The 1st meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, June 19, 2003, at 1:00 PM, at Northern Kentucky University in the Ballroom of the University Center. Senator Katie Stine, Co-Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Katie Stine, Co-Chair; Representative Thomas Kerr, Co-Chair; Senators David Boswell, Julie Denton, Brett Guthrie, Alice Kerr, Vernie McGaha, Jerry Rhoads, Richard Roeding, and Damon Thayer; Representatives Rocky Adkins, Carolyn Belcher, Perry Clark, Tim Couch, Bob DeWeese, Ted "Teddy" Edmonds, C.B. Embry Jr, Bill Farmer, Mike Harmon, Mary Harper, Dennis Horlander, Stan Lee, Thomas McKee, Brad Montell, Tanya Pullin, Ancel Smith, Brandon Smith, Tommy Thompson, Charles Walton, Mike Weaver, and Robin L. Webb.
Guests: Barry Couley, ICNG; Gene Fuqua, Cabinet for Economic Development; Charlie Wheeler, Northern Kentucky Convention Center; Steve Stevens, Northern Kentucky Chamber of Commerce; Kathy Groob, Paul Hemmer Companies.
LRC Staff: John Buckner, Committee Staff Administrator; Laura Taylor and Karen Armstrong-Cummings, Committee Analysts; Cecilia Perry, Committee Assistant.
Senator Stine welcomed all of the members to the meeting in Northern Kentucky.
The Chair then introduced Secretary Ann Latta, Tourism Development Cabinet.
Secretary Latta gave an update on projects approved by the Tourism Development Act. Secretary Latta began her presentation with some tourism statistics. She pointed out that tourism is Kentucky’s third largest income-producing industry. Last year, tourism accounted for a 9.1 billion dollar economic impact in the state, which was an increase from 2001 despite the weak economy. Secretary Latta brought to the attention of the committee that the tourism industry is helping to support other worthwhile programs in the state. Tourism is the second largest employer in Kentucky. Secretary Latta discussed what are known as “tourism trails” in Kentucky, and said that they were a new marketing idea with a regional approach. Tourism trails have been very successful to this point because they promote longer stays in Kentucky which in turn produces more revenue for the state. Secretary Latta specifically touched on the Kentucky State Parks Golf Trail which is a brand new program. She indicated that four new courses will be opening this Summer and one in the Fall. This golf trail involves 13 championship golf courses across the Commonwealth in Kentucky’s state parks. Secretary Latta discussed several other trails that provide opportunities of economic growth by means of tourism to the state. She provided handouts to committee members that outlined trails that were new to the Commonwealth. The research that the Tourism Development Cabinet is doing indicates that trail promotion is having a substantial impact on travel in Kentucky.
Representative Montell complimented Secretary Latta and her staff on their work and indicated that he was very excited about the new developments. He asked if all the trails discussed were operating under the incentives from the coal severence tax money. Secretary Latta explained that only three were using the incentive money at this time.
Senator Roeding asked Secretary Latta to discuss further the golf course trails. Secretary Latta said that all of the state’s 18-hole golf courses are considered to constitute a trail. There are some golf courses that are new and some that have been renovated to be an 18-hole course. She has had the opportunity to visit all the courses and is very proud of the final product. There are currently some preliminary brochures on the new courses and more will be printed in the future.
Senator Roeding asked if the Cabinet had any plans to partner with existing golf courses throughout the state. Secretary Latta indicated that partnering with existing golf courses had been considered and is currently being done with private hotels and other lodging facilities. Most of the new courses on the trail are in areas where there were no existing golf courses. She added that the new golf courses have enabled local high schools to form golf teams for future competitions, increasing opportunities for young adults through possible college scholarships.
Senator Thayer said that he was very impressed that Kentucky tourism dollars experienced an increase in 2001 despite the events of 9-11. He asked if the Cabinet’s research indicated whether most people are staying close to home when taking vacations instead of using airlines or if they were driving long distances to tour other states. He also asked if the Cabinet’s statistics show that the increase in tourism comes from in-state visits or out-of-state. Secretary Latta said that their data does indicate that people are doing more traveling in-state as a result of 9-11. She indicated that Kentucky has been considered to be a safe state to visit.
Representative Weaver asked if there was a tour package or some type of advertisement that would encourage people to visit the Museum of Armory and Calvary in Fort Knox or the Airborne Museum in Fort Campbell. Secretary Latta explained that both museums are in the Cabinet’s “Get Away Guide”.
Representative Weaver asked the Secretary if anyone in a leadership position with the Tourism Development Cabinet has visited either of the museums to determine how attractive they might be to encourage people to visit the state of Kentucky. Secretary Latta said she had visited both museums and participated in some of the expeditions. She stated that she thought they were both wonderful attractions and felt both were great opportunities to promote tourism in the state.
