2013 business outlook: Sunny and growing

Is the recession really over in Shelby County?

By Lisa King

Kentucky Gov. Steve Beshear visits Martinrea Heavy Stamping in April 2011 to announce the plant's $12 million expansion and 150 new jobs. The plant is indicative of the economic growth that makes Shelby County leaders optimistic about 2013.

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Business leaders wouldn’t go as far as to say that, but the overall feeling they expressed about the business climate for 2013 in county ranges from “cautiously optimistic” to very enthusiastic.

“Everything is looking up right now, better than it has been for the past six, seven or eight months,” said Bobby Hudson, president of the Shelby County Industrial and Development Foundation. “I think we’re going to have a good year in Shelby County. The industries are hiring here, and if they’re hiring, that means people are buying, and if they’re buying, then that means the economy is on the move.”

Hudson gave several examples to back up his opinion, including improvements in the local housing and job markets, as well as the auto industry.

“Martinrea [Heavy Stamping] is back up to nearly eleven hundred [workers], almost to what they were before;” he said. “I thought I’d never see that. It’s great, fantastic. We didn’t have any new industry come in last year, but we are getting new jobs from our existing industries.

Many of those that laid people off are hiring again, like Ficosa, Katayama and many others.”

Hudson’s enthusiasm is shared by other business leaders in the county, some of whom were exuberant – such as real estate brokers Torrey Smith and Lee Webb – and others who were more cautious.

Still the facts are the facts. There was strong job growth in the county in 2012, with unemployment dropping steadily, from about 8.1 percent to 6.2 as of November. And tax revenues for the county and Shelbyville and Simpsonville remained steady and up slightly.

Despite the loss of a company or two, such as Masonite Corporation on Commerce Circle, which is closing this month, Magistrate Hubie Pollett, chair of Shelby County’s Finance Committee, said he is hopeful that 2013 “will be a better year.”

“We had a few companies that didn’t do well, but we [finance committee] are getting ready to take a closer look at that soon, and we staying optimistic that things will get better,” he said.

Shelby County Judge-Executive Rob Rothenburger said he thinks the outlook for Shelby County in 2013 is very positive.

“I base that on our unemployment numbers continuing to drop,” Rothenburger said. “Although Masonite will be closing in January, and we will lose seventy plus jobs there, we’re seeing that businesses are still hiring.”

Real estate market up

Smith said he has seen big improvement in the housing market. “It’s been an incredible year,” he said. “In the fourteen years I’ve been selling real estate, 2012 was the best year we’ve had.

“People may ask, well, how can that be? But in Shelby County, we’re just blessed to be located between Lexington and Louisville and there’s folks that may work in one place or other.”

Smith said in 2012, homes in what he referred to as the “hot range” or best selling homes, was [countywide] between $140,000 and $150,000, with 8 percent of home sales in that range. The $130,000 to $140,000 range followed, with a little more than 7 percent. Homes in the $120,000 and $130,000 range, and the $160,000 to $170,000 range were third.

 “What was encouraging was that we had a spike last year in the two-twenty to two-hundred and fifty thousand range, which was very encouraging,” he said. “I’m glad to see more of that.”

Smith said there were 469 home sales in the county last year, with an average price of 187.

“The median price is more of an indicator, because we had a one point nine million dollar sale last year, and that threw the average off,” he said. “The median price is one hundred and forty-six thousand.”

That compares to 420 home sales in 2011, an average price of $169,000 and a median price of $140,00.

What does all this mean?

“I think we’re beyond the [economic] correction phase now,” he said. “I think last year and most of 2011, we were in correction mode. I think we’re stabilized now. Certainly there’s more foreclosures coming up, but the thing is, investors are buying these foreclosures, and fixing them up and that generates money in our economy. People are using local companies for supplies and that starts to stir things up, because more and more houses are going from being dilapidated to being really nice houses. So while foreclosures are sad, there is light at the end of the tunnel. So if you own a home or you’re thinking of buying, you can expect your value to be stabilized.”

Webb cites commercial rise

Things are looking up on the commercial real estate end, too, according to Webb of Alton Webb and Associates.

“The commercial real estate market follows the trends of the residential real estate market, so as things get better in housing, things generally get better in the commercial real estate market,” he said. “It all starts with jobs, so job creation is key. I’m also a member of the industrial foundation board, and I have found that if we sustain the job level that we have, as well as create new jobs, which we are doing, then that means that housing will do well, which means that the commercial market will follow that trend.”

Webb said in 2004-05, the commercial real estate market in Shelby County experienced a tremendous pattern of growth.

“That was when we saw companies like Lowes and some of these big national names, like Walgreens, coming in; those kinds of deals were happening then and also medical and office real estate was very strong,” he said.

