STATE: Three Ky. projects among top 30 U.S. high impact developments in 2012
Trade & Industry Development, a magazine dedicated to site selection, listed three Kentucky projects among the top 30 economic development projects for 2012 for its 8th annual Cici (Corporate Investment and Community Impact) Awards.
The magazine cited General Electric’s expansion in Louisville, Berry Plastic’s reopening of its Madisonville operations and Amazon’s new customer service facility in Winchester for the awards, which were selected from hundreds of submissions.
The CiCi Awards, created in 2006, highlight not only the largest corporate investments but also those that may not involve large investments but make the most notable impact on communities. Criteria considered for the “impact” division include new jobs created, current jobs retained, unemployment figures, income level of the region and plant closings.
As part of an initiative to reverse decades of outsourcing, GE launched several new product lines at its Louisville Appliance Park in 2012. GE has committed to invest $800 million in Louisville by 2014 and has already created about 3,000 new jobs.
Berry Plastics Corp. reopened its Madisonville operation in 2012, investing $96 million in the plant and creating more than 400 full-time jobs. Earlier in the year, Berry had shuttered the facility, which had approximately 140 employees, due to a redistribution of production at its other manufacturing facilities.
In May 2012, Amazon announced its decision to build a new 70,000-s.f. customer service facility in Winchester, creating more than 550 full-time and 600 seasonal and part-time jobs by 2017. Amazon subsidiaries currently operate four fulfillment centers in Louisville, Lexington, Campbellsville and Hebron, but the Winchester facility is Amazon’s first customer service center in Kentucky.
STATE: Kentucky off-track betting to close its 3 operation sites in June
Kentucky Off-Track Betting LLC (KOTB) has announced that it will close all three of its facilities in June, after completion of the 2013 Triple Crown Series.
KOTB operates locations in Corbin, Jamestown and Maysville, and employs a total of approximately 20 full-time and part-time employees.
KOTB was formed in 1993 by Churchill Downs, Ellis Park, Keeneland and Turfway Park. The main impetus behind the partnership was to generate handle dollars, which would in turn help build Kentucky’s purse structure.
Over the past 10 years, KOTB has generated an average of $1.4 million per year dedicated to Kentucky Thoroughbred purses. In addition, KOTB has given back 0.75 percent of each dollar handled to the city where each facility is located, with the respective county receiving 0.25 percent.
However, economic factors – combined with the decline in overall handle at the outlets – forced the organization to evaluate the feasibility of continuing.
A look at the numbers brings the problem to light. Ten years ago, a total of $25.7 million was wagered at the outlets compared to $10 million in 2012.
“Closing our OTBs won’t be easy and it has not been a decision our owners have taken lightly,” said KOTB General Manager Laura Prewitt. “However, the bottom line is that it is not profitable and does not make economic sense to keep operations going. It is imperative that we look critically at our industry and business models to find ways to grow the sport, and it would be irresponsible to continue ventures that are not profitable.”
STATE: Ky. Lottery OKs online sales, adds Keno; expects revenue boost
In a unanimous vote, the Kentucky Lottery Corp.’s (KLC) board of directors has moved to allow Internet sales of lottery tickets and scratch-offs and will add Keno to its mix of games.
The move came at the suggestion of Kentucky State Treasurer Todd Hollenbach, who is also a voting member of the KLC. Hollenbach recommended the additions as a way to bolster a dwindling state treasury.
It is projected that Keno could raise an additional $15 million for the commonwealth in its first full year and could climb to $31 million within five years. Internet lottery sales could raise an additional $4.5 million for the state in its first full year, growing to an estimated $31 million within five years.
Lottery officials say Keno sales could begin as early as January 2014, with about 450 retailers at launch. Internet lottery sales are expected to begin in fiscal year 2015.
KLC President and CEO Arch Gleason said that in Europe, growth in revenue from Internet sales has not come at the expense of the traditional brick-and-mortar retailers.
