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Old wounds lead to new name, purpose for chamber

In World
May 11, 2024

May 11—Despite Frankfort boasting billions in economic development in major industries through two very different administrations, northeastern Kentucky is still hopeful for the day it can take one step forward toward job security — without taking three steps back.

In the past few years, final closure notices rocked the foundation of thousands of families as production lines ground to a halt, railways issued layoffs and a once-bustling hospital shuttered its doors mere months before COVID-19 delivered a sucker-punch to what remained of the local economy.

The ever-resilient region continued to fight its way toward the light at the end of the tunnel by placing its hopeful eggs into an aluminum mill-shaped basket and celebrated with large scissors and silk ribbon at each new investment.

Local counties and cities put special emphasis on economic development through sparing no cost to revitalize downtown areas to attract tourists and potential investors and by partnering with organizations like the former Ashland Alliance — in charge of marketing “prime” industrial sites.

With a region packed with ambitious leaders, development-ready sites and a qualified work force raised on sweat and determination, the lingering question remains: What’s the hold-up?

Economic development revision

The Northeast Kentucky Chamber of Commerce, formerly known as Ashland Alliance, announced several changes in the first quarter of 2024.

Previously tabbed as the main entity handling economic development for the region — specifically Boyd and Greenup Counties — and chamber of commerce for area businesses, Ashland Alliance announced in February it would undergo changes to its branding and would revert back to its roots as a traditional chamber of commerce.

Since then, the Northeast Kentucky Chamber of Commerce has regained support from cities throughout Boyd and Greenup Counties — many of which had severed ties with Ashland Alliance over recent years. Catlettsburg, Russell, Greenup and Raceland are among those hopping back on board.

The month prior to Ashland Alliance’s dissolution and on the heels of former president and CEO Tim Gibbs’s departure from the Alliance, county Judges-Executive Eric Chaney and Bobby Hall unveiled the Northeastern Kentucky Economic Development Authority with a clear emphasis on attracting large industries to Greenup County and touting Boyd County as an entertainment destination.

The new economic development authority, headed by Chaney and Hall, essentially took over Ashland Alliance’s former role of industry recruitment.

Prior to the change-up, Ashland Alliance maintained its typical chamber of commerce duties including small business support, networking, growth and advocacy, as it has since 1887. The Alliance served as chamber of commerce for both Greenup and Boyd Counties.

Although the specific time frame is unclear as to when Ashland Alliance added regional economic development alongside its chamber of commerce duties, the corporation’s Articles of Incorporation filed with the Secretary of State in 1999 states: “The specific purposes of the corporation is to create an environment which supports the needs of existing businesses and provide services to help them grow and be competitive,” or, the chamber of commerce role.

Also included in the 1999 document, Ashland Alliance was to “be the lead agency in the recruitment of new businesses and industry.”

From 2019 to 2022, Ashland Alliance tax filings show the organization expended more than $400,000 in economic development-related ventures. Nearly $80,000 of that went solely towards travel expenses for the purpose of economic development.

In reviewing Ashland Alliance’s Form 990 documents from 2019 to 2022, a large component driving the organization’s yearly revenue was collected through membership dues, including those paid by local cities and the two counties’ fiscal courts.

Between the City of Ashland, Greenup County and Boyd County, the local governments paid nearly $200,000 since 2019 in membership dues and compensation to Ashland Alliance, which, in turn, would market available properties, specifically in EastPark Industrial Center, with the goal of securing a new major industry or investors as the area’s main employers idled or closed.

Worth the investment?In 2019, Ashland, Greenup and Boyd Counties made up about 20% of Ashland Alliance’s $259,814 total revenue collected from membership dues.

According to financial documents obtained by The Daily Independent, Ashland paid $15,000, Greenup $16,000 and Boyd $20,000 in yearly membership fees or contributions in 2019 — the same year Ashland Alliance recorded more than $600,000 in revenue through dues, grants, contributions and fundraising events, and, in turn, the organization shelled out $657,203 in total functional expenses.