Senator Boswell complimented Secretary Latta and Cabinet staff for their hard work and thanked them for being so responsive to members of the committee and people of Kentucky.
Representative Brandon Smith explained that one of his constituents had a problem with handicap parking at one of the Kentucky marinas. He asked if there was a policy regarding where handicap parking is available at state marinas. Secretary Latta explained that there was such a policy and said that handicap parking would fall under both state and federal guidelines.
Senator McGaha mentioned General Burnside Island State Park and commented that it did not have an adequate irrigation system. Secretary Latta agreed with his comments and said she had been looking into ways to remedy the situation.
Senator Kerr commended the Tourism Development Cabinet for a job well done. She stated that in the past Kentucky has been a little lax in promoting what the state has to offer but currently marketing efforts have greatly improved. Secretary Latta thanked Senator Kerr for her comments and said that the new trails were reaching a larger audience which would make a tremendous difference in tourism in Kentucky.
Representative Edmonds asked if there are dress codes at the state golf courses to prevent people from wearing denim while playing the courses. Secretary Latta said that there were no dress codes to her knowledge but that she would double check.
Senator Roeding referred to Big Bone State Park and said that it would be a good idea to promote the park in the upcoming Lewis and Clark Expedition. Secretary Latta agreed with his comments and said that the Cabinet had been working on promoting that area.
Senator Boswell asked the about the situation at Big Bone State Park regarding fossilized bones at their location. Secretary Latta explained that the bones were still at the University of Nebraska and there has been no interest in the bones being returned. She will have to explore the situation once again.
Senator Roeding said that it was his understanding that the primary reasons for the bones not being returned was that there was no place to put them. Secretary Latta said that was her understanding as well.
Secretary Latta updated the committee members on the Tourism Development Act. She went through the criteria needed to have a project approved under the Act. There are independent consultant studies on each of the projects to ensure that the impact on Kentucky the project will have will be positive. Secretary Latta went through a list of projects that have been approved. Projects that have been approved are eligible for a sales tax refund although not all will receive their full refund for various reasons.
Representative McKee asked about the Tourism Development Act as related to the development of lodges at some of the state parks since they would qualify for this Act.
Secretary Latta said that the Cabinet is actively looking into such projects.
Representative Adkins commended the Secretary’s presentation on the Tourism Development Act and expressed that he was pleased to see the success of all the projects. He complimented the different areas of the state that have been positively affected by this legislation.
Secretary Latta went over TIF’s (Tax Increment Financing) and stated that it has experienced some changes over time and it now adds tourism projects to TIF financing. She indicated that it is similar to the Tourism Development Act but broader based, and the Cabinet has not received any applications for any TIF projects this year. Secretary Latta then spoke on the Tourism Development Loan Program, which was developed in an effort to provide assistance to some of the smaller, rural areas. There is 1.5 million dollars available for loans under this program for small, tourism related businesses. She gave an overview of some existing businesses that have been successful with the help of this program.
Chairman Stine introduced Steve Pendery, Campbell County Judge Executive. Judge Pendery introduced two guests: Barry Rosenberg, Steiner and Associates; and Eric Haas, Co-Owner of Hofbrauhaus. Judge Pendery welcomed the committee to the Northern Kentucky Area. He gave a presentation on his views of being an elected official and his thoughts on local government in general. He said that business growth is important to any area because it strengthens the economy which is why Northern Kentucky has taken advantage of the many opportunities presented to the area.
Judge Pendery then turned the floor over to Eric Haas, Hofbrauhaus. Mr. Haas spoke on the amazing success of the Hofbrauhaus and added that the new attraction is also having a positive effect on local businesses. He thanked the committee for their efforts in approving such a project to be done in Kentucky.
Judge Pendery then recognized Barry Rosenberg, Steiner and Associates, for some additional comments. Mr. Rosenberg stated that other states are modeling their economic development efforts after Kentucky due to the state’s tremendous success. Mr. Rosenberg said that the Tourism Development Act has created numerous opportunities in the Northern Kentucky area which have had a positive effect on Kentucky as a whole. He stated that with the success of the new projects, people were motivated to travel both in and out-of-state. Mr. Rosenberg thanked the committee for supporting the new projects in Northern Kentucky.
Representative Walton asked if there were future plans on expanding the Levee area. Mr. Rosenberg indicated that expansion of the Levee is being considered at this time.
Representative Lee asked about the methods used to determine in-state or out-of state travel. Mr. Rosenberg used the Northern Kentucky Aquarium as an example and said that when people purchase tickets, they are asked to give their zip code. He explained that another way tourism information is gathered is through exit surveys. Mr. Rosenberg informed the committee that the information gathered from the two methods is being distributed to the Tourism Cabinet for their review.
