Will Passport's Move To West Louisville Spark Economic Development?

A local health care company wants to build a new corporate headquarters on a long-vacant lot in Louisville's West End.

Officials with Passport Health Plan held a news conference Wednesday morning to announce their intentions to develop the site at the corner of 18th and Broadway in the city's California neighborhood. The site has been targeted for a large-scale development for nearly a decade, to no avail.

Most recently, a Walmart was planned for the site, but officials with the retailer backed out late last year.

City leaders consider the site to be a critical pillar of a broader redevelopment strategy for western Louisville. The Passport site is near the future home of the west Louisville YMCA, just announced last week.

Officials unveiled plans for a new 62,000-square-foot building at the corner of Broadway and 18^th Street on Wednesday morning.

Louisville Mayor Greg Fischer was emphatic in his praise for Passport Health Plan's move to develop the site and relocate their corporate headquarters from 5100 Commerce Crossings Drive near Okolona.

“Passport is a great and growing company, and its decision to relocate its headquarters to 18th and Broadway is a huge win for West Louisville – and for the city at large,” Fischer said. “Passport and its employees are driven by the same core values that we embrace as a city – compassion, health and lifelong learning. Metro government is honored to help make this deal a reality.”

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The new corporate headquarters will initially be home to Passport’s more than 500 employees, but officials say it will be designed with future growth in mind.

“With our community partners and local residents, we hope to add services to the community beyond clinical care, services that are person-centered,” said Passport CEO Mark B. Carter.

But some experts say that while the project could be a catalyst for economic development in the area -- and it's certainly being pitched as such -- that is no guarantee.

"It's not a false flag, but it's no silver bullet," said Kelly Kinahan, assistant professor of urban and public affairs at the University of Louisville.

Passport has acquired the land from New Bridge Development for $9.1 million. A letter of intent with Louisville Metro includes provisions subject to Metro Council approval, such as the creation of a Tax Increment Financing plan – the first TIF established west of Ninth Street – estimated at $2.8-$4 million over 20 year, according to a Passport release.

Those incentives play a key role in determining the viability of economic development, said William Michael Cunningham, an author, economist and investment analyst.

Cunningham said if the public commitment is larger than the private return, then it's a bad deal for the community.

"It really depends upon the nature of the giveaways and the concessions," he said. "Are they hiring local residents, are they doing stuff for the community or are they just using the infrastructure — the roads, the bridges, everything that's been paid for by the community — in order to line their own pockets?"

Janet Kelly, executive director of the Urban Studies Institute at the University of Louisville, said the potential for economic development exists but is not guaranteed, regardless of the incentives provided by local government.

She said the project could do two things: provide more traffic for surrounding businesses and serve as an anchor for other businesses considering a move to West Louisville.

"Sometimes it works, sometimes it doesn't," she said.

Who Gets The Jobs?

The California neighborhood where the site sits stretches south from Broadway to Oak Street and from Ninth Street west to 26th Street. More than half of the land in the neighborhood is either zoned for industry use, commercial use or vacant, according to a 2014 report from the defunct Network Center for Community Change.

Some 6,500 people live in the neighborhood, according to the report. And the poverty rate in 2014 was about 46 percent, while the unemployment rate was 27 percent.

Margaret Simms, director of the Low-Income Working Families Institute at the Urban Institute, said for the project to be a successful driver of economic development for the surrounding area, it's imperative for the corporation to hire residents from the surrounding area — either for full-time employment or to work on the development of the site.

Kinahan, the University of Louisville professor, said that's a key question: What types of jobs will be available?

"How can Passport and workforce development organizations focus on training and skill development to match West Louisville residents to these job opportunities?" she said.

And it's vital the corporate entity listen and respond to the community's needs and desires, Kinahan said.

"The process of disinvestment and decline occurred over many decades, and reinvestment and revitalization will not occur overnight," she said. "There is much more work to be done."