Congressman Guthrie will announce $1 Million Federal Grant for Owensboro Centre for Business and Research

Congressman Brett Guthrie will be in town to announce the award of $986,800 in grants from the Economic Development Administration to the EDC and the City of Owensboro for the purchase of equipment at the Centre for Business and Research.  The grant, which was applied for with the assistance of GRADD, is for communities damaged by Hurricane Ike and the recessionary effects of the market in 2008.

The Centre for Business and Research will contain approximately 30,000 square feet of office space for high-tech business start-ups in the food science and plant therapeutic industries, and will offer companies the ability to rent laboratory facilities "by the bench."  The Centre, scheduled to open in the first quarter of 2010, seeks to be the region's premiere business accelerator for biotech companies.

The announcement will take place tomorrow at 10:30 am at the Centre for Business and Research, 1010 Allen Street.

New Hospital Catalyst in Owensboro's Shifting Economy

The following is the text of remarks by EDC President/ CEO Nick Brake at the Board of Adjustment meeting to approve the conditional use permit for the new hospital on the east-side of Owensboro:

Some in the community are approaching the opportunity of a new hospital from a 20^th century perspective. From this point of view the hospital serves the same basic function of a church or a grocery store in providing services to the people that live here. Hospitals are considered strictly a service industry and therefore do not count as economic development.

I am going to challenge us to view this opportunity in the context of our present global economic age—in this environment the drivers of regional economies especially in mid size or small regions are no longer just large companies—they are institutions like hospitals and research universities.

While it is certainly true that our hospital does take seriously their fundamental mission of taking care of our people, like other growing medical systems OMHS has successfully pursued an economic development mission that make it more than just a community hospital. And since we do not have-- nor ever will likely have-- a research university —our hospital is our driver. And as a result they have positioned Owensboro as a regional medical hub with innovative partnerships in research, teaching, and economic development. The location in eastern Daviess County adjacent to the I-65/ I-64 Corridor is the best location for the OMHS to expand for the good of our economy.

The economic development importance of hospitals is evident in looking at our peer communities. U of L economist Paul Coomes identified these regions for us as a way to benchmark ourselves against like communities. None of these communities have research universities; all are similar to Owensboro in terms of population and infrastructure. We have used these regions as benchmarks in examining the impact of the current recession. Those with a large percentage of workers in medical occupations have significantly lower unemployment rates, 6- 8 % during this recession. Those with the smallest concentrations of medical workers have the largest unemployment rates, between 13 -16%. Owensboro is right in the middle of the list of 12 peers.

A great example from one of our benchmark communities that has transitioned from manufacturing to health care is LaCrosse, WI. They have developed one of the largest medical clusters per capita in the United States. They do not have a research university—they have a regional university campus. We are positioned similarly with the growth of Western Kentucky University-Owensboro and other higher education partnerships, many of which are connected to OMHS. LaCrosse is a couple of hours from the Mayo Clinic and have numerous partnerships much the way OMHS collaborates with hospitals in Louisville and Nashville. The medical cluster in LaCrosse consists of almost 9,000 people; their bachelor degree attainment rate is 27%, a full 10 percentage points ahead of ours. During the recession over the past year their unemployment rate topped out at around 8% and has averaged at 6% for most of the recession. They have an active research and technology transfer component that has lead to the formation of new companies and new jobs. This is a great chance to transform our economy.

Given the way global economic forces have decimated many small regions throughout the Midwest and southeast-- not supporting the expansion of this hospital would be a betrayal to our future economic prosperity. The days of us being solely a manufacturing based economy are over. This expansion will further diversify our economy. We have seen these forces touch us in the past month at Hon and GE. The headline in the paper tomorrow will be about 100 more laid off at Daramic. We have a unique opportunity to retrain our workforce with these layoffs; many are already seeking retraining in the medical field.

The location on the eastern side of the county is strategically superior to the current hospital site on Parrish Ave. The clear opportunity for growth from a community hospital to a regional medical hub exists because OMHS will be in a position to capitalize on the Southern Indiana and north central Kentucky markets further away from Evansville and closer but not too close to Louisville. This location will enhance the hospital’s services as an export industry, which translates into more primary dollars circulating through out local economy.

