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Current Issue, Features

ESOP Can Spell Succession Success

When the founders of a company want to exit leadership, most look to sell, but many Kentucky companies have discovered the benefits of another, less common option: becoming an ESOP (Employee Stock Ownership Plan.) Companies that take that leap go from being privately owned, to being employee owned, with profits divided up yearly among employees but placed in a protected fund and disbursed when employees leave or retire.

It’s an ongoing corporate structure many companies say saves them a considerable tax burden, improves employee productivity and ensures jobs stay local. Is it one your company should consider?

“ESOPs are a great thing for companies and a great thing for the American worker,” said Spencer Coates, president of Bowling Green-based Houchens Inc., one of the largest ESOPs in the United States with more than 18,000 employees nationwide.  “We’ve all seen the fallout when companies sell, with the boarded-up plants and deserted towns they leave behind. Turning your company to an ESOP gives founders the payout they want, while still ensuring those jobs stay in place, generation after generation. Companies have more working capital year to year, and communities get to keep their workforce. It’s a win-win-win,” Coates added.

That’s a conclusion many companies have embraced. In fact, according to The ESOP Association, there are 10,000 in place in the United States covering 10.3 million employees – about 10 percent of the private-sector workforce.

How ESOPs work

When a founder turns over a company to an ESOP, a fair valuation of the company is made. The money for the owner payout is borrowed from a bank, and that money is distributed into equal-sized stock shares. In fact, an estimated 75 percent of all ESOPS were created through borrowing money from a bank, The ESOP Association reports.

Employees are given certain amounts of the stock, based on a percentage of their annual income. Each year, the profits of the company are divided up into shares and placed into this fund. Employees often must become “vested” into the program, earning the full amount after they have achieved full-time status or hit a service milestone.

When an employee leaves the company or retires, they receive their payout, which can usually be rolled into an IRA or paid in cash with taxes deducted. As profits are plowed back into the fund, the value of the employee stock increases. And that money can add up.

According to The ESOP Association, a 39-year-old organization, the average account balance for an individual employee in an ESOP is $113,318. Numbers like that are possible, the association reports, because the average annual contribution an ESOP company makes, per employee, is 11.8 percent of the employee’s income.

Though the company is an S corporation and not an ESOP, Doe-Anderson Advertising in Louisville knows well the benefits an employee stock plan can have. Despite the cutthroat nature of its industry, 102-year-old Doe-Anderson has become one of the oldest continuously running advertising agencies in the U.S., largely due to its employee ownership, said Todd Spencer, president and CEO. 

“Having an employee ownership fund allows us to greatly reduce our tax burden. The extra liquidity it gives us really helps. We hold out a certain amount of that stock money for use in potential payouts. But between our insurances and the cash value of the plan, we have plenty of money for investing in new equipment and facilities, or simply floating payroll and accounts payable while we are waiting for our clients to pay us. It’s a great safety net for the company and one that most ad agencies don’t have,” he said.

Doe-Anderson became employee owned in 1958, when Warwick Anderson put up seed money for the plan. Employees “buy in” to the fund with their own money, and the value of those stocks increase as the company makes profits. Fifty-seven of its 125 employees have bought into the plan. Their stock value has grown enough over the years to see several stock splits.

The value of the original $12,500 in employee stock Warwick Anderson purchased would have appreciated to a worth of $21 million in today’s money, had it stayed in the plan, Spencer said.

ESOP-powered tax benefits

Companies that participate in ESOPs get a whole lot more than the love of their employees. The potential tax benefits can be compelling. Companies that contribute cash or new shares to their ESOP can deduct that amount. For “leveraged” ESOPs, the money a company spends to pay back the loan that created the ESOP can be deducted from taxes, as well.

The tax benefits also extend to employees. Employees only pay taxes on ESOP money when it is disbursed. And even then, employees can roll over a distribution into an IRA with tax advantages or other retirement plan. If they take the distribution, contributions are taxed as income but any gains accumulated are taxed as capital gains.

Alan Taylor, director of BKD Bowling Green, leads a practice that helps companies make the transition to becoming an ESOP. He is quick to emphasize the tax benefits and extra governance that comes with this type of company structure.

“Company earnings are not taxed under an ESOP when the company is taxed as an S corporation and 100 percent ESOP owned, and that leaves companies with the ability to grow, because they have greater cash flow,” Taylor said. “Companies can use those tax-free dollars to grow the company, and ultimately build the stock’s value. But it takes a great deal of planning and oversight. For instance, at BKD, we help companies plan out five years ahead and longer to accurately predict the amount of money coming out in disbursements, and help them wisely invest in the right assets that will produce the most revenue.”

Companies with an ESOP must have a carefully ordered board with independent directors as well as a strong financial reporting system. This board functions similar to most company boards, and is responsible for strategy and policy making, among other things. An ESOP also has a trustee, who has a fiduciary responsibility to the ESOP participants. Employees are not legal stockholders in the traditional sense, and generally do not influence directly how the business is run.

It’s a strategy that has often served as rocket fuel for growth. When Houchens began its ESOP in 1988, it was a grocery store chain with 50 stores. It has since become one of the largest employee-owned companies in the United States, owning all or part of more than 40 companies spanning the industries of grocery, construction, insurance, wealth management, technology, healthcare, manufacturing/distribution, and restaurants. Houchens acquired Hilliard Lyons, the Louisville wealth management and financial services firm, in 2008.

John Megibben, Louisville vice president and region leader with Cincinnati-based Messer Construction, credited that company’s ascent to $1.2 billion in revenue to the firm’s switch to an ESOP in 1990.

“When we created the ESOP, we were in just one region, with $100 million in revenue and 100 employees. Now, 26 years later, we are in nine regions, including Louisville and Lexington operations. We have more than 500 members,” Megibben said. “Year over year, we’ve grown at least 8 percent a year. It’s allowed us to not just have inflationary growth but intentional growth.

“In a business like commercial construction, 70 percent of our business is repeat customers,” he said. “That’s because our customers know when they work with us, they aren’t working with employees – they’re working with owners, and it shows.”

The employee engagement effect

Employees who work at ESOPs feel invested in their company’s success, an effect that can be measured. Recent surveys and journal articles cited by The ESOP Association show employees who are employee-owners were four times less likely to be laid off during the Great Recession, and ESOP companies had a $44,000 per employee sales advantage over their non-ESOP peers.

A full 83 percent of the association’s members report that becoming an ESOP had a direct impact on the company’s productivity. It’s an opinion that is shared by all the interviewees for this story.

Megibben said when Messer made the transition to employee ownership, its turnover plummeted from 7 to 8 percent yearly to 4 percent or less.

“Our turnover is less than half the national average in our industry. So I’m pretty sold on ESOPs,” he said. “It takes the rhetoric out of owners versus workers. It takes the focus away from who is getting what, and puts it back on the customer.”

Normand Desmarais was part of the founding team that created Covington, Ky.-based Tier1 Performance Solutions, a consulting company that helps clients through talent development, strategic change and organizational evolution solutions. He took his payout and now serves on the company board. Tier1 made the leap to being an ESOP in 2001, Desmarais said, and never looked back.

“Being an ESOP has made us stronger, and creates a terrific environment with long-term stability for our consultants,” Desmarais said. “The people who stay with us get to fully benefit from the company’s success. And it makes TiER1 very attractive when we’re recruiting. Overall, it works for us. We’re growing at a rate of about 25 percent a year, 15 out of the last 16 years. We’re estimating by 2020, we’ll have 500 people across the U.S.”

Should your company do it?

Despite the many benefits of employee ownership, experts warn it’s not the right choice for every company.

George Thacker, managing director of New York-based CSG Partners, a boutique investment bank that specializes in ESOP transactions, said the choice isn’t always clear-cut. There are some general disqualifiers.

“Is your company over-leveraged already? Is your company young, or in a very young and fast-changing industry?” Thacker said. “Do the owners want to exit within three to 10 years of founding the company? Then creating an ESOP might not be the right thing for you.

“ESOPs work best when a company is already consistently profitable, and in a business that can benefit from a long-term, stable business strategy,” he said.

Andrew Jacobs, member of Stites & Harbison LLC’s Lexington law office, agrees.

“Companies who do well with employee ownerships have a lot of things in common. First and foremost, they have strong earnings, and they’re not publicly traded,” Jacobs said. “They often have older owners who are looking to transition. They might not have kids or grandkids that want to take on the company, or perhaps they’re having issues with estate tax. They have strong management already, and have a strong commitment to keeping their people employed in the same place they’ve always been.

“They want an orderly handover, one that can be carefully planned and seamless. With the right structure and the right legal representation, companies like these can reap the great advantages of employee ownership,” he said. “Give employees incentive and they’ll share in your success. When they do well, you’ll do well.”


Susan Gosselin is a correspondent for The Lane Report. She can be reached at editorial@lanereport.com.

Current Issue, Features, One-on-One

One-on-One: ‘Change Is Constant; Healthcare People Always Figure It Out’

Russell F. Cox became President/CEO of Norton Healthcare on Jan. 1, 2017. He joined Norton in September 2000 as vice president of support services. He has been senior vice president, operations and development; executive vice president; and EVP and COO.

Russell F. Cox became President/CEO of Norton Healthcare on Jan. 1, 2017. He joined Norton in September 2000 as vice president of support services. He has been senior vice president, operations and development; executive vice president; and EVP and COO.

Editor’s note: This is a longer version of the interview than what appears in the August magazine.

Mark Green: Where do you now stand in numbers of employees, facilities and providers at Norton?

Russ Cox: We’re right at 14,000 employees. That includes the 900-employee physician group. About 4,800 are nurses. We’ve got five hospitals, seven outpatient centers, 13 immediate care centers and about 260 physician practice sites; there are about 300 places with access to some sort of care in the Louisville/Southern Indiana geography.

MG: Describe the geographic footprint where you operate, please.

RC: The main geography would be the Greater Louisville area, but we consider ourselves a regional provider. We still get a lot of referrals daily, and people are helicoptered here for neurosurgery, for different orthopedic procedures, for the maternal-fetal medicine physicians for troubled births. Norton Children’s Hospital receives patients from all over the state, all 120 counties and from Southern Indiana, Tennessee, from Ohio.

MG: Why do the children’s services have a larger footprint?

RC: We’re the state’s only freestanding pediatric facility. That’s one reason. And it always goes back in healthcare to physician workforce. When you look at pediatrics, then at subspecialties in pediatrics, it becomes even more important. Take neurosurgery: There are only so many neurosurgeons; it really becomes fewer when you look at those who specialize in pediatrics. Because there are people and children in the state and region who have very specific needs, that’s something we take very seriously, making sure we can aggregate and have enough volume and cases for physicians to want to be here. Physicians want to make a difference and be in a place that has enough volume to keep them busy. It is more about the physician workforce and specialty/subspecialty side than anything.

MG: How many physicians are part of your 14,000?

RC: We employ 900 physicians or advanced practitioners. There are some VNPs and nurse practitioners who see patients just like a physician would, but the great majority of that 900 are physicians. Over the past four or five years we have grown by 50 to 100 physicians. Our strategic plan has been very much pointed toward making sure we have enough physicians to provide access to those who want to get care. Access is a big issue in our state and region.

