Logistics, tourism and health care load the bases.
By Robyn Davis Sekula
US Airways | June 2007, PROFILE Louisville
Armed with a freshly printed bachelor’s degree, Dave Dafoe descended on Louisville in 1989 with the idea that he wouldn’t be here long.
But something unexpected happened: He fell in love with Louisville. Dafoe, now 45, felt it was ripe with business opportunity. In 1992, he started his own company, Pro-Liquitech, which develops beverages for other companies.
By 2006, he had moved the business to a freshly renovated historic building downtown. He’s within blocks of the historic Brown and Seelbach hotels, scores of locally owned restaurants, and Louisville’s Waterfront Park. There’s nowhere else Dafoe would rather live. “I think this is a great place to run a business,” he says.
Business leaders have been singing the praises of the Derby city lately. Louisville’s economy has grown because of many factors working together, according to Mayor Jerry Abramson. One of the most significant was the 2003 merging of Jefferson County and Louisville City governments into one organization, which helped the area compete for business interests.
One of the engines driving economic development is UPS, Louisville’s largest employer. Its global operations center headquartered at Louisville International Airport processes an average of 304,000 packages per hour. The company is in the midst of an expansion set for completion in 2010 that will increase its capacity to sorting 487,000 packages per hour.UPS employs roughly 20,600 people in Louisville, and the expansion will create more than 5,000 new jobs.
UPS Airlines, a subsidiary of UPS headquartered in Louisville, handles the company’s next-day and two-day air packages. The airline, which is the eighth largest in the world, comprises the company’s 284 jets and 2,800 pilots, as well as other related employees. Largely thanks to UPS, the city’s two airports, Louisville International Airport and Bowman Field, comprise the largest employment center among private operations in the area, generating more than 43,000 total jobs and $1.8 billion in total annual payroll.
UPS has spawned another industry in Louisville: biologistics. The handling and distribution of both biologics and biotech drugs perhaps makes sense with Louisville’s growing health-care industry. Two California-based drug research and development companies, Amgen and Genentech, have distribution centers in Louisville.
UPS positions Louisville as a leader in the logistics field in general, says Joe Reagan, president and CEO of Greater Louisville Inc., the metro chamber of commerce. “Louisville is really an emerging hot spot in the country right now,” Reagan says. “There is a lot of buzz about the business community. The two growth sectors are health and logistics. Both of those sectors have huge global implications.”
Louisville and the surrounding area has benefited from Kentucky’s strategy for developing a technology-based new economy, according to the Kentucky Cabinet for Economic Development. Research and development in the region is booming in areas such as medical devices, pharmaceuticals, biotechnology, and life sciences.
Health care thrives
Ground-breaking research is part of the health-care story in Louisville. With a $3.5 billion annual payroll and 85,000 regional employees, the health industry is one of the city’s largest economic drivers, according to Gerald Joiner of the Health Enterprises Network.
Most of the research takes place in the downtown Louisville Medical Center. The University of Louisville Health Sciences Center, Jewish Hospital and St. Mary’s HealthCare, and Norton Healthcare are based there and involved in the bulk of the research. Another venture within the Medical Center is MetaCyte Business Lab, which creates and accelerates the development of life-science and health-care technology businesses in the region.
U of L has been in part responsible for pioneering research in bone-marrow transplants, a cervical cancer vaccine, and treatment for spinal cord injuries. The Cardiovascular Innovation Institute— a partnership between U of L and Jewish — opened in January to find better treatments for cardiovascular diseases.
U of L surgeons at Jewish Hospital implanted an artificial heart for the first time in 2001, while a team of physicians and researchers from Jewish Hospital, U of L, and Kleinert, Kutz and Associates Hand Care Center completed three hand transplants, the first in 1999.
Health-benefi ts giant Humana started in Louisville in 1961. The Fortune 500 company with 2006 revenue of $21 billion now has 11.3 million members and 22,000 employees across the United States. About 8,400 employees work in Louisville. Humana is known locally as the builder of one of the city’s most architecturally significant buildings, the Michael Graves-designed Humana Building on Main Street.
Kindred Healthcare operates long term acute-care hospitals, nursing centers, pharmacies, and rehabilitation services. Kindred has roughly 56,000 employees across the United States —approximately 2,300 of them in the Louisville area.
Later this year, PharMerica Corp. will form in a merger of the institutional pharmacy divisions of Kindred and AmerisourceBergen, making it the second-largest provider of institutional pharmacy services in the nation. Its headquarters will be in Louisville, Kindred officials say.
There are several medical facilities in the area. Jewish Hospital owns major centers in Louisville and Shelbyville, Kentucky, plus Clark Memorial Hospital in Jeffersonville, Indiana. Norton Healthcare owns and operates Kosair Children’s Hospital, the only freestanding, full-service hospital in Kentucky dedicated to children.
Floyd County’s Floyd Memorial Hospital and Health Services in New Albany, Indiana, opened a heart and vascular center in 2005, as well as an emergency center and laboratory and Women’s Imaging Center. Harrison County Hospital in Corydon, Indiana, an acute-care community hospital, is building a new hospital campus set to open in January 2008.