I want to address the issue of the Parrish Ave campus. If you look at the former Mercy Hospital property on Ford Ave, OMHS has made that property very attractive and a functional part of their health system, focusing on wellness. I know the plans have not been finalized, but certainly there are exciting opportunities for the best use of the Parrish Campus. I mentioned earlier higher education and research—it would be a tremendous way to help aide the further expansion of allied health and applied research programs. The OMHS Campus is close to our new business accelerator the Centre for Business and Research—the Parrish Campus could be a fully functional technology park for many of these companies to grow into—the possibilities are limitless, the commitment from OMHS is strong, and the track record of previous property development is exceptional.

Lastly, I want to address the expansion of OMHS and the potential for planned, smart growth-type expansion along the new corridor. It is not a question of if development will occur along that corridor; it is more of a question of when. Allowing planned expansion of the hospital along that route puts the community in the driver’s seat to leverage sustainable development rather than allowing unplanned suburban expansion to occur as a consequence of a new highway.

The options are clear; if we want OMHS to be Owensboro’s hospital then they can stay where they are presently located. If we want them to be our region’s medical center and the catalyst of an economic change, then approve this tonight so that we that together we can take the next step helping this region be competitive in the 21^st Century economy.

Kentucky BioProcess collaborating in development of anti-rabies antibody with South African-based Council for Scientific and Industrial Research

OWENSBORO, KY – Kentucky BioProcessing (KBP) has signed an agreement with the South African-based Council for Scientific and Industrial Research (CSIR) to develop a commercially efficient process for RabiVir,—CSIR’s award-winning anti-rabies antibody developed in a start up venture with GreenPharm.

The announcement follows GreenPharm's achievement in the Innovation Fund’s SA Bio Business Plan Competition* at the end of 2008. CSIR plant biotechnologists walked away with an investment indication of up to R15 million (approximately $2 million US) and an opportunity for further training in the USA.

The start-up venture holds tremendous potential for using plants (in particular tobacco) to generate proteins used in preventative post-exposure rabies treatment and other complex therapeutic proteins such as HIV antibodies at a competitive price. Before finalizing the partnership, representatives from CSIR toured KBP.

Contract research and development manager at CSIR Biosciences, Fanie Marais, says, “KBP is well respected for its expertise in producing clinical grade biotherapeutics in plants. It has world-class good manufacturing production compliant (cGMP) facilities and provides contract services for bench scale, pilot and manufacturing process development in this field. cGMP conditions are essential for the production of antibodies that will go into early phase of safety testing.

According to the agreement with the CSIR, KBP will assist in the development of a process for the purification and preparation of clinical grade monoclonal antibodies (i.e high purity antibodies suitable for use in clinical development). The technology will be transferred to the CSIR and as part of the technology transfer process, CSIR scientists will spend time at KBP for training in all stages of process development. The agreement with KBP will help us speed up the commercialization process of RabiVir.

“We will also obtain the necessary documentation from KBP as prescribed by the USA Food and Drug Administration to enable registration of the antibodies with the regulatory authorities,” Marias said. “This development bodes well not only for the successful production and commercialisation of clinical batches of an anti-rabies antibody, which would be packaged as a post-exposure prophylaxis, but also for human capital development within South Africa.”

First Centre for Business and Research tenants expected by end of the year

The transformation of an 86-year-old former tobacco warehouse at 1016 Allen St. into the high-tech Centre for Business and Research was originally scheduled to be completed by midsummer.

But Malcolm Bryant, the building's owner, said last week that he still expects the massive project to be completed before the end of the year.

"I would hope to have at least one, if not three, tenants moved in by the end of the year," Bryant said.

Alisha Hardison, owner of Dalisha's Desserts, won the Greater Owensboro Economic Development Corp.'s first eMerging Ventures Challenge. The business plan competition's prizes included a $15,000 investment award and a free six-month lease on office space in the Centre for Business and Research.

And Hollison Technologies, a local startup biotech company, has already leased space in the building.

Madison Silvert, vice president of the EDC and executive director of its eMerging Ventures Center for Innovation, said Friday that he's working with a third company that's likely to lease space in the center.

But if that company commits, he said, "They probably won't be ready to move in until after the first of the year."

Plans for the building call for research space for biotech companies as well as office space for a "business accelerator," a place where new businesses can rent as much space as they need until they're ready to move out on their own.

Seven universities and colleges will be affiliated with the Owensboro center when it opens.

The list includes the University of Kentucky, University of Louisville, Western Kentucky University, Murray State University, Brescia University, Kentucky Wesleyan College and Owensboro Community & Technical College.

Nick Brake, EDC president, said he's still optimistic that the grant, which had been expected in September, will come through.

"It has to be announced by a member of Congress," he said.

