The Elk, The Tourists And The Missing Coal Country Jobs Thursday, Oct 22 2020 

Stacy Kranitz, special to ProPublica

Recently strip mined land at the Appalachian Wildlife Center.

Standing at the site of a long-abandoned, multimillion dollar industrial park in November 2016, U.S. Rep. Hal Rogers urged residents in southeastern Kentucky’s Bell County to envision the tourism potential for miles of open land.

Joined by Matt Bevin, then Kentucky’s governor, and local politicians, Rogers pointed to the expanse of forestlands and mountaintops in the distance as he unveiled a $12.5 million federal grant for the Appalachian Wildlife Center. Rogers, a Republican who represents the state’s Appalachian region, had helped secure the money through the Abandoned Mine Land Pilot Program, a federal initiative designed to foster economic development around former coal mine sites in Kentucky and other states. 

The proposed state-of-the-art facility would include a museum and local artisan market where visitors could learn about nature. The center’s biggest attraction: the elk that roam the area.

“Let me assure you this is a worthy project that we are investing in,” Rogers said during the gathering. “The Appalachian Wildlife Center has the potential to transform tourism in our region. There is no place in the country with a better story than eastern Kentucky.”

Nearly four years after the announcement, and three years after the wildlife center was first supposed to be completed, the land is still largely untouched except for a few pens to hold elk and some water utility construction. The projected infusion of hundreds of thousands of tourists has not materialized. And Bell County residents, a third of whom live in poverty and fewer than 1 in 10 of whom have a college degree, are still waiting for an influx of jobs from yet another effort promising to help the area recover from the decline of the coal industry.

The AML Pilot Program, created in 2015, is among the latest efforts that pledged to change the fate of eastern Kentucky. State and federal leaders have directed hundreds of millions of dollars to the region over the past 50 years as part of multiple economic revitalization efforts.

Those investments have resulted in some improvements, including new hospitals and other health care facilities, job-training programs, and some businesses that have come and stayed. But many projects haven’t lived up to expectations, leaving residents waiting for an economic lifeboat that never seems to arrive. 

Stacy Kranitz, special to ProPublica

Downtown Pineville, Kentucky, a small town in Bell County near the future site of the Appalachian Wildlife Center.

Since its inception, the AML Pilot Program has awarded $105 million to 43 projects in the state with little vetting. Some projects like the wildlife center have taken far longer to complete than promised, with no consequences. And lofty projections for job creation, visitation and tourism revenue made by the wildlife center and other projects went largely unchallenged by the state, the Kentucky Center for Investigative Reporting and ProPublica found. 

An industrial park in Martin County was awarded $3.37 million in September 2019 even after a consultant warned that the project had “fatal flaws,” including its location near a federal prison. Two other industrial parks that received funding have already lost, or are at risk of losing, major businesses after pledging large numbers of jobs and related economic growth.

And a $2.5 million grant to Harlan Wood Products LLC in 2016 was tabled after the company was unable to obtain additional private funding. The Harlan County business, which is now dissolved according to the Kentucky secretary of state’s office, had planned to produce wood pellets for biomass fuel, employ up to 35 people and create about 60 indirect jobs.

For the wildlife center, pledges of economic turnaround soared even as the projected opening date was repeatedly delayed. The center is now expected to open in June 2022, according to the Appalachian Wildlife Foundation, the nonprofit organization that is responsible for its construction.

“We’re actually building it. Nobody’s ever done anything for tourism like we’re doing,” said David Ledford, president and CEO of the nonprofit foundation. He said project delays have been primarily due to construction challenges on the reclaimed mine site and a request by federal authorities for an additional environmental assessment. The coronavirus pandemic also has pushed back construction, according to recent reports submitted to the state by the foundation.

The federal Office of Surface Mining Reclamation and Enforcement, which oversees the distribution of AML Pilot Program funding to states, did not respond to a request for details about its application review process. But three officials familiar with the process, who aren’t authorized to speak publicly, told KyCIR and ProPublica that the agency does no independent scrutiny of grant applicants’ claims. 

State officials also could not provide KyCIR and ProPublica with records showing that they verified the tourism and job projections. In fact, a committee appointed by the state Energy and Environment Cabinet secretary has helped to dole out millions in taxpayer dollars without maintaining any records of discussions or votes, as required for public bodies, KyCIR and ProPublica found.

The committee, which helps determine how the program’s federal tax dollars are spent, is not required to comply with state transparency laws, according to state officials who argue that it is not a public agency because it serves in an advisory capacity to the cabinet secretary. 

