SOAR takes off: economic connectivity

Part 2 of an ongoing Lane Report series – Last month: Regional leaders join forces to stimulate entrepreneurship and turn natural attributes into competitive advantages. This month: SOAR takes off. Next month: The coal industry’s perspective.

On Aug. 31 – about 20 months after first gathering to explore strategies to lift the economic prospects of mountain counties whose mainstay mining jobs are crumbling – members of Shaping Our Appalachian Region (SOAR) will break ground on a $350 million opportunity-opening infrastructure project dubbed Kentucky Wired.

Also called the Super I-Way, the project will bring high-speed, high-capacity state-of-the-art broadband Internet access to every commonwealth county, but first to the mountains of Eastern Kentucky, where even basic access has been spotty due to its beautiful but challenging geography.

More than 3,000 miles of high-speed fiber-optic Internet cable ultimately will connect all of Kentucky’s 120 counties at an estimated cost of between $250 and $350 million. The first priority, though, is Eastern Kentucky, where work is expected to be complete by April 2016.

A long-discussed, decades-old need is finally being met, the biggest accomplishment yet for SOAR, and a way to say to the abundant naysayers that progress can indeed be made in Eastern Kentucky.

“The broadband initiative is one of the most significant aspects of SOAR,” said Gov. Steve Beshear, who co-chairs efforts to enliven the Appalachian economy. “Kentucky’s network will be one of the fastest, highest capacity networks in the nation.”

That capability will “help shape the future of our region,” Co-chair and Fifth District U.S. Rep. Hal Rogers said. “SOAR is moving into an exciting phase as we take another step forward with broadband implementation and work to attract more jobs and opportunities to the region.”

“Broadband is a stepping stone, a tool, but it will help us build local capacity,” said Jared Arnett, SOAR’s executive director. Broadband access has been Arnett’s top priority since becoming the founding executive director in November 2013.

In late July, there was another a big announcement from the co-chairs: a new dentist recruitment program in the form of loan forgiveness for dental students from Eastern Kentucky or those who choose to practice in the region. Two to five students will receive $100,000 each for two years through the program, with preference given to Eastern Kentucky natives. The program is supported by $500,000 in state funds and will be administered by the dental schools at the University of Kentucky and the University of Louisville.

Self-help key to SOAR approach

These actions fulfill pieces of a plan some 1,500 to 1,700 Kentuckians are collectively crafting. They are members of 10 working roundtable groups that collectively form the SOAR advisory council. By design, the groups foster discussion by and garner recommendations from those who live in the area. And most importantly, regional residents are urged to get involved.

They have. Working groups presented a final report to the SOAR executive board on Sept. 23, 2014 (see soar-ky.org), and are turning their focus to implementation.

The roundtables are organized by regional needs:

• Agriculture, community and regional foods, natural resources

• Broadband

• Business incubation

• Business recruitment

• Education and re-training

• Health

• Infrastructure

• Leadership development and youth engagement

• Regional collaboration and identity

• Tourism, arts and heritage

Each group has developed specific goals and priorities and in some cases started making progress toward them. For example, the business recruitment, retention and expansion group recommended five, first-year steps. One is to have an economic development site consultant complete an analysis of strengths, weaknesses, opportunities and threats (SWOT) for an eight-county region of Eastern Kentucky.

An original SWOT analysis for Pike County was a catalyst for Alltech to invest in the Marion Branch industrial property owned by the city of Pikeville – which is the kind of business investment that will help both the company and the region.

The 10 groups are working simultaneously on goals they expect can be accomplished from within a few months to a few years.

The Futures Forum is focusing on long-term strategies to improve the region. A development committee is building a financial base for SOAR to continue its work. It got a big boost with Senate Bill 168, which establishes the Kentucky Appalachian Regional Development Fund (KARDF) as a source for future appropriations for SOAR from the General Assembly. KARDF money may be used in support of job creation and retention, entrepreneurship, tourism, broadband deployment, workforce training, leadership development, health and wellness, infrastructure and economic diversity.

These groups all report to the SOAR executive board (see member lists), the two co-chairs (Beshear and Rogers) and Executive Director Arnett.

“What we are trying to do at SOAR is a new business,” Arnett said. “We are creating something out of nothing. We have put it on the line that we will do big things. People’s lives are on line.”

Goal is to stop ‘thinking by county’

Arnett personalizes that vision.

“When I look at SOAR, I think about my 5-year-old daughter,” he said. “We are going to see a region where she has opportunity here. She is going to have a quality education because we are making big strides in education. She is not going to be forced to get a traditional job in some city if she gets a four-year degree. If she chooses to be an engineer or a computer software, she will be part of a global economy and won’t have to leave here to have a good job.

“This region is going to be more about creativity and innovation. We are going to train the next generation to create the future rather than accept it. We are going to help them learn how to think and solve complex problems and be engaged and committed to the region.”

One overarching goal is to end people thinking by county and to get everyone thinking regionally.

