Home » The Road to Economic Development

The Road to Economic Development

By wmadministrator

The $2.3 billion Ohio River Bridges Project includes “untangling” improvements to Louisville’s notorious Spaghetti Junction intersection of three interstates: I-65, I-64 and I-71. The project is expected to generate an average of 15,000 new jobs annually for 30 years, according to a study for the Indiana Finance Authority.

“Today’s interstates and roadways are essentially rolling warehouses,” said Kentucky Association of Highway Contractors Executive Director Chad LaRue. “Our society runs on just-in-time delivery at this point.” For Kentucky to fully take advantage of its U.S. logistical prowess and to better ensure the safety of working in, living in and traveling through the state, keeping roads maintained and new ones built is crucial.

There is a certain gratification that comes from driving on smooth new roads, but they also are paths to greater economic prosperity.

Projects are huge instant job creators both for the contractors performing the work as well as the suppliers that provide the resources used.

And it promotes better tourism in the state.

Travelers don’t need to look far to see the proof that Kentucky is working hard on its roads.

Louisville’s and Southern Indiana’s $2.3 billion Ohio River Bridges Project is the most noteworthy one underway.

Beyond Louisville, plenty more is happening. This spring, the General Assembly passed a two-year, $4.5 billion spending plan on 1,239 total Kentucky roads and bridges projects. Major projects in House Bill 305 include continuing the expansion of the Mountain Parkway in Eastern Kentucky, the single largest dollar item in a plan that also funds projects on many of the state’s largest interstates.

“Where we’re doing very well is in constantly upgrading our infrastructure,” said Erik Dunnigan, acting secretary of the Kentucky Cabinet for Economic Development. “The challenge, obviously, is making the finances of these and future projects work out. The state’s leaders continue to find ways to support infrastructure repair, maintenance and development, even when we face tight budget cycles. Funding allocated for highway, roads and bridge projects in the coming years will take us a long way, and I commend Gov. (Matt) Bevin and the General Assembly for seeing the importance of infrastructure and acting to support it.”

Cost is an issue, so that taxpayers are protected and receive the most return on their money. The cabinet he now heads tracks development of manufacturing and service-related businesses, Dunnigan said, and there is no doubt that with better access to major shipping routes and population centers, investment by industry follows.

He cited the example of development along I-65 in Bullitt County in the past decade.

“You see Amazon and other distribution-intensive companies locating in the area, thanks to access to Greater Louisville’s workforce and to the UPS Worldport and Centennial Ground Hub,” he said. “Location, highway infrastructure and existing businesses are all reasons why you see UPS investing $310 million to roughly double package-processing capabilities at its Centennial Ground Hub in Louisville. Their research has tracked an increase in packages from e-commerce and traditional retail. To the future impact of infrastructure investment in that corridor, the widening of I-65 to the south will likely bring additional development opportunities to Hardin, Larue and Hart counties.”

And of course all of the projects require skilled workers.

Better workforce and more exports

“There’s certainly an economic trickle-down effect in hiring contractors and subcontractors and, in some cases, the skills of their employees – engineers, surveyors, heavy-equipment operators and welders – are in demand in other sectors of the economy,” Dunnigan said. “Getting those professionals and skilled workers to remain permanently in Kentucky’s economy becomes part of a larger, multifaceted effort.”

Some of the goods for road building are made here, LaRue noted. Kentucky has many aggregate providers that provide materials for roads being built right in the state. Guardrail materials, pipes and steel bridge beams also are made here. It is no surprise, since Kentucky ranks among the nation’s top manufacturing states.

With the expansion of the Mountain Parkway, Dunnigan and LaRue hope to see Eastern Kentucky become a bigger manufacturing player and gain a much-needed economic boost.

Exports statewide are improving. Last year Kentucky exported a record $27.6 billion in goods and services, and in the first quarter of 2016 the state improved on that pace compared to the same months of 2015.

“It’s safe to say our highways, roads and bridges helped move a significant portion of those exports,” Dunnigan said. “Our highway and road networks provide gateways to the U.S. South and Midwest. Major logistics companies, including UPS, DHL and FedEx, as well as distribution-related businesses – notably Amazon and certainly many others – recognize these benefits and continue to reinvest, expand and create jobs here.”

In Northern Kentucky, DHL Express announced a $108 million expansion of its hub at the Cincinnati/Northern Kentucky International Airport last May.

“While it concentrates on air cargo, a substantial number of the DHL hub’s packages – whether coming or going – travel Kentucky highways,” Dunnigan said. “Believe me, our state wouldn’t have been in the running for that additional investment if our infrastructure didn’t meet and exceed the company’s needs.”

Infrastructure improvements in Northern Kentucky will be vital to keep the progress going. With an estimated $750 million replacement price tag, the outdated and overcrowded Brent Spence Bridge that carries Interstates 71 and 75 across the Ohio River to connect Northern Kentucky and Cincinnati is a major dilemma.

Public officials and engineers alike say a new bridge is a must. It consistently ranks among the nation’s worst bridges and sees a lot of accidents for drivers.

LaRue cites a May report by The Hill, a Washington-based political news website, ranking the Brent Spence Bridge as the No. 1 most dire transportation need in the United States. According to that report, the 53-year-old bridge is responsible for moving 4 percent of gross national product, but it’s handling double the amount of traffic that it should.

Finding the funds to improve or rebuild that bridge will, like the Ohio River Bridges Project in Louisville, be yet another challenging but economically necessary roads project.

“I do think as a general rule our roadways are probably on par with other states,” LaRue said. “I liken it to owning a house; it’s maintaining what we have and keeping it in good operating condition.”

The work is paying off. Dunnigan said cabinet officials hear from prospective companies considering moving here that they are impressed with the quality of highways and roads that the state offers.

Sarah Davasher-Wisdom, chief operation officer of Greater Louisville Inc., said the city foresees increased development in the next decade as a result of the massive Ohio River Bridges Project that involves two brand new bridges and major improvements in existing infrastructure.

“The largest piece of this project is the construction of the two new bridges, but included within it is the ‘untangling’ of what is known as Spaghetti Junction, where I-65, I-64 and I-71 come together,” she pointed out. “This will greatly improve safety on all three interstates thanks to the elimination of tight curves and short merges.”

This safety is crucial to an area like Louisville that is so dependent on being able to move goods quickly and attract new talent.

“Over 30 years, the Ohio River Bridge Project is expected to generate an average of 15,000 new jobs every year and $29.5 billion in personal income according to a study done for the Indiana Finance Authority,” said Davasher-Wisdom, adding that the project has already had a major economic impact on the state through construction jobs and generating more interest in the region’s major corporate parks like River Run and River Ridge.

But it’s not just business that will benefit. Louisville has talent attraction and quality of life in mind.

“Quality of place and life is a key component of growing any economy,” Davasher-Wisdom said. “These bridges are a fantastic addition to our region because they will allow more people to travel to and from their homes to job centers faster. When you cut down on commute time, people are more satisfied with where they work and live. These projects will also increase economic growth and opportunities in our region, which is an important factor in improving the quality of life for everyone in our region.”

Abby Laub is a correspondent for The Lane Report. She can be reached at [email protected].