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COVER STORY - May 2001
by Claude Hammond

Sidebar-
Liquid Assets
Kentucky's waterways provide opportunities for a wide variety of businesses

Though it’s located far from the ocean, Kentucky has one of the best-established maritime traditions of any state in the South or Midwest. And if you look at the physical geography of the Bluegrass State, you’ll find out why: Kentucky has more miles of navigable waterways than all of the other United States except Alaska.

Large portions of the state historically have been tied to their waterside location, especially along the Ohio River. Cities like Louisville, Ashland and Paducah owe their existence to river-born commerce.
Even today, waterways can be good for business. Whether one runs a port facility for shipping grain and gravel or manages a waterside real estate development, a waterside location can be a major asset for business.

The lakes
The TVA impoundments of smaller waterways in Kentucky and other states in the mid-20th Century created huge lakes that have made recreation and tourism large economic forces in certain regions.

Speaking in terms of tourism alone, the greatest single attraction in Kentucky, Land Between the Lakes, owes its existence to waterways development. This 170,000-acre recreation area helps define the Purchase region of Western Kentucky. Created by the damming of the Cumberland and Tennessee rivers in the early 1960s, the near-island boasts 300 miles of undeveloped shoreline and numerous wildlife and nature-related attractions.

With the construction of Wolf Creek Dam that created Lake Cumberland in 1951, Southeastern Kentucky suddenly found itself home to a 63,000-acre body of water with more than 1,260 miles of shoreline. While there are larger impoundments, particularly the twin West Kentucky giants of Lake Barkley and Kentucky Lake, it would be accurate to say that Cumberland is the lake that spawned an industry. Approximately 80 percent of the houseboats in America are made in Kentucky, most within a few miles of Lake Cumberland’s shores.

“There are more houseboats built in Kentucky than anywhere else,” confirmed Mike Harris, publisher of Houseboat magazine.

“With houseboats, you have three different types,” he said. “The first kind is the full-hull aluminum boat, of which 90 percent are made in Kentucky. The second type is the pontoon boat; the third is the fiberglass-hulled boat, which has only two manufacturers, both in Tennessee.”

Kentucky’s 23 houseboat manufacturers play such a dominant role in the industry that Louisville was chosen as the site of the national Houseboat Expo.

“This is the third year for this event,” Harris said. “I don’t see a reason for us to have the event anywhere else. The location is convenient for the majority of manufacturers and the Kentucky Fair and Exposition Center is a tremendous facility.

One of the most visible pioneers of Kentucky’s houseboat industry is James E. Sharpe, who founded Sumerset, one of the first and largest custom manufacturers in the business. Appropriately located in Somerset, the company is now owned by Thomas Neckel. His spouse, Carol Neckel, serves as the company’s president.

“The average price of the boats we sell is more than $225,000,” said Cecil Helton, Chief Information Officer for Sumerset. “We build anywhere from 100 to 150 houseboats a year, depending on the size and amenities of the more popular boats. ”

Sumerset employs about 200 people. It is notable that the majority of its products go out-of-state, which is typical for most of Kentucky’s houseboat manufacturers in the present economy.

“There’s been a dramatic change over the last six months,” Helton said. We’re losing out in midrange boat buyers – those buying houseboats under $300,000. Most customers buy in the $180,000-200,000 range or over $300,000. We strive to be the provider of the high-end product.”

But the Sharpe family has not stayed away from the industry in which their patriarch has played such a large role. James E. Sharpe’s son, Joe, is president of Sharpe Houseboats, located just a short drive from Sumerset’s operations.

“This is our fourth year in business, but I’ve been in the houseboat business since I was 10,” Joe Sharpe said. Also a producer of high-end luxury houseboats, Sharpe custom-builds each of its watercraft to precise customer specifications. The company has about 100 employees.

One of Sharpe’s more interesting customer orders requested that a fishing hole be installed in the floor of the living room in a particularly large houseboat. “That particular customer wanted to be able to fish all year,” he said. “We’ve built about 155 boats since March, 1998, which translates into maybe one boat a week.”

