Blue Sky Works - Site Selection Analysis (7.16.25)
BLUE SKY SMALL AREA PLAN
Site Selection Analysis
Prepared for:
Lexington-Fayette Urban County Government Division of Planning
July 16, 2025 Guiding Locations and Location
INTRODUCTION
TSW engaged Strategic Location Advisors (SLA) as a part of the Blue Sky Small Area Plan commissioned by the Lexington-Fayette Urban County Government (LFUCG) to provide valuable insight and analysis from the perspectives of corporate site selection and local economic development practices to incorporate real-time market and industry trends not commonly engaged when planning for future land use.
As a site selection firm, SLA works all over the United States on behalf of corporate clients to analyze communities and real estate sites to determine their viability, and ultimately, the optimal location for our client’s operation expansion or relocation needs. Additionally, as an economic development consulting firm, SLA works with a variety of local and regional economic development organizations, as well as city and county governments, on strategic community and economic development-related planning efforts to align on-going work and prepare them for economic success.
PROJECT BACKGROUND, PURPOSE, AND OBJECTIVES
The 301-acre Blue Sky Activity Center was added to the Lexington-Fayette County Urban Service Area (USA) following recommendations made in LFUCG’s most recent Comprehensive Plan, Imagine Lexington 2045, adopted in November 2023. Due to the Activity Center’s existing industrial land uses, the Planning Commission requested a small area plan for the site to provide an analysis of existing conditions and to identify opportunities for Blue Sky to help Lexington-Fayette County meet its current and future industrial land use needs and economic development goals.
The SAP resulting from this process should provide a cohesive framework for future development that is guided by the goals, objectives, and policies of Imagine Lexington 2045 and the Urban Growth Master Plan (adopted October 2024) and should prioritize sustainable development practices and identify infrastructure needs and potential funding mechanisms to support economic development, employment growth, and access to jobs.
MARKET ANALYSIS SUMMARY
Market analysis for the Activity Center was completed by Partners for Economic Solutions (PES) for the SAP. In this analysis, PES discussed a variety of data points regarding the Activity Center including, but not limited to:
• Activity Center’s attractiveness to a variety of industry including biotech, pharmaceutical, manufacturing, distribution, and existing regional employers.
• Existing land uses, businesses, jobs, and wages present in both the Activity Center and areas adjacent and proximal to the Activity Center.
• Currently undeveloped real estate within the Activity Center.
• The Activity Center’s competitiveness compared to other industrialized areas within the Lexington-Fayette MSA.
• Lexington-Fayette County’s importance to the greater MSA.
• Projected absorption rates for industrial-type businesses across MSA, Lexington-Fayette County, and the Activity Center.
Based on the PES analysis, the Activity Center is home to 140 businesses largely representing the construction, transportation and warehousing, and manufacturing industries. These businesses support over 900 jobs, of which over 60% pay more than $3,333 per month. A variety of property classifications exist within the Study Area include industrial, flex space, retail, office, hospitality, and specialty. PES’ findings legitimized the importance of this industrialized area to the economies of both Lexington-Fayette County and the larger MSA due to the variety of industries and types of jobs the Activity Center supports and determined there is limited opportunity for infill or greenfield development given current levels of development. In conclusion, tenants best suited for future development within the Activity Center are limited to regional employer expansion, manufacturing, and transportation/distribution uses and the Activity Center’s need for new industrial/flex space could be between 200,000 and 400,000 square-feet over the next 20 years.
SLA REVIEW OF MARKET ANALYSIS
The SLA team reviewed data from the PES Market Analysis. The data is sound with appropriate narrative explanations. For instance, the executive summary discusses the Blue Sky employment area’s jobs and wages, seen below:
“The Study Area—shaped by its industrial and commercial character—supports a relatively high share of mid- and higher-wage positions. Over 61 percent of workers earn more than $3,333 per month, while another 28 percent earn between $1,251 and $3,333 monthly with a minority of 11 percent earning less than $1,250.”
