CEO Ousted At Kentucky Aluminum Company Amid Questions About Controversial Funding  Tuesday, Feb 4 2020 

A controversial economic development project in Ashland, Kentucky, hit a snag last week as aluminum company Braidy Industries ousted CEO and board chairman Craig Bouchard. In a statement, Braidy Industries’ interim CEO said he appreciated Bouchard’s hard work for the company. Bouchard says the firing was improper and is refusing to step down.

The dueling statements from Braidy and Bouchard come amid continuing questions about the company’s effort to cobble together about $2 billion in financing from a mix of taxpayer money and private investment from both foreign and domestic sources. 

Bouchard’s financing strategies have been a frequent source of controversy. The aluminum company received the strong support of former Kentucky Gov. Matt Bevin, whose administration took the unusual step of investing $15 million in taxpayer dollars into the development of a new aluminum mill. Braidy Industries also benefited from $4 million from the Abandoned Mine Lands fund, which Kentucky Rep. Hal Rogers and Sen. Mitch McConnell announced together in 2018. 

But Braidy’s most controversial investment came from Rusal, a Russian aluminum company that had previously been under federal sanctions due to the company’s connections to Russian oligarch Oleg Deripaska. The U.S. lifted those sanctions shortly before Rusal pledged $200 million to the Braidy development. Rusal now owns a 40 percent share of the mill, as well as a 10-year supply contract with the Ashland facility. 

The move to lift sanctions led Democratic leaders in the U.S. House and Senate in 2019 to urge the Treasury Department to investigate Braidy Industries last summer over concerns that Rusal’s investment in the Kentucky mill could lead to the “erosion of technological superiority from foreign direct investment.”

The Treasury Department has not confirmed or denied whether such an investigation has been opened. In a response to questions from Democratic Sen. Ron Wyden of Oregon, Bouchard denied any impropriety in his company’s relationship with Rusal. 

An Unfolding Situation 

The company announcement of Bouchard’s removal from leadership set off an unusual and highly public spat.

Bouchard said he was unaware of the board’s decision until stepping off an international flight early Saturday morning. “I believe the sudden and unexplained action taken by the Board of Directors of Braidy Industries to attempt to remove me as CEO is without basis and, if allowed to stand, threatens significant damage to Braidy Industries, its stockholders and the Ashland community,” Bouchard wrote.The genesis of the disagreement is my pursuit of foreign strategic partners representing patient capital that will stay with us for generations.”

In a Facebook post, Bouchard attempted to cast doubt on the board’s ability to remove him by citing voting documents filed with the Governor’s office, but company bylaws seem to permit the board to remove the CEO with or without cause with a 70 percent majority vote by the board.

A spokesperson for the company said its plans for the billion-dollar aluminum mill are unchanged, although it reportedly still lacks the funding to begin construction. The project is slated to cover 1.4 million acres in Greenup County and will be a more environmentally friendly aluminum rolling mill than others in the U.S. Braidy Industries has claimed the project will bring in 1,500 temporary construction jobs and 650 permanent advanced manufacturing positions. The rolling mill would be the company’s first project. 

Board member Charles Price, a Kentucky native and longtime entrepreneur in the construction and coal ash industries, has been named board chair, and Tom Modrowski has been named CEO. As of Monday morning, a spokesperson for Braidy Industries said the board stands by its statement that Bouchard has stepped down. Bouchard is expected to remain a member-at-large of the board. 

West End YMCA To Open In December Monday, Nov 25 2019 

17th and Broadway YMCA Front EntranceLouisville’s newest YMCA, at 18th Street and Broadway, will open on Dec. 14, officials said Friday.

The YMCA missed its planned October opening due to construction delays, officials said at the time. It is one of several major developments taking place in west Louisville, and the first to be completed.

The facility sits across the street from the stalled development of a new corporate headquarters for Passport Health Plan. And about 12 blocks west of there, construction on the Louisville Urban League’s track and field complex is underway.

These projects plus the renovation of Beecher Terrace are the largest in a planned mass investment that could total hundreds of millions of dollars. The neighborhoods of west Louisville have not seen that kind of development in decades, due to government policies that were designed to block investment.

The new facility cost $28 million and spans more than 77,000 square feet.

