Does Louisville need to pattern itself off Nashville? Would medical marijuana and gambling help state revenues? Should the city exploit the bourbon industry further?
Those were some of the questions explored by local developers Jonathan Blue, founder and chairman of Blue Equity LLC, and Craig Greenberg, president of of 21c Museum Hotels LLC, before a small, invite-only crowd of local real estate developers and business leaders at The Green Building, 732 E. Market St., Thursday night.
The men took part in a panel discussion during the fourth session of the Louisville Economic Development Series, sponsored by PRG Investments, Merrill Lynch Wealth Management and BridgeTrust Title Group.
Reed Weinberg, president of PRG Investments, launched questions, both personal and professional, at Blue and Greenberg, and here are some of the highlights from the conversation.
Is bourbon Louisville’s savior?
Blue, who conducts business on a global level, said Louisville has become known for its startup companies and venture capital, but he said the city must be more aggressive in establishing large, profitable corporate companies here that are in the later stages of development if it hopes to keep pace with cities such as Nashville. Louisville also needs to embrace the next generation of business leaders or they will move elsewhere, he added.
Weinberg pointed to statistics for Nashville showing that many of its downtown residents are under the age of 40, have college educations and make $60,000 to $150,000 a year.
Greenberg noted that Louisville is most often compared with Nashville, but he warned against trying to mimic other cities, Instead, he argued that Louisville should embrace its unique assets and avoid becoming generic.
Probing further, Greenberg and Blue said Nashville has benefited from the music industry, no state income tax and having an urban campus in Vanderbilt University.
But they said Louisville might have the tools it needs to spark its own economic revolution in bourbon, which is booming right now.
For years, Blue said, the first thing he was asked when traveling for business was, “What do people do in Louisville?” This question kept recurring, he said, because the city had no identity or image that came to people’s minds.
Now, he said, he is immediately asked about the bourbon industry, much more than the Kentucky Derby. “We finally have an identity,” he said.
In addition to its centralized location and its efforts to expand medical research, Blue said, Louisville must exploit the bourbon industry further to reap all the benefits.
To fully hammer home his point, he held up a small bottle of Angel’s Envy bourbon.
“This is glitzy,” Blue said. “… This is our Music City.”
Medical marijuana and expanded gambling
The panelists also explored new revenue streams for the state of Kentucky, noting that the state cannot fund its own pension system or invest in K-12 education the way it should, which creates disparities in educational attainment at the post-secondary level.
Blue lobbied to place expanded gambling on the ballot, noting that a majority of the state wants to vote for it. Added revenues from expanded gambling, he said, could help shore up some of the shortfalls in the state’s general fund. “It’s insane we have a state that’s broke,” Blue said.
And, he said, “to not be able to educate our kids in public schools is a crime when 23 other states are doing it with (gaming) money.”
Greenberg agreed, saying the measure keeps getting defeated for “archaic political reasons.”
Likewise, Blue said medical marijuana is bringing an infusion of tens of millions of dollars of new tax income to other states and could help Kentucky, saying there is nothing left for the state to cut.
Both said that if Kentucky is the last state to approve these measures, they will lose their value because the market will be oversaturated.
“Kentucky needs to be the first at more things as opposed to the last at certain things,” Greenberg said.
U of L’s move into private investment and the ACC
Blue and Greenberg both are trustees for the University of Louisville, and Blue said the state’s budget problems have led to cuts at the university for more than a decade.
Blue noted that U of L, needing more revenue, has started pursuing private business development by building business parks to offset tuition.
Blue prefaced his comments by saying he is knowingly talking out of both sides of his mouth. As a developer, he said, he has lost a tenant to the university and cannot hope to compete on rent because U of L does not have the same tax limitations.
But Blue and Greenberg applauded the university for being creative with the business parks and for gradually improving the number of graduates. They said they are pushing U of L to place as much emphasis on academics as athletics.
A move to the Atlantic Coast Conference has been talked about mostly from an athletic perspective, but Blue and Greenberg said the biggest gain from the move is being in the neighborhood of the ACC schools academically.
Greenberg said it puts more pressure on U of L to perform because it now is compared with schools such as Duke University and Wake Forest University on education attainment — not just state schools
“Let’s aspire to be better than even the state is expecting of us,” Greenberg said.
To read the original article from Louisville Business First, click here.