STATE: Kentucky General Assembly passes pension reform bill; creates hybrid cash-balance plan
After weeks of negotiation, the Kentucky General Assembly has passed bills stabilizing and modernizing the state’s pension system.
The new bills address the lack of funding for the Kentucky Retirement Systems that includes state and local employees. The system currently faces some $18 billion in unfunded liabilities, which in turn has affected the state’s standing in the eyes of the national bond rating agencies. Within the last year, both Standard and Poor’s Rating Services and Moody’s Investor Service have labeled Kentucky’s financial outlook as negative, citing the unfunded pension liability. A downgrade in bond rating means it costs taxpayers more for public building projects, as it increases the borrowing costs.
The new pension reform plan creates funding to pay the state’s full recommended annual pension contribution without threatening key state services, such as education and public safety. The companion bills, House Bill 440 and Senate Bill 2, passed both chambers, eliminating the need for a special session on pension reform.
The increased cost to fully fund the actuarially required contribution to the Kentucky Retirement Systems is estimated at $100 million per year from the General Fund. The agreement fully funds the annual increased estimated state obligation to the pension plan, beginning in fiscal year 2015.
To address long-term sustainability issues, SB2 creates a hybrid cash-balance plan for future state and local employees hired on or after Jan. 1, 2014. The hybrid plan is approximately actuarially equivalent to the existing benefit plans, and provides state and local governments with improved predictability and stability for pension costs. HB440 reduces the personal tax credit by $10 – which will generate about $32.5 million annually to the General Fund – and provides a new trade-in tax credit for the purchase of a new car.
STATE: Legislature OKs $363M in bonds for projects at 6 universities without using taxpayer dollars
Eleven major construction projects at six state universities will soon be under way thanks to a new bill passed by the Kentucky General Assembly that allows the schools to issue bonds for project financing – without using taxpayer dollars.
House Bill 7 authorizes $363.3 million in agency bonds by Kentucky’s public universities for campus improvements that include dormitory renovations, new student centers and athletic facility improvements. The bonds will have an estimated economic impact of nearly $623 million and will support 5,110 jobs.
The bonds will be paid for through existing revenue streams such as student fees and athletic revenues. However, the bill prohibits the universities from raising tuition as a result of the construction process. To achieve the needed funding at the University of Kentucky, UK will utilize athletic revenues to help pay for construction of an academic building, which is a first for a Kentucky university.
The projects supported by agency bonds include:
♦ Morehead State University: Residence hall renovation, $9.2M
♦ Murray State University: Residence hall renovation, $9.9M; College Courts housing sprinkler system upgrade, $590,000; Capitol renewal projects, $4.9M
♦ Northern Kentucky University: Residence hall acquisition and renovation, $12M; Albright Health Center renovation, $45M
♦ University of Kentucky: Gatton College of Business and Economics renovation, $65M; Commonwealth Stadium/Nutter Training Center renovation, $110M; Academic Science Building construction, $100M ($65M contributed by athletics revenue)
♦ University of Louisville: Student Activities Center renovation, $9.6M
♦ Western Kentucky University: Honors College and International Center construction, $22M
OWENSBORO: U.S. Bank adds 332 new jobs for mortgage operations
In Owensboro, U.S. Bank has announced plans to add a new facility and 332 new jobs as part of a $15.2 million expansion of the company’s mortgage operations.
U.S. Bank is the fifth-largest bank in the United States, with 3,084 branches in 25 states, and 40 U.S. Bank Home Mortgage production offices nationwide. The new office brings the total number of U.S. Bank Home Mortgage operations centers in Owensboro to six.
The service centers support U.S. Bank’s portfolio of more than 1.6 million mortgage loans that total approximately $266 billion in balances. The expansion in Owensboro will meet increased demand for U.S. Bank’s mortgage services.