Along with exercise facilities such as a fitness center and pool, the YMCA will offer health and job training resources, including a center to train teens for jobs that require technology skills

Op-Ed: Kentucky cities, counties need control over revenue, freedom to create own tax systems Monday, Nov 25 2019 

This article first appeared in The Courier-Journal on November 22, 2019. In the business world, crisis tends to pave the way for positive change and transformation; so too, it turns out, for the worlds of government and public policy. Earlier this year, Louisville’s elected leaders found themselves staring down a...

The post Op-Ed: Kentucky cities, counties need control over revenue, freedom to create own tax systems appeared first on Greater Louisville Inc..

West End YMCA Opening Delayed Past October Target Wednesday, Sep 18 2019 

17th and Broadway YMCA Front EntranceA state of the art YMCA facility under construction near 18th St. and Broadway is a bit behind schedule.

Until recently, the $28 million facility facility was expected to open in October. But officials now say that will be pushed to an unspecified date this fall.

Steve Tarver, CEO of YMCA Greater Louisville, said in a statement that the organization is excited to open the facility, which will span 77,000 square feet, this fall.

“Our original opening date of October was based on preliminary construction projections. As part of the routine construction process the opening has been moved to later this fall,” he said. “Our efforts remain focused on bringing the community a state-of-the-art facility.”

The YMCA is one of a handful of major projects in west Louisville contributing to a level of investment in that part of the city that has not been seen for decades due to discriminatory policies and a resulting lack of business interest. Of the major projects, is the furthest along in its progress.

The intersection of 18th and Broadway is expected to be a locus of investment, if plans pan out. In January, the city opened a realigned intersection that it invested $1.2 million to create.

At the time, Mayor Greg Fischer said in a statement that the project “helps to make this critical intersection a foundation for even more investment in West Louisville.”

On the north side of Broadway, non-profit OneWest, which promotes commercial real estate development, is working on plans to redevelop a strip of buildings.

But across the street from the YMCA is the stalled framing of the new corporate headquarters of Medicaid provider Passport Health Plan. That project is on hold amid the company’s financial struggles.

Learn more about planned investments in west Louisville in this episode of the WFPL podcast Here Today:

SOAR At Six: Group’s Lofty Goals For Coal Country Meet Challenges On The Ground Monday, Sep 16 2019 

In a conference hall in Pikeville, Kentucky, this September, Gov. Matt Bevin led an eager audience in a countdown. When the audience reached “One!,” a map on the screen behind the governor lit up with the promise of a high-tech future.

After years of delay and scandal, major portions of the commonwealth’s “middle mile” of high-speed internet were complete.

“There are so many negative haters, so many people who pooh-pooh things and say this can’t happen, it’s not possible,” Bevin told the crowd. “But I’ll tell you what. We’ve never quit.”

Sydney Boles | Ohio Valley ReSource

Rep. Hal Rogers and Gov. Matt Bevin announce the completion of east Kentucky’s “middle mile” of high-speed internet.

The event was the annual summit of a group called Shaping Our Appalachian Region, or SOAR, founded in 2013 to help guide the flagging counties of Appalachian Kentucky into a new, post-coal economy.

SOAR leaders have largely emphasized improved internet service and increased industrial development. But despite the organization’s recent progress, local development officials struggle to fill vacant industrial parks, large areas still lack high-speed internet, and many coalfield residents remain unconvinced that the organization holds the key to a new future.

Limited Scope

SOAR began in the winter of 2013, when 1,700 east Kentucky business leaders, elected officials, agency heads and concerned citizens gathered in that same Pikeville conference center to hatch a bold new agenda. With 27 percent of east Kentucky coal mining jobs lost in just one year and no turnaround on the horizon, the only option was to chart a new path towards a more diverse central Appalachian economy.

Community leaders fanned out across the 54 counties comprising Appalachian Kentucky. They held listening sessions with thousands of Kentuckians and turned in recommendations that included items like involving incarcerated people in community gardens, supporting local artists, and identifying hotspots of air and water pollution resulting from coal mining.

The effort was bipartisan, spearheaded by east Kentucky’s longtime congressman, Republican Hal Rogers, and Democratic former governor Steve Beshear.

