Developers across state are energized by current expectations for more projects
Originally appeared in The Lane Report | Dec. 1, 2024
Local economic developers in the commonwealth see blue skies in 2025 for a Kentucky economy already flying at historic heights for dollars invested, jobs created and tax revenue.
Many billions more in investment with thousands of modern jobs are in the business and industry investment pipeline. Kentucky communities are well positioned with access to the all-important U.S. market, costs substantially less than the coasts, sites ready for fast development, and a welcoming business environment — if they also can meet surging expectations for energy and workforce.
Economic developers expect the wins to continue
As The Lane Report was gathering comments for this article, state officials right on cue announced another major battery manufacturing project in mid-November, this one in Shelbyville: a $714 million investment by e-STORAGE of Canada, which describes itself as “part of the growing energy technology transformation across the U.S.”
Shelbyville Battery Manufacturing will hire 1,570 workers for a 1 million-s.f. operation near the intersection of I-64 and KY 55 to produce energy storage systems for utility-scale use. Parent company e-STORAGE in Ontario is a subsidiary of Canadian Solar, a leader in battery technology design, manufacture and integration. It’s the biggest project in Shelby County history.
For three-plus years, Gov. Andy Beshear has been proclaiming the commonwealth economy “on fire” and touting Kentucky as “the electric vehicle battery manufacturing capital of the world.”
The brag becomes reality in 2025
In the coming year, the $5.8 billion BlueOvalSK project in Hardin County begins cranking out batteries for Ford vehicles. The $2 billion Envision AESC plant in Bowling Green will ship out batteries for multiple vehicle makers. A $1 billion Ascend Elements EV battery recycling facility in Christian County plans its startup. LOTTE Chemical’s $238 million facility in Elizabethtown will roll out ultra-thin aluminum foil for lithium-ion EV battery makers.
Kentucky’s local economic developers expect momentum in advanced manufacturing to continue. They mention logistics, business services, life sciences and healthcare more broadly as categories in which they also expect to win projects.
“As EV battery projects come online, there are plenty of suppliers to those projects that are also looking to locate within a specific perimeter,” said Gina Greathouse, executive vice president of Commerce Lexington. “The Greater Lexington region has seen some interest from suppliers looking to locate nearby.”
Greathouse talked of the opportunity that is created when the density of industry clusters increases. It’s something Commerce Lexington knows from decades of experience — Toyota Motor Manufacturing Kentucky arrived in Georgetown in the mid-1980s, bringing dozens of supplier operations to the state since — and encourages by nurturing strong connections within the existing business community to support long-term expansion.
“We are fortunate to have a variety of companies who are committed to the Greater Lexington region and are carrying out their growth plans here. This allows economic development partners around the region an opportunity to attract additional companies, thus increasing the density of specific industry clusters,” Greathouse said. “Toyota’s expansion announcement last year is a great example of a long-standing company continuing to invest in the Greater Lexington region by implementing EV technology into their product lines in the Georgetown facility.”
More energy capacity, more workers
Primary factors affecting business investment location decisions nationally are “energy infrastructure and talent acquisition,” Greathouse said. “Large-scale mega projects including EV, semiconductors, and advanced manufacturing reshoring projects are all contributing to an ever-growing pressure on the nation’s energy grid.”
Commerce Lexington is now seeing project requests for information (RFI), she said, that put an early emphasis on determining the availability of meeting large energy requirements and the availability of obtaining necessary infrastructure to bring that energy to sites and buildings.
“Available sites and utility capacity are hand in hand at the top of the list” of prospects’ concerns, said Lee Crume, president/chief executive officer of BE NKY Growth Partnership in Northern Kentucky. “Workforce falls next and is a big driver in site-location decisions.”
Advanced manufacturing is a historical and present-day strength for Northern Kentucky, he said.
“We continue to see high project volume in this sector and to target companies looking for an ideal location,” Crume said. “2024 has been a good year for manufacturing projects in food and beverage, consumer products and the chemical industry.”