The world of healthcare has changed because physicians now want to be part of an integrated delivery system. A lot of things have driven this, one being the federal mandate around electronic medical records; that’s very expensive on your own. Another thing is, as a physician looks at quality of life and call coverage; as part of a group or system you may only be on call a couple of nights a month, whereas in your own independent group you’re going to be on call more.

Being part of a system able to deliver all levels of care for your patients, being able to make sure you’re able to manage their care, is attractive to physicians. This employment model is the most preferred over the past five years.

We have grown in a very intentional way. It’s been around primary care; it’s been around those difficult-to-recruit subspecialties – orthopedics, neurosurgery, neurology. Once you get a critical mass of primary care, you’re going to have patients who need to see those subspecialists. It’s been an overall recruitment strategy, if you will, making sure that we have the access that we can provide those subspecialties to people that are referred out of the primary care offices.

MG: A few years ago our coverage found some of the major provider groups had grown their specialties too fast ahead of their primary care physicians, who feed them patients. Did Norton intentionally grow the primary care providers first?

RC: We did. Our board of trustees started this process of aggregating and employing primary care physicians 20 years ago. Norton was one of the first in the region to employ primary care physicians, and it was a difficult process. A lot of healthcare providers were doing it 20 years ago, but most of them got out very quickly because quite honestly it was a drain on the financials, and there wasn’t a lot of information about how best to integrate what had previously been independent practice into regional health systems. And from the back office perspective it was a difficult management process understanding how primary care physicians work. Our board stayed with it.

MG: Norton reported 2016 revenue of $2.09 billion, an increase of 4.6 percent over 2015. You were in the black by $89 million on patient services and by $142 million for overall operations and investments. That was a 4.3 percent margin for patient services and it looks like 6.8 percent overall. A lot of big systems are in the red. What strategies is Norton using to achieve these results when many others are reporting losses?

RC: Some information released last week speculated that this year 50 percent of hospitals will be operating in the red, so our 2016 results certainly are unusual. The differentiating factor for us is that that 900-physician group has done a great job of working together, making sure we do the right things for patients and consumers as far as being available. We were able to increase volume.

Also, we spent $200 million two years before that on our electronic medical record, which was epic. We began to feel the benefits of efficiency related to getting an EMR installed and understanding how that could help us. We were some of the first into electronic medical record installation. If you look at our financials from ’14 or ’13, we didn’t have a positive margin because it is a difficult process, a real drain on cash and accounts receivable, and it just disrupts the process.

The other thing was we benefited from Medicaid expansion. 2016 was the year people had not had coverage did have coverage. We had the physician workforce to accept those patients and that made a difference.

Norton Healthcare is locally governed and locally run. Our 23-member board all live in this town. They understand healthcare in a different way and have an ability to be nimble, to act quickly. They understand what’s going on; they understand the need to seize opportunities as they come up. That’s a bit of a difference.

In healthcare over the last five to seven years all everybody wanted to talk about was how important scale was. You saw mega-systems coming together, and they would be run out of a town somewhere else. There are a lot of those. Some of them work; some of them don’t. We believe Kentucky healthcare is very much a local thing, that people appreciate it having a local feel, local flavor. It’s worked well for Norton Healthcare that we have remained local and our brand has remained strong. Having that local board, having the 14,000 employees here feel like it is their organization and that they are responsible for executing on the mission, vision and values, is a real differentiator.

MG: Some systems generate their profits off the largest cases and procedures like organ transplants or brain surgery. What are Norton’s most important revenue-generating services or procedures that feed into that good financial result?

RC: When you’re a not-for-profit healthcare system, you have to have some services that do make a profit because you have a lot that don’t. The ones on the more positive end for us are neonatology; cardiovascular services; oncology – we’ve been making certain we continue to grow our access for our oncology patients, because we are entering a time where we’re diagnosing much earlier. Orthopedics and spine does well. Those predominantly have been helpful in achieving that margin.

MG: In a national survey, hospital administrators said their top concern was financial challenges, and within that Medicaid reimbursement, increasing costs for staff and supplies, and then reducing operating costs. Is that what you see at Norton?

RC: When you’re a CEO, you get that question about what keeps you awake at night a lot. You could produce a voluminous list. The first thing we ought to worry about is, are we doing everything we can to provide a safe environment for patients. It’s much more difficult than people realize to make sure you are providing safety from infection, safety from adverse events. We start with wanting to be the safest place that we can possibly be.

If you ask what financial things I worry about, one of the things I’m going to say is Medicaid reimbursement. We already lose money on Medicaid reimbursement, and not in charges – I’m talking about in costs. And inflation continues to grow in the medical world; the cost of supplies, drugs and wages continue to grow, and way outstrips the increase in reimbursement. And with what’s looming in the future about Medicaid, that’s something that would keep us all awake.

MG: Does Norton lose money, break even or achieve a margin treating Medicaid patients? And what about Medicare patients?

RC: For Medicaid we use a number called a cost-coverage ratio. Think of 100 percent as being that your costs are equal to your reimbursement, that’s a good number. With Medicaid, we’re at about 86 percent. And for Medicare, it’s about 98 percent. What’s being proposed, talked about and hashed out is a diminishment of Medicaid reimbursement, and when a system like us is already at 86 percent, anything that further reduces that is of grave concern.

MG: What are the key strategies Norton and your board are pursuing in this current healthcare business environment? Is it to grow personnel, focus on in- or outpatient care, or add certain types of capacity or facilities?

RC: We’re trying to become more consumer-centric, and make sure that we provide as much access as is humanly possible so that we can take care of more people. One of my goals was to simplify the five-year strategic plan and make it a plan that has lots of tactics and a lot of aspirational and inspirational things, but more than anything else one that all 14,000 people could understand, via simplicity, what their part in this plan was.

Strategically, we want to be an organization about Great Human Interactions, a term I coined because I believe it. Often people come to us in the worst possible state they can be in; their families are in the worst possible state they can be in. If we can make every interaction with those people the best it can possibly be, we’re going to be a long way toward everything else we need to achieve. That goes for patients, for families, for vendors and with each other. That’s a plank everybody can nod their head on right off the bat: Let’s focus on having those great human interactions.

The second thing is, we want to be the safest. We want to make certain we don’t do any harm while you’re under our care. We want to make you better. The best way we do that is to be safe, so we started a Reach For Zero. We don’t look at success as achieving safety numbers better than last year; we look at getting to zero.

The third plank of our plan is about convenience. For too long we looked at the patient and instead said, what works best for us as a hospital or healthcare system? That’s how we developed all our system, all the things we do from a procedural and process standpoint. What we committed to do was to flip that and look at everything we do from the patient or consumer standpoint. That could be extended hours, that could be location of the facilities to be easier to access, that can be not asking for their insurance card and driver’s license every time they come in. Part of that process was focus groups and asking a lot of questions, and saying, what is the process that you want?

The fourth part can be corny, but it does resonate: We need to be the friendliest healthcare system in the country. It doesn’t cost us a thing to have a great environment people enjoy being around and want to be a part of.

Now, let me answer your question from the tactical side of it. The one word that describes the most important part of what we do is “access.” We have to be able to provide you the opportunity to see a doctor within 24 hours of when you need to see one. The way we’re going to make a difference in reducing healthcare costs is to give people access to primary care medical ‘homes’ where they can be seen when they need to be seen, where they can come in for health and wellness sorts of things, where we can make sure we keep bad things from happening. This plan says, what are all the ways we can expand and create more access and opportunities for people who need care to get care?

We’ve begun a lot of that. We’ve started some expansions at Norton Audubon Hospital. We’ve begun expansion of Norton Children’s Hospital. We announced we’re going to have primary care offices with the YMCA in West Louisville. We need to provide more access in the underserved parts of the community, so our plan includes how we go there. We’re expanding the mobile prevention unit that does cancer screening, cardiovascular screening. We need to be able to get out in the community, in the underserved areas, everywhere. The more we can get out and do more screening, get people involved earlier, the better we are.

MG: How much of a management problem is the uncertainty about public policy on healthcare, both for the seven years the Affordable Care Act has been around and now in trying to plan for the next few years when it may or may not get reformed significantly?

RC: It’s a frustration more than anything. Everybody I talk to is uncertain about what’s going to happen in their industry. I’ve been in healthcare since about 1981. We thought when DRGs were introduced in 1984 that the sky was going to fall and the world was going to end. We figured it out, and it didn’t. In 1997 when we had the Balanced Budget Act, where everything was wiped out and cuts were draconian and everybody thought the world was going to end and healthcare was going to be denied, we figured it out, and it didn’t. Now, while we would like current reform to be less draconian with fewer cuts and not as austere as it sounds like it could be, healthcare folks will figure it out.

If you sit around and worry about what’s going to happen, you’re going to miss the opportunity to be innovative. You’re going to miss a great opportunity to make a difference in a lot of people’s lives, to take care of patients who are coming to you because they trust that you can do it. I always say the same thing: If we do those four strategic planks, we’re going to be fine. We’ll figure it out. If you’re in healthcare, you pretty much knew when you signed on that it’s going to be dynamic, it’s going to be riddled with change, and you’re going to have to figure it out as you go. And that’s a competency for us in healthcare: the ability to deal with change.

MG: How does the Louisville healthcare provider market fit into the overall Kentucky and regional picture? What are the unique characteristics of Louisville’s healthcare sector?

RC: We are fortunate in Louisville to have great systems that work hard to take care of the people and their needs in healthcare. Most communities don’t have what we have. Louisville has the state’s only freestanding children’s hospital, that’s the first thing that’s important about healthcare in Louisville. Four out of 10 children in the country are on Medicaid. Norton Children’s Hospital is the largest Medicaid provider in the state. That’s important. That begins to set the tone for the future. That’s very important.

Look at what physician workforce is being trained at the University of Louisville and the University of Kentucky, and the ways we’re beginning to all work together from the standpoint of how do we not only train the medical workforce and the nursing workforce, but how do we retain them in the state. That’s a big part of it. UofL trains great physicians; they’re attracting the right kinds, so that’s a very important aspect of what Louisville brings. If you go into the disciplines in Louisville and look at what’s happened in neurosurgery, what’s happened in cardiovascular services, what’s happened in the transplant areas, at the numbers of people in the state coming to Louisville, it’s a very impressive array of services that are provided extremely well.

A lot of folks come to Louisville from out-of-state for specific subspecialty coverage. A helicopter lands at Norton Brownsboro quite a few times during the day with stroke patients coming from other states. We’ve got an orthopedic surgeon who does total hip replacements in 23 hours and avoids an overnight stay for patients. He gets a whole lot of requests from patients in other states because his outcomes are unbelievably good. His infection control is astoundingly good; the recovery is astoundingly good.

Louisville has done a great job. We’ve not done as good a job of talking about it and making sure everyone else knows about it. The healthcare economy and healthcare opportunities in Louisville are great. Norton’s played a huge role in that. I mean, when you talk about Louisville, we are the market leader as it relates to healthcare services in Louisville. So we’ve certainly been involved, and we’ve certainly not done it alone. We’ve done it with partners. And the other systems have done a great job, from my perspective, too.

MG: What advice would you have for employers in other business sectors who want to lower their costs for health insurance for their employees?

RC: We have 14,000 employees at Norton Healthcare, so we join that conversation because we’re self-insured. Certain things make a difference. I encourage a whole lot of education, a lot of incentive around physical activity; I encourage and support anything around wellness, early detection, any kind of screening. Education about how to utilize healthcare services is the best thing you can do. So many people don’t have a primary care physician. Then when something happens they go to the emergency room at a hospital, one of the most complex and highest-cost areas in healthcare. Educate your workforce to the right level of care, that’s a great way to save money. We have 13 immediate care centers that are open not 24 hours but pretty close to it.