The Rural Policy Research Institute said of the inaugural summit, “Everyone there knew the region was ready to respond to the urgency of the moment with a renewed commitment to working in greater unison, toward a preferred future.”

But when SOAR’s leaders turned the working groups’ recommendations into a blueprint for the organization, working group members found them somewhat changed. The organization would start by championing KentuckyWired, the commonwealth’s fiber-optic internet system, and then, with that critical 21st-century infrastructure in place, it would go full throttle on improving health outcomes, developing a tech-savvy workforce, and germinating growth in the region’s industrial and small-business ecosystem.  As Congressman Rogers put it in 2019, the focus was “jobs, jobs, jobs.”

Sydney Boles | Ohio Valley ReSource

Joyce Pinson of Friends Drift Inn Kitchen displays jams and jellies.

But KentuckyWired quickly became mired as costs ballooned and its timeline extended. As most of the eastern Kentucky lagged behind the rest of the country in access to internet, communities continued to struggle to retain residents and build a sustainable economy.

“[SOAR] started as a really great idea, where they were seeking a lot of input from a lot of different people,” said Ivy Brashear, Appalachian Transition Coordinator for MACED, an economic development organization that was involved in SOAR’s early working groups, but has since stepped back. “Over time it has shifted into their approach being outside investment and industrial recruitment,” she said.

Brashear pointed to a recent solar energy project MACED had financed, which helped four Letcher County groups adopt solar energy.

“We believe that shifting the way that energy works is a big deal, and it matters to communities, it matters to them saving money, it matters to what they then are able to do with the money they saved. And what we see in places where we’ve helped people transition to solar is, it can be the difference between them staying open and them closing their doors.”

SOAR officials did not return a request for comment, but its principals told the Lexington Herald-Leader last year that its objectives were long-term, and it had been successful in building connections across eastern Kentucky.

The crowd at SOAR’s sixth conference was a bit thinner – about 800, according to executive director Jared Arnett. The event featured a start-up pitch competition and 92 booths running the gambit from addiction recovery programs to an international drone port. Highly produced videos touted projects conceived of and championed by SOAR, projects like the high-tech greenhouse AppHarvest, and teleworks operation Digital Careers Now.

Sydney Boles | Ohio Valley ReSource

Kentucky entrepreneurs show their products at the 2019 SOAR Summit.

Infrastructure And Industry

Some working at the ground level see a long way to go to meet SOAR’s goals.

“There’s tremendous opportunity that people can take advantage of with our workforce down here, and they don’t realize that,” said Bill McIntosh, who worked as a coal miner for 40 years before taking a grant-funded position as Perry County’s economic development coordinator. Part of his job is luring new businesses to the 236-acre Coalfield Industrial Park that Perry County shares with four nearby counties. Like other industrial parks in the region, this one was built on reclaimed surface mines in the hopes of attracting new businesses to a region desperate for a new source of employment.

McIntosh lamented that as more mine land across the region has been turned into build-ready land, companies have their pick of locations, and businesses he hopes to bring to the industrial park often find one thing or another to make them decide against it.

Siting industrial parks on mine land brings its own challenges. “Sometimes it is remote in that it doesn’t have gas, or it doesn’t have broadband or it doesn’t have rail,” McIntosh said. “That’s going to disqualify you as far as having your site selected for a company to come in and set up shop.”

Part of McIntosh’s job, he said, is shifting outsiders’ perceptions of who Appalachians are. “A lot of people are still seeing negative stereotypes: poverty-stricken area, uneducated workforce. That’s not true,” he said. “The major population group in our workforce, [people aged] 45-64, these are people that come from a industrial background. They can easily be cross-trained in other sectors of industry.”

Perry County’s Coalfields Industrial Park is currently home to a FedEx distribution facility, a trucking company, and a call center that is known for its frequent layoffs. A potential new development was recently announced for the industrial park, an aluminum company that could employ as many as 265 people once it’s up and running. The community in 2018 received nearly a million dollars to bring natural gas to the industrial park.

Alexandra Kanik | Ohio Valley ReSource

The focus on industrial growth hints, too, at an unstable future for the region. A recent Brookings Institution report found that manufacturing sector jobs are among the most vulnerable to automation. With other job losses likely in food service and transportation sectors, it is projected that the Ohio Valley could lose about one quarter of its jobs to automation. Some counties in the SOAR region could lose up to 65 percent of their jobs.

