The3rd meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, October 19, 2006, at 10:00 AM, at the University of Kentucky's Technology Development Center, ColdStream Research Campus, Lexington. Senator Alice Forgy Kerr, Co-Chair, called the meeting to order, and the secretary called the roll.
Members:Senator Alice Forgy Kerr, Co-Chair; Representative Eddie Ballard, Co-Chair; Senators Julian M Carroll, Julie Denton, Denise Harper Angel, Ray S Jones II, and Jack Westwood; Representatives Carolyn Belcher, Joe Bowen, Denver Butler, James Carr, Larry Clark, Tim Couch, Mike Denham, Ted "Teddy" Edmonds, Mike Harmon, Mary Harper, Dennis Keene, Thomas M McKee, Brad Montell, Fred Nesler, David Osborne, Ruth Ann Palumbo, Tanya G Pullin, Brandon D Smith, John Will Stacy, Tommy Thompson, and Ron Weston.
Guests: Dr. Lee T. Todd, Jr., President, University of Kentucky; John Nicholson, Executive Director, Kentucky Horse Park; Jim Host, Chairman of the Board, and Jack Kelly, Chief Executive Officer, World Games 2010 Foundation, Inc.; and Secretary George Ward, Kentucky Commerce Cabinet.
LRC Staff: John Buckner, Committee Staff Administrator; Karen Armstrong-Cummings and Louis Pierce, Legislative Analysts; and Dawn Johnson, Committee Assistant.
Dr. Lee Todd welcomed the committee to Lexington and to the University of Kentucky (UK) Technology Development Center. He explained the University's role in and plans for economic development in the state. Referring to a handout, Dr. Todd said that universities were typically known for education, employment, and entertainment, but they should now include economic development as well. He said universities in today's economy create many economic benefits. Dr. Todd said it is incumbent on research universities to not only educate students but create jobs for the purpose of retaining students.
Dr. Todd said that 21st century economic necessities are innovation, creativity, and uniqueness. He explained that sustainable jobs in the United States must involve innovation and creativity because once a product is developed and designed, it will be manufactured in the cheapest location of this issue, which will most likely not be in the United States. He said that based on studies of this issue, by 2025 50 percent of Americans will be self-employed. Dr. Todd tells UK students not to go to college to get a job but to go to college and create a job, therefore they need an environment where this is a possibility. He explained that uniqueness is also a necessity and UK is looking into the equine industry, advanced automotive products, pharmaceuticals, and energy.
Dr. Todd explained that UK's research has resulted in $290 million in new grants and contracts in 2005-2006. He said research grants and contracts from out-of-state resulted in a $410.6 million contribution to the state's economy during the last fiscal year. There are 58 Ph.D programs at the university.
Dr. Todd said UK's chain of economic development resources includes the E-Club, an entrepreneurship club for students; the Venture Club, a monthly meeting for entrepreneurial faculty to speak to investors, lawyers, and others interested in starting new businesses; the Angel Network, a network of investors for start-ups; the On-campus incubator, which allows professors to start companies on campus; venture capital investments; the Coldstream Research Campus; and intellectual property (IP) "brokers."
The University of Kentucky is creating an Office of Economic Development to maximize the impact of intellectual property. The office will report directly to the President. Dr. Todd said UK has 281 active patents with 95 licenses issued and they have received $905,879 in royalties thus far. He said UK is 10th among all universities for the number of start-up companies formed per $10 million in research spending.
Dr. Todd explained UK's efforts to add value to Kentucky industries such as Toyota and Secat, and through equine, energy, agriculture, and health care initiatives. He explained that UK has been an economic development recruiter with such companies as Belcan/Sikorsky, Exstream Software, Neogen Corporation, and the National Bio and Agro-Defense Facility in Somerset.
A motion and second made by Representatives Ballard and Pullin to approve the September 22, 2006, minutes was approved by voice vote.
Next, Chairman Jim Host of the World Games 2010 Foundation, Inc. gave an update on the upcoming Federation Equine International (FEI) Games. Chairman Host introduced Jack Kelly, CEO of the 2010 FEI Games; John Nicholson, Executive Director of the Kentucky Horse Park; and Secretary George Ward of the Kentucky Commerce Cabinet.
Chairman Host said the Kentucky Horse Park contributes nearly $200 million to the state's economy. He said other states have been visiting Kentucky in an effort to capture a portion of the horse industry and that it will take a unified effort for Kentucky to remain in the forefront. Chairman Host presented photos of the 2006 equestrian games in Atcham, Germany. There were 580,000 tickets sold with attendees from 61 countries. He said that the games are not a onetime event but will have far-reaching effects on the future of Kentucky's economy. He stated that 90 percent of the attendees will have never visited Kentucky and 60 percent have never been to the U.S.
Chairman Host said there will be three preliminary events before the 2010 games. Mr. Host said that previously cities that hosted the Olympics did not consider what would happen afterwards. He explained that the Horse Park is working with the F.E.I. and with U.S. Equestrian, which is headquartered at the Horse Park, on an ongoing event--the U.S. Equestrian Masters, to begin in 2011
Chairman Host said that the World Games Foundation purchased a 1 1/2 hour special on NBC television to market Kentucky. He explained that the Foundation is a stand-alone entity whose role is to create a profit structure for return to the Horse Park and the 2010 Games. Chairman Host said the need from the state is infrastructure capital.
Responding to Representative Pullin's question, Chairman Host said that the 2010 Games will affect areas outside of Lexington as well for dining, hotel needs, and other amenities.
Senator Carroll asked if the state was pursuing road fund assistance through the Federal Highway Administration or through the Transportation Cabinet to build another access point off the interstate to access the Horse Park. John Nicholson said this is one of the highest priorities for the Horse Park. Secretary Ward added that he has been in discussions with Transportation Cabinet Secretary Neighbert. Secretary Ward said a plan would be issued within the next 30 to 60 days to the Transportation Cabinet for the Horse Park's roadway needs.
Secretary Ward added that there were 450 million worldwide television viewers of the 2006 Games with 449 million of those outside the U.S.
There being no further business, the committee adjourned at 10:55 a.m.