With our program called “In Good Health,” we’ve seen great cost reduction by providing incentives that encourage wellness and healthy lifestyle as well as providing education for people. Having open, honest, confidential conversations with individuals about their health and what they need to do to improve their health is a very good investment. Not only is it a way to save money, but more importantly this is the way to build a very healthy and vibrant workforce.

Many employers look at facilities like Norton Healthcare and ask what can we do together? Could you have a clinic on site? Could you send somebody here? Could you send your mobile prevention unit here? The best way to reduce costs is through training and educating employees on the best possible way to interact and interface with the healthcare system.

Pharmaceuticals and drug utilization is a whole lot of the cost for employers. There are a lot of opportunities that can get people off those drugs, that help in the long run. If you can get people who are diabetics in a good nutritional program, get them in a good physical regimen, you can reduce medication. There are many ways you can reduce hypertension just by facilitating other activities and reduce the costs.

MG: A new Norton Cancer Institute is under construction in eastern Jefferson County and the Jennifer Lawrence Foundation Cardiac Intensive Care Unit is part of an investment at Children’s Hospital. Is there increasing demand for these services, and what will providers be able to do there that they can’t do in your existing facilities?

RC: We currently have a Cancer Institute site on Old Henry Road (in eastern Jefferson County) in a building formerly owned by KentuckyOne Health. You can imagine they didn’t want us in that building; our lease is ending, so we had to move. When we looked at what’s best, we determined our model downtown works so well – a Norton Cancer Institute facility on Broadway where everything is under one roof and everything is integrated. The one on Old Henry Road had radiation therapy and medical oncology.

We decided to build this new facility on the campus of Norton Brownsboro Hospital to get some of the synergies of the hospital so we could manage costs. Just like we had done downtown, we could put under one roof every service a cancer patient, outpatient-wise, should need, from infusion to alternative therapy to radiation therapy to medical oncologists. They can get everything in one setting.

Norton Brownsboro is also in a growth corridor. We’re getting a lot of folks from Bullitt County, from Hardin County, Meade County. They get on I-65 and on the Gene Snyder Freeway (I-265). The East End Bridge (on I-265) now goes over to Southern Indiana, so that certainly opens some doors as well. Having a facility there is somewhat like being at the corner of Main and Main; it’s on two very good highway arteries that draw from a regional perspective as opposed to just Louisville.

It’s going to have something cool that I’m proud of: our Norton Cancer Institute Prompt Care Clinic. Often when patients are going through the regimen of chemotherapy or radiation therapy, later that night they feel awful. Instead of having to go an emergency room in the hospital and go through that process of explaining everything, we’re going to have a prompt-care clinic after hours where cancer patients can come and we will deal with their specific problems as they relate to the cancer treatment.

The Jennifer Lawrence Cardiac Intensive Care Unit is a part of an overall $78 million renovation project we’re doing at Norton Children’s Hospital. Lawrence, a Louisville girl, has done great – Academy Award winner – and she has an unbelievable heart for children; the whole family does. Whenever she comes through Louisville, she finds a way to sneak into Norton Children’s Hospital and visit patients; she is spectacular with them, they love seeing her. She came forward with a wonderful gift to create the Cardiac Intensive Care Unit.

Right now, all the children dealing with cardiac issues are with other intensive care patients. This gift and renovation will allow us to aggregate these patients in their own unit. We’ll have nurses and clinical staff who only deal with cardiovascular patients. We’ll have physicians who only work in that unit. This gives us a great opportunity to specialize even more and to improve outcomes. This is a great thing, and Jennifer and her family got us jump-started.

MG: One of the most recent things Norton did was create a nursing apprenticeship program. Will this provide nurses to Norton or to the state? Why did you do this?

RC: My early roots are in teaching and education. I spent two or three years as a teacher; my parents were teachers; my sister’s a teacher. Education is an incredibly important part of any industry. We have always been very involved in training nurses, because that is the lifeblood of our workforce. The nursing workforce is extremely important. One of the reasons we have weathered storms that others haven’t is because we’ve invested in training and apprenticeship programs for nurses. We have our own Norton University that allows them to get new skills once they’re here. In our robust Norton Scholars program, you go to school and do rotations with us.

This apprentice program is meant to formalize the process and make it available for all who are interested in a nursing career. We are the first in the country to formalize an apprentice program, and we hope it will be adopted by other health systems throughout the state and the country so we can all work together to replenish the nursing workforce not just in the present but in the future.

With ours in particular, we’re hope to answer clinical workforce needs. We also recognize some folks want to work in other states, and we understand that. So it’s not just designed to answer our needs; it’s designed to begin to answer some of the questions about the discipline of nursing and how we begin to replenish that workforce. One of the single biggest limiters in healthcare right now is a trained workforce. There are a lot more people seeking care these days, so we need a whole lot more people to take care of them. We view it very much as planting seeds that will grow trees that maybe we won’t get to enjoy the shade in, but hopefully the next generation will.

MG: Healthcare is more diverse than we have time and space to talk about. Was there an area we didn’t cover that you’d like to address?

RC: What’s so often overlooked with what regional health systems provide is community benefit. In 2016, Norton Healthcare provided $155 million in community benefit. We have to file that on the (IRS Form) 990. We understand: It is our responsibility because we don’t pay taxes. That $155 million is pretty significant. That breaks down as $4 million in charity care, about $97 million in the unpaid cost of Medicaid services. We spend $35 million a year in educational support with the University of Louisville, University of Kentucky or other colleges and institutions.

Those things are very important when you look at how healthcare is delivered and what the not-for-profit healthcare system does; community benefit is important.

Also, Norton Healthcare is a place that understands the value of connecting and partnering. One of the reasons healthcare as an industry found itself in a mess is that everybody had to have their own everything. You know, we could go build our own post-acute care, our own home health, our own fill-in-the-blank-of-what-we-don’t-have. That’s not what’s responsible going forward. We need to be able to partner with entities that have that competency and have a partnership that makes sense.

We have a great partnership with LifePoint, a for-profit healthcare out of Nashville, working in the more rural hospital areas. We’ve got a great partnership with UofL around pediatric training. We’re part owner in Passport Health. To work better and build a better network for economic development in the healthcare sector it’s important to do more partnering and less duplication. What we talk about a lot is, what’s best for the community is for us to be able to meet the needs in a way that is responsible.

MG: Do you have a closing comment?

RC: Healthcare is an important part of the economic development structure of Kentucky, and being able to grow jobs and being able to have opportunities for people to get training and to stay in the state and to have a great occupation that helps others is a wonderful thing. Don’t underestimate the importance. If we continue to cut all of this reimbursement and to change things, we are also impacting something people don’t think of with healthcare sometimes: the very important economic development aspect of what we do.


 

Mark Green is executive editor of The Lane Report. He can be reached at mark@lanereport.com

Current Issue, Features

Agribusiness | Kentucky Wants to Grow Its Ag Manufacturing

Much of the corn grown in Western Kentucky, such as this from the significant Jepson Family Farm operation, goes to the Hopkinsville Elevator Co-op and associated Commonwealth Agri-Energy LLC ethanol facility, which is the major supplier of ethanol to the Nashville market.

Much of the corn grown in Western Kentucky, such as this from the significant Jepson Family Farm operation, goes to the Hopkinsville Elevator Co-op and associated Commonwealth Agri-Energy LLC ethanol facility, which is the major supplier of ethanol to the Nashville market.

According to the Kentucky Farm Bureau, Kentucky is home to 76,500 farms, good for No. 6 in the nation in number of farms, which raked in a peak of $2.74 billion in net farm income in 2013 to rank 16th in the United States.

The financial numbers put up by Kentucky’s farmers are impressive – especially considering average farm size is 170 acres compared to national average of 435. Of Kentucky’s 25.4 million acres, 13 million are farmland.

Some of those acres house the state’s agricultural processors and manufacturers that generate products for consumers in Kentucky and around the world. The more processors on Kentucky soil, the more value-add agribusiness revenue generated for the state.

“Kentucky already has numerous processors and manufacturers of agricultural products such as the Commonwealth Agri-Energy ethanol plant in Christian County, the Pilgrim’s Pride poultry processing plant in Graves County, Champion Pet Foods in Logan County, and Prairie Farms Dairy in Somerset, to name just a few,” said Kentucky Agricultural Commissioner Ryan Quarles. “Kentucky boasts the leading bourbon manufacturers in the world, and the industry is in a $1.2 billion construction boom.”

However, a key Department of Agriculture goal, being pursued with public and private partners, is to grow its processor, manufacturer and other agribusinesses sector. The state touts its low energy costs, spectacular logistics – within a day’s drive or two-hour flight from two-thirds of the U.S. population – and status as a right-to-work state. Other new reforms such as fewer regulations are a draw also, Quarles said.

Small producers and processors make up a vast majority of the actual agribusiness operation numbers in Kentucky, but the big ones like bourbon still make the biggest impact. Some 95 percent of the world’s bourbon is processed in the state, and upwards of 20 million bushels of corn are used by Kentucky’s bourbon and spirits industry.

Kentucky has other top national rankings. It’s No. 1 for tobacco and equine sales including stud fees, No. 4 for hay products, No. 7 in broiler poultry production, No. 14 in both corn and soybean production, and has the most beef cattle of any state east of the Mississippi. The commonwealth is the leading producer of hardwood sawlogs in the South and is in the top three in the country.

$46 billion annually – but growing

All of these materials go somewhere, many to Kentucky’s 154 food manufacturers, 50 nonalcoholic beverage manufacturers, 34 distilleries and more. The state Cabinet for Economic Development website ThinkKentucky.com cites more than $7 billion in GDP from food, beverage and related products manufacturing. Overall, agriculture contributes close to $46 billion to Kentucky’s annual economy.

The state’s manufacturing economy has grown at nearly twice the national average since 2008, and this includes agricultural processing. In fact, 14 percent of the state’s manufacturing jobs are in the food and beverage-products industry.

But there are still ways to increase profit and keep more of the various production cycles within the state.

“Extremely important for the future growth of Kentucky agriculture is to capture more of the consumer dollar,” said University of Kentucky agriculture economist William Snell. “Agriculture would like to see economic development focus more on attracting more ag-related processors to not only add more value to farm production but also add jobs in rural areas.”

Snell said some of the key areas where value could be greatly added include beef and hemp, especially the highly profitable hemp cannabinoid oil – but that crop still contains many legal uncertainties and hurdles. Still, an increasing number of hemp processors are popping up around the state to accommodate the rapidly growing market and are following the lead of heavy hitters like Atalo.

Quarles said his department is making it a top priority to link together manufacturers and processors with the agriculture community. In July it hosted several LAND (Linking Agriculture for Networking and Development) conferences to connect farmers to emerging markets.

“We look forward to taking what we talked about there and putting it in action for the state,” he said. “We are also looking at ways to expand the international reach of the Kentucky farmer. International trade presents a great opportunity to increase market access for both farmers and processors.”

The commonwealth has one of the most successful state farm marketing programs in the nation, Kentucky Proud, and is home to global food and beverage companies like Brown-Forman, Papa John’s, Yum! Brands, and Alltech.