MACED’s Brashear said the region’s transition would require work on multiple fronts, but she worried about focusing too heavily on industrial development. “I think our history shows that that doesn’t necessarily work, it doesn’t necessarily build a sustainable economy that isn’t trying to figure it out every 10 years or so.”

Wired For Growth

Broadband access is a challenge across the Ohio Valley. The internet provider data service BroadbandNow estimates that 7% of Ohioans, 9% of Kentuckians, and 22% of West Virginians lack the critical 21st-century infrastructure. Those figures mark an improvement from just a few years ago. In 2017, for example nearly 20% of Kentucky homes lacked broadband service.

Alexandra Kanik | Ohio Valley ReSource

SOAR officials hope that reliable, fast internet will help the region retain its workforce and compete for high-tech industries. In fact, SOAR was a part of early conversations about a statewide broadband network, for which bids were solicited in the summer of 2014. The Kentucky Communications Network Authority, a government agency, would spearhead the construction of 3,000 miles of fiber-optic cable, a “middle mile” that would bring high-speed internet to government offices and other key buildings, and would allow private internet service providers to hook in, for a price, to bring wireless internet to businesses and communities across the region.

Alexandra Kanik | Ohio Valley ReSource

But the “last mile” to connect rural, dispersed homes and businesses, is still a challenge. KCNA interim executive director Deck Decker says residents may have to wait anywhere from six months to several years before broadband is available in their homes and businesses.

“We’re going to try to get in local civic leaders, business leaders, we’re going to get in a room and start discussing this last mile and see who has the best plan,” Decker told a small crowd at the SOAR summit. “I don’t think anybody in this room will tell you they’ve got a magic bullet that’s just going to automatically make the last mile appear in, you know, Harlan County, but we’re going to give it our best,” he said.

Decker said each community would need to find the best way for it to make use of the fiber-optic network, whether it be a private company, a public investment, or a public-private partnership. But the investment will likely be a hurdle for rural counties with far-flung communities.

“I’ve had major providers sit in my office and say, if they can’t get a payback on their investment in 18 months, they can’t do it, because they can’t build a business case for it,” Lonnie Lawson said. Lawson is a KentuckyWired board member and CEO of the Center for Rural Development. He hopes to provide some seed money to help internet service providers justify the investment expense.

Lawson said he hopes the network will allow more Kentuckians to work from home or in high-tech careers, and will help Kentucky students complete digital homework in their own homes.

“It’s about the only solution of trying to keep our best and brightest in the region,” Lawson said. “Otherwise, if we don’t have job opportunities, then our young people are going to leave, and our region is going to suffer year, after year, after year.”

Metro Council Members Call For More Protections In City-Owned Surplus Property Sales Sunday, Aug 18 2019 

Take three seemingly-disparate projects: the Louisville Urban League’s track and field complex, the Urban Government Center redevelopment and two historic buildings on Bardstown Road. All of them share a key detail: the land or buildings were owned by the city, but city officials say they aren’t needed for government use.

Declaring the properties “surplus” allows Louisville Metro to sell them cheap. That could mean pricing them below their assessed value, or selling them for a dollar. Often that low price is considered a subsidy for potential developments seen as worthwhile to the city and community.

But with Louisville’s budget shrinking, some Metro Council members are scrutinizing how the city sells these surplus properties. They say some deals have cost the city — either because they’re over-discounted, or because promised developments haven’t panned out.

Some have called for Louisville Forward and the Jefferson County Attorney’s office — which negotiate and write the deals — to write in more or different protections for the city. And one council member says the deal-making process should be overhauled.

Brent Ackerson (D-26) is critical of the expectation that Metro Council should simply rubber-stamp deals made by the mayor’s office.

“These are assets that belong to the city, these are assets that can affect our budgets,” he said. “The more we give away things, the question is, what are we getting in return for that? Because we’re not Daddy Warbucks, you know. The city runs on a tight budget.”

City services and staff were hit hard this fiscal year, as growing pension and employee healthcare costs forced officials to pass a budget that was more than $25 million below what the city needed to maintain last year’s levels.