State and local programs across the country that offer incentives for economic development repeatedly come under scrutiny for failing to achieve job creation and revenue benchmarks. 

The AML Pilot Program falls within a gray area that sometimes escapes deeper examination. 

The federal government has gradually given states more decision-making authority over grant distribution and oversight, said Brett Theodos, a senior fellow and director of the community economic development hub at the Urban Institute in Washington, D.C. 

But the AML Pilot Program stands out because the federal agency responsible for distributing the funds does not appear to have provided clear parameters and measurements for success, he said. 

“The lack of expert decision-making, public meetings or outcome tracking makes (the AML Pilot Program) open for abuse,” Theodos said.

Disney-like Experience

The announcement on building the wildlife center came nearly two decades after the failure of an industrial park project on the same site.

The state spent more than $10 million to buy the land, build a bridge over the Cumberland River and run a three-lane, paved road up to the mountaintop, where the industrial park would be located.

But no industry came. The park sat empty for more than a decade. 

Stacy Kranitz, special to ProPublica

This sign is all that remains of a proposed industrial park. Nearly two decades later, the Appalachian Wildlife Center would choose to build on the same site.

Then, in 2014, Ledford announced plans to construct the Appalachian Wildlife Center. At the time, Ledford said he was considering five counties as potential locations for the center, which would be funded solely through private donations.  

The following year, Ledford chose Bell County.

Ledford said in 2015 that the project, which would encompass 12,000 adjoining acres, would draw 580,000 visitors and generate more than $113 million for the region in its fifth year in operation. “We will not seek any government funding for the project. It will be funded thru private donations,” Ledford said in a news release that projected a 2017 completion date. 

After three years of operating at a net loss, the Appalachian Wildlife Foundation sought to bolster funds for the center by seeking an AML Pilot Program grant.

In an application filed in 2016 by the county, the foundation offered more ambitious tourism numbers than it had a year earlier. Not only would the center draw 638,000 visitors in its fifth year in operation, it would spur the creation of more than 2,000 jobs in the region.

By the time Rogers announced the AML Pilot Program funding later that year, the foundation was projecting that the center would be complete in 2019.

Ledford did not respond to a request to explain why he sought government funding after vowing not to do so. He has said that the state and federal governments vetted the economic projections. 

But hundreds of pages of federal and state documents related to the Appalachian Wildlife Center project show no indication of any independent assessment or critical vetting by the state or the federal government of the tourism and job creation projections. At least three federal documents, including a 2019 report, repeat almost verbatim the project application’s claims for visitation, job creation and revenue generation. 

In 2019, foundation leaders estimated that the center would open in June 2021. By its third year, it would make $8.5 million after operating expenses, they said. The projection was based on new estimates of 850,000 visitors annually, starting in its third year, and average per visitor spending of $44 on admission fees, food and gift shop items.

“We’re going to build a first-class tourism destination and we’re going to deliver a Disney-like experience,” Frank Allen, a foundation board member, said during a presentation last year. “I know it sounds ambitious and it is but, bear with me, at one point so was Disney World. Ultimately, all you need is a great plan and a lot of money. We’ve got the plan and most of the money.”

Stacy Kranitz for ProPublica

A screenshot of Kentucky Gov. Matt Bevin’s Facebook post in 2016 announcing the Abandoned Mine Land Pilot Program grant for the Appalachian Wildlife Center and showing the proposed rendering

Stacy Kranitz, special to ProPublica

Four years later, the future site of the visitor center still lies empty.

The Appalachian Wildlife Foundation’s tourism projections exceeded by nearly 300,000 the number of visitors last year to western Kentucky’s Mammoth Cave National Park, one of the region’s leading tourist attractions and home to the longest-known cave system in the world. 

Ledford said the projections stem in part from his belief that the wildlife center will generate more visitors and revenue than the Keystone Elk Country Alliance in northwest Pennsylvania, which was created in 2009. The facility attracts more than 481,000 people annually, according to its website.

The wildlife center hopes to capitalize on tourists traveling to other destinations, including resorts such as Pigeon Forge, a mountain town two hours away in eastern Tennessee that is home to Dollywood, and Hilton Head Island in South Carolina, which is a seven-hour drive from Bell County. About 94% of the center’s visitors would be from outside the state, according to the foundation’s estimates.

“Our visitors are not going to spend three or four days here,” Ledford said in an interview. “It’s not the end destination. It’s a stop on the way to someplace.”

Stacy Kranitz, special to ProPublica

An elk pen at the future site of the Appalachian Wildlife Center in Bell County, Kentucky.

Jeffrey Larkin, an Indiana University of Pennsylvania professor who teaches ecology and conservation, is skeptical that the wildlife center will be able to live up to its projections.