Making all of the necessary connections from producer to processor and adding more facilities for small farmers is key. While it may not produce billions of dollars like bourbon, or grow to $1.2 billion a year in farm cash receipts like Kentucky’s poultry industry – poultry and eggs are Kentucky’s leading agricultural commodity – it could make the difference of whether or not small niche producers grow their business or not. And the proof is in that Kentucky thrives off of its small farms.

76,000 farms all need processors

The numbers show the significance. A 2015 study by University of Kentucky’s Department of Agricultural Economics put the total impact of agricultural processing in Kentucky at $34.9 billion, employing 124,199 people. Production and processing tips the scales at nearly $46 billion, according to the report.

Kentucky’s agricultural producers fall in line with the national average of receiving 15 to 17 cents of the retail food dollar.

“This stat includes both at-home and away-from-home consumption,” said Snell. “Farmers receives around 25 cents of the retail at-home sales. The USDA does not track this via individual states.”

Snell is co-director of the Kentucky Agricultural Leadership Program and specializes in tobacco economics, agricultural policy, markets and trade, and macroeconomics.

He cited some of Kentucky’s most notable food processors. Names like Tyson, Purdue and Prairie Farms poultry, Jif peanut butter, Yum! Brands fast food chains, Purnell Sausage, Siemer Milling, Alltech animal feed supplements, Atalo Holdings, Marksbury Farm, Little Kentucky Smokehouse, Kenny’s Cheese, Laura’s Hemp Chocolates and dozens of others make a major impact on the state’s economy.

The impact of small operations may seem to be a mere drop in the bucket compared to the tens of billions of dollars generated by agriculture, but managing the processing component for a small farmer can be a major sticking point, and the difference between having resources to put into producing and marketing or not.

For example, Alvina Maynard of River Hill Ranch in Richmond is one of the farmers who contributes to Kentucky’s glowing agricultural numbers. For her niche alpaca operation, having a quality meat processor less than 40 minutes away at Lancaster’s Marksbury Farm has been invaluable to her business.

“Marksbury has been really super accommodating in our scheduling, and they have been able to do things even last minute,” Maynard said. “But Marksbury is a relatively young business as well, and because of their quality standards and their values, they’re running at max capacity. So it’s becoming more difficult as a small producer to get on their schedule.”

The next closest meat processors are almost two hours away.

“Having an increase in processors would be valuable for people doing small batches,” said Maynard, who serves as vice president of the Kentucky Alpaca Association. “It’s harder for Marksbury to do custom because as they grow they’re dealing with bigger clients.”

Less red tape, more opportunity

Smaller producers easily get edged out, and in some cases operations like Kentucky State University’s Mobile Processing Unit can help. Other times, it can’t. More processors are hindered by equipment costs, facility limitations, government permitting and inspections and staffing. For a specialty producer like Maynard, there are more loopholes in the system that leave her constantly seeking processing answers that no one seems to know.

There’s something to those claims.

While the demand for locally sourced animal products has increased, according to the U.S. Department of Agriculture’s 2015 Report to Congress, the number of small, federally inspected cattle slaughter plants declined by 12 percent from 2001 to 2013. Access to meat processors with required inspection processes and the ability to customize orders is key to providing customers with locally produced meat products.

Appreciated by chefs for being lean yet tender, alpaca are in a meat processing “no man’s land,” Maynard said, and she often has to use multiple facilities – sometimes not even in Kentucky – with separate permitting.   

“If I want to do a sausage or pepperoni, it’s a completely separate facility to process that cut of meat,” she said.

River Hill Ranch also produces highly coveted alpaca fiber and currently ships most of its fiber to Gallatin, Tenn., to get high quality processing – which is even more difficult to obtain than meat processing.

The state Department of Agriculture does a great job of helping people at least know where to start, Maynard said.

“At the department, we work closely with local, state and federal agencies to strike a balance between producing safe, high-quality and competitively priced products while also maintaining an environment conducive to business creation and job growth,” Quarles said. “In the future we will be identifying what we think are over-burdensome regulations and eliminating them from the books. I really applaud Gov. Bevin for his Red Tape Reduction initiative. We are committed to doing our part.”

While it took her two years of persistence to be get her alpaca meat permitted to sell, food processing needs regulation for obvious reasons, Maynard said. But there need to be more processors in the marketplace, and the state seems to be supportive.


Abby Laub is a correspondent for The Lane Report. She can be reached at editorial@lanereport.com.

Current Issue, Features

Equine Tourism | Taking Up the Tourism Reins

Fans get a glimpse of Triple Crown and Breeders Cub winner American Pharoah, the most popular horse for equine tourists in Central Kentucky. He is at Ashford Stud in Woodford County.

Fans get a glimpse of Triple Crown and Breeders Cub winner American Pharoah, the most popular horse for equine tourists in Central Kentucky. He is at Ashford Stud in Woodford County.

Lexington has long been a destination locale for the equine inclined. They attend races at Keeneland and the Red Mile, take in a wide variety of competitions, activities and exhibits at the Kentucky Horse Park, and enjoy the many equine-themed shops and attractions throughout the city. Visitors who come to the Bluegrass for horse-related experiences often hope to immerse themselves in Lexington’s iconic equestrian culture.

Often, however, as out-of-towners tour Central Kentucky’s country roads, flanked mile after mile with stately trees, stone walls and rolling green pastures, they are left to wonder what lays behind the fences and gates of the area’s lauded Thoroughbred nurseries. Unless tourists know where to look or who to ask, it usually proves difficult to gain access to the vast majority of the area’s farms.

Until recently, there was a missing link in Lexington’s equine tourism industry.

In 2015, that changed after a group of forward-thinking and determined industry stakeholders saw the effect marketing and tourism had on the bourbon and wine industries in Kentucky and California respectively. Hoping to create the same hospitality boom and cultivate a new generation of fans for horseracing and Central Kentucky’s horse industry, they set out to create a way for Thoroughbred farms and related businesses to be accessible to the public, while not hindering their day-to-day operations.

The result was a membership-based not-for-profit, aptly named Horse Country Inc.

Getting Horse Country off and running

With a soft launch during the Breeders’ Cup World Thoroughbred Championships in 2015 and its official unveiling the following year, Horse Country Inc. is revolutionizing the equine sector of Lexington’s tourism and hospitality industry. Structured as a one-stop-shop for people seeking behind-the-scenes horse farm and equine-related tourism experiences, Horse Country connects farms, equine-related businesses and nonprofits with tour companies to create a retail website that allows people to purchase tickets for pre-determined tours or plan their own group tour experience.

At the helm of this innovative approach is Horse Country Executive Director Anne Sabatino Hardy.

Before Horse Country came about, Hardy said, some farms were apprehensive to get involved with the tourism and hospitality industry, concerned bringing tourists onto their property could at the least impede daily work flow and at the most present significant liability. These were working farms often operating with lean staffs hired to handle horses, not people. Furthermore, they were concerned about the toll regular tour traffic could have on their grounds plus potential risks associated with inviting non-horse-savvy guests onto their farm in close proximity with young, and at times unpredictable, Thoroughbreds.

“Certainly our members are exceptional horsemen, veterinarians and the like, but hospitality and tourism was a new area for them,” Hardy said.

As more conversations were had between tour operators and farms and protocols were developed, farm owners and management became more amenable to the idea. By the time of Horse Country Inc.’s official launch, 36 entities were throwing their support behind the organization as members. These included not only farms but large veterinary clinics, Thoroughbred retraining facilities, feed mills and more, the majority of which also signed on to offer tours.

“We’ve seen more and more of our members offering tours,” Hardy said. “For example, we recently started offering tours at Stonestreet Farms’ various divisions, and the Maker’s Mark Secretariat Center (a retraining and adoption facility for ex-racehorses) came on board as a nonprofit affiliate member, so we get the chance to share that part of the story with Horse Country guests now, too.”

The group’s approach seems to be working from the customer side as well. Horse Country business has steadily increased since it began offering tours, and new farms and ancillary businesses continue to sign on as members.

“We are about 30 percent ahead of where we were last year in terms of ticket sales,” Hardy said in late July. “The growth trajectory is excellent. We have a great example we often look at in the Bourbon Trail and the growth they’ve seen in the years its members have been working together.”

Offering an elevated experience

Hardy and the team behind Horse Country took a “rising tide lifts all boats” approach in creating not only a mechanism for equine tourism but best practices advice for member organizations offering tours.

Prior to the first tours being offered through the Horse Country brand, best practice development included an educational trip for founding members to the Disney Institute in Florida and bringing in hospitality experts from the Biltmore Center for Professional Development in Asheville, North Carolina, to garner their perspective on how best to showcase Lexington’s hallmark industry.

What was gleaned was used to educate Horse Country member organizations how best to showcase the industry and their facilities and offer the most enjoyable, educational and safe experience for the public.

“We have always offered tours at Ashford, but in the past they were much more informal and not as well promoted,” said Coolmore Stud’s Scott Calder, who handles marketing for the farm’s American base, Ashford Stud near Versailles. Ashford Stud is home to 2015 Triple Crown winner American Pharoah and as such is one of the most popular tour offerings for Horse Country. 

“It’s probably fair to say the quality of experience people received varied quite a bit from day to day depending on what was going on at that specific time,” Calder said. “Once we got involved in the planning of Horse Country, it definitely made us think more about how we could improve the experience for our visitors.”

Those improvements, he said, include specialized staff training and the creation of a dedicated visitors’ center where people waiting for a tour could learn more about the farm and the industry.

“We trained up a number of staff to do the tours in a particular way so that there was always someone available who knew the process and had the time available in their day to do it well,” Calder said. “We also refurbished a building next to our breeding shed and installed a number of touch screens where visitors can watch race footage, learn about the history of Coolmore around the world and watch videos about some of the day-to-day activities that happen around the farm.”

Better for hospitality sectors members

Tour operators also saw the benefits of the changes Hardy and the Horse Country team were bringing about at the farms. Lisa Higgins – who, along with her husband, Sean, operates Mint Julep Tours, which specializes in custom tours that include bourbon distilleries, horse farms, wineries, culinary experiences and more – says the advent of Horse Country has not only made more farms accessible to tourists, but has created a more accommodating experience.

“Horse Country has been a good liaison to the farms in understanding the needs of tourists – like restrooms, varied tour times, information about the farm – and helping tour operators appreciate the expectations of the farm, since they are working farms and the safety of their horses is always a top priority,” Higgins said.

Some farms have the parking and other resources to offer tour access directly to the public, while others prefer that visitors come in groups with local tour operators. Horse Country coordinates with tour companies like Mint Julep to arrange for transportation and guides for such horse farm tour offerings. Tour companies can also purchase tickets from Horse Country for specific farms, dates and times to create unique tour packages they can sell directly.

“When you have a ticket for a tour, you’re always going to be guaranteed a personal, guided experience on property with someone who works there,” Hardy said. “Our members are all committed to being their own brand ambassadors and engaging guests with their teams and stories. We believe that means a better product for tour operators to share with their clients. Ultimately we’re committed to a greater experience for the guest.”

An eye to the future

While visitors come to Kentucky for many reasons, VisitLEX, Lexington’s convention and visitors’ bureau, has seen a steady rise in equine tourism inquiries in the past year and a half, according to organization President Mary Quinn Ramer.