Potential is good

As those segments grew, Shelby County experienced abundant commercial growth in 2005 and 2006, Webb said.

“Then when we hit 2008, everything really slowed down, so the last couple of years, we have been recovering,” he said.

Webb said in 2011 and 2012, the commercial real estate market continued to stabilize.

“Last year was a better year than 2011, and I expect 2013 to follow that pattern of growth, and hopefully we will do more than stabilize and maintain,” he said.

Webb noted areas of recent commercial growth, citing Ken Towery on Midland Trail, Speedway on Mount Eden Road, and a medical facility being built in Stonecrest.

“That area [Stonecrest] has really held its own and done well, with its medical and professional offices,” Webb said. “Then, there’s the really big potential in Simpsonville with the outlet malls.”

Then on top of the new development, there have been several businesses coming in and inhabiting existing facilities where another businesses has moved out of, he said, such as Rural King, that moved into the old Kroger building when the latter built a huge new store.

““So I feel like we are poised to be in a really good place going forward,” he said. “Our company too, is involved in several potential deals that we’re really excited about.”

Downtown Shelbyville steady

Some of the vacant buildings that Webb mentioned are located in downtown Shelbyville, but Eileen Collins, executive director of Shelby Development Corporation, said she is still enthused about the state of the city’s downtown business climate.

“Based on the few vacancies we have in our downtown buildings, and the vitality of the people who own the businesses downtown, I think that we’re going to have a really good year,” she said. “I think that people are looking to the new year with hope and with optimism, and if we can keep that up, we’ll be in excellent shape.”

Collins said the good thing has been that when buildings were vacated in Shelbyville’s central downtown business district, that encompasses Main and Washington streets and many side streets in between, most have gotten new occupants fairly quickly last year.

“We’ve been fortunate; we haven’t had long term vacancies, as other towns have,” she said. “We do still have a few vacancies, but percentage wise, compared to other towns, we’re in really good shape.”

Collins said she is working on an idea to draw even more business in for the downtown merchants.

“One thing I’m working to make happen is to unify our business owners to be open one night a week; and our business committee has been looking at that,” she said. “Some have late hours some nights already, and some are open late one night. We would really like to see all business open till seven or eight o’clock one night per week. That is a goal of ours this year.”

In addition, events such as the downtown concert series, the Horse Show Jubilee, and others, continue to draw in more people all the time, Collins said.

A picture of growth

Shelley Goodwin, executive director of the Shelbyville Chamber of Commerce, said the chamber had 365 members in 2012, up from 340 in 2011, which makes her hopeful for 2013, she said.

“I think the outlook for the bus community is positive, but cautiously optimistic,” she said.

“There are a lot of predictions out there for 2013 from both state and federal levels. I think there’s a lot of opportunity, but still a lot of challenges ahead of us.

“We have seen the housing market start to rebound a little, and the unemployment rate is continuing to improve month by month. We have seen more businesses open last year, and I think we’ll continue to see some more of that. What will happen with tax reform at the state and federal level, and health care, that’s still very much on people’s minds.”

Rothenburger said that even though 2012 did not see any businesses being granted tax incentives, that is OK, because in 2011, nine businesses were approved for incentives from the state, compared to only two in 2010, and one each in 2009 and 2008.

“Two-thousand and eleven was an extremely busy year,” he said. “In 2011, they started their paperwork, and in 2012, they started activating their KBIs, [Kentucky Business Investment program], so they go ahead and get the paperwork started and it’s months before they put that into full gear. We had three or four activate in 2012 and will see some more this year.

“That’s basically what filled our buildings back up, because the fiscal court really got aggressive with working with these factories through the KBI and the state, and so we were able to back these positions very quickly.”

James Ray Wiley, county occupational tax assessor, said revenue from occupational taxes increased from $2.7 million in 2010, to $2.9 million in 2011 and that rate held steady in 2012.

“We had been flatlined for the past couple of years, but things are picking back up, and Martinrea really helped out with that,” he said. “I do Simpsonville’s too, and they are also up. Of course, the [outlet] malls, if they come in out there, they will provide much needed jobs,” he said, referring to the estimate of 1,000 jobs that would be created for each of the two proposed malls. “But there will probably be a lot of part time help. I could see retired people going back to work and also people taking a second job, that would give people more opportunity to do that.”

The city of Shelbyville’s occupational tax revenue has also been showing a steady increase, with $2.5 million in 2009, to $2.6 million in 2010, 2011 and 2012. The later three years, that figure has been steadily rising, with an increase of $10,786 from 2010 to 2011 and $41,632 from 2011 to 2012.

