< Previous78 KENTUCKY ECONOMIC DEVELOPMENT GUIDE A s the nation drives forward on the path to a sustainable energy transition it seems all roads lead to Kentucky. The Bluegrass State’s robust automotive industry has laid a natural foundation for industry leaders to integrate electrification efforts. A strategic focus has been placed on boosting production of battery-powered electric vehicles from automotive giants Toyota, Ford and General Motors within their Kentucky-based operations, introducing a stream of multi-billion- dollar investments from suppliers aiming to advance industry activity forward. Subsequently, an expansive supplier PLUGGED IN by ALEXIS ELMORE The commonwealth solidifies its role as the nation’s EV capital. [ ENERGY STORAGE & EV ] Governor Andy Beshear is joined by leaders from Canadian Solar and e-STORAGE to to announce a new utility-scale battery storage facility called Shelbyville Battery Manufacturing. Photo courtesy of the Office of the GovernorKENTUCKY ECONOMIC DEVELOPMENT GUIDE 79 network has continued to gain momentum in the state, manufacturing EV-related products such as motors, structural products, assemblies, air springs, nanomaterials, battery components and more. This has positioned Kentucky to support every phase of the EV lifecycle, encompassing manufacturing and recycling of batteries to EV parts production and vehicle assembly. In 2024, Kentucky’s EV and energy storage industries welcomed five private sector new-location and expansion projects that brought more than $1.5 billion in investment, resulting in the creation of about 1,700 new jobs. Since 2019, these sectors scored 28 projects whose investments total $12.4 billion and have introduced more than 11,800 jobs. Coming Soon Previously announced projects, including the $5.8 billion BlueOval SK Battery Park in Glendale and AESC’s $2 billion EV battery gigafactory in Bowling Green, are geared up to begin operations. The pair of blockbusters are the two largest economic development projects in Kentucky’s history. “We conducted a rigorous site selection process which considered site size, shovel ready, their business environment, government incentives, workforce and the availability of renewable energy,” BlueOval SK said in a statement. Ford Motor Company and South Korea- based EV battery manufacturer SK On announced the first of two planned lithium-ion battery plants in the state, named Kentucky 1, would begin initial production in 2025. Construction work on Kentucky 2 is still underway at the 1,500 acre site, which will bring the final 2,500 jobs for a total of 5,000 jobs between the two facilities. Once complete, production capacity Since 2019, KENTUCKY HAS SCORED 28 NEW & EXPANSION PROJECTS FOCUSED ON EV & ENERGY STORAGE AESC is creating 2,000 jobs in Bowling Green.80 KENTUCKY ECONOMIC DEVELOPMENT GUIDE at BlueOval SK will reach 80 gigawatt hours (GWh). Batteries manufactured here will be used for future Ford and Lincoln EV models. Meanwhile, 73 miles south in Bowling Green, Japan-based AESC will also launch its 30 GWh EV and energy storage battery facility in the coming months. A new generation of battery cells will be produced at the site, offering 30% more energy density than previous generations. These batteries allow for reduced charging times while supporting increased range and efficiency. By 2027, AESC will manufacture enough batteries to power 300,000 EVs per year, creating 2,000 jobs. “We are confident that this gigafactory will not only strengthen local economies by creating thousands of new competitive clean energy jobs but also advance Kentucky’s position at the forefront of the fast-growing and global EV industry,” said AESC U.S. Managing Director Jeff Deaton. In 2024, Toyota announced that its investment into the Toyota Motor Manufacturing Kentucky (TMMK) plant, located in Georgetown, would receive a $1.3 billion boost. TMMK’s operations will not only evolve to produce battery electric vehicles (BEV) but will now additionally establish a battery pack assembly line at the facility, which will be used for production of BEV’s and hybrid models. Toyota revealed that it will manufacture an all-electric three-row SUV model, bZ5X, made specifically for the U.S. market. The company has stated that the site will play a critical role in accelerating Toyota’s global electrification strategy, which looks to offer EV or hybrid versions of all Toyota models by 2025. Powering North America Just outside of Louisville, the city of Shelbyville landed on the radar of e-STORAGE as the ideal location to cater to rising demand in North America for utility-scale battery energy storage systems. The arrival of the Investments Totaling Over $12.4 B & More Than 11,800 Jobs CreatedKENTUCKY ECONOMIC DEVELOPMENT GUIDE 81 operation, known as Shelbyville Battery Manufacturing, adds