“There’s always been a healthy interest in equine experiences in the area, but information on visiting horse farms has been the No. 1 request from our guests for the past 18 months,” Ramer said. “These experiences are as authentic as it comes. This isn’t an amusement park or fabricated attraction. This is simply our way of life. Visitors appreciate our authenticity.”

Since offering its first tours during the 2015 Breeders’ Cup, Horse Country Inc. has hosted guests from all 50 states, as well as 16 countries.

“The average stay is about three days, so we know they’re booking hotel rooms, eating at restaurants and shopping, spending dollars in our local economy,” said Hardy.

Horse farms have been largely pleased with their foray into equine tourism, with several eager to expand not only what they offer to the public but how they offer it. Hardy says the next step for equine tourism in Central Kentucky is for Horse Country and its member farms to create retail opportunities for visitors, something that has become hugely popular with visitors of the Bourbon Trail. 

“Our member organizations are really investing in the experience, taking in guest feedback and using it to improve. For example, Winstar Farm and Darley both just purchased electric vehicles to give guests access to new parts of their farms,” Hardy said. “Horse Country and several of its members are offering or working on merchandise, and one day we would like to have a visitors’ center of our own where we can greet guests and provide services. All of these things and more are part of the potential we want to capture.”


Jen Roytz is a correspondent for The Lane Report. She can be reached at editorial@lanereport.com.

Marketing, On the Boards

On the Boards: Aug. 2017

AMERICAN HEALTH LAWYERS ASSOCIATION

Michael N. Fine has been named chair of the American Health Lawyers Association’s tax and finance practice group. Fine is a partner with the law firm of Wyatt, Tarrant & Combs.

BACK THE BLUEGRASS

■ Back the Bluegrass, a statewide effort to build a stronger bench of Democratic millennial candidates, has announced its board members for the 2018 election cycle: McKenzie Cantrell, state representative, House District 38; Jacqueline Coleman, founder and president, Lead Kentucky; Adam Edelen, co-founder, New Kentucky Project and former state auditor; Colmon Elridge, former special assistant to Gov. Steve Beshear; Angela Evans, councilmember, Lexington District 6; Blair Haydon, executive director, Emerge Kentucky; Alison Lundergan Grimes, secretary of state; Trey McCutcheon, member, Teamsters 89; Christian Motley, senior manager, StriveTogether; Travis Scott, president, Kentucky Young Democrats; Adrian Wallace, board of directors, Kentucky NAACP; and Sellus Wilder, progressive activist, former vice mayor of Frankfort.

JUVENILE JUSTICE ADVISORY BOARD

■ The following individuals have been appointed to the Juvenile Justice Advisory Board: Ida Dickie, Louisville; Paula Ratliff Pedigo, Smiths Grove; Ricky Stiltner, Frenchburg; Carey Cockerell, Georgetown; Dalton Gordon, Maceo; Adria Elaine Johnson, Louisville; Gregory Joseph Jones, Independence; and Glenda Mae Edwards, Greensburg.

KENTUCKIANS FOR BETTER TRANSPORTATION

Steven Henderson has been named to the board of directors of Kentuckians for Better Transportation. Henderson is a member of the law firm of Stites & Harbison, based in the Louisville office.

KENTUCKY BOARD OF NURSING

Teresa Huber, Gail Elaine Wise and Dina Byers have been appointed to the Kentucky Board of Nursing. Huber, of Maysville, is a nurse on faculty at Northern Kentucky University. Wise, of Mayslick, is a professor of nursing at Kentucky Christian University. Byer, of Murray, is an associate professor of nursing at Murray State University.

KENTUCKY BOARD OF OPTOMETRIC EXAMINERS

Dr. William Thomas Reynolds has been appointed to the Kentucky Board of Optometric Examiners. Reynolds, of Richmond, is an optometrist.

KENTUCKY BOARD OF SOCIAL WORK

Thomas “Jene” Hedden and Charlene Burlew have been appointed to the Kentucky Board of Social Work. Hedden, of Shelbyville, is a contract clinical therapist for Whitten Psychological Services. Burlew, of Burlington, is clinical director of residential-based services for the Children’s Home of Northern Kentucky.

KENTUCKY NATURE PRESERVES COMMISSION

Larry Prentice Clark and Carl Wayne Breeding have been appointed to the Kentucky Nature Preserves Commission.  Clark, of Greensburg, is a farmer. Breeding, of Lexington, is an attorney.

KENTUCKY PAROLE BOARD

Robert Powers has been appointed to the Kentucky Parole Board. Powers, of Harrodsburg, is the executive director of the Bridge Program.

KENTUCKY PUBLIC SERVICE COMMISSION

Talina Rose Mathews, of Frankfort, has been appointed to the Kentucky Public Service Commission.

KENTUCKY REAL ESTATE COMMISSION

Shirley Wiseman has been appointed to the Kentucky Real Estate Commission. Wiseman is a Lexington homebuilder and realtor.

KENTUCKY RETIREMENT SYSTEMS

Wilburn Joe Brothers and James Fulkerson have been appointed to the Board of Trustees of Kentucky Retirement Systems. Brothers, of Elizabethtown, is a retired plant manager. Fulkerson, of Owensboro, is a retired accountant.

KENTUCKY STATE UNIVERSITY

Roger Reynolds has been appointed to the Kentucky State University board of regents. Reynolds, of Louisville, is an entrepreneur and small-business owner.

KENTUCKY VETERANS HALL OF FAME

Lt. Gov. Jenean Hampton has been elected to the board of directors of the Kentucky Veterans Hall of Fame.

LOUISVILLE REGIONAL AIRLIFT DEVELOPMENT INC.

■ The following individuals have been named to serve on the board of directors for Louisville Regional Airlift Development Inc., a newly formed coalition of business, community and government leaders who are working to bring more air service to Louisville: Chair – Koleman Karleski, investor; Vice Chair – Ed Glasscock, Frost Brown Todd; Secretary – Sandra Frazier, Tandem Public Relations; Treasurer – Michael Montjoy, Mountjoy Chilton Medley; Directors: Wendy Dant Chesser, One Southern Indiana; Roger Cude, Humana; Chuck Denny, PNC Bank; Terry Gill, Kentucky Cabinet for Economic Development; Brett Hale, Beam Suntory; Jim Hartlage, Hartlage Management Group; Pete Mahurin, Hilliard Lyons Financial Services; John Moore, Atria Senior Living; Jim O’Malley, Brown-Forman; Kent Oyler, Greater Louisville Inc. (GLI); Brad Richardson, Hardin County Chamber of Commerce; Lesa Seibert, Mightily (Louisville Regional Airport Authority director); Kerry Stemler, K.M. Stemler Co.; Mary Ellen Wiederwohl, Louisville Forward/Louisville Metro Government; and Karen Williams-Goetz, Louisville Convention & Visitors Bureau. 

LOUISVILLE SPORTS COMMISSION

■ The following individuals have been appointed to the board of directors of the Louisville Sports Commission: Travis Doster, Texas Roadhouse; Amber Halloran, The Kentucky Center; Steve Hester, Norton Healthcare; and Nick Sarantis, Baptist Health Sports Medicine. Elected as officers are: Chair – David Wombwell, US Bank; Vice Chairman – John Willmoth, Poplar Ventures; Secretary – Casner Wheelock, Middleton Reutlinger; Treasurer – Phil Poindexter, Stock Yards Bank & Trust; and Immediate Past Chair – Wendy Wagoner, LG&E/KU Energy. Elected to serve a one-year term on the commission’s executive committee are: Cleo Battle, Louisville Convention & Visitors Bureau; Dr. Stacie Grossfeld, Orthopaedic Specialists; Brett Hale, Beam Suntory; Ed Hartless, 4th Street Live!; John Hollenbach, Hollenbach Oakley Development; David Phillips, Palladium Consulting; Phil Poindexter, Stock Yards Bank & Trust; Jason Rittenberry, Kentucky Venues; Marty Storch, Louisville Metro Parks Department; Gary Ulmer, Louisville Bats; Lani VanderToll, KentuckyOne Health; Wendy Wagoner, LG&E/KU Energy; Casner Wheelock, Middleton Reutlinger; John Willmoth, Poplar Ventures; and David Wombwell, US Bank.

MOREHEAD STATE UNIVERSITY

Deborah Haydon Long has been appointed to the Morehead State University board of regents. Long, of Lexington, is proprietor of Dudley’s on Short restaurant.

MURRAY STATE UNIVERSITY

Don Irvin Tharpe has been appointed to the Murray State University board of regents. Tharpe, of Nicholasville, is a past president of the Pan American Health and Education Foundation and former executive director of the Association of School Business Officials International.

UNIVERSITY OF KENTUCKY ALUMNI ASSOCIATION

The University of Kentucky Alumni Association has announced its 2017-2018 board of directors officers: President – Susan Van Buren Mustian, Hebron; President-Elect – J. Fritz Skeen, Ponte Vedra Beach, Fla.; and Treasurer – Taunya A. Phillips, Lexington.

UNIVERSITY OF KENTUCKY

Sandra Robbin Shuffett and Derrick Ramsey have been appointed to the University of Kentucky board of trustees. Shuffett, of Nicholasville, is a physician for Baptist Health and a part-time farmer. Ramsey, of Lexington, is secretary of the Kentucky Labor Cabinet.

Corporate Moves, Marketing

Corporate Moves: Aug. 2017

BANKING

Patrick Farnan has been named business banking manager for Fifth Third Bank’s Kentucky region. Farnan will be focused on the Louisville and Lexington markets. Roni Karbach has been promoted to consumer market manager for Kentucky.

Rusty Clark, senior vice president of Danville-based Farmers National Bank, has been pro-moted to head of lending. Kevin Arnold has been promoted to senior vice president, senior lender for the bank.

Julia Pigg has been promoted to market vice president for Community Trust Bank. Pigg is the branch manager of the Mount Vernon Bypass office.

David Greenwell has been promoted to executive vice president and chief credit officer for Town & Country Bank and Trust Co. in Bardstown.

CONSTRUCTION

Bill Quenemoen has been named chief executive officer of Lexington-based Denham-Blythe Co.

ECONOMIC DEVELOPMENT

Karen Finan has been named president and chief executive officer of the newly formed Northern Kentucky Regional Alliance.

EDUCATION

Mark Shanda has been named dean of the University of Kentucky College of Fine Arts. Shanda comes to the position from The Ohio State University, where he is a professor and season producer in the College of Arts and Science’s Department of Theatre.

Donna Hedgepath has been promoted to provost and vice president for academic affairs at Campbellsville University.

■ The University of Kentucky has named Mark F. Newman as executive vice president for health affairs. Newman will succeed Michael Karpf, who is retiring.

Dr. Donald J. Egan has been appointed director of contact lenses at the University of Pikeville-Kentucky College of Optometry.

Michael Montross has been named chair of the University of Kentucky Department of Biosystems and Agricultural Engineering.

Christian Brady has been named as the first dean of the Lewis Honors College at the University of Kentucky.

Karen Damron has been named dean of the Elliott School of Nursing at the University of Pikeville. Mathys J. Meyer has been named as the university’s first dean of student success.

Jing Li has been named associate director of the University of Kentucky Center for Health Services Research and the new director of the Office of Value and Innovation in Healthcare Delivery.

Barry Swanson has been named chief
procurement officer for the University of
Kentucky.