Baptist Hospital East has 407 acute and skilled-care beds and plans a 112-bed expansion. Susan Stout Tamme, president and CEO of Baptist East, says the hospital and the health-care industry in Louisville is growing in part because of hard work by city leaders to promote Louisville as a leader in health care. “Louisville is such a great community that it’s easy to recruit high quality physicians,” Tamme says.
Other notable employers in Louisville fall into a variety of categories. Brown-Forman Corp. is one name closely associated with Louisville; the company makes Jack Daniel’s products, Finlandia vodka, Korbel champagnes, and a host of other wines and liquor around the world. Brown-Forman employs roughly 1,300 people in Louisville.
Ford Motor Co. has two manufacturing plants in Louisville that boast a combined 8,745 employees. The Kroger Co. stores and distribution facility employs a little more than 5,000. Louisville is also home to the global headquarters of GE Consumer & Industrial, which develops and manufactures appliances. Across the Ohio River in Southern Indiana, a host of manufacturing companies are bolstering business by becoming suppliers of components other companies need, says Michael Dalby, president and CEO of One Southern Indiana, the economic development and chamber of commerce organization for Clark and Floyd counties. Dalby believes the entire region has potential to grow those businesses and attract related ones, as Southern Indiana boasts one of the largest tracts of available land close to a metro area in the United States. “Southern Indiana has an abundance of opportunity,” says Kerry Stemler, president of K.M. Stemler Co., a construction company in New Albany, Indiana, and chairman of the board of One Southern Indiana. “We are part of a large metro area. We still have the advantages of that large metro core, and within 750 miles of here, we reach 60 percent of the U.S. population.”
Tourism, too, is a major driver in the Louisville economy. About 30,000 people are employed in tourism-related businesses in Louisville, says James T. Wood, president and CEO of the Greater Louisville Convention and Visitors Bureau. “Tourism is a billion-and-a-half-dollar industry on an annual basis,” Wood says. Two of the city’s tourism assets are the Kentucky Exposition Center, located near the airport, and the Kentucky International Convention Center in downtown Louisville. The convention center went through a major renovation and expansion in recent years, and the Exposition Center is doing so now.
Of course, one of the biggest tourism boons in Louisville is the Kentucky Derby Festival and Derby. The
Derby, set annually for the first Saturday in May, is preceded by two weeks of events. Thunder Over Louisville, the largest single-day event in the region, kicks off the festival with approximately 500,000 people attending. With 60 tons of fireworks shells used during a 28-minute show, it’s the largest fireworks extravaganza in North America.
Other events during the Derby festival include a marathon, balloon race, and parade. Some 1.5 million people attend Derby Festival events, with a total economic impact estimated at $93 million. The Derby itself brings in 150,000 or more people each year. Business leaders know what’s possible here and want to tap into the potential via a new campaign called Brand Greater Louisville. Louisville-based advertising firm Red7e will develop marketing messages and themes this summer.
Dan Barbercheck, president of Red7e, says such a branding campaign can help market the region as it continues to grow. Greater Louisville Inc.’s Reagan believes the city is poised to play in the big leagues. “Main Street in Louisville, Kentucky, will be one of the most exciting places in the country,” he says.
Educational selections (SIDEBAR)
Aspiring chefs, entrepreneurs, doctors, lawyers, and engineers have a place to gain an education in Louisville.
The dominant player is the University of Louisville (louisville.edu), a state-supported university with roughly 22,000 students on three campuses. The university has 11 colleges and schools, including engineering, law, dentistry, and medicine.
Students at both the university and Jefferson Community and Technical College (jcc.kctcs.edu) can get a great deal if they’ll take a part-time package-handling job at UPS: free tuition through the Metropolitan College (metro-college.com) program. Some 75 percent of part-time package handlers at UPS’ Worldport air hub are full-time students.
Sullivan University (sullivan.edu) along with Spencerian College and Louisville Technical Institute, which are part of Sullivan, offer associate’s, bachelor’s, and master’s degrees in several disciplines, as well as a culinary school. Courses of study include medical, hospitality, and business. — RDS
Food city (SIDEBAR)
Some of the world’s most popular restaurants have ties to Louisville. Yum Brands, which owns A&W All American Food, Kentucky Fried Chicken, Long John Silver’s, Pizza Hut, and Taco Bell, is headquartered in Louisville. With some 34,000 restaurants in 100 countries, Yum is the largest player in the restaurant business in Louisville.
Other chain restaurants with headquarters in Louisville include Papa John’s. The international pizza chain started in Jeffersonville, Indiana, in 1984 and today has 3,000 restaurants around the world. Texas Roadhouse, which features hand-cut steaks, first opened in Clarksville, Indiana, in 1993 and now has 261 U.S. locations. Tumbleweed Southwest Grill, a Tex-Mex chain, fi rst opened in New Albany, Indiana, in 1975 and now has 63 restaurants mostly in the United States. — RDS