a new level of diversity to Kentucky’s growing battery manufacturing ecosystem, creating , high-tech jobs. “ ey have acquired the largest building in this region at over million square feet and will become the largest employer in Shelby County,” said Shelby County Industrial and Development Foundation President and CEO Ray Leathers. “As a result of our U.S. central location, infrastructure and available land we’re in the process of experiencing pretty phenomenal growth.” e $ million battery cell, module and packaging manufacturing facility will produce self-contained, modular utility-scale energy storage solutions. ese systems will play a key role in enabling solar and wind energy deployment to be made more reliable and dispatchable around the nation for utility companies and project developers, according to the company. As Shelbyville is positioned to reach nearly % of the U.S. population within six hours due to ample access to I-, I- , I- and I- , Shelbyville Battery Manufacturing can distribute its product year-round with ease. “ is new plant will allow us to provide our U.S. customers with cutting- edge, American-made battery energy storage products,” said e-STORAGE President Colin Parkin. e greatest benefi t to building domestic supply of battery energy storage systems is the ability to enhance grid resilience, reduce carbon emissions and streamline U.S. clean energy goals. e facility will have an initial capacity of GWh once operational by late , scaling to GWh by the end of . e facility will house its own on- site R&D lab, bringing collaboration opportunities to the region’s local universities. Leathers said the company is in the midst of modifi cations to the existing facility. He will soon meet with e-STORAGE’s leadership team to ensure resources and support are available as the project nears completion. “I expect to see a lot more activity in this coming year,” noted Leathers. “I anticipate because of our location and resources we have that the Tier and Tier suppliers to EV factories will be looking for locations, in addition to the renewable energy sectors.” BlueOval SK is set to begin production at its $5.8 billion EV battery operation in Glendale in 2025. Photos courtesy of BlueOval SKK entucky’s ability to land corporate facility investment projects increased exponentially with the launch six years ago of the Kentucky Product Development Initiative. A state-funded program that provides matching grants to localities for the development of shovel-ready sites, KPDI has proven to be a game-changer for communities across the Bluegrass State. Projects like Pratt Industries in Henderson and Phillips Tank & Structure in Columbia may not have occurred without the dollars from Frankfort to these communities for investment into creating development-ready sites. The structure for administering the program is outlined on the KPDI website: “The established Kentucky Product Development Initiative (KPDI) 2024 Program is a statewide effort to support upgrades at industrial sites throughout the commonwealth and position Kentucky for continued economic growth. KPDI, a collaboration between the Kentucky Cabinet for Economic Development (KCED) and Kentucky Association for Economic Development (KAED), includes $35 million per fiscal year in state funding toward upgrades of sites and buildings across the state. KPDI applicants, such as local governments and economic development organizations, may seek funding assistance for transformative site and infrastructure improvement projects that will generate increased economic development opportunities and job creation for Kentucky residents. Through KPDI, funding is available through a competitive application process, with each of the 120 Kentucky counties eligible for a maximum funding amount calculated based on population. There is a maximum of $2 million per county per project. Applicants are encouraged to submit regional projects, which allow available funding for multiple counties to be combined, increasing the maximum allowed for a given project.” Since its inception in 2019, the commonwealth has set aside $170 million for site development — money that has been used to help communities land record-setting amounts of corporate facility investments across the state’s 120 counties. State funding closes gaps in making business sites shovel ready. [ SITE DEVELOPMENT ] How Kentucky Expedites Speed to Market by RON STARNER 82 KENTUCKY ECONOMIC DEVELOPMENT GUIDE Team Kentucky and partners statewide ensure growing businesses get up and running faster than anywhere else. Photo by Charity Hedges courtesy of Kentucky Cabinet for Economic DevelopmentJeff Noel, secretary of the Kentucky Cabinet for Economic Development, calls KPDI a game-changer for economic development. “Go back to the pilots that were done. We had $100 million in the first round and $70 million in the current round,” he said. “Pratt Industries invested $500 million into a KPDI site in Henderson. Companies all over the state have located on KPDI sites. To award these funds, we use an outside consultant who goes into communities and evaluates each proposal. They ask questions like ‘Do you have the right tools for your workforce? What is the land you are proposing?’ We use that to score the applications for funding. We then provide feedback to each community. Our communities are stronger because of these KPDI programs.” How KPDI Works at the Local Level Missy Vanderpool, executive director of Henderson Economic Development, said that KPDI was instrumental in her community landing the $500 million plant investment by Pratt Industries. She added that KPDI funds are also being used to develop the Sandy Watkins Site in Henderson’s 4 Star Industrial Park. “This site is just over 100 acres and is a CSX Railroad site with water, gas and electrical power,” she said. “We were able to use state funds to create a Build-Ready Pad of just over 1 million square feet. That is now the largest pad in the state.” Jenny Schenkenfelder, senior sites and buildings manager and GIS specialist for KCED, said “there is a whole KPDI site selection and vetting process. A third-party, non-biased entity chooses the projects that receive funding. We keep track of the sites and buildings that get awarded funding. We are now in the third round of funding. Project managers are finishing their site visits now.” In the current round of KPDI, some 32 sites are being evaluated, noted Schenkenfelder. “Properties that just need that next step of development qualify for these funds,” she said. “This benefits many smaller and rural communities that otherwise would not have the money to do this on their own.” A matching amount of dollars is required from each community that wins a KPDI grant. Smaller communities may qualify for relief from the 1-to-1 matching requirement and may have to contribute only 10% to 20% of the amount. “Using those funds for infrastructure and roads can help a community solve the need for speed to market,” says Schenkenfelder. Round one of KDI concluded in December 2023 and resulted in 53 projects statewide being approved for $31.2 million in funding. Those dollars were combined with local contributions that led to more than $123 million in new investments made to sites and buildings in Kentucky’s portfolio. To date, round 2 of KPDI has seen over $51 million in state funding go to 36 approved projects across Kentucky. Combined with local contributions, these projects generated more than KENTUCKY ECONOMIC DEVELOPMENT GUIDE 83$ million in investment in buildings and sites. KCED also oversees the Build-Ready program for the state. “We approve all of the Build-Ready pad sites,” said Schenkenfelder. “We work with the local economic developer in concert with an engineering fi rm. ey have a checklist of actions that they must send over to us. We have as many as Build-Ready pads across the state. Several of those sites have been created with the use of KPDI funds.” Case in point is the Green River Commerce Park in Columbia in Adair County. “We were fortunate to be included in round one and round two of KPDI,” said Heather Spoon, consultant for the Economic Development Authority of Columbia-Adair County. “KPDI enabled us to double our dollars at Green River Commerce Park. We spent $, on that site and the state matched it. at put almost a million dollars into GRCP. Our new Build-Ready pad is ready to go, and we have won three very impactful projects.” Two of those wins are Phillips Tank and Pennyroyal Distillery. Because of state assistance through KPDI, Spoon said “we are even more ready now to host companies for a visit.” Meanwhile, Kentucky continues to invest dollars in its Build-Ready Program. is initiative helps communities get shovel-ready sites developed quickly. ese state resources can be used to help local jurisdictions assemble controllable sites for development; complete archeological, environmental and geotechnical studies; construct a building pad; perform preliminary design work; and approve site plan permits. e commonwealth is home to “ Companies all over the state have located on KPDI sites. To award these funds, we use an outside consultant who goes into these communities and evaluates each proposal. ” – Jeff Noel, Secretary, Kentucky Cabinet for Economic Development Photo courtesy of Team Kentucky !( ! ( !( !( !( !( ! ( ! ( ! ( ! ( ! ( !( !( !( !( !( ! ( !( !( !( !( ! ( ! ( !( ! ! ( ( ! ( !( !( !( !( !( ! 