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Central Kentucky, a complete community – with character

Region diversifies via its blending of urban tech and small town collaboration

By Abby Laub

(EOP Architects rendering) The Lexington Center broke ground in July 2018 on a much anticipated $241 million renovation and expansion of Rupp Arena and Lexington Convention Center.

Visions of horses, rows of painted board fences, rolling hills, bourbon, basketball … And manufacturing, and hospitality, and history, and innovation, big city amenities, and small town charm, and an educated workforce … The list doesn’t end. Fayette and its surrounding counties benefit from a diverse economy and count many household name brands among its business and tourism assets. This wealth is shared throughout a region whose counties all collaborate on a shared vision of better business and improved quality of life.

“As you go out in the region, you see it a lot in Lexington, that ‘cool factor’ – the entertainment and cross section of all of the amenities. But if you go to the smaller towns around us, they’re all doing it, too,” said Bob Quick, president and CEO of Commerce Lexington Inc. “The hearts of local downtowns are very active, and there are people everywhere. Everything we say about Lexington, you can find in the surrounding towns.”

Lexington and its surrounding towns are all benefitting from roughly $18 million in new investment in 2018 alone. And while Lexington is the largest city in Central Kentucky, it only tells part of the story. Its relationship with the surrounding counties is characteristically symbiotic – they can’t survive without each other, and that relationship is intentional.

High-tech moves

The recent injections of capital into Lexington and beyond is proof that it’s working. Not only are new companies starting up, new ones are moving to the region. In late 2017, EnerBlu Inc. announced it would relocate its headquarters and manufacturing operations to Kentucky from Riverside, Calif. The high-power energy storage provider’s $373 million investment kicked off by moving more than 100 jobs to its headquarters in downtown Lexington and nearby step-up production plant; it will add 875 full-time jobs in Eastern Kentucky at a planned energy storage system production facility.

Chairman and CMO Xavier Guerin said EnerBlu’s team includes executives from Motorola and other major global tech firms. The team was attracted to Central Kentucky because of its affordable employment, available space and workforce, he said.

“There are a lot of resources locally, and we want to be local as much as possible, not just in human resources,” Guerin said, adding that suppliers and clients the company works with are within very easy reach from Central Kentucky.

EnerBlu will construct a 1 million-s.f., high-tech facility in Pikeville to manufacture lithium-titanate (LTO) batteries, called EnerBlu Advanced Energy Storage Units. The batteries power transit buses, commercial trucks, military vehicles and other equipment. The LTO is a rechargeable battery with the advantage of a faster charge and discharge than other lithium-ion batteries and provides high power when necessary.

Currently, more than 70 percent of the world’s LTO production is located in China. The Pikeville facility will be the first LTO factory in the United States. Construction is scheduled to start in 2018 with the facility’s opening planned for 2020.

Guerin, who is from France, said, “Hospitality is high, there are very nice people here.”

He also noted that networking with officials and other businesspeople in Central Kentucky was a seamless process, and his company was met with a responsive and welcoming atmosphere. EnerBlu works with University of Kentucky and University of Louisville researchers and utilizes laboratory space at the Center for Applied Energy Research.

Speed getting the company’s products to market is of the essence, he said, and Central Kentucky has proved to be helpful in that regard.

LTO “chemistry is something that has been around for a while, and we are putting this chemistry on steroids,” Guerin said. “Our team has been working on this chemistry for over 15 years, and we think we understand it better than anyone else. Our goal is to bring the cost down to get into a larger market.”

Improving technology for all Central Kentuckians – businesspeople or not – also is on the minds of executives at MetroNet, which in July 2018 announced the hiring of more key players for its Lexington team as part of efforts toward making Lexington the nation’s largest gigabit city.

“We have been inundated with requests from consumers and businesses to sign up for MetroNet’s 100 percent fiber-optic (internet) speeds, and we’re excited to bring it to them,” said Kevin Stelmach, MetroNet executive VP/general manager, in a press release. “Putting a great team in place who can deliver the level of customer service for which MetroNet is known is the next step in bringing Lexington into the digital future.”

