Jere Downs and Sheldon S. Shafer

The Courier-Journal

A 24-acre vacant land parcel on 30th Street in western Louisville will be transfromed into the Louisville Food Hub.

Seed Capital Kentucky is seeking funding and is negotiating with food and agriculture-related companies.

The hub will rise in a USDA-certified food desert%2C a neighborhood where there is little or no access to fresh foodstuffs.

Mayor Greg Fischer said the hub would advance Louisville%27s recently noted status as a top %22foodie city.%22

In a move to strengthen the production and distribution of locally grown food in Louisville, Mayor Greg Fischer this week granted a 24-acre vacant parcel of land in the West End worth $1.2 million to developers of a "Louisville Food Hub."

Where National Tobacco Co. once dried, cut and packaged tobacco purchased from Kentucky farmers on 30th Street, the new commercial agriculture park will process, store and distribute locally grown foodstuffs.

Seed Capital Kentucky, the hub's nonprofit developer, is pursuing tax credits to fund a warehouse, commercial kitchen and office space. It is negotiating final details with food and agriculture-related companies, including a juicery, an industrial food processor and a 2-acre demonstration farm. The first company to break ground later this year is a privately funded $20 million methane gas plant powered by compost and staffed by 21 union workers.

Fischer called the Louisville Food Hub "a green job-generating machine for west Louisville."

Although some funding remains uncertain, the $45 million hub may be more critical than a proposed Wal-Mart at Broadway and Dixie Highway to revitalizing the West End, Fischer said. In all, the project could create about 250 permanent jobs and 270 construction jobs. In its first phase, developers estimate the project's cost to be $45 million.

Fischer likened government support for the food hub to being as critical to the city's economy as longstanding public private partnerships that develop infrastructure such as roads, bridges and the airport.

"This is all about the local food scene, healthy living, reducing our carbon footprint and promoting our farm economy," Fischer said Tuesday at Metro Hall.

The hub will help fill the gap between consumers and commercial buyers craving local food and the farmers who lack required trucking, storage, processing and marketing support.

Louisville area consumers surveyed in 2012 said they would more than double household spending on local food — to 20 percent of their food budget — if such groceries were more readily available. Commercial buyers surveyed said they were willing to spend an extra $139 million annually, for a total of $353 million, for more produce, according to the Louisville Local Food Demand Analysis, a study sponsored by the city and Seed Capital.

The food hub will rise in a USDA-certified food desert, defined as a neighborhood where access to fresh, healthy foodstuffs is scant or nonexistent while fast-food outlets and corner liquor stores predominate.

"I've been looking at an empty lot for several years," said Bill Jones, owner of Dad's Muffler Shop, 3001 W. Market, across the street. "I've seen a lot of tall grass. Anything that would bring it back would be desirable,"

When Jones opened his auto shop in 1974, he said about 3,000 tobacco workers were employed across the street at National Tobacco. "A food hub beats public housing," he said.

Similar food hubs in Baltimore, Philadelphia, St. Louis and elsewhere are models for the Louisville industrial agriculture park, developers said. The Russell, Portland and Shawnee neighborhoods converge at the concrete-paved tract bordered by a rail line on one side and 30th Street on the other between Muhammad Ali Boulevard and Market Street.

"We are looking at ways to do just what the tobacco economy did, take the produce from hundreds of Kentucky farmers and bring it here to west Louisville, process it, and create hundreds of jobs," Seed Capital founder Stephen Reily said.

"This is a transformational project based on local food," said Seed Capital project manager Caroline Heine.

Securing funds

About $14 million is expected to be spent to develop the site's infrastructure, including utilities, roads and an initial 70,000-square-foot, warehouse-style structure with loading docks, offices, classrooms, and cold storage.

That money — securing it is uncertain — is proposed to include $5 million of federal New Market tax credits, $8 million sought from several foundations and government grants; and around $1 million in private funds.

The city, meanwhile, plans to use a $25,000 grant from the J. Graham Brown Foundation and another $25,000 from the Community Foundation of Louisville to assess soil conditions at the urban brownfield, help hire engineers and architects to plan the site and further develop financial and business plans.