Source: 2025 Market Analysis for the Blue Sky Small Area Plan (Partners for Economic Solutions)
While this reflects a good mix of job types for the Study Area, our team would suggest any strategic redevelopment to target industry/jobs paying more than the MSA’s current average annual wage of $62,290, or $4,792 per month (JobsEQ; 2024Q4). Additional most recent data from JobsEQ shows that the MSA will add 9,277 net new jobs across all industries through the fourth quarter of 2034, however Lexington-Fayette County’s share of this job growth is only 28.5% (2,647 jobs).
We are in agreement with PES that future development and redevelopment opportunities within the Study Area are constrained and that regional companies are more suitable targets for this area. Outside manufacturing and distribution/warehousing companies desire flexible real estate to accommodate future growth, typically requiring enough space to accommodate the growth of their initial facility footprint anywhere from 10 to 30 years in the future. The Study Area may face limitations in accommodating the region’s projected industrial and flex space development, as outlined in the Market Analysis. Community input has also emphasized a strong interest in maintaining existing land uses around the Study Area, reinforcing the importance of aligning future planning efforts with both market trends and local priorities. Additional reasons beyond those included by PES are detailed in the Fatal Flaw Analysis section of this report (page 9).
PERSPECTIVE: SITE LOCATION SELECTION ANALYSIS
When siting corporate facilities, our team relies on a combination of data-driven decision making and boots-on-the-ground investigation of industrial sites and communities. Below, we have included the top ten site selections factors from Area Development Magazine’s most recent Site Selection Factors survey. Annually, AD collects feedback from both corporations and site selection consultants, like SLA, to help provide insight regarding current site selection trends for economic development professionals and community leaders.
Top Ten Site Selection Factors - Corporate and Site Location Consultants
Source: Area Development Magazine Annual Corporate and Site Selection Survey Results (2025)
Full survey results can be found here and include a ranking of 30 different variables related to site selection. Those factors ranked among the bottom five/least important in the site selection process include access to airport, rail, ports/waterways, shovel-ready/certified sites, and right-to-work.
SITE SELECTION ANALYSIS - Summary
For this project, we approached the analysis of the Study Area as we would approach the assessment of a site’s viability to support manufacturing and transportation/distributionrelated operations for a site selection client.
Site Selection – Lexington-Fayette County
Lexington-Fayette County and the Study Area are ideally positioned in the center of one of North America’s major industrial corridors – the intersection of Interstates 64 and 75. These arteries provide easy transportation of goods to major manufacturers, assembly facilities, regional distribution/warehousing facilities, traditional big-box retailers, and more. Ninety percent of our clients will begin initial geographic searches along Interstates 75 and 65.
Additionally, corporate site selection clients are also highly interested in communities with robust talent development pipelines, including secondary and post-secondary training, diversity of workforce training programs, availability of labor, and a strong quality of life to attract top talent. Lexington-Fayette County would be considered a top contender in these key areas.
Site Selection – Study Area
While manufacturing and distribution operations typically seek available real estate along interstate corridors, the Study Area has a limited ability to be attractive to them in the short and medium term due to the availability of developable land.
Using PES’ market analysis of available and developable real estate within the Study Area, we have concluded that there are approximately:
• 34 +/- acres across 10 non-contiguous parcels
• 3.8+/- acres of wetlands
• 36.77+/- acres of privately-held former transportation and distribution operation (former UPS)
The only suitable acreage available within the Study Area with significant new job creation potential by a new business/industry would be the former UPS facility, however this site specifically would most likely need some redevelopment to be attractive for a new tenant.
SITE SELECTION ANALYSIS - Detail
In the site selection process, we review a large contingent of data points on communities. Once we approach the time for decision making, we identify and analyze key data points among finalist communities and how they compare. One of those key data points is the population of a variety of geographic areas, most notably, the 45-minute drive-time radius, which is used for most manufacturing industries when considering locations. In our analysis, we utilized the former UPS facility as a location point. We have included a sampling of data that would be reviewed if the Study Area was currently under consideration for a corporate site selection client on the following pages.
Sampling of Data:
• Population growth (historic and projected)
• Simplified Labor Force Profile
• Economic Dependency Ratio
Table – Population Comparison by Geography
NOTE: The market analysis conducted by PES projected industrial and flex-space needs for the Study Area and Lexington-Fayette County did not include potential large employers such as Toyota and there is good reason for this. Industrial projects seeking to build larger facilities aiming to employ 1,000 or more people typically exclude locations from consideration that do not have a population of at least one (1) million people within a 45-minute drive-time. However, in recent years, due to the US’ limited energy and labor capacity in the US, there has been a shift in this thought process. Some corporations will consider locations with populations of at least 500,000 people within a 45-minute drive-time.