FOOD/SPIRITS/HOSPITALITY

Jackie Zykan has been certified as master taster of Brown-Forman’s Old Forester Kentucky Straight Bourbon Whisky. Brown-Forman has appointed Tom Vernon as Woodford Reserve global brand ambassador. 

GOVERNMENT

Sean Southard has been named director of communications for the Kentucky Department of Agriculture.

Richard Todd Cooper has been appointed judge-executive of Ballard County.

Jessica Ann Moore has been appointed district judge for the 30th judicial district, division 11.

Larry Gillis has been appointed ombudsman for the Kentucky Personnel Cabinet.

Darryl Scott Lavery has been appointed circuit judge for the 30th judicial circuit, division 2.

HEALTH CARE

Greg White has been named vice president of finance for Louisville-based PharmaCord. Chad Forinash has been named senior director of pharmacy and clinical services.

INSURANCE

■ Louisville-based Humana Inc. has named Sam Deshpande to the newly created position of senior vice president and chief risk officer.

LEGAL

Adam Hall has been elected as the new chief executive officer of Frost Brown Todd, effective Jan. 1, 2018. Hall will succeed George Yung, who is stepping down from the position next year.

James R. Irving has been named managing partner of Bingham Greenebaum Doll’s Louisville office.

Daniel Cameron has been named as a principal of CivicPoint, Frost Brown Todd’s full-service public affairs subsidiary. Cameron, who has served as legal counsel to U.S. Sen. Mitch McConnell since March 2015, will also serve as a senior associate in FBT’s litigation department.

NONPROFIT

Keith Inman has been named president of Kosair Charities in Louisville. Inman succeeds Randy Coe, who is retiring as president but will remain on the organization’s board of directors.

TECHNOLOGY

Ying (Vivian) Liu has been named senior vice president and chief financial officer of Lexington-based Lexmark International.

TRANSPORTATION

Gary Hammes has been named president of Erlanger-based Delta Private Jets.

OTHER

Mason B. Rummel has been named president and chief executive officer of The James Graham Brown Foundation in Louisville.

Darren Srebnick has rejoined World Trade Center Kentucky as chief trade officer.

Perspective

Perspective | Get to work Congress

PatFreibert 2The White House wasted no time in delivering on several significant Trump campaign commitments: Achievements include early confirmation of his Supreme Court appointment; regulatory reforms; energy initiatives; environmental initiatives; confirmation of his cabinet secretary appointments; and the biggest victory by a president in a generation in the Supreme Court’s 9-0 decision upholding the essence of his executive order protecting Americans from unchecked immigration from a handful of countries acknowledged to export terrorism and terrorists.

The pace has now slowed significantly with the opposition party (aided on occasion by a handful of members of his own party) deliberately stalling action on the president’s initiatives. Dozens of presidential appointments have still not received confirmation hearings, and getting these positions filled is a key to efficient governing.

Undermining the president, and open hostility to his initiatives may pacify the rabid base of one political party, but it contributes in no way to a functional federal government. Too many important issues await debate and action to waste time on petty politics and endless preoccupation with issues of little interest to most Americans. What makes sense is getting down to the nuts and bolts of solutions for our nation’s challenges such as tax reform, healthcare reform, national security readiness and improving the nation’s economy.

Not the least of national importance is the issue of terrorism unleashed on Americans here on our own soil. Case in point: Congressman Steve Scalise, majority whip in the U.S. House of Representatives, is still facing a long recuperation after being shot along with a number of other Republican lawmakers while practicing on a ball field near the Capitol.

Americans must set examples of respect for each other’s political beliefs and differences. Respect and tolerance in this regard must be taught at home and in schools.  Respect and support for those enforcing our laws is also necessary in our free society.

Meanwhile, back in Congress, there are too many vacations and “August recesses” for its members, while the nation’s work is not getting done. Recent consideration for canceling their “August recess” was welcome news and almost unheard of.

Another congressional perk is their very own special health insurance while the nation’s other citizens must navigate the vagaries, escalating expense and diminishing choice of “ObamaCare” health insurance. Does the electorate remember the promises of members of Congress “to live under the same health insurance” as their constituents? What a struggle this health insurance issue has been for America’s workers and employers. How many members of Congress “live under” ObamaCare health insurance and restrictions? 

The economy is far more important to Americans than “August recesses” and time off work for members of Congress. Members should remain at work until they make progress in improving the economy.

Some of the “jobless problem” can be attributed to the fact that the U.S. never experienced a year of economic growth above 3 percent under Obama. The average growth for those 8 years was 2 percent, ending at 1.6 percent – though every Obama budget forecast confidently predicted growth of at least 3.4 percent and as high as 4.6 percent for the years of 2009-2014. It never happened, of course, and that matters because economic growth equals jobs, and U.S. workers need more, good-paying jobs.  We still have approximately 100 million “working age” Americans not working. In fact, Washington currently spends $1 trillion each year paying people not to work.

Talented, award-winning economists stand ready to assist President Trump with his plan for economic growth and a brighter future. But most of President Trump’s early achievements have come through executive action and without legislative support from Congress.

As President Obama learned, there are limits to what a president can achieve without the collaboration of Congress. It is time for Congress to do the work its members were elected to do and create an environment that allows job creation and greater and sustainable economic growth.


Pat Freibert is a former Kentucky state representative from Lexington. She can be reached at editorial@lanereport.com.

Features

Transportation | Time Is Money, Flights Are Golden

Mark Mitchell, chief accounting officer of Frontier Airlines, and Candace McGraw, CEO of Cincinnati/Northern Kentucky International Airport, announced six new direct flights serving CVG on July 18, increasing the number of direct service routes at CVG to 56.

Mark Mitchell, chief accounting officer of Frontier Airlines, and Candace McGraw, CEO of Cincinnati/Northern Kentucky International Airport, announced six new direct flights serving CVG on July 18, increasing the number of direct service routes at CVG to 56.

Cabinet for Economic Development officials and residents in the swath of the state that radiates out from the commonwealth’s largest city believe Kentucky’s business climate would improve to 72 and sunny year-round if airlines provided more non-stop passenger service to and from Louisville International Airport.

State and local officials who focus on business creation and growth as well as a long list of executives who run Kentucky airports all made it clear they believe economic growth has been hampered – and will continue to be – unless it becomes far easier for business travelers to get in and out of the state quickly and efficiently.

“The data is indisputable in terms of the correlation between air access to major markets and economic growth,” said Terry Gill, secretary of the state’s Cabinet for Economic Development. “What we’ve seen is the business community telling us, quite honestly, that this is a major issue in Louisville. What we’re hearing from business leaders is, ‘I can’t get to the markets I want to serve from Louisville.’ ”

In an effort to attract more flights, the state as well as government and business leaders in Louisville announced a Minimum Revenue Guarantee (MRG) program in July designed to entice airlines to provide more service to the state’s largest city. Gill and Luke Schmidt, the consultant leading the newly created Louisville Regional Airlift Development (LRAD), said the organization’s top priority initially would be to use the MRG inducement with airlines that can offer non-stop service to Boston and Los Angeles.

MRGs allieve budget uncertainty for air providers. If traffic does meet the agreed upon revenue minimum, local entities such as LRAD commit the difference to an escrow-type account. The commitment decreases when traffic generates more than the minimum.

The Kentucky air service problem, both Gill and Schmidt point out, extends to the much larger issue of overall population growth and is more than whether business travelers must devote three extra travel hours to, for example, flying from Louisville to Seattle.

Economic growth, job growth and population growth all are linked, according to Gill and Schmidt, who were interviewed separately but provided similar data that had been collected to support the creation of the LRAD, which will oversee the MRG air service recruitment program.

Others grew via air service

Other mid-sized U.S. cities have shot ahead of Louisville in population and economic growth over the past 35 years after they adopted strategies including “air travel as a growth tool,” Schmidt and Gill said. They mention Nashville especially, along with Raleigh and Charlotte in North Carolina, and Austin, Texas, as metropolitan areas now substantially larger than Louisville’s.

“I think that it’s not a stretch to look at population growth as an indication of economic advancement,” Gill said. He provided data that showed dramatic increases in the populations of the cities mentioned as well as the explosive growth of “enplanements” – the number of people who boarded aircraft in those cities.

In numbers of regularly scheduled nonstop flights, Louisville has fallen behind nearby cities that now attract Louisville travelers because of their flight availability, according to Schmidt and Mary Ellen Wiederwohl, chief of Louisville Forward, the economic and community development agency inside metro government, and a member of the 19-person LRAD board.

After Frontier Airlines announced in mid-July it would offer nonstop service to Denver, the Louisville airport said it had 28 nonstop flights, half the number of nonstops available at the Cincinnati/Northern Kentucky International Airport, which is 90 minutes from Louisville International. Indianapolis has 47 nonstop flights, while Nashville emphasizes it provides more than 50.

Besides making travel to and from Louisville far easier for people doing business in the U.S., nonstops to Boston and Los Angeles would facilitate international travel because those cities are key connecting points for air service to Europe and Asia, Gill said.

“Foreign direct investment is a big component of our growth this year,” said Gill, pointing to the $6.8 billion worth of economic development projects that already have been announced for 2017, when the total will “obliterate the previous high-water mark” for business investment. “About a third of that is coming from Europe and Asia,” he said.

“Not all businesses obviously have a national or international aspect … but if companies do have business on a national basis or they do business internationally, it’s (air service) a top-three issue,” the cabinet secretary said.

A tool for competitiveness

Gill and Schmidt both also said the effort to bring more flights to Louisville is one more example of how Gov. Matt Bevin is trying to make Kentucky more business friendly.

“Obviously Kentucky is a changing state. We have a stronger pro-business climate than the state did two years ago (and) … Kentucky now has right-to-work, which is a big, big issue – a big, big deal,” said Schmidt, referring to the January passage of legislation in early that makes it more difficult for unions to collect dues at businesses where the unions have contracts. “That’s put the state in a much more competitive position to go out and attract industry.”

Louisville Forward’s Wiederwohl made it clear that she’s in agreement with Gill and Schmidt about the critical importance of nonstop air service for business growth.

“To be competitive we need this kind of a tool to attract the carriers,” said Wiederwohl, referring to the new MRG program. “It’s not just Louisville knocking on their (the airlines’) doors. It’s Oklahoma City and Columbus (Ohio) and St. Louis and smaller cities knocking on their doors.”

Schmidt said as many as 500,000 travelers who are within an easy drive of the Louisville airport routinely bypass it and fly out of other airports because of the availability of nonstop flights.

Wiederwohl agreed.

“There are a lot of business and leisure travelers driving to other airports to take advantage of nonstop flights,” said Wiederwohl, adding that travelers can drive to the Nashville, Indianapolis and Cincinnati/Northern Kentucky Airport in two hours or less to avoid the complications and time delays that can surface when changing planes.

Louisville has budgeted $200,000 for the program. The city’s LRAD partners might have to contribute, too, to the pool available for MRG agreements with airlines, but it’s too early to know if that will be needed.

Wiederwohl said a nonstop flight to Los Angeles is the top priority for Louisville and that she is confident that there are enough LA-bound passengers to support the flights.

Connectivity is time, time is money

“Connectivity with customers (and) business partners … is extremely important,” said Candace McGraw, CEO of the Cincinnati/Northern Kentucky International Airport, which is located in Hebron. “Even when you can Skype and FaceTime and do webinars, there’s no substitution for sitting across the table from the person you do business with – to shake their hand and close the deal. A nonstop will save you time and when you’re a large business you’re very time sensitive.”

