How BE NKY and the Port Authority work (and why you should care)

The new Commonwealth Center for Biomedical Excellence, which will relocate NKU’s Chase College of Law and the local branch of the University of Kentucky’s College of Medicine from Highland Heights to Covington, passed a public facility review with the Kenton County Planning Commission earlier this month.

The project has received $125 million from the General Assembly to get underway and could reshape that area of the city. The land on which the center will sit is owned by the Northern Kentucky Port Authority, which recently spent $3.8 million, according to Kenton County property records, to purchase the land on East Rivercenter Boulevard from the Butler Foundation.

If you’re a regular reader of LINK nky – or if you’re plugged into the local business community – you’ve probably heard of the Port Authority. How about SparkHaus or the OneNKY Center or BE NKY?

What do these groups have in common?

A cursory look at any of these entities’ websites will reveal significant cross-pollination in their leadership structures. For instance, the executive director of the Port Authority is a former VP at BE NKY. The OneNKY Alliance’s CEO sits on the Board of Directors for the Port Authority. Many share connections with other pro-business orgs like the NKY Chamber.

The center’s public facility review wasn’t without its criticisms, and the relationship between the Northern Kentucky Port Authority and BE NKY is unusual when compared to other port authorities in the state. So now’s a good time to ask: How does all of this actually work? And why should you care?

Port Authorities in Kentucky (and other states)

The port authority itself is old: Legislation establishing all port authorities in Kentucky dates back to the late 1960s, although the laws have been updated several times throughout the years. The law, as it stands, states the purpose of an authority “shall be to establish, maintain, operate and expand necessary and proper riverport and river navigation facilities.” The law also grants authorities the ability “to acquire and develop property … to attract directly or indirectly river-oriented industry.”

Officially, the governance of Kentucky’s 10 port authorities falls under the Kentucky Transportation Cabinet. The cabinet categorizes each authority as either active or developing —a somewhat informal designation; there’s no official threshold beyond which an authority stops being developing and becomes active. Instead, the categorization roughly corresponds to whether boats can drop their cargo directly at authority facilities.

Northern Kentucky’s Port Authority is listed as developing, so if you’re hauling freight on the Ohio, the authority isn’t going to help you unload it. You have to take it to a private dock.

If you’re not familiar with the Northern Kentucky Port Authority and its activities, it would be easy to think that its role would be dedicated to managing river cargo operations and similar commercial activities; there are port authorities in Kentucky that operate this way.

The Paducah-McCracken County Port Authority, for instance, likely matches what many think of when they first see the words port authority. Located at the confluence of several major rivers, including the Ohio, Paducah-McCracken occupies about 48 acres of public land, has room for roughly 14,000 tons of cargo storage and maintains a large cargo crane for moving freight.

Other states have port authorities, too, and the authority that’s closest to Northern Kentucky’s is located in Cincinnati, which, by its own admission, is less about managing river commerce and more about general economic development. Legislation allowing Ohio riverport authorities to take on economic development activities was passed in 1982. Additionally, the Cincinnati riverport can issue bonds and other forms of municipal financing, which Kentucky port authorities can’t do.

In any case, the Northern Kentucky Port Authority views its role in the region as more akin to Cincinnati’s port authority than to Paducah-McCracken’s, which brings us to…

Tri-County Economic Development Corporation/Tri-ED/BE NKY

Although the Transportation Cabinet is the official governing body of the port authority, the local KYTC District 6 office has little direct impact over its operations. In fact, the Port Authority remained unused and dormant for many years until 2022.

Enter the Tri-County Economic Development Corporation, or Tri-ED, known today as BE NKY (it still uses its original name on legal documents), a nonprofit business league whose purpose is to “generate, preserve and enhance high quality economic opportunities for Northern Kentucky,” according to the organization’s bylaws.

BE NKY was created in 1987 by the fiscal courts of Boone, Kenton and Campbell County for the purpose of attracting businesses and development (and the tax revenue and jobs that would come with them). The organization’s current bylaws reveal specifics, namely the organization’s emphasis on entrepreneurialism.