Ackerson said council members should be involved in surplus sales earlier in the process. At present, Metro Council has the power to deny a deal by declining to approve the surplus status for a property. But it cannot as a body influence the sale price of a property, nor what is written in the contract. The only place the council can make changes is to the resolution authorizing a property to be designated as surplus.

And Ackerson said he isn’t satisfied with how little input the council has in the current deal-making process. He would like representatives from the Mayor’s office or Louisville Forward to formally discuss potential sales with council members before committing to the projects.

“They might need to come to us in advance and say, ‘Here’s what we’re talking about. Can you support this if we strike this deal? If not, what is it that you’re looking for?'” he said.

That way, he said council may have the ability to tweak terms of an agreement to make it acceptable, rather than having to vote to pass or kill it after the details are already decided.

Knowing about potential sales earlier in the process could help prevent costly mistakes, in Ackerson’s view. He offered the example of 814 Vine Street, which has been held up in committee because the city promised the land to two groups.

Now, if council approves the surplus designation for the property, which is part of the Urban Government center, Louisville Metro will pay a $150,000 settlement to The Marian Group. That developer planned to build shotgun homes on the vacant lot. At the same time, the Paristown Preservation Trust, which leased the land for parking in 2017, will pay $500,000 to The Marian Group and purchase the land from Metro for a dollar.

“I’m not accusing anyone of doing something wrong. But there’s the potential that wrong can be done,” Ackerson said. “In order to avoid the potential, we need mechanisms in place that allow the branch of this government being the Metro Council to question things.”

‘Evolving’ Economic Development Processes

Caitlin Bowling, a spokeswoman for economic development agency Louisville Forward, said her team works regularly with Metro Council members to apprise them of their work and to hear their feedback and concerns.

“We’re continuing to communicate with Metro Council about their expectations, because that’s something that has been evolving, as have our processes with developments and any surplus resolutions,” she said.

The biggest procedural change is some deals now contain provisions that would give Louisville Metro the first right of refusal to purchase a property if it isn’t developed as planned, she said. The Urban League deal, which the city is backing with a $10 million bond, includes this disclaimer:

If the Project is not developed within five (5) years from the date of title transfer of the Property from Metro to Developer, Developer agrees that the Property will revert back to Metro.

James Peden (R-23) said at a recent Metro Council meeting that development agreements for surplus property sales should include a standard line to give Louisville the right of first refusal for repurchasing a property at the price it sold it for under certain conditions.

“If whatever you’re doing doesn’t work out, if you try to flip it, whatever it is, we have the right to buy back for whatever it is you bought it from us — whether it’s that dollar, that symbolic dollar that we sometimes charge, or a few thousand dollars more,” he said.

The much-criticized sale of two Bardstown Road buildings included no such protection. Those properties were sold for a second time last month, for $1.12 million. The city sold them at a discount for $425,000 in late 2016 with the hope they would be turned into a Sterling Beer brewery.

Councilman Brandon Coan (D-8), who represents the district where the historic properties are located, said council members learned from that experience. He said they want the city to have the opportunity to repurchase properties for the original price so that “someone else doesn’t promise us something, fail to deliver and they get to keep the property.”

This Bardstown Road project didn’t include a development agreement; Louisville Forward only writes these agreements for sales in which the city is investing in the project, such as the Louisville Urban League’s planned track and field complex in the Russell neighborhood. A development agreement is a type of contract that dictates the terms of certain city property sales, and includes details including how the property would be developed and what might happen if that fails.

Bowling, with Louisville Forward, could not say whether right of refusal clauses would become standard in surplus sales. She said each deal is different.

Greater Louisville: A Progressive City Gaining National Acclaim for Talent Attraction and Workforce Development Efforts  Monday, Jul 1 2019 

Pictured from left to right: Kent Oyler, Greater Louisville Inc.; John Launius, Greater Louisville Inc.; Joseph Gioino, Newmark Knight Frank, New York; David Shrock, NAI Robert Lynn, Dallas; Lew Mollenkamp, American Corporate Location Services, Fort Worth; Ryan Gould, CBRE, Los Angeles; Sean Ferguson, Clark Street Associates, San Francisco; Bob Gallant,...

The post Greater Louisville: A Progressive City Gaining National Acclaim for Talent Attraction and Workforce Development Efforts  appeared first on Greater Louisville Inc..