The Bluegrass Area Development District

and the Future of Kentucky Regionalism

 (Clinton, Ky, January 7, 2014) - Regionalism is once again in the news. Kentucky Attorney General Jack Conway issued an opinion on Friday, January 3^rd that the Bluegrass Industrial Foundation did indeed violate Kentucky’s open records law when it refused to turn over records to the Lexington Herald Leader.

The Attorney General’s office sided with the Lexington newspaper in its opinon that “the Foundation’s documents are public record because it gets more than 25 percent of its income from a taxpayer funded agency, the Bluegrass Area Development District.”

After the AG opinion issued, Robert Houlihan, attorney for the Lexington Herald Leader, commented that “The public has the right to examine the workings of entities that receive 25 percent of their money from the state. In recent years, the Bluegrass Industrial Foundation has received from 74 to 87 percent of income from the state.”

Central to the workings and structure of the Bluegrass Industrial Foundation is Jas Sekhon. From the year 1971 through 2005, Sekhon served as the Executive Director of the Bluegrass Area Development District (ADD).

Sekhon secured the job after a bitter and intense behind the scenes fight in 1971 which pitted the money interests of old Lexington against the smaller towns of the district. Mrs. Louie Nunn was the major supporter of Sekhon and ultimately helped him beat out all other competitors for the position of Executive Director.

Governor Nunn established the powerful Kentucky Program Development Office as the center for creating the 15 Area Development Districts. This office lasted from 1968 through 1972. The Bluegrass ADD was one of three urban ADDs to be formed in 1971. Louisville and Northern Kentucky were the other two urban ADDs.

The important aspect of this investigation into the workings of the Bluegrass ADD and its former Executive Director is that the Lexington Herald Leader is searching for possible public misuse of taxpayer monies. Lexington has had several high profile investigations along similar corruption issues. The scandal involving the Kentucky League of Cities comes to mind.

However, the timing of the release of the Attorney General’s ruling just two business days before the start of the 2014 General Assembly makes the issue of investigating ADDs may give several major players within the Kentucky economic world an opening to do away with or take control of the existing 15 ADDs. Such forces include:

(1) The UK Extension Service

Rocked by major budget cuts during the past five years, the University of Kentucky State Extension Service has been forced to drop programs, fire key staff, and generally pull back their entire service program for rural Kentucky.

Back in 1970 and 1971, it was the UK Extension Service that fought so very hard to gain control of the new regional development districts. They lost that battle, but UK leaders know that in a rematch set in 2014, UK may have just the power to persuade the General Assembly to give the 15 ADDs over to the Extension Service to administer.

(2) State Universities

During the same time period of the early 1970s, Kentucky’s regional universities were given new mission statements. University of Louisville became the state center for urban affairs. Murray State University became the rural development center. University of Kentucky became the all around state flagship university.

With the movement to create a new vision for Eastern Kentucky will be the birth of another regional university: Pikeville University. This will hurt the budgets of Morehead University and Murray State, both as seen as the weak spots within the Kentucky higher education structure. Morehead has to fight Eastern Kentucky University, while having a weak leader and support base.

Murray State University has no friendly powerful state legislative support during this time. Murray also suffers from a lack of coordination and vision from the campus to actually engage broad base regionalism. Only the Office of Regional Stewardship seems to have a clue on how to merge the power of the University to meet the needs of the 18 counties and over 30 small towns in its service area.

In a legislative fight to redefine the ADDs, Pikeville, UK and U of L win while Morehead and Murray lose.

(3) Regional Economic Organizations

Other forces are standing in the shadows of the Capital Rotunda with the idea of simply doing away with the ADD concept all together.

One such player is the Kentucky Economic Development Partnership Board. For years, they have wanted to establish a new regionalism in Kentucky that would collapse the 15 ADDs down to 7 new regional economic zones. This would allow the Board to control all federal dollars coming into Kentucky.

(4) At the End of the Day

At the end of the day, the investigation into the money movements of Jas Sekhon will prove to be the reason an attempt will be made to redefine regionalism in Kentucky. If the Bluegrass ADD is proven to have broken the laws of Kentucky, how far will the enemies of the existing ADDs go to use the Bluegrass ADD situation as a springboard to total revamping of Kentucky aid to regions and local government.

Kentucky has a history of regionalism being forged within the fires of politics. Often, logic and comprehensive planning have little to do with the truth of economic reality.

Question is, Are we really ready to undergo regional economic development warfare in the hollers of East Kentucky or the flatlands of West Kentucky?