Of course, time is also money.

“When you’re a mid- to smaller business, to have to add on an overnight (stay) because the timing doesn’t work right, now you’ve added on the cost of a hotel or a rental car or whatever else you need,” McGraw said. “So that’s why we’re trying to drive as much nonstop traffic as we can.”

During the last four quarters, 70 percent of the air travelers at CVG have boarded nonstop flights, said Bobby Spann, vice president of external affairs at the airport, which says it has non-stop flights to 38 of the top 40 business destinations.

Not that long ago, when Delta Air Lines had a major hub at CVG and dominated its gates, many travelers in the region flew out of Louisville because the fares in Cincinnati were among the highest in the country. Now that Delta flight numbers and influence have diminished and low-cost carriers are providing service, the airport says its fares rank just south of 40th in the U.S.

McGraw said her airport is growing at 13 percent this year – about three times the national average – and offers far more nonstop flights than Louisville, Lexington, Indianapolis, Columbus and Dayton.

Eric Frankl, executive director of Blue Grass Airport in Lexington, said the availability of nonstop flights is vitally important to many travelers.

“Obviously, if they don’t have to make a stop in some hub on the way to the West Coast it’s quicker and more efficient for them, and certainly that’s their priority … you know, less hassle,” Frankl said.

But he was doubtful that Lexington would be seeing nonstop flights to Los Angeles, for example, anytime soon.

“So much of this is really population based. In Lexington we don’t have the population base that would support a direct flight to LA, for example, based on the aircraft they have to use and the number of seats on that aircraft. We would have to have a pretty large population to make that work,” Frankl said.

Response to business community

Secretary Gill acknowledged that the minimum guarantee program supported by the state would seem to provide assistance to Louisville that isn’t available to competing airports in Lexington and Northern Kentucky.

“We’re certainly responding to what we’re hearing from the business leadership in Louisville – and that’s really what’s driving this. Could there be some concern from other markets about not having support? I suppose that’s a possibility, but we have not heard from those who are concerned about direct air service out of Lexington or Cincinnati,” said Gill, adding that he wouldn’t rule talking with the other airports in the future.

Business people have discussed the flight-service issue for years, Schmidt said.

“This whole issue has bubbled up, I would say, over the last two or two and a half years (and) really started with a number of significant business leaders expressing concern about the quality of existing air service at the airport,” he said. “We’re really talking about access of nonstop destinations out of Louisville. There’s been a lot of frustration about that.”

Most Louisville flights go to large connecting hubs like Atlanta and Chicago where travelers change planes to get to their final destination.

“If you’re going to be a successful company, and if you’re going to base the company in the Louisville region, you want access to the major markets,” Schmidt said. “You want to be able to reach your customers who are located in the major markets, and you also want the people who work for you and live in the major markets to be able to get to you easily.

Almost all of the companies receive complaints about how hard it is to get to Louisville, he said.

“We haven’t found one company that says the service is terrific and meets all their needs.”

Schmidt emphasized he and other members of LRAD, whose governing board includes Lesa Seibert, a member of the Louisville Regional Airport Authority board, are not suggesting the Louisville airport has failed in its effort to attract flights.

Instead, the MRG program announced in July gives the Louisville region an incentive to offer airlines skeptical about whether they can make money with nonstop flights from Louisville.

How it works

Under the MRG program in Louisville, LRAD and a carrier would enter into an agreement that would allow the airline to cover its costs and make a reasonable profit for a year or two. If ticket sales were sufficient to cover those costs, LRAD would not have to provide any funding.

If a flight’s monthly revenue target is $1 million and the flight comes in one month at $950,000, then LRAD would cover the $50,000 needed to meet the target, according to Joe Lilly, a spokesman for the Cabinet for Economic Development. And if a flight produces a profit of $100,000 above that $1 million goal in a month, that $100,000 would be carried forward into the next month as a community credit, Schmidt said.

Schmidt and others point out that airports are prohibited by the Federal Aviation Administration to offer incentives like those available through LRAD for specific nonstop flights at the Louisville airport. McGraw explained that airports may offer incentives to carriers that include reduced landing fees or terminal rental fees “as long as the program is open to everyone – carrier agnostic. (They are) fairly common around the country.”

“In a general sense, I can say that airlift is important to business growth, but it is somewhat of a chicken/egg situation. Airlines are different from other sectors in the travel industry because they can adjust capacity to demand rather quickly,” said Michael Baker, senior editor for transportation for the Business Travel News, which tracks the airline industry carefully. “Whereas a hotel or convention center will take years to build and continue to sit there empty if a region hits rough times, airlines can adjust their networks rather quickly to move flights in and out of airports as demand dictates.

“But, of course, business and especially major conferences/events are going to look at how easy it is to get people in and out of a region when they decide where to open a new HQ, have a major event, etc.,” Baker said in an email.


Greg Paeth is a correspondent for The Lane Report. He can be reached at editorial@lanereport.com.

Features

Women Worthy of Note

Our occasional feature, Top Women in Business, highlights some of the women around Kentucky and Southern Indiana making an impact in business, the professions, politics and economic development. The intent is to recognize not the household names, but those in key roles whose work ethic and body of work are making important contributions to commerce – and life – in the area.

The seven women featured in this issue are among the many such women The Lane Report editorial board has identified. We welcome your suggestions for others who also are deserving of recognition for their efforts to boost the economy. Send your recommendations to editorial@lanereport.com.

TOP-WOMEN-Sara-SmithSara G. Smith

Title/company: CEO of Smith Management Group

How long at company/position: I became CEO in January of 2017.  I served as president for over 10 years previously, and was vice president since the company was founded in 1989.  I have always served as counsel for the firm as well.

Previous jobs/positions: Before SMG, I was an attorney with Wyatt Tarrant & Combs in Lexington. I started with Wyatt while in law school and continued through graduation and the birth of my second child.  Wyatt and I successfully explored the concept of a part-time attorney after my son was born. In my younger days I have worked as a surveyor, baker, house painter and television producer.

Education: Bachelor of Arts from Temple University in American studies; juris doctor degree from the University of Kentucky; mediation training.

Person(s) who most influenced or mentored me: There are many whose character I admired, who taught me ways to think and listen. I had two uncles who were quite different from each other, whose demeanor and intellect I admired and tried to emulate. I was raised by a mother who walked through each day with intelligence, curiosity and responsibility. I have been fortunate to marry a man who is the best father and husband possible, and who has lived up to his promise that I would never be bored. Just ask his kids.

What inspires/drives me: I love watching the next several generations grow into their shoes as people, family members and workers.

Hobby/interests/volunteer work:
My interests change regularly.  I enjoy cooking, and I love the result of gardening. I have recently learned to make very good jam. I’m learning how to take very good photographs.

My biggest challenge and how I overcame it:  The biggest challenge is the one in front of you today.

My advice to younger women in business: Stand up straight, look people in the eye, have a strong handshake and use your full name. And that’s just for openers.

TOP-WOMEN_Allison-BarkerAllison Barker

Title/company: Corporate communications manager, Kentucky Power

How long at company/position:
Since 2014

Previous jobs/positions: Corporate communications consultant, Appalachian Power; communications coordinator, West Virginia Department of Education; reporter/editor, The Associated Press; reporter, Charleston Daily Mail; anchor, WOAY-TV; reporter, KMPH-TV.

Top accomplishment: A few stand out. As an Associated Press reporter, I was the first reporter to figure out that a missing solider in the 2003 War with Iraq was Jessica Lynch, the first POW/MIA to be rescued during that war. She was from a small town near my hometown and I was able to talk to her family. While working for a state education agency, I persuaded some well-known actors, including Jennifer Garner and John Corbett, to do free television PSAs promoting reading. At Kentucky Power, I have strengthened our employee communications, media relations and community outreach.

Education: Post-graduate certificate, digital marketing communications, West Virginia University; Master of Arts in journalism and Bachelor of Arts in journalism, Marshall University.

Person(s) who most influenced or mentored me: My mom, who sadly died right before Thanksgiving last year. I miss her every day.

What inspires/drives me: Family and friends. I love my job but spending time with family and friends is most important.

Hobby/interests/volunteer work: Cooking. I participate in a girlfriends Supper Club where we try different recipes and cuisines each month and take turns hosting. If the guys are good, we invite them to our Christmas event.

Currently reading and/or recent movie/play/concert attended:
“Hillbilly Elegy” by J.D. Vance

My biggest challenge and how I overcame it: Learning that not everyone you will work with is ethical and truthful. I learned to keep good records and document everything.

My advice to younger women in business: Find a mentor you respect that you can turn to for advice and guidance throughout your career.

TOP-WOMEN_Wendy-Dant-ChesserWendy Dant Chesser

Title/company: President and CEO, One Southern Indiana

How long at company/position:
Almost five years

Previous jobs/positions: President of Cornerstone Alliance, Benton Harbor, Michigan (2005-2012); deputy executive director, Indiana Department of Commerce (2003-2005).

Top accomplishment: Named one of North America’s Top 50 Economic Developers of 2015 by Consultant Connect; named the 2016 Chamber of Commerce Executive of the Year  by the Indiana Chamber Executives Association.

Education: Bachelor of Science in business, Indiana University Southeast, 1991; earned the Certified Economic and Community Development Certification in 2010.

Person(s) who most influenced or mentored me: My mother, who has always been the source of my strength.

What inspires/drives me: I am passionate about helping groups of people work together for the common good. It’s truly what makes America great.

Hobby/interests/volunteer work: My daughter and her basketball; staying physically active; sports; and live music.

Currently reading and/or recent movie/play/concert attended:
My daughter, Joslyn, and I saw Jimmy Buffett in July. She’s 9 years old, and this was her sixth Buffet concert!

My biggest challenge and how I overcame it: Defeat is temporary. There is always a way to bounce back.

My advice to younger women in business: My favorite quote: “Act like a lady. Think like a man. Work like a dog.”

TOP-WOMEN-Jennifer-WebbJennifer Webb

Title/company: Paralegal specialist, U.S. Attorney’s Office for the Eastern District of Kentucky; founder and coordinator of Madison County Youth in Action Inc., an underage drinking and drug prevention coalition.

How long at company/position:
4-plus years at the U.S. Attorney’s Office and 10-plus years as coordinator of Madison County Youth in Action.

Previous jobs/positions: District judges’ paralegal for the 25th Judicial District; part-time faculty at National College of Business and Technology; retail sales at Morgan’s Discount Inc., my parents’ business, which they’ve owned for more than three decades.

Top accomplishment: My two children, Adriannah and Ayden. I am an extremely driven person and I wear many hats, but being a mother is the most important job I will ever have. My children inspire me to help make the world a better place.

Education: Bachelor of Arts in paralegal science, minor in political science, Eastern Kentucky University.

Person(s) who most influenced or mentored me: My parents and grandparents set the work ethic and integrity bars high for me and I have always tried to exceed their expectations.  John Lovell was my high school basketball coach and one of my first mentors. He motivated me to be the best I could be and taught me the importance of teamwork. Judge Jeffrey M. Walson took a chance and hired me as a paralegal intern. He was and continues to be one of my biggest professional mentors. Judge Brandy Oliver Brown and Dr. Melissa Jones have been my advisors, constant sources of encouragement, and true friends. Each have urged me to go outside my comfort zone professionally.

