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Tom Martin Q&A: Promise Zone investing in future of Eastern Kentucky

Jerry Rickett is president and CEO of Kentucky Highlands Investment Corporation.
Jerry Rickett is president and CEO of Kentucky Highlands Investment Corporation.

Eastern Kentucky needs help: Coal jobs are disappearing. People are leaving the region. Some counties are among the poorest in the entire country.

President Barack Obama has identified eight Eastern Kentucky counties as one of the first rural regions to benefit from the administration's Promise Zone program. The initiative partners federal agencies with local communities and businesses with the aim of creating jobs, improving educational opportunities, building private investment and improving public safety. This process is being coordinated and managed by Kentucky Highlands Investment Corp,. of which Jerry Rickett is president and CEO. He shared details with Tom Martin.

Martin: What is a Promise Zone?

Rickett: A Promise Zone is a program where the communities put a community-based strategy together, some federal agencies agree to partner and provide some priority on funding. And we are fortunate to have served a role together with the USDA and the University of Kentucky Extension program. We put together counties that are part of the Kentucky Highland service area that had been most adversely impacted by the decline in coal jobs. From 2011 through the first quarter of this year, the Promise Zone counties have lost almost 4,400 direct coal mining jobs. Those jobs paid around $63,000 a year. We think there are as many as three indirect jobs for every direct job. So that's why we targeted those eight counties.

Martin: For perspective, $63,000 in this particular region is good money.

Rickett: It is fantastic money, and they generally have very excellent benefits. You know, health care insurance, dental insurance and those things go through the economy at the local level, through our health care system. I just can't speak enough on what an adverse impact it's had on that region.

Martin: What are the eight counties comprising the Promise Zone?

Rickett: Harlan, Letcher, Leslie, Perry, Clay, Knox, Bell and part of Whitley.

Martin: Describe the conditions that attracted the attention of the president.

Rickett: Those counties are identified by the Appalachian Regional Commission as distress counties. That's based on literacy rates, incomes and a lot of social conditions that are measured by the census and Department of Health and Human Services. The president wanted to focus on some of the most challenging places in the country and to use the power of partnering. We started out with 12 primary partners. We're up to 57 partners now. Those partners are a cross-section of the organizations that help alleviate poverty and improve the quality of life for Appalachian residents.

Martin: I understand that the University of Kentucky helped formulate a strategic plan. Is that plan in place, and can you sketch it for us?

Rickett: It's the University of Kentucky College of Agriculture that's actually helping; Dr. Alison Davies and her staff. They've gone out in the communities and done a lot of public input both at the adult level and at the high school level. They were particularly encouraged by the young people and the vision they had for our communities. So we're working in topical areas now: education, health care, agriculture. We're trying healthy foods, any segment of the economy you can think of we have a committee that covers it in some way.

Martin: Drug abuse and drug-related crime in the region have been pretty unappealing to employers. Is it still an issue to overcome?

Rickett: I believe it's still very much an issue to overcome. Our partner in crime prevention and rehabilitation is the UNITE group that Congressman (Hal) Rogers worked on several years ago. He's worked very closely with state officials and the court systems and law enforcement. They're focusing on the rehabilitation of individuals. Most employers today require a drug-free employee. So we're seeing a significant problem. Another problem we have is folks' credit scores. There are a lot of programs out there that work with families on enhancing their credit, getting their score up where they can qualify to work for a company that handles confidential information, for example.

Martin: What's your strategy to improve career education opportunities and develop the workforce?

Rickett: Our primary partner in that area is the Eastern Kentucky Concentrated Employment Program. We also have the three community colleges that serve counties in that area. We've met a significant number of times with the presidents of those organizations looking at ways to work with the universities to bring training programs and curriculum into the region. It's very exciting to me to have the community colleges and research universities working together on all these social and educational issues. Gov. (Steve) Beshear and the Health and Family Services Cabinet got a $19.9 million grant from the U.S. Department of Agriculture to work with families that are on the SNAP program — the food stamp program. We're really anxious to see these people start to grow businesses or, if they have a business, to see if we can find a way to help them sell more beyond the region and improve their market share, efficiency and chances of succeeding.

Overall, Kentucky Highlands' philosophy from the very beginning has been the most powerful force man has ever invented: the American free enterprise system. We need to bring that to full force in the Promise Zone. We think that's the best way to build a region back. We've got a significant number of small businesses in the Promise Zone, and if we can get maybe 10 percent of them to hire an additional person over the next five years, it would go a long way toward getting us started on back to the path of recovery.

Martin: Your organization has now identified more than $206 million in funding for the zone. Where is that money coming from, and how is it being invested?

Rickett: The $206 million is a composite of several different programs. The largest success we've had was with our partners at Berea College, who are leading our education committee. They received a $38 million Gear Up program that's going to come over a five-year period. Each county in the Promise Zone will now have a Gear Up program. That works with middle school kids on thinking about a career and tries to get them into the tough classes and see that they'll be prepared as they go through high school and then on to either a professional school or some type of a college.

Martin: I understand that Kentucky Highlands has established a loan program that is focusing on some agricultural businesses.

Rickett: This is the program Grow Appalachia, out of Berea College. They're working to help families grow food in a pretty significant piece of geography in Eastern Kentucky and the adjoining Appalachian states. We're working with the Governor's Office of Agricultural Policy. We got a $200,000 grant from them and we're trying to do loans to small businesses to get them to commercialize their production, improve the efficiency of what they're doing. The loan can go as high as $7,500. We try to secure the loan as best we can with collateral. It is public money that we have been entrusted with, so we need to be a good steward of it. The interest rate is great. It's 1 percent, and to date we have closed 12 of those loans.

Martin: What can you say to those who might wonder if Eastern Kentucky has the leadership and talent to become a more successful region?

Rickett: I think there's just a tremendous amount of talent out there. We were really encouraged with what we heard from the youth groups. We're tired of hearing negative things about Eastern Kentucky, and they had a very positive outlook on the future. All of the Promise Zone counties continue to lose population, and our workforce is shrinking. We've got to stop that hemorrhaging.

Tom Martin's Q&A appears every two weeks in the Herald-Leader's Business Monday section. This is an edited version of the interview. To listen to the interview, find the podcast on Kentucky.com. The interview also will air on WEKU-88.9 FM on Mondays at 7:35 a.m. during Morning Edition and at 5:45 p.m. during All Things Considered.

Tom Martin's podcasts

Tom Martin’s Q&A appears every two weeks in the Herald-Leader’s Business Monday section. To listen to the interview, find the podcast below. The interview also will air on WEKU-88.9 FM on Mondays at 7:35 a.m. during Morning Edition and at 5:45 p.m. during All Things Considered.

Nov. 16 Tom Martin interviews Jerry Rickett, president and CEO of Kentucky Highlands Investment Corp.

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