U.S. Bank first opened a mortgage-servicing center in Owensboro in the late ‘70s and now has nearly 1,900 employees in Owensboro. The company announced plans to add 500 jobs in 2011 and has continued to experience tremendous growth over the last 12 months, adding $31 billion in outstanding balances and 163,000 new customers. That growth, said Bob Smiley, executive vice president and head of servicing for U.S. Bank Home Mortgage, was the driving force behind the company’s decision to expand its servicing capacity.
U.S. Bank’s success has also benefited the Owensboro community, said Owensboro Mayor Ron Payne.
“The economic partnership the city of Owensboro has found in U.S. Bank has been a great success,” Payne said. “U.S. Bank has contributed to a 70 percent increase in Owensboro’s GDP in the financial sector, jumping from $400 million prior to the growth of U.S. Bank to more than $680 million recently.”
STATE: Governor will lead inaugural Kentucky trade mission to Canada
Gov. Steve Beshear will lead an international business trade mission in June to Toronto, Canada, a trip that represents the first-ever Kentucky Export Initiative trade mission.
Comprised of government entities, business organizations and trade experts, KEI was formed in December 2010 with the goal of increasing export activity among the state’s small and medium-sized businesses.
“This trade mission will give Kentucky businesses the opportunity to have one-on-one meetings, open avenues to increase sales and explore a market that’s only an 11-hour drive from Kentucky,” Beshear said.
Interested companies may register to take part in the trade mission, which will run from June 4-7. The trip will feature a reception on June 5 to celebrate and help build business relationships between Kentucky and Canadian companies.
Canada currently ranks as the commonwealth’s No. 1 export destination.
Companies interested in participating in the trade mission are encouraged to act quickly due to limited spacing. Some companies may be eligible for grant assistance through the U.S. Small Business Administration State Trade and Export Promotion (STEP) program administered by the Cabinet for Economic Development. More information about the trade mission and STEP grant can be found at KYExports.com.
A three-day Kentucky Export Initiative trip to Toronto, Canada, will enable participants to make business connections in the country that ranks as Kentucky’s top export destination.
STATE: Pipeline to transport natural gas liquids through Ky. to gulf
Williams and Boardwalk Pipeline Partners have formed a joint venture to develop a pipeline project that will transport natural gas liquids (NGL) from the infrastructure-constrained Marcellus and Utica shale plays in upper Appalachia to the rapidly expanding petrochemical and export complex on the U.S. Gulf Coast and the developing petrochemical market in the Northeast.
The proposed “Bluegrass Pipeline” design would provide producers with 200,000 barrels per day of mixed NGLs take-away capacity in Ohio, West Virginia and Pennsylvania. The proposed pipeline could be increased to 400,000 barrels per day to meet market demand. It would deliver mixed NGLs from the producing areas to proposed new fractionation and storage facilities, which would have connectivity to petrochemical facilities and product pipelines along the coasts of Louisiana and Texas. Williams and Boardwalk are also exploring development of a new export liquefied petroleum gas terminal and related facilities on the Gulf Coast to provide customers access to international markets.
As proposed, the Bluegrass Pipeline would include:
• Constructing a new NGL pipeline from producing areas in West Virginia and Ohio to an interconnect with Boardwalk’s Texas Gas Transmission system in Hardinsburg, Ky.
• Converting a portion of Texas Gas from Hardinsburg to Eunice, La. (the TGT Loop Line), from natural gas service to NGL service, including construction of new pump stations and related facilities
• Constructing a new large-scale fractionation plant and expanding natural gas liquids storage facilities in Louisiana and a new pipeline connecting these facilities to the converted TGT Loop Line.
Williams and Boardwalk are currently engaged in comprehensive project development planning and expect to place the planned project into service in the second half of 2015, assuming all necessary conditions are met.
Boardwalk has two home offices, one in Owensboro and the other in Houston.
HOPKINSVILLE: Hopfed Bancorp Inc. to buy Sumner Bank & Trust for $14M
HopFed Bancorp Inc. the parent company of Heritage Bank in Hopkinsville, has entered into a definitive agreement to acquire Gallatin, Tenn.-based Sumner Bank & Trust for approximately $14.3 million in cash.