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( Pike Ohio Clay Hart Hardin Bell Trigg Pulaski Lewis Logan Christian Adair Todd Graves Knox Warren Barren Butler Floyd Laurel Casey Harlan Allen Wayne Leslie Hopkins Carter Knott Perry Bath Union Owen Nelson Daviess Grayson Whitley Breathitt Shelby Scott Lee Bullitt Estill Lyon Madison Morgan Marion Henry Clark Grant Meade Lincoln Breckinridge Green Taylor Larue Fleming Letcher Jefferson Calloway Lawrence Elliott McCreary Henderson Monroe Jackson Greenup Rowan Boone Caldwell Webster Muhlenberg Marshall Wolfe Ballard Fayette Russell Mason Harrison Martin Mercer Magoffin Crittenden Bourbon Metcalfe Boyle Boyd McLean Fulton Johnson Clinton Rockcastle Pendleton Edmonson Hickman Powell Franklin Owsley Simpson Bracken Menifee Carlisle Washington Oldham Cumberland McCracken Nicholas Spencer Trimble Anderson Carroll Livingston Garrard Kenton Hancock Woodford Campbell Jessamine Montgomery Gallatin Robertson !( 50 - 99 acres !( 100 - 299 acres ! ( 300 - 599 acres !( 600 - 999 acres !( 1000+ acres Kentucky Sites Christian County 1,000 Acres McCracken County 1,000 Acres Ohio County 1,042 Acres Rockcastle County 1,400+ AcresLewis County 1,086 Acres 84 KENTUCKY ECONOMIC DEVELOPMENT GUIDEavailable Build-Ready sites. Multiple other locations across the state are currently working toward certification. To date, 12 former Build-Ready- certified sites — including tracts located in Barren, Butler, Christian, Graves, Hart, Laurel and Pulaski counties and five sites in Warren County — have been selected by companies for new location projects. These sites allow companies to bring their operations online in a cost-efficient manner while creating jobs for Kentuckians. From Gas Pump to Closed Deal All that preparation paid off when representatives of Martins Peterbilt came calling. “They were literally driving through our county and stopped at a corner gas station and asked if anyone knew of a commercial building site for sale,” said Spoon. “I set up a tour of 14 sites in Adair County within an hour. I got to know who they were, and they ended up picking a facility with a business in it. I made a connection, and they ended up striking a deal.” Martins Peterbilt sells Peterbilt trucks and parts and services those vehicles too. Today, Adair County has another contributing business because the community took the steps needed to be ready for new industry. “We live in a microwave world, not a crockpot world,” said Spoon. “In this culture, people don’t wait for a callback. Sometimes, rural economic development starts at the local gas station — and when a prospective buyer is in town and ready to make a deal, you must be ready to assist them. That’s exactly what we did in Adair County.” Today, that business employs 17 workers making an average annual wage of $72,000. “We landed a $2 million annual payroll because we were ready,” said Spoon. Around the 120 counties of Kentucky, other places are taking notes and following suit. To learn more about available sites in Kentucky, visit SelectKentucky.com. KENTUCKY ECONOMIC DEVELOPMENT GUIDE 85by ALEXIS ELMORE Turning Dreams into Reality Turning Dreams into Reality [ FILM& TELEVISION ]O ver years ago, Tim Bates, senior program manager at the Kentucky Cabinet for Economic Development, and actor Steve Zahn sat outside a café in Lexington and began chatting about the potential of building an established fi lm industry in Kentucky. At the time the conversation seemed nothing more than a “pipe dream or fantasy” to them both, albeit the idea of being able to work close to home had an undeniable appeal. A decade later, following one of the fi rst shoot days on the fi lm “Wildcats,” Bates received a text from Zahn stating, “I’ve never been able to do this,” followed by an image of him feeding goats on his family’s farm that same evening. Hollywood has shown its favor to Kentucky as a fi lming destination for generations, producing classics such as “Coal Miner’s Daughter,” “Next of Kin,” “In Country,” “Dreamer” and more around the state. In the past, the luxury of housing the full cycle of a production’s needs had yet to come. e same cannot be said today. Kentucky’s fi lm industry supports more than , direct and , indirect jobs, resulting in over $ million in wages, according to recent data from the Motion Picture Association. is growing industry is bolstered by adequate infrastructure, locations and, more importantly, an incentive that keeps fi lmmakers coming back for more. “It’s not just a dream anymore,” said Bates. “It’s all because of this tax incentive that we have in place and what we’re trying to build here. It’s gratifying to see the progress we’ve made. ere’s still a long way to go, but we’re moving in a good direction.” Kentucky continues to earn its seat at the national fi lm industry’s table KENTUCKY ECONOMIC DEVELOPMENT GUIDE 87 The Kentucky Entertainment Incentive has allowed the state to signifi cantly grow its role as a fi lming destination. Photo courtesy of 502 FilmNext >