Life sciences is a growing focus with the Covington Life Science Lab under construction and opening mid-2025, and the life science sector has been a focus for at least a decade.
“Employment in the sector is projected to grow by 49% through 2025,” Crume said. “We have a strong mix of established companies throughout Northern Kentucky, such as Bexion Pharmaceuticals, Gravity Diagnostics, Ethos Labs, the PPD clinical research business of Thermo Fisher Scientific, and a strong university research system at Northern Kentucky University, the University of Cincinnati and Cincinnati Children’s Medical Center & Hospital.”
Growth in ever-surging Nashville is helping Bowling Green and Warren County get more opportunities to diversify the economy in its area.
“We are increasing focus on technology-driven operations that can grow and locate in our area,” said Ron Bunch, president and chief executive officer of the Bowling Green Area Chamber of Commerce. “Recent successes in aluminum, aerospace and the EV sector have underscored the economic diversity of South-Central Kentucky.”
The chamber aims to target expansion in sectors such as aviation, motorsports, professional services, and research and development, Bunch said. It’s a strategy that seeks to build on the region’s established strengths while pursuing new avenues for growth.
“Talent acquisition remains the biggest challenge for communities and companies,” he said. “Kentucky’s historically low labor-force participation rate, coupled with the aging baby boomer population, intensifies this challenge. The Bowling Green Area Chamber of Commerce has invested significantly in the local talent pipeline.”
With $2.6 million in private-sector investment, the Chamber has implemented SCK LAUNCH — a comprehensive career program based on “The 7 Habits of Highly Effective People” by Stephen R. Covey — across two school districts. This has built career pathways in seven high-demand sectors. It’s engaged over 20,000 students in career shadowing, 580 educators in professional development, and over 3,400 8th-graders in annual hands-on career fairs. The program’s successful “Leader in Me” initiative for students has drawn global accolades.
Greater Bowling Green is thriving with major projects in metals, glass for the distilling industry and a huge bacon production operation for Tyson, among many projects.
About 65 miles north up I-65 in Hardin County, the outlook regarding the state economy is especially sunny. Some 700 workers are in training to begin operations at the first of what will be twin factories at BlueOvalSK. When fully built out, the electric vehicle battery manufacturing park will have 5,000 employees.
“Kentucky’s economy is the best it’s ever been. The job creation over the last four years has been nothing short of extraordinary,” said Andrew Games, president and chief operating officer of Elizabethtown Hardin County Industrial Foundation. “Companies are seeing the value of locating in Kentucky because of the relationships and partnerships the state and local governments are investing in.”
Games gives Kentucky’s Cabinet for Economic Development (CED) leadership credit for showing prospects from all over the world that Kentucky is ready to invest in all types of job creation.
“Automotive might be the most notable, but we are seeing all types of industry look for new locations in the state,” Games said. “I believe Kentucky will continue to recruit at a high level. We are working hard here locally to prepare for more industry in our area. We have secured new land to create our third industrial park.”
Local economic development partners are critical members of Team Kentucky, said CED Secretary Jeff Noel.
Serving them “is our top priority. Kentucky is stronger as a result,” said Noel. “We pride ourselves on a process in which we meet with our local partners quarterly on their ‘turf’ to discuss their priorities and formulate strategies that highlight the unique advantages of each of our 120 counties, while enhancing the interdependencies that bind us across the commonwealth.”
That process, which the cabinet calls the Collaborative Blueprint, is creating a common template for preparing data about sites all over the state, presenting that data, organizing site visits and coordinating marketing that then has common elements.
“Teamwork matters and we are blessed with so many talented economic development professionals across all of Kentucky,” Noel said. “This is exactly the type of partnership that will position our state for even more success in the future.”