Evansville, Ind.-based MetroNet began construction in early 2018 on a $70 million high-speed, 100 percent fiber-optic network.

Preservation creates dollars

For some Central Kentucky communities, economic development looks much different. About 30 miles northeast of Lexington in Bourbon County is Millersburg. The town of less than 1,000 is a prime example of an economy that helps paint the larger picture of Central Kentucky’s diverse landscape.

Lexington-based CMW Architects & Engineers associate Todd Ott specializes in historic preservation and was involved in the preservation of a historic Millersburg property now called Mustard Seed Hill. Listed on the National Register of Historic Places, the property includes several buildings, including the Greek Revival style Allen House that dates to the 1850s.

In 1920, the citizens of Millersburg purchased Allen House so Millersburg Military Institute could return to the town. MMI added several buildings, including a gymnasium. The property was a signature Kentucky private school for 113 years.

In 2016, Lexington based Community Ventures purchased the abandoned and rapidly deteriorating property in order to restore and repurpose the historic venue. CMW was tasked with the job, and former MMI grounds are now home to Mustard Seed Hill Events, Bourbon Christian Academy and one of Community Ventures’ six offices. More programs are in development stages.

Ott called the project a “labor of love” and noted the great lengths taken to recover historic assets, and keep the property’s characteristics true to the period it was built – all the way down to the warm, amber tones of the lighting. Repurposed pieces were harvested from as far away as the Caribbean.

“We did not want it to look brand new; we wanted it to look characteristic of its age,” Ott said. “The property has been here longer than we have, and it will be here after we’re gone. We’re just good stewards of it while we’re here, so my goal is to recover the property and place it in the next chapter of its life.”

This type of restoration, he notes, is as important to the region, albeit in different ways, as something like a new structure in downtown Lexington such as the $200 million City Center, because without it the town of Millersburg probably would not be able to sustain itself.

“They’re very much equal and different, and they’re proportional to their environments,” Ott said. “Millersburg is a very small community, and MMI was the largest non-governmental development there. When MMI ceased to operate, finding a way to make that up in the economy and value of life in Millersburg was a big challenge. When we talk about the big new properties, they’re nice and have their place. And then there are places like Millersburg.

“We can make a contribution to recovering those towns and making those towns livable communities again. Doing what Community Ventures has done in Millersburg is an enormous investment in Millersburg. These projects are extremely important, because it’s how we preserve our heritage.”

Livable small towns – priceless

The restoration came at a good time, Ott said, since the U.S. 68 bypass opened around the small town in January and could have caused the town to be forgotten.

Scenic areas like Millersburg or Midway or Harrodsburg – name it, there are dozens – are part of what make Central Kentucky special and simply pleasing to the eye. Executive Vice President of Economic Development Gina Greathouse said she and other Commerce Lexington officials have been known to drive visitors and potential clients around to show them firsthand what they had always imagined in their minds about Kentucky.

“We often take them out to tour horse farms or distilleries,” she said. “There’s nothing like a sunset at Woodford Reserve.”

Quick added, “Central Kentucky is a combination of the big-city economy here but then it’s supported by all of these smaller areas that are stunningly beautiful and have smaller economies.”

Many of these smaller economies are bolstered by partnerships, one of them being Lexington’s Bluegrass Alliance, a brainchild of Greathouse. The alliance started out as officials from eight counties who wanted to work together to improve the economics of the whole region by working together. Relationships and trust were built, and over time these counties began to take a truly regional approach. Montgomery County, the third-fastest growing county in Kentucky, was recently added to the fold.

“Economic development was the first component; the second was when we started bringing people of all backgrounds and interests together, and they all learned about each other,” Quick said. “It sounds trivial, but that was the beginning of building lifelong relationships, and we all got to know the intricate things in each community and got to know each other.”

Working together sells well

The group’s agenda was solidified in 2005. Quick noted that Toyota Motor Manufacturing Kentucky in Scott County, which employs more than 7,000 people, was one of the “central roots because they needed to be and wanted to be regional.”