“I would say that the challenges that lie before the Kentucky facility would be, ‘If you build it, would they come?’” said Larkin, who received his master’s and doctoral degrees from the University of Kentucky and who once conducted fall elk tours in the Appalachian area of the state. “It’s in a part of Kentucky that’s not often visited by a lot of people.”

A New Program, Another Promise

Nestled in the southeastern corner of the state at the juncture with Virginia and Tennessee, the land that would become Bell and Harlan counties was cemented in the region’s history when frontiersman Daniel Boone blazed a trail through the Cumberland Gap in 1775.

The counties also reflect in many ways the Appalachian region of which they are a part: They are breathtakingly beautiful, largely rural, overwhelmingly white and significantly poor. 

The remote counties, among 38 deemed economically distressed in eastern Kentucky, have long wrestled with high poverty and unemployment rates. But a struggling coal industry hastened economic contractions for rural communities in Appalachia.

In the past decade, coal production in the state’s Appalachian region dropped from 67 million tons to 13.6 million, forcing the elimination of most mining-related jobs, which plummeted from 13,000 in 2010 to 3,400 in 2019. 

“Coal’s hold over eastern Kentucky has long dampened creativity, long-term planning, alternative economic development, the ability to think in terms of the public good rather than personal gain and adequate taxes with which to support public infrastructure and services,” said Ronald D. Eller, former director of the Appalachian Center at the University of Kentucky and a retired history professor.

Rogers, the politician who earned the nickname “Prince of Pork” because of his success earmarking funding for his district, has been at the center of many of the infusions of federal dollars for the region he represents. In June 2015, he chaired the U.S. House Appropriations Committee, which pushed for the AML Pilot Program as part of the U.S. Department of the Interior and Environment Appropriations Bill.

Lawmakers created a new pot of money, setting aside $90 million in 2016 to create new job opportunities and stimulate the economies of Kentucky, Pennsylvania and West Virginia by developing reclaimed mine sites. The program later expanded to include three additional states and three Native American tribes.

The federal government distributes the money but allows state officials to develop their own criteria for selecting the projects and monitoring their progress.

“This is a thoughtful alternative to help hard-hit communities reinvigorate their economies by using abandoned mine land to develop hospitals, community centers and much more,” Rogers said in a June 2015 news release after his committee’s approval. 

Rogers has since promoted the program as a key economic driver in Appalachia. In a 2018 news release, he called it “one of the most successful job creation and tourism initiatives that we’ve ever had in Eastern Kentucky.” At the time, none of the projects had been completed.

Rogers defended the money spent on various projects that have drawn limited results. 

“There isn’t a silver bullet that can lift our region out of generational poverty, and none of our local officials who have applied for an AML grant believes that one project in an industrial park or an exciting new tourism project will lift their county out of poverty,” Rogers said in an email. 

Kentucky officials acknowledge that the state’s oversight of the projects focuses on planning and construction, not on expectations for economic development. Once construction is complete, state oversight largely ends, leaving no consistent accountability system for measuring whether the investments drew promised economic changes to the area.

John Mura, a spokesman for the state Energy and Environment Cabinet, said the administration of Gov. Andy Beshear is committed to helping to improve the economy in coal communities and considers the AML Pilot Program an effective tool. 

While agreements with grantees do not clearly articulate oversight responsibilities once projects are completed, Mura said the cabinet “may require that the grantee continue to submit an annual report on various metrics such as job creation.” 

“This program has brought a good measure of economic vitality to eastern Kentucky in the past four years and there is every expectation that under the Beshear administration, it will continue to produce new jobs and new economic vitality in this part of the state,” Mura said in an email. He did not respond to questions about which circumstances might trigger the request for annual reports.

Mura pointed to two projects that he said have led to an additional 44 jobs in eastern Kentucky. 

Dajcor Aluminum, a business operating in the Coal Fields Regional Industrial Park in Perry County, has hired 31 employees since the county received a $6.5 million AML Pilot Program grant in 2018 to buy equipment for the company. SilverLiner, a tanker truck manufacturing company, also has hired 13 employees, Mura said. The company is located in Pike County, in the Kentucky Enterprise Industrial Park, which received a $5 million AML Pilot Program grant in 2016. 

Stacy Kranitz, special to ProPublica

A coal miners flag in the front yard of a home in Middleport, Kentucky.

James P. Ziliak, an economics professor at the University of Kentucky, said the eastern part of the state could be in worse shape without government investments such as the AML Pilot Program. But he worries about the lack of a broader strategy. 

