Finger - lickin' GOOD

Entrepreneur, Jan, 2001 by Geoff Williams

IF YOU THINK BUSINESSES NEED BIG, GRIMY CITIES TO SUCCEED, CHECK OUT LEXINGTON, KENTUCKY, AND DECIDE FOR YOURSELF WHETHER THE GRASS IS BLUER ON THE OTHER SIDE.

FOR THOSE OF US WHO LIVE IN THE CITIES THAT DWELL IN THE SPOTLIGHT (THINK NYC, LA, DC), IT'S SOMETIMES HARD TO REMEMBER THAT BUSINESSES CAN EXIST JUST FINE BACKSTAGE. IN THE FIRST OF AN OCCASIONAL SERIES, WE TAKE A LOOK AT ONE AMERICAN COMMUNITY GETTING RAVE REVIEWS FROM ITS ENTREPRENEURS: LEXINGTON, KENTUCKY. MR. ED WOULD HAVE LIKED THIS CITY, AND SO WOULD BILL GATES. THERE AREN'T MANY PLACES YOU CAN SAY THAT ABOUT.

To the uninformed entrepreneur, it's easy to see why one might pass up the chance to put down business roots here. As stereotypes go, Lexington should have more in common with the Dukes of Hazzard than the Duke of Edinburgh. But actually, Kentucky's second-largest city isn't just metropolitan; it's cosmopolitan, with universities and colleges, an opera house, theaters, nightclubs, coffeehouses and quaint book nooks to go with the Barnes & Nobles. Education is the biggest employer in the city, but it's still horses that Lexington is best known for.

In fact, the equine industry pumps "hundreds of millions of dollars into the community," according to Adam Edelen, vice president of the Greater Lexington Chamber of Commerce. Lexington is the thoroughbred horse capitol of the world. Downtown, the city courthouse has statues of not soldiers but stallions. This is where the Sultan of Dubai shops to fill his foreign stables. Queen Elizabeth has visited Lexington and has boarded horses here, and William Shatner owns a horse farm in nearby Wood ford County.

Equestrian or no, entrepreneurs could feel comfortable here. And judging from what several of them have to say, they do. That comfort goes beyond just the mere ability to make a living. "If you want to talk about the economy, you have to talk about the quality of life," insists Edelen. "It's what lures people here. You don't live in Lexington so you can take a direct flight to London or Milan. You live in Lexington because it's one of the greatest places in the country--in the world. It's one of the rare places, except maybe for [Northern California's] Napa Valley, where we really use the quality of life and natural beauty as an economic development tool."

SOME PROBLEMS, SOME SOLUTIONS

Lexington is indeed beautiful. It's a big city with a small-town feel, from its tree-lined Main Street to the fountains at Thoroughbred Park and Triangle Park. Few buildings here could be considered tall, so you're always aware of the sky above; there's no concrete jungle feeling here. And just blocks out of downtown are neighborhoods of stately 19th-century brick houses with sprawling lawns. Even in the midst of all the fast-food joints and strip malls, there are parks and pieces of green space, and throughout the city, you see numerous trees of beech and buckeye, poplar and pine. As cities go, it's beautiful all right, but, of course, that doesn't mean it's a utopia for all entrepreneurs.

"Unfortunately, Kentucky's economic policy is still [geared] toward recruiting manufacturing and chicken plucking firms, and cutting ribbons. There's too much emphasis on that, instead of [nourishing] young, growing companies," says Janet Holloway, a business consultant in Lexington and former director of the Small Business Development Center and the Center for Entrepreneurship at the University of Kentucky.

Despite the lack of support, more and more young companies are forming in Lexington, according to Holloway. "They seem to almost be like genies out of the bottle; they burst into reality and grow themselves," she says.

The local government isn't completely falling short, however. It's helping fund Lexington United, a nonprofit group recently created to assist both monolithic corporations and scrappy entrepreneurs with problems such as finding venture capital and decent office space. Meanwhile, the private sector provides valuable resources for entrepreneurs, including the Center for Entrepreneurship at the University of Kentucky and the Kentucky Science and Technology Corp.'s newly formed Science and Technology Center, which encourages the use of technology and science in the economy.

But make no mistake: Lexington's nurturing persona is still in its infancy stage, says Lexington United president Terry Burkhart.

"One thing that puts us at a disadvantage is that Lexington is not like a Portland [Oregon] or Cleveland," says Edelen. "Those cities have made the transition from manufacturing based economies to high-end, high-tech, new-economy-type communities. Lexington's a bit different because historically we were never a large manufacturing town. Lexington has always been an agricultural town. It has the world's largest burley tobacco market. We have the equine economy, and there are a lot of service jobs here. But we didn't have manufacturing."

That factor, combined with the local government's resistance to urban sprawl, has created strong demand for space in Lexington. As a recent issue of Midwest Real Estate observed, it's tough to get projects approved for new building here. As a result, the downtown corridor is being dusted off. Edelen points to a high-tech incubator setting up shop in an abandoned Woolworth's building and adds that local dotcoms are being encouraged to locate downtown.