Kentucky wants to put a big company in a small town. A key official owns land there.
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Kentucky’s Economic Development Cabinet hopes to attract a big company — or maybe more than one — to a 1,550-acre site it owns at the Glendale exit of Interstate 65 in Hardin County. That’s one reason why the legislature last week approved a $410 million state incentives package to help cover construction costs and worker training.
That vacant Glendale spot — what state officials last week touted as a “mega-site” — is familiar to Economic Development Secretary Larry Hayes.
Hayes co-owns 8.5 acres of land in Glendale just a short distance from the state’s property, according to his most recent financial disclosure report. Hayes also is an owner and partner in an Elizabethtown warehouse business about seven miles up the road.
If the cabinet did win a major economic development deal in tiny Glendale, as state officials hint is possible, then local property values likely would boom — including those owned by Hayes. State officials won’t identify what companies they’re trying to recruit, but state Senate Majority Leader Damon Thayer, R-Georgetown, last week compared the prospects to the huge Toyota plant that came to his district in the 1980s.
Hayes has been in this position before. He served Gov. Andy Beshear’s father, former Gov. Steve Beshear, in the same post a dozen years ago. At that time, the Economic Development Cabinet unsuccessfully tried to lure a lithium-ion car battery plant to the Glendale site.
The Executive Branch Ethics Commission at that time cautioned Hayes about the potential conflict of interest.
“In light of your ownership interest in the properties located near the Hardin County industrial site which could, if not directly, certainly indirectly benefit from the successful development of the site as long as you remain interim secretary of economic development, you should abstain from any involvement in matters relating thereto,” the commission wrote to Hayes in 2009.
Initially, Hayes failed to include his ownership of the Glendale property on his annual financial disclosure report until the Herald-Leader inquired about it in 2009.
On Monday, Hayes declined to comment on the Glendale site, but cabinet spokesman Jack Mazurak said the secretary will keep his professional and personal interests separate.
The governor is chairman of the Kentucky Economic Development Finance Authority board that would decide on awarding incentives to a company, while Hayes is a non-voting member, Mazurak said. The governor or some other cabinet official, not Hayes, would present any deals related to the Glendale site to the KEDFA board, he said.
“Secretary Hayes has taken no official action on any such project. While Secretary Hayes will remain active in recruitment, he does not have a vote in the decision-making process,” Mazurak said.
However, a critic on Monday said Hayes should sell his properties in the Glendale area if he wants to remain at the cabinet.
“There already is enough doubt about these economic development projects and the effectiveness of their incentives that we don’t need, on top of it, economic development officials offering the perception of impropriety,” said Jim Waters, president and CEO of the Bluegrass Institute for Public Policy Solutions.
“Being involved in these decisions as he is, he should just separate entirely, just draw a clear line” Waters said.
Hayes and a longtime friend, former state Transportation Secretary Joe Prather, acquired land around Glendale from 1999 through 2006, before both men joined the first Beshear administration, land records show. Separately, Prather and his family also purchased land just north of that area and developed it into housing.
The Economic Development Cabinet and the Elizabethtown-Hardin County Industrial Foundation purchased the Glendale site in 2002 when then-Gov. Paul Patton tried to recruit a Hyundai car factory that instead went to Alabama. Several subsequent attempts to lure a major employer to the site have proven fruitless.