Said Webb:  “Other counties would be beside themselves to have the opportunities that we have here.”

2013 business outlook:

Sunny and growing

Strong growth in 2012

expected to continue

By Lisa King

Is the recession really over in Shelby County?

Business leaders wouldn’t go as far as to say that, but the overall feeling they expressed about the business climate for 2013 in county ranges from “cautiously optimistic” to very enthusiastic.

“Everything is looking up right now, better than it has been for the past six, seven or eight months,” said Bobby Hudson, president of the Shelby County Industrial and Development Foundation. “I think we’re going to have a good year in Shelby County. The industries are hiring here, and if they’re hiring, that means people are buying, and if they’re buying, then that means the economy is on the move.”

Hudson gave several examples to back up his opinion, including improvements in the local housing and job markets, as well as the auto industry.

“Martinrea [Heavy Stamping] is back up to nearly eleven hundred [workers], almost to what they were before;” he said. “I thought I’d never see that. It’s great, fantastic. We didn’t have any new industry come in last year, but we are getting new jobs from our existing industries.

Many of those that laid people off are hiring again, like Ficosa, Katayama and many others.”

Hudson’s enthusiasm is shared by other business leaders in the county, some of whom were exuberant – such as real estate brokers Torrey Smith and Lee Webb – and others who were more cautious.

Still the facts are the facts. There was strong job growth in the county in 2012, with unemployment dropping steadily, from about 8.1 percent to 6.2 as of November. And tax revenues for the county and Shelbyville and Simpsonville remained steady and up slightly.

Despite the loss of a company or two, such as Masonite Corporation on Commerce Circle, which is closing this month, Magistrate Hubie Pollett, chair of Shelby County’s Finance Committee, said he is hopeful that 2013 “will be a better year.”

“We had a few companies that didn’t do well, but we [finance committee] are getting ready to take a closer look at that soon, and we staying optimistic that things will get better,” he said.

Shelby County Judge-Executive Rob Rothenburger said he thinks the outlook for Shelby County in 2013 is very positive.

“I base that on our unemployment numbers continuing to drop,” Rothenburger said. “Although Masonite will be closing in January, and we will lose seventy plus jobs there, we’re seeing that businesses are still hiring.”

Real estate market up

Smith said he has seen big improvement in the housing market. “It’s been an incredible year,” he said. “In the fourteen years I’ve been selling real estate, 2012 was the best year we’ve had.

“People may ask, well, how can that be? But in Shelby County, we’re just blessed to be located between Lexington and Louisville and there’s folks that may work in one place or other.”

Smith said in 2012, homes in what he referred to as the “hot range” or best selling homes, was [countywide] between $140,000 and $150,000, with 8 percent of home sales in that range. The $130,000 to $140,000 range followed, with a little more than 7 percent. Homes in the $120,000 and $130,000 range, and the $160,000 to $170,000 range were third.

 “What was encouraging was that we had a spike last year in the two-twenty to two-hundred and fifty thousand range, which was very encouraging,” he said. “I’m glad to see more of that.”

Smith said there were 469 home sales in the county last year, with an average price of 187.

“The median price is more of an indicator, because we had a one point nine million dollar sale last year, and that threw the average off,” he said. “The median price is one hundred and forty-six thousand.”

That compares to 420 home sales in 2011, an average price of $169,000 and a median price of $140,00.

What does all this mean?

“I think we’re beyond the [economic] correction phase now,” he said. “I think last year and most of 2011, we were in correction mode. I think we’re stabilized now. Certainly there’s more foreclosures coming up, but the thing is, investors are buying these foreclosures, and fixing them up and that generates money in our economy. People are using local companies for supplies and that starts to stir things up, because more and more houses are going from being dilapidated to being really nice houses. So while foreclosures are sad, there is light at the end of the tunnel. So if you own a home or you’re thinking of buying, you can expect your value to be stabilized.”

Webb cites commercial rise

Things are looking up on the commercial real estate end, too, according to Webb of Alton Webb and Associates.

“The commercial real estate market follows the trends of the residential real estate market, so as things get better in housing, things generally get better in the commercial real estate market,” he said. “It all starts with jobs, so job creation is key. I’m also a member of the industrial foundation board, and I have found that if we sustain the job level that we have, as well as create new jobs, which we are doing, then that means that housing will do well, which means that the commercial market will follow that trend.”

Webb said in 2004-05, the commercial real estate market in Shelby County experienced a tremendous pattern of growth.

“That was when we saw companies like Lowes and some of these big national names, like Walgreens, coming in; those kinds of deals were happening then and also medical and office real estate was very strong,” he said.

