What should you look for on the Lexington-area business front this year? The Herald-Leader business staff went through our 2011 notebooks to make a few guesses on what to look for in 2012.
Toyota Camry sales: It’s been a tough couple of years for Toyota, one of Central Kentucky’s largest employers with its 7,000-employee plant in Georgetown.
A series of recalls in 2010 dented the company’s once-untarnished reputation, and an earthquake and tsunami in Japan in March disrupted production of crucial components and temporarily idled many U.S. plants, including Georgetown’s. The effect has been to stifle the company’s once-hot sales.
In August, though, it launched the seventh generation of its vaunted Camry, which has been the top-selling car in the United States for 13 of the past 14 years and was on track to earn that title again for 2011. But as the Camry hits dealerships nationwide, it does so with more and more competition from the likes of the Honda Accord and Hyundai Sonata.
Can the Camry keep its title? Georgetown is eager to see.
Home sales: Last year was up and down for local real estate.
Sales of homes during the first half of the year couldn’t live up to the numbers sold during the time of the federal home-buyer tax credit in 2010. The effect was a series of year-over-year declines that finally ended in July, when the tax credit no longer factored into the comparison. Since then, home sales have been up year over year but still nowhere near pre-recession levels. New home construction also remains depressed. With the inventory of unsold homes declining, though, this is expected to be a better year for the housing market. Still, analysts suggest it’s a long road toward recovery.
Rupp Arena and the Lexington Convention Center: The price tag for a renovated Rupp, with dramatic translucent surfaces, and a new convention center is estimated at up to $260 million. A financing plan is not yet announced and is possibly the most controversial part of the plan — especially if it involves a local tax.
Insight’s end: Lexington’s cable provider, Insight Communications, announced in August it was being acquired in a $3 billion deal by national cable giant Time Warner Cable, which operates in many counties and areas around Lexington. The sale is expected to be completed during the first half of 2012, and its consequences are the subject of much discussion.
Will rates rise or fall? Will programming be enhanced? Will Insight’s CN | 2 channel, focusing on local sports, weather and politics, continue to operate? Will we wind up missing the folksy commercials featuring Insight CEO Michael Willner? Will Time Warner’s notoriously bad customer service put us all in a terrible mood?
Tune in to find out.
The former Lexington Mall becomes a church: The old shopping center site at Richmond and New Circle roads, once home to beloved Lexington institution McAlpin’s, is becoming a campus for Jessamine County-based Southland Christian Church. The new church, one of Southland’s five planned satellite worship centers, is expected to be completed in 2012. With an influx of new traffic in that area, will supporting businesses spring up to take advantage of the after-church crowd?
Agriculture: Agriculture in general is booming as worldwide demand for grain and meat grows. In Kentucky that means more acres will be converted from pasture to more lucrative crops such as corn and soybeans. Corn is beginning to rival poultry as the state’s leading farm commodity.
Jobless rate: For the first time in more than two years, the state’s unemployment rate dipped below 10 percent, in May.
Since then, it’s been on a slow and uneven decline, settling at 9.4 percent in November. The economic measure continues to be worse than the nation’s jobless rate; Kentucky had a higher percentage of jobs, such as manufacturing, that were cut during the recession. And the effect of those layoffs is still being seen. Even in November, with the rate at its lowest point since 9.2 percent in January 2009, the decline came because the unemployed stopped looking for work and no longer were counted as unemployed.
It’s widely expected to be a slow decline for the unemployment rate nationally and in Kentucky, but how much it declines during 2012 is up for debate.
Whither CentrePointe? The CentrePointe site downtown continues to be undeveloped. MacArthur genius grant-winning Chicago architect Jeanne Gang, who produced a tube-heavy vision of what the site could be, no longer is working on the project. No new development plan has been announced.
Gambling expansion: Ellis Park in Henderson will open its instant racing facility during the first quarter. Revenue from Kentucky Downs in Franklin continues to climb.
The Kentucky Court of Appeals probably will rule soon on the challenge by the anti-gambling Family Foundation on the constitutionality of betting on previously run races. If the foundation wins, it all could grind to a halt. If the tracks and state win, more tracks are expected to open expanded gambling parlors.
The push for other forms of expanded gambling is expected to continue in the General Assembly. The early favorite seems to be moving toward a simple constitutional amendment for the November ballot.
Will all this lead to a very heated debate? You can bet on it.
Horse sales and horse farms: Sales and farms are experiencing a quiet rally, perking up the spirits of Central Kentucky’s signature equine industry. The September yearling and November breeding stock sales were surprisingly strong in 2011, leading to improved expectations for Bluegrass breeders.
Lexmark’s inkjet printers: In recent years, Lexington-based Lexmark International has been shifting its inkjet printer focus from consumers to businesses.
The company, which in the past sometimes gave away printers in computer bundles for consumers, chose to move away from those customers because they didn’t print often and buy enough ink to meet profit expectations. The consequence of that shift, though, has been a series of quarters with declining financial measurements of the company’s inkjet products.
In its third quarter, the number of inkjet printers that were shipped fell 34 percent compared to the prior year. That year-ago effect is expected to end in 2012, as the company no longer has the tougher comparisons of previous years in which it sold its inkjets through mass-market retailers.
Without the impact of its legacy products, it will provide business analysts more insight into how the company’s newer business-themed inkjets are performing.
What retailers are headed this way? Foodies and aspiring foodies eagerly await the 2012 opening of Lexington’s first Trader Joe’s supermarket, on Nicholasville Road. Microwaveable fondue cannot arrive soon enough. Sadly, there are no Lexington outlets of the much-wanted Costco, Pottery Barn, Ikea or HM in sight.
Health care expansion: Health care is big business in Kentucky, and it’s getting even bigger. A merger that would have created Kentucky’s largest health care system was dealt a crippling setback last week when Gov. Steve Beshear said it was not in the state’s best interest.
It would have united Jewish Hospital St. Mary’s HealthCare and University Hospital in Louisville with St. Joseph Health System of Lexington, owned by Denver-based Catholic Health Initiatives.
The University of Kentucky in 2012 should continue to be a player in statewide health care as it broadens the reach of its specialty services, including care for complicated cancers and extending the reach of its organ transplant services. For the next several years, UK’s hospital tower will continue to complete individual sections.
Annual Graeter’s update: The Cincinnati-based ice cream chain with the cult following is expected to return to Lexington when it opens a store in early 2012 in Chevy Chase Plaza.