“The economy doesn’t have any idea where the county line ends,” Arnett said. “The real (local) economy is probably six to eight counties. You can’t do every project in every county. We have to grow regionally. A big piece of our work is planning. Now is the time to start working to change behavior and do the things that create an environment where innovative businesses can grow.”

Arnett sees a big role for business.

“The key is when you have business leaders at the table and they remain committed to creating jobs,” he said. “SOAR is about strategic investment and growing the region. I hope business leaders will see the region as an opportunity rather than somewhere to avoid. There are many positives about doing business in the region. If you want to help, find a way to run a profitable business in the region.”

Beshear had another thought for business.

“We need ideas,” he said. “SOAR is not a top-down organization; it is an effort to empower all of Kentucky. As one part of the state goes, so goes the entire state.”

Rogers offered yet another role for business.

“We need businesses to become sponsors,” he said. “We need them to contribute to the (KARDF) fund and to recruit business to the region.”

Currently, SOAR Presenting Partners are the University of Kentucky, University of Louisville, KentuckyOne Health, and Pikeville Medical Center. Founding Partners are Aetna, East Kentucky Power Cooperative, Booth Energy, Forcht Bank, Kentucky Community and Technical College System KCTCS), and Passport Health Plan. Kentucky Partners are Community Trust Bank, Eastern Kentucky University, VanAntwerp Attorneys and Walters Automotive.

Back to the beginning

It was December 2013 when SOAR conducted its first summit. Despite decades of task forces, white papers, conferences and other initiatives that fell short at helping Eastern Kentucky break the grip of unemployment, poverty and low educational attainment, some 1,500 Kentuckians still gathered, listened, and discussed the future of the region.

Perhaps the hope for real change this time sprung from the group’s powerful bi-partisan leadership: Democrat Beshear and Republican Rogers, and the array of leaders SOAR attracted to delve into the major issues facing the region. Perhaps it came from its young, charismatic executive director, Jared Arnett, an Eastern Kentucky native whose success exemplifies what leaders hope for every person living in Eastern Kentucky.

Whatever the case, SOAR received an immediate boost when the White House designated eight Kentucky counties as a Promise Zone, improving their access to federal grant programs and stimulating job creation and education opportunities. A few months later the White House announced that through the POWER Initiative, Kentucky can apply for grants up to $38 million for coal communities to support economic and workforce development.

A month after that welcome message, Kentucky Agriculture Secretary Tom Vilsack announced Kentucky would now be included the U.S. Department of Agriculture’s StrikeForce Initiative: $220 million in grants and loans for infrastructure, homeownership financing and business development that Kentucky are eligible to apply for.

“The StrikeForce strategy of partnering public resources with local expertise is helping to grow rural economies and create jobs in persistent poverty communities,” Vilsack said.

The announcements continued to come in a flurry.

SOAR received a $750,000 grant from the Appalachian Regional Commission (ARC) to help cover its startup costs. The U.S. Economic Development Administration invested $312,000 to provide technical assistance for job creation and private sector growth. The Eastern Kentucky Concentrated Employment Program received federal grants of $11.3 million to continue efforts to help several thousand laid-off coal miners and their spouses find jobs.

Recently, Beshear announced a $20 million federal grant to fund a pilot project in southeastern Kentucky aimed at helping Supplemental Nutrition Assistance Program (SNAP) participants find jobs and pursue eventual self-sufficiency. In addition, a $1.5 million, five-year project funded by the Centers for Disease Control and ARC will address the region’s above-average rates of cancer and other chronic diseases by promoting screening and prevention. New funding also became available for a program to develop leadership among community health advocates.

In his position as governor, Beshear has been able to target funds for projects in Eastern Kentucky such as the $382 million expansion and four-laning of Mountain Parkway from I-64 to Pikeville. He has also set aside $2 million in single-county coal severance dollars in each year of the current budget.

One year later

One of the strongest cases that SOAR might succeed where other efforts have not could be seen in May. At SOAR’s second summit, 1,300 people hammered out and implemented strategies for regional growth and business development – using goals outlined in SOAR’s first year. The interest was still high, the hope still alive, the leaders still engaged, the plans fleshed out, the needle was moving.

Beshear promised to continue with SOAR after he leaves office later this year.

“I have already talked with the (2015 election) Democratic nominee for governor, and (Jack Conway) has assured me that he will continue my efforts with SOAR,” said Beshear, who leaves office in December but does not expect his involvement to end then. “SOAR is close to my heart. I will do whatever anyone in the SOAR leaderships asks of me.

“This is a very big effort and a long-term effort. We will not accomplish our goals in the short term,” Beshear added. “It is going to take several years. People have to understand that. The only way this happens is if people, particularly those who live in Eastern Kentucky, get involved.”

Rogers said the Republican nominee for governor, Matt Bevin, also has promised to remain involved in SOAR.

Look for part 3, Coal Speaks Out, next month.