 “It’s kind of a failure of economic development policy,” Ziliak said. “A lot has been spent, but has it been spent in the right places? And there have been a lot of empty promises over the years.”

Banking on Tourism

The Appalachian Wildlife Center is not the only tourism project in eastern Kentucky banking on big promises to uplift the region.

A Letcher County nonprofit, the EKY Heritage Foundation Inc., was awarded two AML Pilot Program grants totaling nearly $3.5 million in 2018 and 2019 after promising to transform more than 100 acres of “stagnant land” into Thunder Mountain, a “world-class” sport-shooting and archery resort park. The park would draw an estimated 40,000 annual visitors, according to the nonprofit’s application.

The completed project would employ 40 to 50 people and include shooting ranges, campgrounds with cabins, an amphitheater and a training site for law enforcement and the military. 

The application offers no supporting evidence that Thunder Mountain could attract the number of tourists it projects. And while the application asserts that Thunder Mountain would be a “valuable resource” for personnel at a federal prison to be built in Letcher County, plans for construction of the prison were shelved last year.

Missy Matthews, president of Childers Oil Co. and of Double Kwik, a chain of more than 40 convenience stores and gas stations in the southeastern Kentucky region, formed the nonprofit that proposed the project. She did not respond to interview requests. 

State Rep. Angie Hatton of Whitesburg, an EKY Heritage Foundation board member, declined to discuss claims for the project in detail. She provided a statement that she attributed to Sally Oakes, a Childers Oil Co. employee who served as the foundation’s grant writer.

“The estimates in the grant application are based on various sources of information including reports, journals and magazines as well as communications with other owners/operators of shooting ranges,” the statement said. Oakes could not be reached for comment.

About 130 miles northeast of the proposed site for Thunder Mountain, another tourism-related project, in eastern Kentucky’s Boyd County, received a $4 million AML Pilot Program grant after pledging to double the number of visitors for an existing off-road park.

The grant, awarded in 2017 to Boyd County government, would assist with water, sewer and road improvements intended to primarily benefit Rush Off-Road, a business owned by E.B. Lowman III, who also is president of a real estate company in eastern Kentucky.

In its application, Boyd County government officials said the improvements would help the park increase to 100,000 the number of visitors. It did not provide a timetable for the increase and offered no evidence or documentation to support the claim. 

Project documents cite, but do not include, a market research study by Marshall University in West Virginia, which Lowman said found that the park had a $5 million-plus economic impact on the county in 2017. Lowman declined to provide KyCIR and ProPublica with a copy of the study, and university officials said they were unable to find one. 

Boyd County officials did not respond to repeated requests from KyCIR and ProPublica to discuss the project. Federal and state officials did not reply to specific questions about the project. 

Shawna McCown said she struggles to understand how the four-wheelers roaring by her house in Rush, Kentucky, will help her or her neighbors. 

“They’re saying it’s going to help the community, but we don’t see any benefit for us at all,” McCown, a schoolteacher, said of the project. “How does that help me? I want a community center, a library.”

Residents Left Waiting

Stacy Kranitz, special to ProPublica

Cynthia Gooch watches her niece Lillian Howard at the unfinished park in Pineville.

By now, the Appalachian Wildlife Center, which has rebranded itself as Boone’s Ridge, was supposed to be pumping millions of dollars into Bell County. It was expected to have created more than 1,000 direct and indirect jobs in the region, as many as the county’s two largest employers combined: Smithfield Foods, which produces a variety of hams and smoked meats with 500 workers, and the Bell County school system, which has about 430 employees.

Instead, a countdown clock on the project’s website winds down to the most recent opening date: 593 days away.

Meanwhile, Rome Meade, a 26-year-old who lives in the area, has for six months hunted for a full-time job without success. 

“I believe it’s gonna turn around,” Meade said. “At least I hope so.”

He’s better off than some. He draws a salary as pastor of the Winchester Avenue Church of God in Middlesboro. And he, his wife and their two young children live rent-free in the church parsonage.

Meade makes too much money to qualify for food stamps or most other government benefits, except for health care.

“I want a job. I’ve always worked, but I can’t get no help,” Meade said.

Meade wishes the government would focus more on helping create well-paying positions that will allow him to stay in the area and not “on things that don’t matter, like an industrial park.”

“All of the tax dollars are going for things that people see no benefit to,” Meade said. “They’re getting frustrated. People are bustin’ their tails, trying to make a living for their families.”

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This article was produced as part of the ProPublica Local Reporting Network.

The post The Elk, The Tourists And The Missing Coal Country Jobs appeared first on Kentucky Center for Investigative Reporting.

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,...

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