One of the key discussions was over public policy, he said, so the Central Kentucky Regional Public Policy Group was formed, and members in the public and private sector began traveling to Washington, D.C. to advocate for their collective policy needs.

“We found there was a whole lot more that pulled us together, so when we went out to D.C. it was interesting to see our senators and representatives say ‘it’s about time you came out collectively,’ because they were used to having many groups come out separately,” Quick said. “Now we’re advocating for a collective agenda and are more powerful together.”

The roots that tied the group together were economic development, which can’t be fleshed out fully without public policy to support it.

“Another thing that was a real ‘seller’ in D.C. was when you had one county selling the priorities of another county,” Quick said. “And every project, every issue of public policy that we brought up, had to have roots in multiple counties.”

Diversifying builds strength

This year, Commerce Lexington is excited about many new projects around the region. These regional assets are what help make the economy diverse and able to weather storms.

“Lexington was recently named the No. 9 most diverse economy. You’ll see between education, healthcare, manufacturing and professional services, that’s why a lot of our companies are doing so well,” said Kimberly Rossetti, Commerce Lexington’s vice president of Economic Development. “We don’t have all of our eggs in one basket. It’s a key to longevity.”

For example, recently constructed More Than A Bakery in Versailles is fully operational. The nearly $60 million facility completed in 2017 employs more than 300 people and produces cookies, crackers and other baked goods by contract for major food brands and retailers. It is already considering expansion.

Meanwhile, industrial hemp is continuing its surge in all areas from research to farming to CBD production. In Cynthiana, hemp farmer, formulator and processor AgTech Scientific is creating more than 270 jobs at a new products development and manufacturing center. The operation is farmer-forward and plans to help lead the way in Kentucky’s efforts to be an international leader in hemp production.

“The Bluegrass region’s long agricultural history continues to pair well with modern industrial development,” said Terry Gill, secretary of the Kentucky Cabinet for Economic Development. “We’re seeing ag-tech projects locating in the region, from hemp-processing and products manufacturing planned for Bourbon County to next-generation greenhouse farming in Lincoln County.”

Industrial hemp sparking excitement

According to Dr. Mark McElroy, AgTech chief business officer, the company’s success is dependent on the success of farmers. AgTech created the Kentucky Hemp Farm Initiative (KHFI) with Central Kentucky farmers in the 2018 growing season. The initiative uses a cooperative approach under which hemp farmers receive plants, initial supplies and payments throughout the season.

“As of July 30, 2018, AgTech has made over $125,000 in direct cash payments to Kentucky farmers with more payments coming soon,” McElroy said over the summer. “This approach has farmers in Kentucky excited; our site gets new farm applications at an incredible rate. We have 225,000 thriving, high-CBD hemp plants on over 120 acres in Central Kentucky. An improved variety we introduced is showing a lot of promise early this season and dramatically increased yields are anticipated. We are able to cut costs by utilizing traditional tobacco industry techniques combined with cutting edge technology.”

The company plans to expand KHFI tenfold next year. AgTech partners for research with UK and has launched two long-term studies on the effect of industrial hemp extracts, commonly known as CBD, on pets and horses.

“The Central Kentucky community has been a great partner already,” McElroy said. “Beyond the grants and incentives, we have been embraced by the region. As a hemp company, we are thankful to have great business partners for banking and investment. Many hemp companies don’t have those basic partnerships in place at this time.”

AgTech will complete construction of its 50,000-s.f. facility in Bourbon County next year and will then formulate a variety of products enhanced with CBD.

Wide-ranging expansions

Also new to the scene is TruTone Finishing Inc. In January 2018 the family owned provider of industrial e-coating announced plans to create 120 jobs and will initially implement an e-coat metal finishing process to serve the surrounding region at an existing 70,000-s.f. building in Lexington.