It is notable that Harris and other houseboat industry executives are strong advocates of the National Recreational Lakes Act, which will possibly be considered by Congress later this year. Federally created water impoundments draw almost one billion recreation visits annually and prompt more than $44 billion in recreation spending.

Getting the lay of the land
Being on the water is nice, but being near the water is just as desirable. High-end real estate developments by Kentucky’s lakes are increasing in number.

The first large-scale development of vacation property in Kentucky occurred with Woodson Bend Resort in the mid-1970s. Located near the small Lake Cumberland town of Bronston, the development of condominiums and other properties was built on the bluffs of a 455-acre peninsula overlooking the water. The property has been accentuated with an 18-hole golf course and other amenities.

One of the more ambitious waterside real estate developments in Kentucky is the Lake Cumberland Resort, located south of Burnside on Pulaski County’s southern edge. A three-year-old development, Lake Cumberland already boasts one celebrity property holder in Baseball Hall-of-Famer Johnny Bench. The resort is being developed by Anthony Del Spina, a retired stockbroker, and his wife Frances.

“We have about 150 property owners and our own boat ramp,” said W. Chris Alford, vice president for sales at the resort. “But only about 30 percent of our owners are boaters. The rest of them simply enjoy being near the water.”

Vacation homes built at Lake Cumberland Resort range in size from 950 to 5,000-s.f. The 500-acre vacation home project, when completed, will account for $50 million in development dollars invested in Kentucky.

The rivers
With oil prices continuing to increase, the option of shipping by river may well be an increasingly popular one.

Kentucky’s northern and western boundaries are the Ohio and Mississippi rivers. This enables commercial and recreational traffic to connect to a vast portion of the country.

The Tennessee and Cumberland Rivers bisect Western Kentucky and connect commercial and pleasure boats with the Tennessee-Tombigbee Waterway and the saltwater port of Mobile. America’s northernmost ice-free inland port, Paducah could accurately be called the heart of water-based business in Western Kentucky. The city not only has direct river connections to two international ports (Mobile and New Orleans), but has offices for at least eight inland barge lines. Paducah is also home to one of the few training schools for river pilots in the nation.

Ashland, Henderson, Louisville, Maysville and Owensboro are also home to similar companies. American Commercial Barge Lines, located across the river from Louisville in Jeffersonville, Ind., is America’s largest inland shipping company and employs about 670 Kentuckians. Among its member companies is Jeffboat, which is the country’s largest inland shipyard.

“The demand for commodity transportation has been fairly constant,” said Jim Adams, American Commercial’s vice president for public affairs. “This demand has been growing by only one or two percent per year. We’re the nation’s largest barge line, with 200 towboats on the Ohio-Mississippi river system and the Gulf Intracoastal Waterway between Florida and Texas.”

Taking a cruise ship to Kentucky?
According to officials at the Paducah-McCracken County Convention and Visitors Bureau, that city annually receives 7,000 tourists who arrive by steamboat – a welcome mode of transportation in a city where 3,500 jobs are directly related to the river industry.

“Any town we visit has its own history and beauty to offer. It enhances the experience of the vessels,” said Lucette Brehm, news bureau manager for New Orleans-based Delta Queen Steamboat Co. “Paducah, Henderson and Louisville are ports we regularly visit, as well as Maysville and Owensboro.

“The whole passenger experience that we deliver is visiting the towns and communities along the river and exploring the history and lore of the place,” Brehm said. “It’s a slower pace, with our steamboats being something like the glory boats of the late 1890s, but with all the conveniences of cruise ships. We’re a good cross of the historic and the modern.”

Likewise, Kentucky maintains its historic tradition of using its waterways, as well as creating new innovations in their use that bring jobs and prosperity statewide.




Claude Hammond is editorial director of The Lane Report.
editorial@lanereport.com

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