Kindred plans 500 more jobs, downtown expansion
Kindred Healthcare is planning a $39.5 million expansion of its headquarters along Fourth Street at Broadway, adding up to 500 additional employees over perhaps three years.
The health care giant will build a six-story, 142,000-square-foot building adjacent to the current corporate headquarters facing The Brown hotel that will house a support center for training, an employee wellness clinic and other operations. Kindred said ground may be broken next summer, with construction to take around two years.
Kindred officials were joined by Gov. Steve Beshear and Mayor Greg Fischer Thursday afternoon at Theater Square to announce the new jobs and the construction, after the state Economic Development Finance Authority reviewed a set of $11 million in state incentives for the expansion earlier in Frankfort.
Beshear said Kindred's success is helping drive the state's position as a "critical hub for the health care industry." The project reinforces the state's and city's status as being "at the center of the health-care universe" and Kindred is a big part of that, the governor said.
Fischer described the investment as a sign of the company's confidence in Louisville and "solidified our best-in-the-world status as the leader in lifelong wellness and aging care."
Fischer called the expansion "a huge deal for us." In addition to making a major commitment to the city and its employees, Fischer said Kindred is making a large investment "in downtown's built environment, creating an attractive place for people" to gather. He called the area near Fourth and Broadway an "iconic corner and the investment here is a dream come true."
Kindred had purchased most of the western half of Theater Square along Fourth where the new building will rise over the last year, at a cost of $3.3 million. But company executives acknowledged that they considered several options for expanding, including moving to the Louisville suburbans and across the river to Indiana.
"This is the best option for everyone," CEO Paul Diaz said, emphasizing that the company's goal was to invest in its employees and their professional growth and development.
Diaz described the move as a big opportunity for Kindred's patients, employees and shareholders. "We're enormously excited about the progress we've made as an organization," particularly following a "difficult" stretch of years. Diaz said that the company's board of directors still must sign off on the plans, but he expected that wouldn't be a problem.
The new structure, featuring an exterior predominantly of glass and brick designed by the local architectural firm of K. Norman Berry, will have ground-level retail space with room for several Theater Square tenants facing possible displacement.
Popular lunchtime spots Bluegrass Brewing Co. and Yafa Cafe will be affected by the expansion, though both have two years remaining on their leases. The Louisville Clock, which is on city-owned land is also being moved.
Like the neighboring corporate campus to the south, the new building will feature some outdoor green space, some public art work and a wall that features cascading water on the north boundary of the property. The new structure will also have a "green roof" to conserve energy.
Its current corporate offices are in a six-story building on the north side of Broadway between Fourth and Fifth streets. It will be connected to the expansion by a covered walkway.
Kindred also purchased a building, now vacant, on the west side of Theater Square adjacent to its headquarters from FMEE Properties last December.
Many businesses have opened and closed at Theater Square since it was established as part of the Broadway Renaissance in 1985. For instance, the currently empty building owned by Kindred on the west side of the square was originally Hugs nightclub — and over the years it also housed the Palladium, Rick's Square Piano, the Sheer Image Salon Spa, Club Villa Fontana and, most recently, the Roxbury.
Businessman Larry Bisig, a partner in an office building near Theater Square, said Thursday that Theater Square had been an asset for many years but, "it's like your first apartment. It has good memories, but you're glad to be moving out. ... Fourth Street will be a little brother no more."
Kindred and its subsidiaries operate more than 100 hospitals, nearly 100 nursing centers and numerous home-health, hospice and non-medical home-care facilities. It has more than 2,000 employees based in Louisville, including about 200 in offices at 4th Street Live.
The activity comes as city officials work to beef up Fourth Street south of Muhammad Ali to Broadway. They have targeted South Fourth as a new retail center, and a half-dozen merchants have opened there in the last year or two.
The city also is in the middle of a nearly $4 million upgrade of South Fourth's streetscape.
A Hilton Garden Inn opened at Fourth and Chestnut streets in October. The new Mercury Ballroom concert venue near Chestnut and the Louisville Palace join The Brown hotel as pedestrian-traffic generators.
In the early 1980s, a public-private partnership was formed to develop the south end of Fourth Street near Broadway. Its effort included developing Theater Square — and saving all or part of the old Kentucky and Ohio theaters — building a parking garage and reopening The Brown hotel. The partners in the $45 million project included the city, state, a labor pension fund and five local corporations and banks.
The Broadway partners in 1993 agreed to sell the Theater Square buildings to FBM Properties.
Two months ago, Kindred confirmed a $720 million deal to buy Gentiva after a five-month pursuit and significantly grow its reach. The company also announced it would elevate No. 2 executive Benjamin A. Breier to chief executive officer and shifted current CEO Paul Diaz to be executive vice chairman of the board of directors.
Kindred is projected to become the country's largest provider of long-term, acute-care hospitals and inpatient rehabilitation facilities, along with the home health and hospice services.
The Gentiva purchase, which is expected to be completed early next year, would make Kindred, with annual operating revenues of $7 billion and $1 billion in operating income, the nation's fourth largest health care employer. It will have about 110,000 workers at nearly 3,000 sites in 47 states, caring for more than 1 million patients.
With that acquisition, the company's strategy is to create integrated care markets in 25 to 30 cities where the company can offer a range of transitional care hospitals, rehab services, skilled nursing facilities and home health and hospice services.
Kindred, which was founded in 1985 as Vencor Inc., was renamed in 2001 following its emergence from Chapter 11 bankruptcy. It operates 97 transitional care hospital and five inpatient rehab hospitals, as well as more than 2,200 sites for rehab services, which includes 104 hospital-based acute rehab units.
With Gentiva's facilities and manpower, the combined home health and hospice businesses within the Kindred at Home division would grow to include 44,500 with more than 126,000 patients daily.
According to documents released by the state economic finance agency, Kindred plans to invest $39.5 million in the expansion — $3.3 million spent for the land acquisition, $26.7 million on construction, $2 million on equipment and $7.5 million for unspecified startup costs. The company plans to move 200 employees from the 4th Street Live offices to the addition. The new jobs are expected to pay an average of $32.60 an hour.
Diaz said the support center will have Kindred University, a place where employees can be brought together to share best practices, ideas and to be trained. The result, he said, will be improved "clinical outcomes" for consumers. Diaz added a word of caution, saying that the expansion plans are subject to a stable climate of regulations, policy and reimbursement.
Reporter Grace Schneider can be reached at (812) 949-4040. Follow her on Twitter at @gesinfk. Reporter Sheldon S. Shafer can be reached at (502) 582-7089. Follow him on Twitter at @sheldonshafer.