Recently opened in Midway is Lakeshore Learning Materials, a developer and retailer of high-quality educational products. It located a 500,000-s.f. distribution center in Woodford County’s Midway Station industrial park with an investment of more than $47.4 million. It is the company’s second distribution center in Midway.

Craft beer continues its climb, with Country Boy Brewing making a nearly $4.5 million expansion into Georgetown recently. Lexington based West Sixth Brewing continues to grow its local and national footprint, with new added equipment and its own farm.

Meanwhile, bourbon continues to grow. In July the historic James E. Pepper Distillery in Lexington reopened for tours, the culmination of the multiyear project to re-launch the iconic whiskey brand and rebuild a distillery that was abandoned in 1958.

In Frankfort, a spectacular former Old Taylor Distillery that closed in 1972 is getting new life as Castle & Key Distillery. All Castle & Key products are made from scratch on its picturesque 113-acre estate, giving Commerce Lexington officials yet another place to knock the socks off of visitors.

Gill called these types of expansions and openings an ideal combining of the “elements of agriculture, manufacturing, retail and tourism.”

Old names always modernizing

While new development often grabs the headlines, it’s the region’s longtime heavy hitters like Toyota Motor Manufacturing Kentucky (TMMK), LBX, Alltech, and Valvoline, to name a few, that continue to provide a solid baseline of uncompromising corporate dedication to the Bluegrass.

“Central Kentucky has been great for us, and over the years Toyota has been able to attract industry suppliers and other businesses to the area which has helped grow the economic footprint of our communities,” TMMK Senior Vice President Brian Krinock said.

The carmaker recently further expanded its multimillion-s.f. Scott County footprint with addition of the Production Engineering & Manufacturing Center, which houses more than 600 engineers and supports all of Toyota’s North American plants.

“As for potential growth in the future, I’m excited about the things we are seeing and hearing from our leaders in Frankfort,” Krinock said. “The Cabinet for Economic Development has been very aggressive in its pursuit of more business, and Kentucky is now a state that many businesses are taking a strong look at, especially when they can see evidence of success in our business-friendly state with expansions of businesses like Toyota.”

TMMK has always been on the forefront of workforce development and has deep ties with schools like Bluegrass Community and Technical College.

“Recently, our company started a global reinvestment effort to modernize all of our manufacturing plants so we can adapt to market changes and develop new technologies faster and more efficiently,” Krinock said. “Here in the U.S., our Georgetown plant was the first to undergo the plant modernization which we call TNGA, Toyota New Global Architecture, a $1.33 billion investment. This project required a lot of retraining, and because we have a very talented workforce, we adapted quickly to this new technology. Consequently, as we implement these changes across our plants, our workforce is more connected and can share more knowledge with each other. This also has benefits to our supply chain across North America.”

The year 2018 and beyond brings new potentials hurdles like trade and tariff issues on a national scale, and ever present challenges like consumer demand, lean practices, and industry trends.

“Toyota has a good track record of weathering the trends and the ups and downs of our industry and our latest plant investment will help us adjust to these market changes,” Krinock noted.

South of Lexington in Jessamine County is the international headquarters of agricultural solutions provider Alltech, an international leader in animal nutrition, brewing and distilling, plant health, cattle production and longevity life science. It’s busy expanding its Kentucky presence and economic impact, most recently opening a $15 million Dueling Barrels Brewery & Distillery in Pikeville.

In June, longtime Lexington heavyhitter LBX Co. LLC began construction on a $10 million customer experience and training center in Lexington to supplement its current headquarters. Japanese owned but Lexington-based crane manufacturer Link-Belt began producing excavators in Lexington as well in 1975.

Well known brand names Valvoline in Lexington and Florida Tile in Lawrenceburg also announced major expansions in recent years.

“All these projects provide positive impact that will help the region’s cities and counties economically,” said Vivek Sarin, executive officer at the Kentucky Cabinet for Economic Development. “At the same time, they create a vibrancy and attractiveness that make Central Kentucky an additionally appealing location for new companies.”

Sarin and Gill noted that the region’s equine industry strength is an integral aspect of their recruitment work.