Marketing the state’s assets The Greater Lexington region is targeting its growth and recruitment efforts into attracting advanced manufacturing, ag-bio and ag-tech, biopharma and life sciences, business and financial services, food and beverage manufacturing, marketing and design services, medical device production, and warehousing and logistics, Greathouse said.
Those industries were identified through a study for Commerce Lexington completed by Ted Abernathy and his Raleigh, N.C.-based Economic Leadership in 2023. It analyzed current industry clusters, availability of workforce and area assets that will best allow Greater Lexington to increase regional job, wage and gross domestic product (GDP) growth rates to the national average.
The commonwealth has long tended to track about 20% under those national rates, offset somewhat by a lower cost of living and business operation.
“I believe we will continue to see strong economic momentum in our region because of our adaptability to technology, lower costs of doing business, and infrastructure advantages,” said Sarah Davasher-Wisdom, president/chief executive officer of Greater Louisville Inc.
“We are poised to see growth in our current signature industries like healthcare, advanced manufacturing, logistics and business services if we continue building a strong ecosystem and investing in training a highly skilled workforce,” she said.
Kentucky’s economy is stronger than it has been in recent memory, not only when looking through the lens of jobs reports and GDP, but through a national reputation lens, according to Davasher-Wisdom.
“Kentucky is receiving worldwide recognition as a leader in healthcare, biotechnology, advanced manufacturing and professional services. That is positioning the entire state to reach new heights and continue to break economic investment records.”
Davasher-Wisdom considers the state’s business environment the most important factor influencing company decision making today.
“At its core, economic development is a business transaction,” she said, “and companies will only relocate or expand to our region if there is a strong business case to do so. That’s why GLI’s advocacy work is a cornerstone of our work in regional economic development.”
The development community is cheered General Assembly leaders say that since budget and revenue triggers were met, the state income tax will be lowered from 4% to 3.5% in the 2025 session.
“Efforts to create a more competitive tax code and more innovative incentives are crucial to our success now and into the future,” Davasher-Wisdom said. “Especially as we see the costs of doing business on the coasts substantially rising, we need to continue to create competitive cost advantages for businesses and seize the opportunity to grow high-paying industries.”
Primed for success
State policy changes the past few years — particularly income tax reform and the Kentucky Product Development Initiative grant program to help local communities prepare Build-Ready sites — have made Kentucky a place many people are considering for relocation, said Chris Girdler, president/chief executive officer of the Somerset Pulaski Economic Development Association.
“Kentucky as a whole is primed for much more success,” Girdler said, “and I think we are just getting started. As long as we stay true to our state motto, the sky’s the limit.”
“The past five years in the Lake Cumberland region have been record breaking,” he said, “and we are very grateful for the success we have garnered. It has been a period of outstanding and exciting growth where we have announced over $500 million in new and existing business expansions, over 1,000 new jobs, and seen our tourism spending and visitation levels increase year after year.
“Through changing the definition of economic development to include things such as education, workforce development, arts and entertainment, tourism and the like, we have led the way in Kentucky and seen ‘quality of life’ become the new catch phrase,” Girdler added. “In Somerset and Pulaski County we sell our high quality of life along with a low cost of living and the new equation has proven to be very successful.”
“Long-term success in economic development requires us to be able to continue to deliver reliable, affordable, accessible and diverse forms of power, which is why Team Kentucky is so involved in this space, said Kristina Slattery, commissioner of CED’s Department for Business and Community Development.
Energy is a vital element of quality-of-life factors that are increasingly important to recruiting and keeping companies and energy-related projects also create jobs. In October, Grissan Renewable Energy broke ground on a clean energy manufacturing facility in Marion County that will convert spent mash from distilleries into sustainable, renewable natural gas and fertilizer.
“The Kentucky Energy and Environment Cabinet is a key partner in Kentucky’s speed-to-market advantage and Team Kentucky works collaboratively with the Office of Energy Policy,” Slattery said. “We’ve seen great reinvestment and innovation from Kentucky’s energy providers to stay competitive in a changing market.”