joint meeting

Interim Joint Committee on

Economic Development and Tourism

interim joint committee on labor and industry


Minutes of the<MeetNo1> 5th Meeting

of the 2010 Interim


<MeetMDY1> October 21, 2010


Call to Order and Roll Call

The<MeetNo2> 5th meeting of the Interim Joint Committee on Economic Development and Tourism was held on<Day> Thursday,<MeetMDY2> October 21, 2010, at<MeetTime> 1:00 PM, in<Room> the Bluegrass Ballroom, Lexington Center. Senator Alice Forgy Kerr, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Alice Forgy Kerr, Co-Chair; Representative Eddie Ballard, Co-Chair; Senators Julian M. Carroll, Denise Harper Angel, Katie Kratz Stine, Gary Tapp, Robin L. Webb, and Jack Westwood; Representatives Royce W. Adams, John "Bam" Carney, Jim DeCesare, Mike Denham, Myron Dossett, Kelly Flood, Jim Gooch Jr., Keith Hall, Mike Harmon, Melvin B. Henley, Dennis Horlander, Joni L. Jenkins, Dennis Keene, Thomas Kerr, Adam Koenig, Tom McKee, Terry Mills, Fred Nesler, David Osborne, Ruth Ann Palumbo, Don Pasley, Ancel Smith, Fitz Steele, Addia Wuchner, and Jill York.


Guests:  Barry McNees, Developer, Lexington Distillery Project; John Nicholson, Executive Director, Kentucky Horse Park; Beth Brinley, Commissioner, Department of Workforce Development; William Monterosso, Executive Director, Office of Employment Training; and Tom West, Executive Director, Kentucky Workforce Investment Board.


LRC Staff:  John Buckner, Lou DiBiase, Karen Armstrong-Cummings, and Dawn Johnson.


Approval of Minutes

A motion by Representative Nesler and second by Representative Dossett to approve the minutes of the August 17 and September 16 meetings carried by voice vote.


Co-Chair Ballard commended Co-chair Kerr for holding the committee meeting in Lexington.


Bill Owen, President and Chief Executive Officer, Lexington Center Corporation, welcomed committee members to the center. He expressed appreciation for General Assembly appropriations in previous years of approximately $30 million that funded major improvements at the center. Along with $20 million in new debt service issued by the center, these improvements, which were made between 2001 and 2005, included significant renovations to Rupp Arena and the creation of new convention center space, including the Bluegrass Ballroom prefunction lobby space, where today's meeting was being held. With the investment, the center has attracted more business, including the 2010 Southeast Theater Conference with over 4,000 delegates and the 2010 International Little League Congress, among others. Improvements at the center helped initiate a $17 million renovation at Hyatt Regency and the Hilton’s $14 million renovation.


Lexington Distillery District

Barry McNees, developer of the Lexington Distillery District, provided an update on the distillery district project. Mr. McNees said the project consists of approximately six partnerships that represent 30 current or former Kentuckians who are dedicated to the reinvention of a heritage distilling corridor in Lexington. The project is an attempt to combine a number of Kentucky’s finest elements: a rich historic heritage, an appreciation and promotion of the bourbon industry, and rejuvenation of Kentucky’s resources. In the past four years, over 20 parcels have been created in the 25-acre development. Elements of the development include legacy distillery buildings and a water tower. He explained that the distillery area dates back 140 years. The first registered distillery in the area was the Tarr Distillery. Largely intact and on the National Historic Registry is the James E. Pepper Distillery.


The distillery project received tax increment financing (TIF) approval in late 2009. Project leaders worked with the Lexington officials to create new zoning overlays and rezoning the area for mixed use. In 2008, property surveys identified the area as predominantly underutilized and vacant property. Over 300,000 square feet of building space had been left unused over the past 10 years. Under the new zoning classification, buildings that were once zoned industrial can now be used as residential or commercial space. The distillery project was selected by the National Brownfield Association as one of 15 showcase properties among over 100 applicants.


The Distillery Project is working with the Kentucky Distillers Association in an attempt to become part of the Kentucky Bourbon Trail. Mr. McNees noted that during the World Equestrian Games, the district attracted national as well as international visitors.



The Distillery Project represents a significant private/public partnership and investment. Although it is in an economically distressed area of Lexington with a high poverty rate, there has been significant community building over the last five years. Efforts include those by the University of Kentucky’s College of Design and Architecture, neighborhood meetings, and local interest in the possible business opportunities the proposed arts and entertainment district may provide. Mr. McNees said more than $1 million has been used on predevelopment. The project is Kentucky’s first mixed use, redevelopment of a blighted area using TIF. He said Lexington approved $2.2 million for the corridor—a direct result of the TIF program. Mr. McNees noted that being designated an historic building qualifies the Pepper Building for historic preservation tax credits. He said a project coordinator has been appointed to work through the difficulties of brown fields, historic preservation, being located in a flood plain, as well getting online an area that has not seen public infrastructure improvements in decades.