The money, which would be used to install "wet labs" in the Centre for Business and Research, would come from federal funds designated for communities affected by Hurricane Ike and its remnants in September 2008.

Downtown Owensboro Hotel Update

EDC President/ CEO Nick Brake delivered the following update on the selection of a development team for the downtown Owensboro hotel:

A review committee, consisting of staff from the EDC and Downtown Development Director Fred Reeves, Judge Executive Reid Haire, City Manager Bill Parrish as well as Gateway consultants, including an economist with extensive experience in vetting similar deals, is working to select a development team from the RFPs received.

The committee is using the following criteria to evaluate the RFP respondents:

• Adequate financing
• Experience in construction and management of hotels
• Providing a full service experience
• Track record of success on previous projects
• Willingness to incorporate the design into the Downtown Master Plan
• Level of involvement with the Convention/Events Center

The committee and consultants identified three finalists. As with other economic development projects, providing specific information about each proposal would jeopardize the deal and result in the potential of the developers from withdrawing their proposal from consideration.

The Committee is recommending a developer and not working with hotel chains. The developers have indicated which hotel flag or flags they could potentially bring to the development in downtown Owensboro. Each proposal comes from highly respected developers that have strong relationships with nationally respected hotel flags.

All three proposals have significant local groups involved with the proposal or have already made significant investments in the local economy.

Given the current economic environment, each proposal brings different mixes of financing options, ranging from publicly supported bonds to private equity financing and traditional financing from banks. The Committee has clearly indicated that public bonding and public financing of the hotel is not an option. All three proposals have asked for public incentives, such as infrastructure improvements.

All proposals have strong urban design components that match the Downtown Master Plan. All have expressed a strong desire for the hotel design to match the design of the convention center/ events center.

All three proposals meet the requirements of a full service hotel, as defined by the Kentucky Tourism Development Act. These amenities include room service, a restaurant and bar on the premises, and the catering services to the convention/ events center. Many of the proposals have innovative ideas for these amenities.

Each proposal indicated their intent to construct a hotel with a range of between 150 and 175 rooms. The average room rates, cited by the three finalists, ranged from $110 to $140 per night for a standard room.

The review committee and consultants have asked each of the three proposals for clarifying information. The committee will receive responses from each of the three over the next couple of weeks, at such time the committee will begin negotiations with those that provide the appropriate follow up information.

The committee expects to have a recommendation to the City Commission in 30 to 60 days.

Kentucky Aluminum Network Emphasizes the Impact of the Aluminum Industry in Kentucky

Aluminum industry representatives as well as economic development officials in Northwest Kentucky and Greater Owensboro have formed the Kentucky Aluminum Network (KAN) in an effort to help the aluminum industry remain competitive in the region and throughout Kentucky.

In the seven counties of northwest Kentucky around the cities of Henderson and Owensboro, the aluminum industry employs over 5,000 people at over 30 establishments with an annual payroll of nearly $300 million. With an employment multiplier of about 2.5, the industry accounts for 16,000 direct and indirect jobs in northwest Kentucky alone.

According to the Kentucky Cabinet for Economic Development, across Kentucky aluminium employs nearly 15,000 people in 120 facilities located in 53 Kentucky cities and towns. The average wage of primary metal jobs is $52,336 compared to $33,800 in private sector jobs. Primary shipments totaled over $4.3 billion in 2005 making Kentucky number one in the industry. Kentucky is home to two of the 14 smelters operating in the United States. Century and Rio Tinto Alcan's combined production represents 16 percent of the total production capacity in the U.S.

KAN includes members many of the large and small establishments linked to the aluminum. The group is currently formulating a list of priorities to share with local, state, and national elected officials that impact the future competitiveness of the aluminum industry in Kentucky.

EDC Statement Regarding the Closure of Hon Owensboro Facility

HNI, the parent company of the local Hon Company informed employees today of their intent to close the Owensboro Hon facility effective this spring.

"We are saddened by the news about the closing of the Owensboro Hon plant by spring 2010. Our thoughts are with the families of the 145 employees impacted by this decision. The local governments, state government and EDC worked closely with the union leaders and plant officials at Hon Owensboro for many months to fight keep these jobs in Owensboro. We exhausted all alternatives and in the end offered a competitive package of incentives and training grants valued at over $2 million," said EDC President/ CEO Nick Brake.

"Our attention will now turn to helping the members of the Hon family through this transition. We will form a Rapid Response team and work closely with GRADD and the Owensboro Community and Technical College to best meet the needs of these displaced employees."