As stated in the Study Area market analysis, Lexington-Fayette County has a healthy labor force participation rate as compared to both Kentucky and the US, which indicates a population with a desire to work. The simplified labor force profile illustrated below details the potential for available workers. For the drive time radii, we used the former UPS facility as the center point.
Labor Force Profile - Lexington-Fayette County
POPULATION
Source: Esri BAO (2025)
Source Esri BAO (2025)
Labor Force Profile - Lexington-Fayette County (con’t)
HIDDEN UNEMPLOYED POPULATION
Within the 30-minute drive time labor shed radius of the former UPS facility located in the Study Area, the current unemployment rate is 5.1% while the labor force participation rate is 67.1%. This means that of the 411,940 people (aged 16 and older) within a 30-minute drive of the site, 262,047 are employed; 14,211 are unemployed (but seeking work of some kind); and 71,215 working age people (ages 16 to 64) are not engaged in the labor force. This number is also known as the hidden unemployed population.
If you expand this comparison to the 45-minute drive time labor shed radius, the unemployment rate remains the same at 5.1% while the labor force participation rate decreases to 65.4% This indicates that this labor shed radius has a higher percentage of working age people not actively participating in the workforce. Within a 45-minute drive time of the site, there are 588,636 people (aged 16 and older), 365,539 are employed;19,715 are unemployed; and 104,578 working age people are not engaged in the labor force.
While the 45-minute drive time labor shed radius has nearly 19,000 working-age people actively seeking employment, there is an untapped potential labor force of over 104,500 people for future employers.
The Economic Dependency Ratio (EDR) compares the number of people within a geography’s population working to those who are not (and thus dependent in some fashion) and illustrates this data point as a ratio. In the table below, you can see Kentucky’s EDR is 117.9, meaning for every 100 people working, there are 118 not in the workforce.
Economic Dependency Ratio
Source: Esri BAO (2025)
Source: Esri BAO (2025)
As demonstrated, all geographies compared out-shine the state of Kentucky and the US, indicating that there is a healthy and growing population of working-age people available for future workforce demand. In addition, Lexington-Fayette County and the surrounding regions out-shine many competitor regions when it comes to workforce size and availability. Below, we have outlined the same data for Huntsville, Alabama. A community very similar in population and number of jobs as Lexington-Fayette County, but with a more diverse occupation/industry mix and healthier concentration of industrial jobs.
Labor Force Profile - Huntsville, Alabama
POPULATION
Economic Dependency Ratio
Source: Esri BAO (2025)
Source: Esri BAO (2025)
Community Elimination, Also Known as Site Selection
In the previous pages, we compared and analyzed one important site selection factorworkforce. This simplified comparison between Lexington-Fayette County and Huntsville demonstrates that both communities have an available workforce with an appetite for employment, which is very important for companies when considering their next location. In addition to workforce strength, Lexington-Fayette County and Huntsville share many additional advantages, like quality of life and transportation access.
So why Huntsville? We recently worked with a site selection client that was considering Huntsville for a 1,000+ job manufacturing facility with average annual wages of $120,000. Huntsville shares many of the same advantages for doing business as Lexington-Fayette County, however Lexington-Fayette County was quickly eliminated from consideration for this project due to inadequate availability of desirable, publicly-owned industrial real estate.
Economic Impact of a Similar Project for Lexington-Fayette County and the MSA
We have used JobsEQ’s Economic Impact Analysis tool to illustrate what this potential job announcement could’ve meant for Lexington-Fayette County and the greater MSA:
Direct Jobs Created: 1,000
Indirect and Induced Jobs Created: 762
TOTAL NEW JOBS: 1,762
If a company like this one were to locate in Lexington-Fayette County, it would result in:
An estimated direct total impact of at least $179.7 million in new payroll and $455.6 million in sales/output for the MSA.
An estimated $276 million in indirect and induced sales/output and compensation (the increase in business, subsequent new job creation of existing industry, and new spending by employees) across the greater MSA’s economy.
