Commentary on Life in Kentucky

By LaneReport.com Staff

Frankfort, Kentucky: Home of the World’s Next Great Gambling Mecca

There’s been a lot of recent discussion in the media about Gov. Steve Beshear’s plan to bring gambling casinos to Kentucky. Overlooking the high probability that the General Assembly will not vote to place a constitutional amendment on the Nov. 4, 2008, ballot for the voters to approve or reject, The Lane Report is clicking fast forward with its ideas for successfully bringing casino gambling in Kentucky.

Here is The Lane Report’s proposal in brief:

All Kentucky gambling casinos would be located in Frankfort, Ky.
A casino district on I-64 would be located on state-controlled land. Developed lots would be ground leased to licensees as a part of the state’s gambling license agreement for each casino.

A few good names for roads serving the casino district:
• By Shear Luck Way
• Horse Shoe Lane
• Daniel Monaco Drive
• Gold Dome Boulevard
• Jody Riches Road
• Fletcher’s cul-de-sac

Each casino licensee would be required to build a hotel, meeting facilities, entertainment theater and gaming rooms.

A few good names for casinos:
• Keene to Spin
• Church Hill Ups
• Tough Way Win
• Red Smiles
• Capital Cashland
• My Old Kentucky Roll

The state would also develop a convention center. Kentucky’s central U.S. geographical location is ideal for conventions and expositions.

A major casino district in Kentucky would draw gamblers and conventioneers from the region and around the world and make the venue attractive for big name entertainers and major sporting events.

Frankfort is centrally located on I-64 in the state and is easily reached from Nashville, Louisville, Indianapolis, Chicago, Cincinnati, Columbus, Lexington, Memphis, Knoxville and Charleston/ Huntington. All Kentucky interstate highways connect with I-64 to Frankfort.

Frankfort can be America’s new tourism, gambling and convention mecca.
Hotels and restaurants in the region would benefit from overflow crowds attending major entertainment, sporting events and conventions in Frankfort.

Airports in Louisville, Lexington and Northern Kentucky would provide excellent access to the region for international and national convention attendees.

Since the state is regulating gambling, all casinos being located in Frankfort will make that responsibility substantially easier logistically to manage.

Ownership of casinos should be limited to Kentucky-headquartered corporations and entities so all profits and revenues will be reinvested in the state.

Casinos, hotels, entertainment and sports venues and convention facilities would create major employment opportunities, boost tourism for Kentucky, and increase employment and real estate taxes for the state – not to mention taxes on gaming profits.

If Kentucky is going to bet on gaming casinos, let’s be a leader in the business.  Building 12 black-box casinos all around Kentucky (one for every 350,000 Kentuckians) will dilute competition, diminish the benefits of advertising and promotion, fail to attract major sports and entertainment events, and appeal to the poor, the uneducated, and elderly Kentuckians. Gaming casinos need to attract high-income, sophisticated, high-roller clientele from around North America and the world.  In two words: “First Class!”

One venue for all Kentucky casinos is a good idea! Any other concept would be a big gamble.

LexTran, ACS Arrive at Transit Agreement
Lexington’s public bus system and a major private employer struck a deal announced Feb. 1 whose benefits reach beyond Lexington Transit Authority – better known as LexTran – and Affiliated Computer Services Inc. (ACS), which has 2,200 employees. The community wins, too, when government and corporate citizens find ways to work together effectively.

ACS employees now have more and cheaper options to get to work, a potentially costly parking crunch for the company at Yorktown is relieved, LexTran gains riders and revenue, fewer vehicles are on rush-hour roads and the environment benefits.

The deal announced by Lexington Mayor Jim Newberry, LexTran General Manager Terry Garcia Crews and ACS Group President Tom Blodgett is the first of its kind in the Bluegrass region. In Louisville, however, Transit Authority of River City officials previously have created service plans for employees of Humana, the University of Louisville, UPS night shift workers and Louisville Metro Government. Most participate in TARC’s employee ID program with weekday ridership at 4,500 for UofL, more than 1,000 for Humana and 800 for Metro Government participants.

Lexington’s first Fare Deal program with ACS “began with a casual conversation” and was hammered out quickly, according to LexTran officials. They welcome others, noting that public bus operations are restricted from offering charter service.

The Recession Guessing Game
The jury is still deliberating on whether the U.S. and Kentucky economies are or will be in recession. The official expectation is that there will be – already is – a slowing but no true recession.

At the 19th annual Kentucky Economic Outlook Conference in Lexington last month, sponsored by the UK Gatton College of Business and Economics and The Lane Report, the speakers said they expect the commonwealth to see GDP growth of around 2 percent this year.

“We are certainly not in a recession,” said Ken Troske, who is director of the UK Center for Business and Economic Research. “Right now I don’t expect … a recession.”

Attendees also received an entertaining presentation by Michael Bryan, which he said was nearly identical to what he gives the members of the Federal Reserve Bank of Cleveland board. Bryan, too, said the economy is not in a recession, which is considered official when there are  two consecutive quarters of falling GDP. But Bryan would not say that there won’t be one.

The big problem is in the subprime mortgage realm – housing loans made to people with poor credit, who as a result get less than prime rates of interest. When lenders began issuing such loans in volume a few years ago, it drove up housing prices and profits for lenders. Now, however, lots of borrowers are defaulting, creating tens of billions in losses for lenders and those who invested in products based on those loans, and sending housing prices into a corrective decline totaling many hundreds of billions.

Bryan explained that only slightly more than half of these adjustable subprime mortgages have hit their adjustment maturity, the point when payments go up and defaults tend to occur. It’ll be another six months or so until we see the full extent of subprime impact.

The good news for Kentucky is that because we did not participate so exuberantly in the housing frenzy, there is less exposure now to the painful correction. Troske forecasts the state will see 2.3 to 2.4 percent GDP growth for 2008 with Louisville and Lexington faring a little better than the state as a whole.

Eagle’s-Eye View of Louisville Arena
Victor Staffeiri, CEO of E.ON U.S., parent company of Kentucky Utilities, Western Kentucky Energy and Louisville Gas & Electric, has a view out his office window to the site of the Louisville Downtown Arena being built along the Ohio Riverfront. LG&E is relocating part of its power-distribution infrastructure, visible below the crane, to make way for the arena and continued redevelopment of Louisville’s core.

Lincoln Heritage Trail Unveiled
Gov. Steve Beshear, right, spoke on Feb. 12 during the unveiling of the first marker on the new Kentucky Lincoln Heritage Trail in Hodgenville, near where Lincoln was born in 1809. The scenic route across central Kentucky will feature 27 historic sites in Hodgenville, Lexington, Louisville, Frankfort, Elizabethtown, Nicholasville, Springfield, Richmond and elsewhere across the state that illuminate Lincoln’s life. With Beshear are, from left, LaRue County Judge-Executive Tommy Turner and Hodgenville Mayor Terry Cruse. The trail is a project of the Kentucky Heritage Council/State Historic Preservation Office in partnership with the Kentucky Historical Society, Kentucky Abraham Lincoln Bicentennial Commission, Kentucky Department of Tourism and Kentucky Transportation Cabinet. Take a virtual tour of the trail at www.kylincolntrail.com/trailMap.aspx.

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