Among the organization’s expenses in 2019 were an approximate $133,000 salary for Gibbs, a little more than $88,000 in costs for conferences, conventions and meetings, and $137,000-plus toward economic development endeavors.

In May 2019, Gibbs and Amanda Clark, the Alliance’s former Vice President, traveled to Paris, France, to attend the Farnborough Airshow for the purpose of business meetings related to economic development.

Pertaining filings state the trip in 2019 had a cost of roughly $37,000 for airfare, transportation, lodging and meals while in attendance.

The European trek, according to IRS filings, was to “attend meetings with owners and other delegates of companies who manufacture aerospace products” with a goal to “encourage investors and location in eastern Kentucky as part of our ongoing economic development activity.”

A publication by TDI in June following the trip stated 2019 was Ashland Alliance’s second appearance at the airshow where recruitment activities placed the region on an “international stage,” according to Dr. Larry Ferguson, President of ACTC, who was also in attendance.

In TDI’s archives from the prior month, in April 2019, CSX Russell Locomotive Shop was reported as closing, affecting 108 union workers and wiping out 113 jobs.

In September 2019, 260 employees of AK Steel’s Ashland Works received final closure notices after a diligent fight from local and state leaders.

Turning to 2020, Ashland Alliance brought in roughly $251,000 in membership dues (about 16% from Ashland, Greenup and Boyd), and reported an overall revenue of $332,611 — nearly half of the prior year’s earnings.

The year 2020 started with a tumultuous bang for northeast Kentucky as Bon Secours Health System announced Our Lady of Bellefonte Hospital would close that September, cutting up to 1,000 jobs.

In a publication from TDI announcing the hospital’s closure, Gibbs said, “Even with this gray cloud, there is opportunity.”

The year of COVID-19 meant the Alliance would lean into supporting small local businesses through its chamber initiatives. Still, Ashland Alliance continued a focus on economic development, as IRS documents show the alliance spent about $86,000 toward economic development — $50,000-plus less than the previous year.

The substantial loss in revenue for Ashland Alliance in 2020 could easily be attributed to pandemic lockdowns, but it was also the year clear cracks formed in the proposed multi-billion-dollar aluminum mill set to open in 2022 in EastPark.

In April 2020, TDI published findings from a report regarding ex-Braidy CEO Craig Bouchard’s tenure. The findings indicated Bouchard “misled the company’s board of directors, potential investors and the public about the fiscal health of the company.”

Three years prior, initial announcements of the aluminum mill stated “The company (formerly Braidy) was courted to the region by the Bevin Administration and the Ashland Alliance, which is the chamber of commerce and economic development organization for Boyd and Greenup Counties.”

Even after the 2020 publication alluded to a conned project, elected officials up the chain held on to “cautious optimism,” including Gibbs, who, per the 2020 article, said the “region’s history in the steel industry is the ‘very reason we were successful in getting Braidy to come here.'”

The article included another quote by Gibbs: “More questions could have been asked, but when you have an opportunity like this in an area that is hungry for success, we have to keep doing what we can to help make that opportunity happen.”

In 2021, Ashland Alliance brought in roughly $25,000 less than 2020 in membership fees and, by 2022, would receive just $10,000 from Boyd County and none from Greenup County, cutting the typical ~$50,000 from the region’s three major government entities to just $21,250.

By 2022, Ashland Alliance expended more than 75% of its yearly earnings in total program services, including $117,100 to “provide support to attract new business through economic development activities.”

Available financial records do not break down a specific receipt list for those activities, but do show an 89% increase in economic development service expenses in 2022 compared to 2021.

In short, from 2019 to 2022 Ashland Alliance reported expenses of a little more than $2 million. Broken down, only about 20% of those expenses went toward the specific cause of “attracting” and “expanding” businesses through economic development activities.

The headlines in TDI’s archives celebrate several wins with the Ashland Alliance in the four-year period investigated as new and re-opening businesses provided a glimmer of hope through the official losses of major employers and a dream-like project.