FATAL FLAW ASSESSMENT
In the site selection profession, the term fatal flaw refers to a barrier or issue(s) that make a community or site unsuitable for development or investment, which could prevent the attraction of new job creation/industry. Fatal flaws are typically non-negotiable deal-breakers that cannot be resolved without excessive cost, legal risk, or time. Examples of fatal flaws are:
• No feasible access to major transportation (highway, rail, port, or air).
• Limited buildable area due to the presence of environmental factors like wetlands, floodplains, or protected habitats, or high-risk of flooding without viable mitigation.
• Costly mitigation factors like steep topography or unstable soil.
• Lack of suitable and scalable access to utility infrastructure.
• Land use restrictions and unclear ownership of site.
• Parcels that are too small, oddly shaped, or bisected in a way that prevents usable layout (like underground utilities or overhead power lines).
• Proximity to incompatible existing or planned future development like cemeteries, residential areas, public areas, and schools/school facilities that could create conflict or prevent permitting.
• Excessive off-site infrastructure investment requirements, like utility extensions and highway improvements, to service the site.
BLUE SKY SMALL AREA
Upon initial review and analysis, it was apparent to us that the Study Area was an organic development that began many years ago rather than a planned development through a coordinated effort led by government or economic development agencies. This organic growth has influenced the current mix of businesses in and around the Study Area.
In addition to the limited contiguous acreage available within the Study Area necessary to support substantial growth, certain existing uses, may be incompatible with future development and land uses. The SLA team identified the following additional fatal flaws that could impede future development/redevelopment activity within the Study Area:
• Utility infrastructure limitations that could constrain future growth.
• Minimal land available to create buffers between developments.
• Limited land available to support existing industry expansion.
• Private (K-12 school) sports facility located near Study Area boundaries.
• Public-use sports facility adjacent to Study Area boundaries.
• Existing and planned residential development in proximity to Study Area boundaries on and along Athens-Boonesboro Road.
CONCLUSION AND INITIAL RECOMMENDATIONS
We agree with PES that the Study Area is not positioned for significant employment growth and will most likely experience incremental job growth as existing industry within its boundaries grow, however the Study Area can be positioned for better planned reuse going forward.
Industrial jobs are critical to both the local and regional economies and Lexington-Fayette County is a prime location for growth in the manufacturing and transportation/distribution industries. In addition to such advantages as a growing population, access to workforce training and education, good quality of life, and access to transportation infrastructure, all geographies we analyzed have a strong case for access to a labor force with a desire to work.
Overall, Lexington-Fayette County’s future industrial-type job growth will depend on the community’s ability to plan for and execute on the implementation of recommendations specifically around industrial, commercial, and residential land use planning. As an urban and growing community along a major interstate, industrial space should be a top-priority for planning, economic development, and elected officials.
Initial Recommendations
1. For the holistic economic success of Lexington-Fayette County, comparable communities, like Huntsville, Alabama, should be studied and modeled for future land use planning and growth.
2. For the Study Area, it will be important to remediate the fatal flaws we have identified in order to increase its development and redevelopment attractiveness. The Community should consider:
• Developing zoning specifically for the Study Area to support Lexington-Fayette County’s economic development goals.
• Working with Commerce Lexington to develop and align infrastructure capacity expansion planning around the needs of targeted industry recruitment efforts.
• Utilizing an existing, or establishing a new, industrial development authority to execute options on real estate within the Study Area when those opportunities arise; purchasing them when necessary to ensure desirable use over the long term.
• Immediately marketing the former UPS facility for desired tenants.
• Developing a close partnership with Elliott Services, a growing firm consuming properties within the Study Area to house growth, and target complementary industries for infill and redevelopment opportunities.
ABOUT STRATEGIC LOCATION ADVISORS:
Strategic Location Advisors, LLC was founded on the experience and passion of owner Chuck Sexton. His rural upbringing and successful work in Economic Development, Site Selection, and Strategic Planning converged into an idea for a consulting firm with the overall goal of creating opportunities for people across the country to grasp a better future.
We are a results-driven professional consulting firm with the needs of our clients as our top priority. Utilizing a depth of knowledge and expertise on staff and through our advisory council, we guide action and strategy nationwide toward positive results.
