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One-On-One: Jerry Abramson

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Ed Lane: The Ryder Cup at Valhalla – even with major power outages around Louisville – seemed to be a very successful and flawless operation. As mayor, what is your perspective?

Jerry Abramson: When your city is preparing for an event that will have 700 million television viewers worldwide, you are on pins and needles throughout the entire week to ensure it runs smoothly and that our community is portrayed as positively as possible.  In retrospect, I don’t think the Ryder Cup could have gone better.

The event was during a very traumatic time when over 301,000 households in Louisville were without power, yet hundreds and hundreds of volunteers showed up every day whether they had power or not. The transportation system ran smoothly, food services were right on target, and the chalets were elegant.

Louisville surrounded the Ryder Cup with events we called “The Cup Experience” – concerts, dinners and several black-tie events.  Representatives from Wales, who will be next to host the Ryder Cup, said we set the bar so high they weren’t sure Wales could attain the community engagement we achieved in Louisville.

Louisville was able to do this for the Ryder Cup because it is what we have done in every Kentucky Derby, Breeders Cup and past PGA tournaments.  Folks from all socio-economic backgrounds have events to attend and all felt like they were a part of this wonderful event.

EL: What about the weather?

JA: I wish I could take credit for it. It was fabulous, just incredible, except for a two-or three-hour period on the Sunday before the Ryder Cup, when 80 mph winds blew through town.

EL: How well did Louisville International Airport operate?

JA: The airport not only was in great shape but it also ran as smoothly as one could hope.  Again, Louisville is so used to hosting the Derby every year with those kinds of numbers.

The airport even handled customs for the 747 aircraft that brought the European team to Louisville non-stop from London. We were able to work out an arrangement with Washington to bring in a bunch of customs folks to join the ones who are already here to handle that plane without having it stop in a gateway city prior to coming into Louisville.

The fixed-based operator that services private jets, the day before the first practice round, was without power. We got it up and aviation fuel was available by the time the jets needed it.

EL: Were all of the hotels and restaurants full?

JA: All of the major hotels were full. I bumped into a group of Irish folks who were staying in Shelby County. They told me they went from Valhalla to Shelbyville to clean up and back downtown to Fourth Street Live. There were concerts there every night; entertainment ranged from Three Dog Night to jazz and blues.

Louisville is so large that it can have many nodes of entertainment. Whether they are on Bardstown Road, where you couldn’t get a reservation; or Frankfort Avenue, where you couldn’t get a reservation; or in one of the suburban areas like the Old Brownsboro Crossing or the Summit where restaurants were just backed up, Louisville was successful across the board. In terms of concerts and live entertainment, most of it was centered downtown.

EL: How was LG&E’s response to power outages due to Hurricane Ike?

JA: The good news is Valhalla never lost power. Not one representative from LG&E ever stepped a foot on or rolled a truck to the course. Now a lot of the areas around Valhalla lost power, like the two homes that European team captain Nick Faldo rented. I got the call, but I couldn’t do anything about restoring power.

Being mayor during the Ryder Cup week was a surreal experience. On one hand, I was out at Valhalla with the world titans of industry. No one knew a recession was ongoing based on the number of people in the retail outlets buying $100 golf shirts and $43 caps.  Louisville invited and brought over folks from several countries in Europe and major companies in California and New York. We used Ryder Cup as a way to attract opportunities for investment and job creation in Louisville.

Then, I would go back into my job as mayor for the good of the community. I was trying to provide food to the tune of 1,000 meals a day, find refrigeration for insulin, find shelter for families with children, get the evening dinner meals that our non-profit Dare-to-Care provides for kids to open for lunch time also because there was not school to get the free and reduced lunches that kids are used to getting.

It was surreal working with those who had nothing and had lost everything or trying to replace food stamps for people who bought food and it all spoiled – how do you and your children eat for the rest of the month? Having to get that done and then run out for a meeting that I had previously scheduled in a chalet at 2 p.m. with XYZ company from Munich, Germany, that was thinking about investing here in the community or expanding an existing business – definitely a surreal experience.

EL: What was the economic impact for Louisville and the state?

JA: For the city, $120 to $150 million in tourism dollars is the figure that I’ve seen. In terms of taxes, you have the hotel tax for Louisville’s Convention and Visitors Bureau. The state gets the sales tax from everything; the city gets none of the sales tax. Based on what might come from the business meetings that we had – and we had them every day – there could be some real benefit for the community in terms of future investment and job expansion.
We issued a lot more cab licenses and had a significant increase in limousine licenses. All those people were paying occupational tax on their salaries, which is our source of tax revenue in this community.

EL: Any major boo-boo’s?

JA: (laughs) Well, if I could have just kept those winds away. I think Ryder Cup went as well as can be expected. Joe Steranka, the PGA’s CEO, said it was fabulous, one of the best, if not the best ever. The best thing he said was “we’re coming back” – at the end of the 17th hole when the U.S. Team won the tournament. I happened to be at the green, and U.S. captain Paul Azinger came over and shook my hand and said “thanks for the 13th man.” He felt that Louisville’s and the United States of America’s engagement in the Ryder Cup was like having an extra player on this team.