Despite the organization’s successes, TDI’s inquiry revealed seven out of nine cities were not affiliated or had severed ties with the alliance prior to its dissolution for various reasons, including the name of the organization itself, which left out cities under its own umbrella.

The name game

Scott Martin, Ashland Alliance’s former Director of Operations since 2022 and now the acting CEO of Northeast Kentucky Chamber of Commerce, made a visit to a City of Russell council meeting last May to seal the deal to host a Business After Hours event in downtown Russell in the upcoming summer months.

The council seemed generally receptive, including Russell Mayor Ron Simpson who said he was on board with the concept and Alice Kay Thompson used “fantastic” to describe the collaboration between Ashland Alliance’s event aimed at bringing a networking opportunity into Russell city limits.

“I think what people don’t understand is with the Alliance, since I’ve been there, under our logo it says ‘economic development and regional chamber of commerce serving Boyd and Greenup County,'” Martin told the council, who, according to an open records request, had no record of membership payments to Ashland Alliance during Martin’s 2023 visit.

In fact, the city could not provide any records to indicate membership with the Alliance in the past five years.

At the May 2023 address, Martin told council members he was adamant about rotating events and appearances between Boyd and Greenup County “so everyone gets a fair share.”

The nods of approvals began to hesitate when Russell City Attorney Tracy Frye appeared to foreshadow the rebranding by posing the question she called “the elephant in the room and I’m always the one that points it out.”

“If it’s the Greenup and Boyd County Alliance and chamber of commerce, why is it the ‘Ashland’ Alliance?” Frye asked.

Martin explained the naming of the organization was well before his arrival, but proposed at the time of the name selection — which he said occurred in the ’90s — Ashland was the largest city in the area.

Frye said the name choice “makes us feel very unloved here in Greenup County … I’ve mentioned it several times to Mr. (Tim) Gibbs and I can tell you, you’d get a lot more of a buy-in from businesses in Greenup County if it wasn’t just the Ashland Alliance, because we’ve been pretty ignored until you (Martin) came on board.”

Frye, who has ownership in downtown businesses, told Martin last year, “A lot of business owners (are) waiting to join when the name includes our county.”

Speaking on behalf of the council regarding their history — or lack thereof — with the Alliance, Simpson said the city had already parted ways well before the rebrand.

“It got to a point where … we didn’t feel like we were getting anything from Ashland Alliance,” Simpson said.

In line with Frye’s previous implication, Simpson said the name of the organization wasn’t very “inclusive” to the cities in the region supposedly represented.

Simpson said Russell, through “collaborative efforts,” will start July 1 with the new chamber of commerce.

Twenty minutes away from Russell, Catlettsburg, the county seat of Boyd, provided in response to an open records request “there were no payment of dues for Ashland Alliance from January 2019 to present.”

Catlettsburg Mayor Faith Day said she wasn’t sure when or if Catlettsburg had ever been members of Ashland Alliance but she did know they had not been affiliated when and since she was elected.

“Prior to my administration, before 2019, I don’t know what happened,” Day said. “It’s not that we didn’t want to be members.”

When Day was elected, she said she looked into how to join the Alliance, specifically for its chamber-of-commerce perks.

“I wondered, ‘How do we become members,'” Day said. “We never got the opportunity to be one prior to the new chamber and until Scott Martin arrived on scene.”

According to Day, once Martin was hired in 2022, the city started to see some activity from the Alliance.

“In the last year or so, Scott Martin has helped businesses up here,” Day said.

“We wanted to make sure we were members because I wasn’t sure why we weren’t,” Day said when asked if she or her council had intentions of joining with the new structure.

As for the name change, “The name change helps. You see Ashland Alliance and automatically assume it’s just for the city of Ashland. Now it’s two counties working together,” Day said.

“We want to make sure business owners have a voice to try and support our town, surrounding cities and the county. … I want local businesses to know we want them to succeed and we’d love to see some growth,” Day said.