Senator Roeding spoke on the success in Northern Kentucky and the focus to create projects that are helpful to all the surrounding communities.
Chairman Kerr welcomed Mr. Chuck Grey, representative of the Cold Springs area, to the committee meeting. Mr. Grey spoke on economic growth in the state and the tremendous success of the Northern Kentucky Technology Commercialization Triangle (NKTCT).
Chairman Stine then recognized Judge Pendery once again. Judge Pendery spoke on the tools Northern Kentucky has used to promote economic development. He explained the Technology Commercialization Triangle. Judge Pendery said that the triangle consists of three cities: Wilder, Cold Springs, and Highland Heights. He stated that the idea of the triangle was to attract successful technology-oriented businesses to the Northern Kentucky area by leveraging the assets of Northern Kentucky University (NKU). The university acts as a partner in this process. He said that a member of the NKU faculty, Dr. Rebecca White, heads the search for companies that are ready and willing to grow their business to the next level by partnering with a successful regional university. Dr. White discussed her background and said she was honored to be a part of the NKTCT.
Judge Pendery introduced Dan Tobergte with Northern Kentucky Tri-ED. Mr. Tobergte stated that Tri-ED was also a partner of the NKTCT. He explained that Tri-ED is the regional economic development agency that serves as the liaison between business clients and the appropriate state and local government agencies regarding incentives. Tri-ED can assist in determining the incentives for which a business is eligible and the potential value of those incentives.
Representative Montell said he was very impressed with what has been done in Northern Kentucky and asked how the triangle concept originated and how long it took to implement the process. Judge Pendery said a position opened in 1987 that created a major a opportunity for Northern Kentucky. He further explained that before the position was filled, leadership from the private sector wanted to consider a process that would combine all three counties into one market entity.
Senator Roeding discussed the regional approach that Tri-ED has initiated and added that Tri-ED has been listed in the top 5 economic development corporations in the country.
Chairman Kerr introduced Commissioner Bill Brundage, Office for the New Economy. Commissioner Brundage discussed a handout provided by his office that was distributed to the members indicating projects approved to date. He asked the committee to consider inviting his department to every meeting so that he could keep them updated on projects and events going on in different areas of the state. Commissioner Brundage reported on the office’s strategic plan. He said that the economy of the 21st century is very different than the economy to which most of us are accustomed. He added that today’s economy requires a partnership, and the need to take on different roles was part of the process. Commissioner Brundage said that Kentucky is doing rather well at this time. He stated that the Office for the New Economy is a multi-institutional department that works with many groups and individuals, from entrepreneurs to farmers, to help fulfill Kentucky’s economic needs. Commissioner Brundage reported on investments and said that Kentucky has leveraged their money pretty well to this point. He said that currently there are $230 million dollars worth of new economy projects taking place in the state. He spoke about a system of Innovation Commercialization Centers (ICC’s) throughout the state designed to help Kentucky build on high quality investments. He added that satellite offices were also being set up around the state, some located by colleges and universities, to aide the ICC’s in their efforts.
Commissioner Brundage introduced Casey Barach, Executive Director, Madison E-Zone. Mr. Barach discussed his experiences as an ICC representative. He said that government, both local and state, plus private investors, has played a huge part in the success of the ICC. He shared a video containing a clip aired by a local news station outlining the success of the ICC.
Commissioner Brundage closed with a video recently designed to encourage bio-tech companies to set up in Kentucky.
Representative Embry referenced the Ohio County project and asked when it would be developed, who was overseeing the project, and what economic impact was anticipated for the state. Commissioner Brundage said that Dick Schmidt, Energy and Environment in Paducah, has been working with coal companies and together, they have decided that Ohio County has an adequate site to test and determine how much gas is in one of the local coal mines. He said that the funding was in place and the project would begin toward the end of the year.
Representative Adkins referred to the satellite locations and asked why a satellite had not been placed at Morehead State University. Commissioner Brundage said that the Office for the New Economy has been working with the eastern part of the state and that his office has some interesting plans for the area.
Senator Roeding said that Kentucky had the third ranked pharmacy school in the country. He commented on the lack of space within in that particular school and hoped there were plans for expansion. Commissioner Brundage said that he agreed with the dire need for research space and stated that he would soon be meeting with university representatives to discuss such needs.
Representative Webb also asked about a satellite location in the eastern part of the state, Morehead in particular. Commissioner Brundage discussed the selection process for the satellite locations and said that the available workforce in different locations was sometimes the deciding factor.
Representative Harmon asked how easy it would be to bring those participating in the ways of the old economy to the bio-tech platform of the new economy. Commissioner Brundage said that such a process will not be an easy task but his department is working hard to get more people involved. He said over time the transition will be accomplished.
The motion was made and seconded for adjournment. The Interim Joint Committee on Economic Development and Tourism adjourned at 3:25 p.m.