BE NKY’s marketing materials will often talk about activating the Port Authority in 2022. It’s not immediately clear just what that means, but a memo from 2022 lays out the functional relationship between BE NKY and the Port Authority:

• BE NKY oversees the financial operations of the Port Authority, including the preparation of its annual budget, “a component of which will be a Tri-ED [BE NKY] Budget.”
• BE NKY provides an executive director and other necessary staffing.
• BE NKY assesses and manages any agreements with third party specialists related to insurance, real estate, legal services and accounting.
• BE NKY provides up to $400,000 per year to the Port Authority through the end of fiscal year 2027 (June 30, 2027) “to be used for projects, products and services approved by Tri-ED and the Port Authority as set forth in the Tri-ED Budget.”

BE NKY is governed by a board of directors consisting of appointees by the Boone, Kenton and Campbell County judges/executive, representatives from the private sector and a rotating seat for a local mayor. Current members of the board include representatives from major banks, local universities, major engineering firms and construction companies, Duke Energy, the airport and local tech companies, among others. You can see a full list of the board members and their institutions here.

The port authority also has its own board of directors, the members of which include appointees of the county fiscal courts and a liaison from BE NKY (not including Executive Director Christine Russell, who formerly served as BE NKY’s VP of strategy).

In this way, BE NKY, the Northern Kentucky Port Authority, and its leadership structure are a microcosm of the region’s political and economic power.

The Port Authority’s Executive Director Christine Russell said that BE NKY “activated the Port Authority in 2022 to be a real estate and development tool for Northern Kentucky.”

As a government agency, the port authority’s properties are exempt from municipal and county property taxes, although it may strike a deal to pay them voluntarily, as in the case of the SparkHaus (the business tenants within the SparkHaus and similar buildings do have to pay payroll taxes). Likewise, the port authority’s properties are exempt from zoning regulations.

Not every BE NKY project involves the port authority. Some of these other projects include collecting and analyzing data on the region, recruiting businesses to relocate to Northern Kentucky and issuing grants for the purposes of workforce development.

“We have a very targeted approach to businesses and companies we want to attract here because they create good, high-paying jobs,” BE NKY CEO Lee Crume said. “Our goal is to increase the prosperity of the region.”

Although BE NKY and the port authority are separate on paper, their institutional overlap is extensive, and BE NKY’s use of the port authority as a real estate investment tool is clearly aimed at economic development.

Large, headline grabbing real-estate projects like the OneNKY Center, SparkHaus, the Center for Biomedical Excellence or even the impending refurbishment of the old Duro Bag building in Covington are all owned by the Northern Kentucky Port Authority. Moreover, many of them have been funded with a combination of private and public money.

The argument in favor of these projects (and their funding structures) is that they have downwind economic benefit for the region as a whole: They attract businesses, which offer jobs, which increase payroll tax revenue for local cities. Moreover, as in the case of the SparkHaus and the Duro Bag building, the old buildings where these projects are found are often dilapidated and expensive to restore. Without public subsidizing or some other alternative form of financing, they would arguably continue to sit unused.

“Partnerships with organizations like the NKY Port Authority, Kenton County and the Catalytic Fund are critical to advancing infrastructure improvements, strategic land acquisition and long-term economic development efforts that benefit our residents and businesses,” said Covington Mayor Ron Washington. “It’s important that the city and these regional partners remain aligned on decisions that directly impact city services and the future of our community.”

In his conversations with LINK nky, Crume emphasized that his organization’s work was aimed at benefiting the region.

“What we do, and how we do it, and how we go about doing it, it really matters,” Crume said. “We take it really seriously. We take the results that we can deliver for this community seriously because we think they’re important.”

To recap: A government agency (the port authority) is used by a private nonprofit (BE NKY), which was founded by the local county governments, as a vehicle for real estate investment. Yet, this cross-institutional arrangement has generated concern, not only locally but also at the state level.

Private, public, community stakes

“I don’t think it’s good policy,” Kentucky Rep. Matt Lehman told LINK nky in early March.

This year, Lehman, a Democrat from Newport, filed a bill in the Kentucky House that would reform the statutory duties of Kentucky port authorities. It was co-sponsored by another Northern Kentucky representative, TJ Roberts, a Republican from Burlington. Although the bill would have applied to every Kentucky port authority, it was clearly targeted at Northern Kentucky’s.

When asked why he filed the bill, Lehman expressed concern about how local leaders and lobbyists fielded the establishment of the new Commonwealth Center and secured funding for it. The Northern Kentucky Port Authority is the vehicle through which the $125 million in state funding will be deployed.

A Lexington Herald Leader report examined the process, which critics characterized as hasty and secretive: From its inception to the public announcement of the new campus, the plan took about a month and a half, a timeline critics said left little room for public comment.