Partners in final negotiations to locate operations in the 70,000-square-foot building planned as the centerpiece of the hub's phase one include:

• Natures Methane, a Fort Wayne, Ind., based company that plans to purchase 7 acres from Seed Capital. It will break ground later this year on a $21 million biofuel methane gas plant. Household compost and sewer sludge will decompose in a trio of million-gallon giant tanks that will produce methane gas sold to utilities nationwide via LG&E's infrastructure.

"Louisville is leading the way," said Steve Estes, CEO of the plant's parent company, Star Distributed Energy. "This will be the largest urban food hub in the U.S."

• KHI Foods, a processor of food produced by regional farmers that will relocate from Burlington, Ky. It will employ about 30 people in an 11,750-square-foot plant that will make salsa and process vegetables for sale to restaurants and other users.

• A Weekly Juicery operation that would hire about 40 people and occupy about 6,000 square feet of space. The intended operators currently have a juicery on Bauer Avenue off Lexington Road in St. Matthews and a second store planned on Blankenbaker Parkway. The hub operation would include processing of fruit and vegetable pulp and cold storage.

Kimmye Bohannon, a partner in Weekly Juicery, said the business plans a commissary or central kitchen at the food hub, where food would be processed and then delivered to Louisville stores. "We like to use local farmers and produce," she said. "The (hub) would give us a place where all the food could come in. It would be ideal."

Some tenants will lease space, such as a planned 2-acre demonstration farm, and relocated headquarters and classrooms for the city-funded Jefferson County Cooperative Extension Service. That branch of the University of Kentucky's School of Agriculture promotes agriculture and horticulture and is currently located in city offices at 810 Barrett Ave.

Seed Capital Kentucky would move its three-person office from Second and York streets to the site, occupying about 4,000 square feet.

Phase Two

Plans for a second phase remain conceptual. They include a second major building of perhaps just over 100,000 square feet of space, with tenants employing nearly 100 people and involving an investment of an additional nearly $15 million. The second building could potentially house a food bank, grocery, one or more retail shops and perhaps one or more restaurants, cafes or delis.

Reily said officials have talked with Dare to Care Food Bank about locating at the hub, but no deal has been reached. The food bank has headquarters in southern Louisville and a large commissary on Story Avenue.

"We would love to have them, but we can succeed without them," Reily said.

Louisville Metro has committed $250,000, matched by state dollars from the Kentucky Agricultural Finance Board, to a revolving loan fund for value-added food processors that might locate at the hub.

A variety of other financing is available to potential tenants. They include a low-interest city loan program fed by its federal Community Development Block Grant money and a "microlending" program offering grants of up to $10,000 — primarily intended for farmers.

Fischer said the hub would advance Louisville's recently noted status as a top "foodie city." He noted that the food and consumer study found that there is a local demand for about $2 billion worth of food a year. The challenge, Fischer said, "is how we pull together the demand with the supply."

Louisville's progress at nurturing local food production is drawing attention from supporters elsewhere of the sustainable economy movement. Harvard's Graduate School of Design has made the Louisville Food Hub a research project this fall, and it will be featured at the James Beard Annual Conference in October and at the Milan Expo 2015.

Given the expected effort to hire workers from western Louisville, the food hub has support from neighborhood leaders and organizations, including Metro Councilwoman Cheri Bryant Hamilton, D-5th District, and the Louisville Urban League.

Hamilton, whose 5th District includes the hub site, said the project "would be a revolutionary use for the property. The hub would offer jobs and access to locally grown, fresh food. The cooking and nutrition classes would be great, and the project might help change the lifestyles and increase the healthy outcomes in the community."

New jobs in environmentally friendly industries put the West End on the cutting edge of the growing sustainable economy movement, said Haven Harrington, president of the Concerned Association of Russell Residents, a neighborhood group.

"This is a very future forward concept," Harrington said. "It puts west Louisville in a great growth trajectory."

Ben Richmond, Urban League president, said the planned hub "is an excellent opportunity, if it comes to fruition. It is going to create jobs and economic opportunity and would be a good fit for what we are trying to accomplish in west Louisville. It would mix in well, and it is not heavy industry."

Reporter Jere Downs can be reached at (502) 582-4669. Follow her on Twitter at @jeredowns. Reporter Sheldon S. Shafer can be reached at (502) 582-7089. Follow him on Twitter at @sheldonshafer.