Mr. McNees said in making the area environmentally friendly, there is more being considered than just energy efficient buildings. Consideration is being given to the entire neighborhood and how to best create a sustainable green environment well into the future. The Lexington-Fayette Urban County Government has invested over $1 million in the Distillery District's section of the Town Branch Trail, a proposed ‘shared-use’ greenway trail that will connect downtown Lexington with its world-famous equine landscape via area neighborhoods, parks, and historic sites as it follows the westward course of Lexington’s historic waterway.


Mr. McNees said the project’s progress is incremental, with a number of entrepreneurs surviving and thriving through the economic crisis. He noted that Barrel House Distilling Company, Lexington’s first producer of vodka and legal "moonshine," has expanded from 200 to 600 retail outlets that carry their products. Buster’s Billiards and Backroom has created a music venue that caters to artists and now hosts national acts.  Barrel House Events, a catering company, has events booked into December.


Co-Chair Kerr commended the progress of the project and noted the artwork and improved infrastructure in the district.


Representative Palumbo said the project is a magnificent revival of Lexington’s west side.


2010 Alltech FEI World Equestrian Games

John Nicholson, Executive Director of the Kentucky Horse Park, gave an overview of the recently concluded 2010 World Equestrian Games. Mr. Nicholson said the success of the games was a tribute to all Kentuckians and that history will record that the games were a triumphant success. Choosing Nicholasville-based Alltech, an international, cutting-edge biotechnology and agriculture company as the title sponsor was representative of Kentucky. Kentucky presented itself as a friendly place worthy of business investment and relocation. He said the games had an historic affect on the state’s tourism industry. Mr. Nicholson noted the success of the “Kentucky Experience” pavilion at the games. There has never been a greater effort at selling all the regions of Kentucky at one event. Lexington has experienced a renaissance with the games playing an important role. The city has rediscovered public transportation. Mr. Nicholson noted that three major equine farms were sold to people here for the games.


Mr. Nicholson said legacy for the Horse Park, the state, and the community was at the center of the effort for the games. He noted the success of the Legacy Trail in north Lexington. Mr. Nicholson said Kentucky’s horse industry was a winner. The ascendency of the sport horse sector of Kentucky’s horse industry was in progress before the games but the games were reflective of its growth. The games have allowed Kentucky to present itself as the Horse Capitol of the World well into the foreseeable future. Mr. Nicholson thanked the General Assembly and executive branch administrations for their support of the park during this endeavor. None the $80 million in capital investment in the park over the last four years was just for the World Equestrian Games. He said the investment is now paying dividends in future events and economic activity for years to come. With the completion of the stadium, the new arena, and infrastructure improvements, there are 19 new national events coming to the park in 2011 and beyond. Additionally, 34 existing events have expanded and will be held in the new indoor arena. Mr. Nicholson said Kentucky’s Horse Park is leading the way in the American horse industry, played a significant role in the renaissance of Lexington and the Bluegrass Region, and played a key role in the greatest increase in the international profile of Kentucky.


Co-Chair Ballard said the opening event was spectacular and a proud moment for Kentucky.


Senator Webb commended the professionalism and diplomacy of the coordinators of the event. Volunteers should be applauded for being great ambassadors to Kentucky. She said it is hard to evaluate the economic impact the games had and will continue to have.


            Representative Hoffman noted the success of the events. He noted the acquisition of additional land several years back and suggested the Park purchase any contiguous land that may become available in the future.


            Representative Flood expressed her support for the Arabian horse exhibit given the sometimes tenuous relations with the Arab nations in the aftermath of September 11, 2001. Mr. Nicholson said this was a planned effort because of the events of September 11.


            Responding to Co-Chair Kerr’s question, Mr. Nicholson said HorseTails 2010 is a fund raising event for the Lexington Philharmonic. Art is created through the use of horse mane and horsetail hair from famous horses. Proceeds from the sale of artwork support efforts of the Lexington Philharmonic Foundation's Partners in Education initiative, which builds and strengthens music education opportunities for children throughout the Commonwealth.


            Mr. Nicholson noted that green initiatives during the game included recycling, composting, and the Energy-to-Waste Biomass Gasification Plant that, while not operational, was presented during the games.


            There being no further business, the meeting adjourned at 3:10 PM.