Potential is good

As those segments grew, Shelby County experienced abundant commercial growth in 2005 and 2006, Webb said.

“Then when we hit 2008, everything really slowed down, so the last couple of years, we have been recovering,” he said.

Webb said in 2011 and 2012, the commercial real estate market continued to stabilize.

“Last year was a better year than 2011, and I expect 2013 to follow that pattern of growth, and hopefully we will do more than stabilize and maintain,” he said.

Webb noted areas of recent commercial growth, citing Ken Towery on Midland Trail, Speedway on Mount Eden Road, and a medical facility being built in Stonecrest.

“That area [Stonecrest] has really held its own and done well, with its medical and professional offices,” Webb said. “Then, there’s the really big potential in Simpsonville with the outlet malls.”

Then on top of the new development, there have been several businesses coming in and inhabiting existing facilities where another businesses has moved out of, he said, such as Rural King, that moved into the old Kroger building when the latter built a huge new store.

““So I feel like we are poised to be in a really good place going forward,” he said. “Our company too, is involved in several potential deals that we’re really excited about.”

Downtown Shelbyville steady

Some of the vacant buildings that Webb mentioned are located in downtown Shelbyville, but Eileen Collins, executive director of Shelby Development Corporation, said she is still enthused about the state of the city’s downtown business climate.

“Based on the few vacancies we have in our downtown buildings, and the vitality of the people who own the businesses downtown, I think that we’re going to have a really good year,” she said. “I think that people are looking to the new year with hope and with optimism, and if we can keep that up, we’ll be in excellent shape.”

Collins said the good thing has been that when buildings were vacated in Shelbyville’s central downtown business district, that encompasses Main and Washington streets and many side streets in between, most have gotten new occupants fairly quickly last year.

“We’ve been fortunate; we haven’t had long term vacancies, as other towns have,” she said. “We do still have a few vacancies, but percentage wise, compared to other towns, we’re in really good shape.”

Collins said she is working on an idea to draw even more business in for the downtown merchants.

“One thing I’m working to make happen is to unify our business owners to be open one night a week; and our business committee has been looking at that,” she said. “Some have late hours some nights already, and some are open late one night. We would really like to see all business open till seven or eight o’clock one night per week. That is a goal of ours this year.”

In addition, events such as the downtown concert series, the Horse Show Jubilee, and others, continue to draw in more people all the time, Collins said.

A picture of growth

Shelley Goodwin, executive director of the Shelbyville Chamber of Commerce, said the chamber had 365 members in 2012, up from 340 in 2011, which makes her hopeful for 2013, she said.

“I think the outlook for the bus community is positive, but cautiously optimistic,” she said.

“There are a lot of predictions out there for 2013 from both state and federal levels. I think there’s a lot of opportunity, but still a lot of challenges ahead of us.

“We have seen the housing market start to rebound a little, and the unemployment rate is continuing to improve month by month. We have seen more businesses open last year, and I think we’ll continue to see some more of that. What will happen with tax reform at the state and federal level, and health care, that’s still very much on people’s minds.”

Rothenburger said that even though 2012 did not see any businesses being granted tax incentives, that is OK, because in 2011, nine businesses were approved for incentives from the state, compared to only two in 2010, and one each in 2009 and 2008.

“Two-thousand and eleven was an extremely busy year,” he said. “In 2011, they started their paperwork, and in 2012, they started activating their KBIs, [Kentucky Business Investment program], so they go ahead and get the paperwork started and it’s months before they put that into full gear. We had three or four activate in 2012 and will see some more this year.

“That’s basically what filled our buildings back up, because the fiscal court really got aggressive with working with these factories through the KBI and the state, and so we were able to back these positions very quickly.”

James Ray Wiley, county occupational tax assessor, said revenue from occupational taxes increased from $2.7 million in 2010, to $2.9 million in 2011 and that rate held steady in 2012.

“We had been flatlined for the past couple of years, but things are picking back up, and Martinrea really helped out with that,” he said. “I do Simpsonville’s too, and they are also up. Of course, the [outlet] malls, if they come in out there, they will provide much needed jobs,” he said, referring to the estimate of 1,000 jobs that would be created for each of the two proposed malls. “But there will probably be a lot of part time help. I could see retired people going back to work and also people taking a second job, that would give people more opportunity to do that.”

The city of Shelbyville’s occupational tax revenue has also been showing a steady increase, with $2.5 million in 2009, to $2.6 million in 2010, 2011 and 2012. The later three years, that figure has been steadily rising, with an increase of $10,786 from 2010 to 2011 and $41,632 from 2011 to 2012.

Said Webb:  “Other counties would be beside themselves to have the opportunities that we have here.”