“What the Thoroughbred industry represents to the economy through ag-tech companies and service providers is a tremendous draw, as is the total life experience they contribute to – the region’s beauty and related amenities such as internationally known farms, Keeneland, the Kentucky Horse Park and more,” Sarin said.

‘Coolly sophisticated’

Also key are the region’s quality of life, career and education opportunities, access to workforce, prime location and healthy work-life balance.

“In business meetings, we hear from companies that access to workforce is key,” Sarin said. “Especially a labor pool trained for target industries, including automotive manufacturing, aerospace and defense industries, engineering and R&D.”

Quick is also strongly focused on this because workforce is huge in growing and recruiting business, but the city’s small-town charms also play a part in attracting business from around the world.

“A tech company was here visiting from Texas and pleading not to let Lexington turn into ‘just like all of the other big metros,’ because that is why he was leaving that place,” Quick said. “I think the sweet spot is that we’re big enough to be coolly sophisticated and to have all the amenities of the larger economies, but we’re small enough to have a lot of the attributes that foster safety, low cost of living, a great quality of place. We’ve got built in barriers that prevent everything from toppling.”

All of these are factors – and ultimately brands – that bring people to the Bluegrass for the total package of a vibrant and diverse economy. A “complete community,” according to Quick, is what makes Central Kentucky the ideal place that it is for business.

Numbers don’t lie

#1 Chamber of the Year Commerce Lexington was named 2016 Chamber of the Year by the Association of Chamber of Commerce Executives.

#2 Rapid Recovery Leader Business Facilities evaluated U.S. metros that had the most impressive surge in job creation, wages and salaries between 2013 and 2014, ranking Lexington No. 2. Its key contributing factors included a high-tech economy and local partnerships.

#3 Best City to Raise a Family Lexington scored an “A” rating, behind only Lincoln, Neb., and Madison Wisc., by zumper.com. It was the highest ranking Southern city.

#3 Safest City in the Nation Lexington ranked third on SafeWise’s 2018 list of 10 Safest and Most Dangerous Metro Cities in America.

#4 Top U.S. Business Climate According to Site Selection magazine in 2017, Lexington ranked No. 4 in economic development activity, a testament to the effectiveness of the Bluegrass Business Development Partnership.

#6 Best Large College City Wallet Hub in 2015 gave Lexington this ranking due in part to its top-ranked sports teams, educational opportunities and population with disposable income.

#6 Most Inspiring Cities for Young Artists Lexington’s art culture supports local artists, and in 2015 it earned the No. 6 spot from World Wide Learn based on education data, art dealers, performing arts companies, museums, fine arts schools and creative industries.

#7 Best Midsize City for Jobs Forbes ranked 398 metro areas based on employment data from November 2001 through January 2013.

#7 Most Affordable Big City in America Lexington’s low cost of living, low housing-related costs, and high median household income earned it the ranking by Kiplinger.

#8 Lowest Startup Costs
SmartAsset.com ranked Lexington No. 8 for lowest startup costs, based on utility costs, office space, fees, and first year payroll.

#8 Percentage of Population with an Advanced Degree Among cities of 300,000 people or more, Lexington holds the No. 8 position with 19.2% of its population over age 25 attaining a master’s, professional or doctorate degree, according to the U.S. Census Bureau in 2016.

#8 Best City for Working Parents In 2014 NerdWallet.com named Lexington No. 8 on its top 25 list of best cities for working parents, due to low child care costs and quality schools.

View more rankings at locateinlexington.com.

‘Tons of entrepreneurial talent’

Kenny Schomp and Will Holton of Longship are Lexington natives and chose to launch their logistics company in the Bluegrass since it’s a “young, growing city with tons of entrepreneurial talent,” said Longship.

“This is an ideal place for business professionals looking to establish rapport and start their own company because of how responsive and engaging the community is,” he said. “Local support and networking opportunities are not hard to come by, and with a flourishing local economy, all the local colleges to pull talent from, Lexington is an optimal place to conduct and grow your business.”