $13.5 million Clive M. Beck Athletic and Recreation Center, to open during the next academic year. The facility will house two gyms (including a 1,300-seat arena), a fitness center and a jogging track, and will replace the McAlister Auditorium, built in 1928.

LOUISVILLE

• In late May, Tricon Global Restaurants, Inc., announced it will operate 300 of its KFC units under the same roof with A&W Restaurants. Famed for its root beer, A&W is owned by Long John Silver's parent company, Yorkshire Global Restaurants. Pending the approval of state tax incentives, A&W will move its corporate headquarters and nearly 100 jobs to the Long John Silver's corporate facility in Lexington. Tricon already has co-branded numerous outlets combining its KFC, Taco Bell and Pizza Hut products.

MERCER COUNTY

• Developers of the Cummins Ferry Campground on the Kentucky River want to install a $1 million, 632-foot marina at the site in Mercer County, but are running into stiff opposition from residents and enthusiasts concerned over the loss of tranquility in that area, home to the Palisades. If built, the full-service marina would be the only place for recreational boaters to buy fuel between Boonesboro and Frankfort. The U.S. Corps of Engineers has final regulatory say on the marina, and can decide whether a public hearing ‹ requested by Woodford Fiscal Court ‹ is appropriate.
  Northern Kentucky

• Delta Connection, owner of Comair and Atlantic Southwest Airlines, has purchased 94 new jets from Bombardier Aerospace for $2 billion. The new aircraft will begin entering the fleet in 2001. The agreement includes options for up to 406 more jets by the year 2010. Comair plans to replace all its turboprops with jets by the end of this year, and officials expect the new aircraft to add frequency of flights to growing smaller markets as well as new ones.

OWENSBORO

• n President Clinton visited Daviess County in early May as part of a two-day, four-city tour to highlight educational initiatives. His destinations in Owensboro included an elementary school and a barbeque restaurant.

• Due to consolidation of its operations, Williams Gas Pipeline will add up to 90 employees to its current total of 444 at its SouthCentral headquarters in Owensboro.

• Vision Airways Inc. is considering locating its corporate headquarters and a maintenance hangar at Owensboro-Daviess County Regional Airport. A recent study by the Owensboro Chamber of Commerce revealed strong interest in air freight usage, while passenger service didn't seem to be a pressing issue. Vision flies both, and hopes to capture some of the just-in-time business of the 'Auto Alley' manufacturers.

• According to the Owensboro Messenger-Inquirer, residential, commercial and industrial construction were all up in the first quarter of 2000, with the strong economy being more of a factor than the recovery from a Jan. 3 tornado. Residential construction is up to $10.4 million from $3.2 million last year, while nonresidential is up to $21.7 million from $5.8 million a year ago, a mark that nearly eclipses the total from all of 1999.

PADUCAH

• Computer Services, Inc. reported a fourth quarter rise in net income of 49 percent, to $2.3 million, compared to $1.5 million a year ago. 'Check imaging added over $1 million in new revenue last year,' said Steven A. Powless, the company's president and CEO. The company plans to add new check imaging centers in Bloomington, Ill., and Indianapolis, in early fiscal 2001, as well as consolidating its southwestern operation into a new Dallas processing center and opening a facility in Kansas City.

• Hoping to avoid the acrimony surrounding a similar project across the state in Pikeville, Paducah citizens received their first look recently at a design for the community's proposed $34.2 million Four Rivers Center for the Performing Arts. Architect Eberhard Zeidler's concept includes an 1800-seat main auditorium and 300-seat small theater. So far, $26 million has been raised, including $20 million from the state. The project is expected to be completed by summer 2002.

PARIS

• Kentucky Textiles Inc. has trademarked a new cotton-hemp blend called Hempspun, which it is marketing to retailers as a more durable alternative than cotton or other fabrics, and environmentally friendly as well, since it requires no pesticides or herbicides to grow hemp. A recent General Assembly bill allowed growth of hemp in Kentucky for university research purposes only.

• American Commercial Coatings, a start-up occupying the former Weaver Manufacturing building, will realize the benefits of a HUD grant of over $887,000 to the city of Paris, which will be used to purchase coating equipment that will, in turn, be leased to the company. Lease payments will be used to further develop the Paris-Bourbon County Industrial Park, according to the Bluegrass Area Development District, administrators of the grant.

PIKEVILLE

• After haggling in both the city and state governments, funding is now in place for construction of the Eastern Kentucky Exposition Center. The 7,000-seat facility, expected to be completed within three years, will be funded by $6.9 million in the state's budget, augmented by $3.5 million in future coal severance collections.

PRESTONBURG

• Roger Recktenwald has left his 15-year post as executive director of the Big Sandy Area Development District to assume the director's position at the Kentucky Infrastructure Authority, where he will oversee efforts to link water districts and sewer systems and to improve water quality across the state.

RADCLIFF

• Assurance Packaging and Manufacturing, an Alabama-based manufacturer of returnable packaging and racking systems for the glass and automotive industries, will locate a 200-employee, $1.5 million facility in the 40,000 s.f. spec building belonging to the City of Radcliff in that city's industrial park. 'The proximity to main transportation routes and Fort Knox were important factors in our decision,' said Assurance president Zack Elkaffas. This is the first expansion for the two-year-old, 75-employee company.

SOMERSET

• Tecumseh Products Co., an engine and compressor manufacturer, will close its plant and lay off 1,500 people over the next 18 months. The company's plants in northern Indiana were recently crippled by a strike, which has continued since February.

SPARTA

• Visitors to the new auto racing track in Sparta, set to host its first race June 16, will be able to get extra cash from Firstar ATMs, as Firstar becomes the official bank of the Kentucky Speedway.

WILLIAMSBURG

• A permanent immigrant visa application processing center will be opened here, where 40 workers (80 in peak migrant season) will process around 10 million applications annually. The applications then will be culled to a total of about 100,000 people, according to U.S. representative Hal Rogers.

Copyright 1996-98, by Kentucky Business Online, LLC.  All rights reserved.

Editorial content is copyright 1998, Lane Communications Group
All editorial materials is fully protected and must not be reproduced in any manner without prior permission. 

Buzzword and the Buzzword balloon are registered trademarks of Buzzword, Inc.  The Lane Report is a trademark of Lane Communications Group.  All other trademarks are the property of their respective owners.