EL: Who was the city’s key liaison from state government?

JA: We were working with the Cabinet Secretary Marcheta Sparrow and her staff. The Kentucky Tourism, Arts and Heritage Cabinet was very helpful, very engaged and very supportive. We could have used a little additional financial assistance from the state, but all in all it worked out very well with a great deal of support from the Kentucky Fair and Exposition Center as one of the two staging points for folks to get on to a bus and come to Valhalla.

EL: Where there any major crime or security problems?

JA: As for Valhalla, there were no problems whatsoever. With the blackout, every time I had a press conference the media was always looking for “Oh my god, the world is going to heck in a hand basket,” and in fact there were no criminal activity trends out of the ordinary when we compared communities that had their power on versus communities that did not.

EL: Larry Hayes, your former deputy mayor, is now serving as the acting head of the Kentucky Cabinet for Economic Development. Will he move over permanently?

JA: Larry told me he is not going to stay at economic development and will continue as secretary of the governor’s cabinet. Larry could do either job exceptionally well.  He is very talented, bright, focused and loves Kentucky. When I asked the question, Larry said that the state would recruit a new economic development secretary and that he would return full time to his position as secretary of the governor’s cabinet.

EL: How do you rate Gov. Steve Beshear’s performance?

JA: There were some difficulties that obviously existed when the General Assembly was in town (Frankfort) earlier this year. People don’t realize how difficult it is for a new governor to take office in December and have a $9 billion budget ready in six weeks. I am a strong proponent for new governors to have a year to prepare and then present their budget. This will allow them to get their feet on the ground, recruit and organize their staff.

Since that initial period of difficulty, the governor is doing an exceptionally fine job.  There is no question he has found his sea legs. He is focused, reflective of the needs of this community and responding appropriately. I have been very impressed with his leadership.

EL: How are tax revenues for Louisville during this slow-down in economic activity?

JA: Louisville could always use more tax revenue. If you program into the city’s cost side of the ledger all that we did during the Ike storm (power outages) and without FEMA reimbursement for a significant portion of it, Louisville is going to have a very difficult year in balancing its budget.

Even before the storm, the Metro Government prepared a budget assuming the smallest revenue growth (about 2.2 percent) in the six budgets I’ve presented as a merged government. Louisville is really on a very difficult course to balance its budget. Every penny per gallon gas goes up, for example, costs Louisville $30,000. That’s were we are.

I asked my cabinet at a meeting the other day about revenue trends for this fiscal year; they don’t feel comfortable in their estimate until we have financial data for the first quarter of our fiscal year.

EL: How would you rate Jim Host’s performance as the chairman of the arena authority?

JA: Without Jim Host there would be no Louisville Arena. I don’t care what UK fans say; he is Mr. Louisville. As I said publicly at the arena announcement, if you’re going to war, you want Jim Host, with his tenacity, in your foxhole. This guy doesn’t know the meaning of “no.” It is always “yes,” and it is “we are going for it.”

Jim has just been wonderful for us. He is totally volunteering his services. The guy gets in his own car at 5:30 in the morning and drives to Louisville and works. The bond experts at Goldman Sachs said that it was lucky and smart (during a three-day window) when Jim pulled the trigger and sold the arena’s bonds.

EL: Louisville has taken the lead in using Tax Incentive Financing (TIF). How is this economic development tool working for Louisville?

JA: Louisville has had it for years. Initially, it was just Louisville that had the TIF capability. The General Assembly decided to make TIF available across the board (statewide), and it established thresholds a community would have to meet to qualify for TIF.

EL: Has TIF been a real benefit to Louisville?

JA: The Commonwealth of Kentucky is years behind what other states have done in terms of tax increment financing.  I used to go to meetings of large-city mayors 10 or 20 years ago and people were talking about tax increment financing as just another arrow in their quiver to finance a development. I didn’t know what they were talking about. But as I began to understand it, then everybody began to beat the drum in communities like ours and around the country.

Louisville needed to have a TIF option, and it has been fabulous. TIF has given Louisville the opportunity to build the Louisville Arena, to go forward with Museum Plaza and to develop the medical center. Without TIF, those economic development initiatives would have never have come forward. TIF has given Louisville the opportunity to do Fourth Street Live; now we are going to quadruple Fourth Street Live size-wise in terms of restaurants and retail. Downtown Louisville has over 2,000 apartments and condos going up.

EL: From a mayor’s standpoint, how serious is the problem on Wall Street?

JA: Louisville doesn’t have the big highs or deep lows. As a result, Louisville is ready to benefit when the economy upturns. I say that because the Louisville Arena is going forward; Museum Plaza has already broken ground. Fourth Street Live has done so well the city has told the Cordish Companies it’s going to provide some land, but financing is on you. The economy has literally slowed down these projects, but we have them teed up. Several of them have already broken ground and we’re hopeful that by the second to third quarter of next year these and other projects will be going forward.

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