Sumner, a state-chartered bank that opened in 2005, has full-service banking centers in Gallatin and Hendersonville, Tenn., and loan production offices in Franklin, Lebanon and Jackson, Tenn. As of Dec. 31, 2012, Sumner had total assets of $184 million.
Heritage Bank has 18 offices in western Kentucky and middle Tennessee, in addition to its subsidiary, Fall & Fall Insurance of Fulton, Ky. Heritage also operates Heritage Solutions, a financial services company with locations in Murray and Hopkinsville, Ky., and Kingston Springs and Pleasant View, Tenn., and Heritage Mortgage Services of Clarksville, Tenn.
LEXINGTON: Tempur-pedic completes Sealy purchase, unveils new name
Tempur-Pedic International Inc., the Lexington-based manufacturer of premium mattresses and pillows, has completed its previously announced acquisition of Sealy Corp. and announced plans to change its corporate name to Tempur Sealy International Inc.
The combination of Tempur-Pedic and Sealy creates the world’s largest bedding provider. Together, Tempur-Pedic and Sealy have a brand portfolio that includes some of the industry’s most highly recognized brands, including Tempur, Tempur-Pedic, Sealy, Sealy Posturepedic, Optimum and Stearns & Foster.
Tempur-Pedic acquired all of the outstanding common stock of Sealy for $2.20 per share and assumed or will repay all of Sealy’s outstanding convertible and nonconvertible debt, for a total transaction value of approximately $1.3 billion.
The proposed name change is being submitted for stockholder approval at the company’s annual meeting in May. The company will remain headquartered in Lexington and the stock will continue to trade on the New York Stock Exchange under “TPX.”
STATE: Kentucky ranks 10th in the nation for industry activity in ’12
Site Selection magazine’s annual Governor’s Cup rankings have placed Kentucky 10th in the nation for new and expanded industry activity in 2012.
Site Selection’s rankings are based on a state’s total number of qualified projects as tracked by Conway Data Inc.’s new plant database. Qualified projects include those that meet at least one of three criteria: involve a capital investment of at least $1 million, create 50 or more jobs or add at least 20,000 s.f. of new floor space. During 2012, Kentucky generated 196 projects that met the above standards.
Kentucky has finished among the top 15 states in the nation for the last five years in a row.
In addition, Kentucky ranked fifth in the nation for number of communities making the magazine’s Top Micropolitans list, with 10 making the cut: Frankfort, Glasgow, Paducah, Richmond, Union City (Tenn./Ky.), Campbellsville, Maysville, Somerset, Danville and Murray. Lexington ranked seventh in the Top 10 Metro Areas in the Tier 2 class (population 200,000 to 1 million).
LEXINGTON: Lexmark sells inkjet assets; buys two more companies
Lexmark International has signed an agreement to sell its inkjet-related technology and assets to Japan-based Funai Electric Co. for approximately $100 million. The sale will include more than 1,500 inkjet patents and Lexmark’s manufacturing facility in the Philippines.
“As we continue our transition to becoming a leading end-to-end solutions provider, this transaction essentially completes our exit from the ownership of inkjet-related assets, although we will continue to support our existing customer base with the sale of inkjet supplies,” said Paul Rooke, Lexmark chairman and CEO. “Funai has been a trusted partner of Lexmark’s since 1997, and I am fully confident in Funai’s ability to deliver high-quality inkjet supplies for Lexmark.”
As part of the shift to a more solutions-based company, Lexmark has invested $31.5 million to acquire Twistage, a San Francisco company that offers a pure cloud software platform for managing video, audio and image content, and Seattle-based AccessVia, a company that specializes in signage solutions.
With Lexmark, Twistage will enable customers to capture, manage and access all of their content within their business processes and enterprise applications. AccessVia will enable customers to quickly design and produce in-store signage for timely merchandising. AccessVia’s signage software platform provides paper and digital solutions to more than 75 retailers with more than 60,000 stores, including Best Buy, Office Depot and Family Dollar.