Although its unclear if the exclusivity of the Alliance’s name deterred outlying cities who allegedly fell under the Alliance’s service area, the cities of Bellefonte, Greenup, Wurtland and South Shore also had no documents of payment to the Alliance or indicated affiliation in the five-year period investigated.

In addition to representation issues, Boyd and Greenup County judges-executive said despite spending $100,000-plus in combined dues to the Alliance from 2019-22, the Alliance couldn’t take credit for recent economic feats in the two counties.

‘A serious frustration’

From the moment Greenup County Judge-Executive Bobby Hall began his political campaign, economic development was a clear focus for Hall.

After taking office in January 2023, Hall hit the ground running to establish a county worthy of major industry investment, including his promises to implement a county-wide ambulance service and improve and expand waterline infrastructure.

Both of those goals for Hall were reached within his first year in office, including the waterline project, which simultaneously provided running water to 85 county residents for the first time and parlayed water to a 1,000-acre industrial site.

“If you don’t have water, utilities, fire, police, ambulance, it’s hard to entice corporations to come to Greenup County,” Hall said.

In financial documents provided, the Greenup County Fiscal Court pumped $16,000 per year into Ashland Alliance, but under Hall’s administration, that number quickly dwindled to $0.

As for reasoning, Hall said: “We, the Greenup County Fiscal Court, were not happy with the former leadership of the Ashland Alliance’s economic development.”

At the time of the county’s severance, Gibbs had been President/CEO for roughly a decade before announcing his departure last November.

“I truly believe that it is obvious now to the people in our region, that with the new Northeast Kentucky Economic Development team — the energy, the morale, the teamwork. … You can see now; it was stale and now it’s not,” Hall said, referencing the new economic development authority developed alongside Chaney.

Chaney shared similar views.

“My issues weren’t with Tim (Gibbs) personally,” Chaney said, “My issues were with the way that Tim Gibbs operated and believed in economic development.”

Gibbs told The Daily Independent on Friday that he had “no stones to throw at anyone” and that Chaney was just “aggressive” in his approach.

Chaney, elected in late 2018, said he had questions about membership payments to the Alliance almost immediately.

Financial statements from Boyd County show a $20,000 payment to Ashland Alliance in 2019 and it was cut in half by 2020.

“He’d (Gibbs would) send me an email every quarter and said ‘Hey, you owe me this much,’ and I’m like, for what?” Chaney said. “Why do you need my money? Why do you need taxpayer money for?

“I put Gibbs on notice from the very beginning,” Chaney continued. “I said, listen, you’re going on performance base. … Bring something to the table and we’ll reward you for it.”

Evident in the county’s payment history, no due amount is obvious or consistent from 2019-22, as county contributions show payments of $10,000 in 2020, $23,000 in 2021 and $10,000 in 2022.

Chaney estimated the county’s annual payment to the Alliance was around $30,000, money Chaney said he could pour into economic development himself.

In recent years, Boyd County has made several announcements surrounding economic development, including the development of the old Kyova Mall property which introduced Camp Landing, Sandy’s Racing & Gaming and the nearby groundbreaking on a future horse racing track.

When asked what contribution Ashland Alliance made in those developments, Chaney responded: “Zero.”

According to Chaney, in talks of Kyova’s redevelopment plans, Chaney was told by Alliance leadership that retail (Camp Landing) “is not real economic development.”

Chaney said having economic development under the Alliance’s umbrella was not effective. “Business-wise, for Boyd County, it didn’t work. Ashland Alliance, I mean I can’t lay my finger on a single thing Ashland Alliance brought to Boyd or Greenup County.”

“It was a serious frustration to me knowing what we could be,” Chaney said about trying to present his vision of economic development through retail and tourism to Gibbs early on.

“We had to do it ourselves and we had Ashland Alliance down there that was supposed to have our back and help us and we never had any help or any support,” Chaney said.

“Those are the frustrations,” he said. “… We want Boyd County to grow and that includes the city … but those were never reciprocated. I get ‘retail isn’t economic development’ and then we go to open Sandy’s after working our tail off to get the last horse track in the state of Kentucky and we have the Ashland Alliance dinner there the same night.”