What drives me: Simply put, I have an insatiable appetite for serving others and youth advocacy. Many years ago, I met a mother, father and son as they were being led to court. Handcuffed and shackled, all three were suffering from drug addiction.  At that moment, I understood how addiction devastated families and how the cycle was so difficult to break. I wanted to help and I knew there’d be no easy solution. I started collaborating with others to create or participate in drug prevention programs designed for youth. I have proposed local and state legislation designed to decrease underage drinking and drug use. I have written or co-written numerous grants to secure nearly $1 million to fund drug prevention and treatment programs. My commitment to prevention and treatment is renewed (and my heart is broken) each time I meet someone who is addicted to drugs or someone who has lost a loved one as a result of addiction.

Hobby/interests: I love jogging, walking my dog, seeing movies, listening to music, attending my son’s sports events, spending time with family and visiting the beach – any beach.

Volunteer work: Madison County Youth in Action Inc.; EKU Paralegal Advisory Board (2006-present); Madison County Youth Impact Team (current); Madison County Teen Court (2003-2012); Madison County Safety Coalition; Madison County Delinquency Prevention Council (former secretary); Madison County Agency for Substance Abuse Policy (former chairperson); Madison County Misdemeanor Drug Court (previous grant writer and team member); Telford YMCA Board of Directors (2012-2013); and several other positions.

My biggest challenge and how I overcame it: My lack of confidence and the fear of failure used to be my biggest challenge. Luckily, I have supportive family and mentors who have provided a constant source of encouragement. My faith has allowed me to turn everything else over to God.

My advice to younger women in business: Forgive quickly and never burn bridges because it’s critical in building and maintaining personal and professional relationships. Be politely assertive and set your goals high. Pray without ceasing, be driven and look for opportunities to lift up others. When you are having a bad day, doing something kind for someone else will cheer you up!

mcintosh-priscillaPriscilla McIntosh

Title/company: CEO at The Morton Center

How long at company/position:
Eight years as CEO, five years at company

Previous jobs/positions: MCM Accounting, accountant; Compton, Kotte and Associates, accountant

Education (other pertinent training/certification): Indiana Wesley University

Person(s) who most influenced or mentored me: Growing up, it was my grandfather. I have a lot of people at my table helping me now.

What inspires/drives me: Hearing the many voices that once cried now laughing together as a family.

Hobby/interests/volunteer work: Taking long weekend trips with my
family to different parks and beaches.

Currently reading and/or recent movie/play/concert attended:
I rewatched all the “Twilight” movies with the kids. (I know!)

My biggest challenge and how I overcame it: Trying to be everything to everyone, only to realize that I need to take care of myself first in order for it to balance out.

My advice to younger women in business: Stay strong and believe in yourself, and take care of yourself. No one else can do that for you.

TOP-WOMEN_Connie-Jo-MillerConnie Jo Miller

Title/company: Agency principal, Group CJ

How long at company/position:
I founded the marketing firm at age 28, on Oct. 19, 1987, Black Monday. (I’m an eternal optimist.)

Previous jobs/positions: I worked for my dad, Harry, at my family’s business that my grandfather Barney Miller started in 1922. I started in bookkeeping with my Grandma Bettie, moved to the record department back when they sold 45s, and at 19 I was buying media for the store and doing newspaper and TV ads. That experience with my dad was certainly my kickstart.

Top accomplishment: Transitioning from advertising to more “mindful marketing,” public awareness campaigns that change behavior for the good. We’ve done projects that benefited Fayette County Public Schools, and joined with divisions of Lexington government to make streets safer and our water cleaner. We launched the very first Kentucky Proud campaign for the Kentucky Department of Agriculture, helping farmers diversify away from tobacco. It’s been an interesting three decades.

Education: University of Kentucky B.A. in communications/journalism with a minor in economics.

Person(s) who most influenced or mentored me: First was my grandma, Bettie Miller, because she was a businesswoman before there were women in business. And more directly, my father, Harry, taught me the principles of good marketing, how to see things from someone else’s perspective and why it is so important to be civically involved. He showed me how to have fun with life.

What inspires/drives me: It may well be a genetic forward momentum that drives me. I’m inspired by very smart people, who usually have great senses of humor, and the arts, the aesthetic, things like really good design (of any kind).

Hobby/interests/volunteer work:  I’m a regular Martha Stewart; I love to garden and cook and I’m looking forward to entertaining more often. I’ve practiced yoga for about 25 years.  I have served on boards such as the Bluegrass Trust, Spindletop, and the Headley Whitney Museum. I’m serving my second stint on the LexArts Board, working on novel fundraising ideas like Lexington Restaurant Week and Arty Party’s. I’m very proud to serve on the board of The Bluegrass Land Conservancy.

Currently reading and/or recent movie/play/concert attended: “Life of the Party,” a biography of Pamela Churchill Harriman, and for a laugh, “Today Will be Different,” by Maria Semple.

My biggest challenge and how I overcame it: It was tough in the 1980s to be a young woman starting a business on a wing and a prayer, especially since I was a petite blonde that looked about 16 years old! Persistence, novel ideas and hard work paid off … after the first decade. Being an entrepreneur and starting your own business with no backing is not easy.

My advice to younger women in business: Tenacity cannot be underestimated. There’s almost never one right way to do anything; we all figure it out for ourselves. Surround yourself with interesting people. And start investing now.

TOP-WOMEN_Cindy-FiorellaCindy Fiorella

Title/company: Vice president of workforce and economic development at Owensboro Community and Technical College.

How long at company/position: 25 years at the college, all of which have been in the areas of community outreach and business and industry Services.

Previous jobs/positions: Executive director, Downtown Owensboro Inc.; the Green River Educational Foundation.

Education: Bachelor of Science in education; Master of Arts in organizational communication.

Person(s) who most influenced or mentored me: I was fortunate to serve as the staff representative on the Kentucky Community and Technical College System’s inaugural board. Dr. Michael B. McCall and Dr. Keith Bird, president and chancellor, respectively, were two of the most influential individuals I’ve ever known. For six years, I watched transformational leadership in action, as they utilized their considerable skill sets to motivate stakeholders from two disparate systems to create an innovative, responsive postsecondary system that is considered a benchmark institution across the nation. Their legacy for Kentucky lives on in KCTCS.

What inspires/drives me: My workforce solutions team and community partners! I never cease to be amazed by what focused people can achieve together on behalf of their shared “cause.”

Hobby/interests/volunteer work: Since I’m hopelessly drawn to vintage furniture of all eras, my extended family members often draft me to serve as a pseudo interior designer.

My biggest challenge and how I overcame it: Challenges come in all sorts of packages. Some are “good” challenges and can generally be considered an opportunity at hand. Other challenges are “problematic” or distractors. Regardless, I find that plowing through any challenging situation works best for me. If one strategy doesn’t seem work, I like to regroup (often with the counsel or aid of my teammates) and try a new tactic.

My advice to younger women in business: Speak up; then engage! Share your thoughts and ideas on how your organization can meet a challenge or new opportunity, even if others hesitate to do so. Volunteer to take on a project or lead an initiative. Seek out the “doers” who share your passions and values. Then enjoy the process of accomplishing something amazing together. 


Lorie Hailey is a correspondent for The Lane Report. She can be reached at editorial@lanereport.com.

Emerging Lane, Features

Emerging Lane | A New Vision for Old Things

Alex and Emily Riddle are in the process of renovating the historic Amsden building in downtown Versailles.

Alex and Emily Riddle are in the process of renovating the historic Amsden building in downtown Versailles.

Alex and Emily Riddle appear to be typical young professionals, but their aspirations clearly reveal them as something special. In March they purchased The Amsden in downtown Versailles and are putting the finishing touches on the once derelict space.

Both in their late 20s, Alex Riddle hails from Woodford County, and Emily from Lexington. They were high school sweethearts at Lexington Christian Academy and married just after college.

At the time, Alex was working in the coffee industry in Haiti and Emily was working at Street Scene, a vintage retail business in Lexington, and getting her company, Miss Molly Vintage, off the ground. Emily’s degree is in art education from University of Kentucky, and Alex started out playing football at Centre College before a shoulder injury prompted a transfer to University of Kentucky. He left UK to pursue his career in Haiti before finishing his degree at Georgetown College.

The Amsden bank building was constructed in 1890, and is one of the oldest buildings in downtown Versailles. The building has been a variety of businesses since the bank closed in 1931. After years of neglect, it’s been meticulously renovated to restore much of its original character and is leasing for fall of this year. We asked the Riddles a little more about their motivation on this ambitious project and living the vintage life.

TLR: When did this passion for making old things new again begin for you guys?

ER: For me it has been a life-long passion. Alex is just catching up in the last couple of years, mostly due to our renovation of a historic home in downtown Versailles.

TLR: We live in a world full of disposable things, including clothing and housing. What gives you the desire to buck that trend?

AR: It really causes us physical pain to see these historic buildings throughout Central Kentucky (mostly in downtown areas) waste away and sit empty. We’re willing to take the first step because we believe in our vision and think that the community is ready to support small businesses and a revitalization of downtown areas. Emily sees the same thing in the treasures that she finds for Miss Molly Vintage in an old piece of furniture or a vintage piece of clothing.

TLR: With The Amsden on its way to new occupation, what are your other future aspirations?

ER: We hope The Amsden will be the first of many projects in the downtown Versailles area. We know that it will take more than one business to make Versailles the destination spot we envision, but we think this is the right start. We would also love to start flipping houses and doing custom renovations, hopefully also focused in Versailles. And we have a couple of other large projects in our sights.

TLR: Why did you select Versailles as your center of activity?

ER: Alex grew up in Woodford County, and his entire life the family drove past Versailles to get to activities in Lexington. As we grew up, we both saw a lot of potential for downtown Versailles and a lot of people in Versailles who are willing to support a local revitalization. We also just happened to find a home on Main Street in Versailles that we fell in love with, and that anchored us and gave us a “why.” 

TLR: How have you achieved a balance of reasonable risk and chasing your dreams?

AR: Emily has an incredible vision and passion for what she does, and I’m really blessed to have a full-time job that I love and that supports us so that we are able to take risks through her business and both spend our days exactly the way we want. I work in a “commission-only” role at Rood & Riddle (Equine Hospital in Lexington), so risk is something that I am very comfortable with and even enjoy.

TLR: Emily, can you imagine yourself doing anything else?

ER: Honestly, no. I always had dreams of owning my own business, but I just had so many different passions and interests to narrow down. When I began working at a local vintage store in college, Street Scene, I fell in love with the retail world and started to see all those interests and passions come together. Without that experience, I likely would have been teaching. I know I would have not been happy teaching and would have been trying to do something creative on the side.

TLR: Alex, what is your day job at Rood & Riddle?

AR: I run sales and marketing for our compounding pharmacy. We do custom medications for horses and are launching into small animal (medications) in the next month. We’re a rapidly growing business, and I also enjoy figuring out the operational requirements of keeping up with our growth.

TLR: How have you built your tribe, professionally and personally?

AR: We are both blessed with incredibly supportive families who have been there every step of the way. What we have learned so far is that you aren’t going to be successful unless you put the best people around you, and we’re really lucky to have incredible partners – a bank, real estate agent, and contractor – who believe in our vision and go above and beyond to make it come true. I like to feel that my strength is putting amazing people around me so that I am the weakest link in the team, and I definitely feel that way about this group.