Chaney said he never had issues with the chamber of commerce side.

Back on board

As mentioned, Catlettsburg, which paid $292 in new membership dues to Northeast Kentucky Chamber of Commerce last month, is just one of the areas previously uncommitted to Ashland Alliance that have already joined or intend to join the new chamber under Martin’s leadership.

In Greenup County, specifically, financial records from the city of Raceland suggest a formerly on-and-off relationship with the Alliance since 2019.

In an email exchange with Dustin Burchett, Raceland’s city administrator, the city paid $150 total for 2019 and 2020 in dues to Ashland Alliance.

“I was hired by the city in June of 2021. At that time, we were not a member,” Burchett wrote. “We rejoined in 2022 but we had concerns about the direction of the chamber and its future. That led us to dropping out in 2023.”

In financial records from Raceland, the city’s 2019 and 2020 due rate of $75 increased to $375 in 2022, which Raceland paid prior to its $0 contribution and severance of ties the following year.

“That all led to Scott Martin personally reaching out to me and we began discussing the city rejoining,” Burchett continued, adding personal discussions with Martin, Flatwoods Mayor Buford Hurley, Raceland Mayor Tony Wilson, Hall and Scott Rigsby, chairperson of the chamber’s board, Raceland was back on board.

Due to the recent changes and a clear vision moving forward, Burchett said Raceland was “honored to rejoin.”

Like Catlettsburg, Raceland, too, has already paid its pro-rated membership dues to join the new chamber.

The City of Greenup also intends to officially join, according to Mayor Lundie Meadows, who said in his 16 years as mayor, his city hadn’t been a member of the Alliance for at least the past decade.

Meadows, who said the previous name was only a factor, did not elaborate on Greenup’s historic lack of involvement with Ashland Alliance.

“The past is the past and we want to focus on the future,” Meadows said, adding the City of Greenup is in the process of joining the new chamber.

Per financial documents obtained from the City of Flatwoods, the city paid $8,000 in membership dues from 2019-22.

From the information provided, Flatwoods hadn’t wavered from its ties with the Ashland Alliance in that four-year period.

In March 2024, Flatwoods paid $1,033 for membership with the new chamber.

Like Flatwoods, the City of Ashland also never wavered in its membership with the Alliance, spending an average of $15,000 yearly for affiliation.

In discussions with City Manager Mike Graese, Economic Development Director Chris Pullem and Mayor Matt Perkins, the three contended there were cascading effects to the Alliance’s efforts, specifically in its traditional role as chamber of commerce.

When asked how the city benefited directly in economic development efforts, the response varied.

“If you’re talking specific businesses, I’m not sure that’s a fair question,” Graese said, adding the Alliance’s successes with youth and community leadership programs and networking opportunities were “absolute gold.”

“If you’re looking for a tangible or quantifiable, honestly, I can’t give you one. I know they’ve had a few successes. … They became basically the trusted arm of the Economic Development Cabinet in eastern Kentucky,” Pullem said.

Perkins said Ashland consistently did what it was supposed to do.

“I’m not going to apologize for putting good money down to try to get jobs to this community,” Perkins said.

Added Graese: “And I know Braidy-Unity is so polarizing but what if it would’ve happened? I think about the amount of time we put into that from the city staff. … We didn’t lose anything. We gave staff time to a project that would’ve been incredible for our community.

“The value we got out of that organization is to get us at the table as an organization that was recognized by the state,” Graese said.

The cities of Greenup, Raceland, Catlettsburg, Flatwoods and Ashland, and both Greenup and Boyd Counties, have all either stayed with, rejoined or will join the chamber.

A few — including South Shore, Wurtland, Worthington and Bellefonte — have not indicated their intentions with the new chamber, but Hall said he’s confident the new focus on regionalism will rope in the outstanding.

“(If) we have 14 mayors, 14 city councils, five judge-executives, all working together for the same common goal, then I think we’re gonna prosper as a region. … There’s teamwork that’s necessary to move both counties in this region forward.”

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