“The top administrator of Highland Heights, Republican and Democratic members of Kentucky’s legislature that represent Campbell County, and even Covington’s mayor — none knew about the project until the week the funding plan was announced,” writes Lexington Herald Leader Reporter Austin Horn.

“We’re talking about $125 million,” Lehman said. “It’s not really creating new jobs or bringing new companies to Northern Kentucky. It’s moving two programs six miles down the road … My position is if we’re going to be spending that type of taxpayer money, this needs to involve public input and needs to involve some accountability and transparency.”

Lehman’s bill died in committee, but if it had passed, it would have immediately established several restrictions, namely, preempting the delegation of port authority policy making to outside entities (like BE NKY), mandating compliance with county comprehensive plans and land use categories and prohibiting any direct conflicts of interest within port authorities.

Finally, it would have expanded the purview of port authorities in such a way that they could “enhance, foster, aid, provide and promote transportation, economic development, housing, recreation, education, governmental operations, culture and research within the jurisdiction of the authority,” effectively establishing explicit allowances for the sorts of activities the Northern Kentucky Port Authority and BE NKY already engage in. Lehman modeled his bill after legislation in Ohio.

Lehman spoke with LINK nky again in late April and reflected on the fate of his bill. In conversations he’d had throughout the state, he said he learned that other Kentucky port authorities, especially ones that actually functioned around managing river commerce, were concerned about the broad changes his bill would have enacted.

A letter from Kentuckians for Better Transportation and the Kentucky Association of Riverports to Lehman corroborates this.

“[The bill] would expand statutory authorization and duties for Kentucky’s public riverports,” the letter reads. “[Kentuckians for Better Transportation] and [the Association of Riverports] remain concerned about these provisions and believe that the expansion of duties could create confusion about the role of riverports, giving them the ability to operate more as economic development agencies. There’s no doubt that riverports are economic development drivers, however we believe, at this time, that the ports are better served focusing on the assets and infrastructure of the ports…”

The port authority allegedly has an internal legal opinion laying out how its current operations are in compliance with the law, but LINK nky’s records request for this document was denied due to attorney-client privilege.

Others have expressed concerns, as well.

“The simple fact is that the Port Authority is not operating within the plain language of the statutes authorizing port authorities,” said former Covington Mayor Joe Meyer, who also spoke with LINK nky in March. Meyer is the mayor mentioned in Lexington Herald Leader article who was reportedly cut out of the process of moving the schools.

“It’s doing stuff that no other port authority in the state can do or will do because they’re not authorized by law to do it,” Meyer continued, “and here, because of the proximity to Cincinnati, they think the way that the Cincinnati Port operates is the way they can operate.”

Meyer has been critical of the port authority in the past, expressing concerns that – because it’s a public agency – the port authority wouldn’t conform to municipal zoning and historical preservation standards, the latter of which are a big part of both Covington law and culture. In February 2024, Meyer called for a resolution for the port authority to abide by Covington’s standards or cease doing business in the city.

This call was later rescinded, but Meyer still expressed concerns about the Commonwealth Center, especially as it related to parking, an issue that took up a large part of the discussion at the planning commission. Although the commission ruled the facility conformed to comprehensive planning standards, it acknowledged the issues that may arise around parking and traffic. Meyer submitted a letter to the commission in which he characterized the parking study the port authority had done as “inadequate.”

Newport City Commissioner Ken Rechtin expressed similar worries about the port authority conforming with the letter of the law and how openly it was conducting its business. More broadly, however, he wondered if the public funds flowing through the port authority and similar entities might be better used.

“The potential is huge,” Rechtin said, “and we have all these entities – we got the Cincinnati Port Authority, Northern Kentucky Port Authority, we got OKI, we’ve got all these cities. Why can’t we come together and make [a] public investment?”

Examples of a public investment Rechtin gave were a boardwalk along the Ohio River or a public water taxi system.

Finally, at a recent candidate forum in Kenton County, several candidates for the Kenton County Fiscal Court felt BE NKY and its projects ought to be more subject to public oversight, although none thought it should be defunded entirely.

Crume responded to the concern about more public oversight, saying that “we’re really intentional about engaging the community.”

“We don’t pretend like we do all things for all people to Northern Kentucky,” Crume also said. “There are people that are caring and dedicated servants with the homeless shelter or around children or around education. Might they be less represented inside of our world than in other places? They might, but only because those services don’t get applied through us.”

BE NKY recently approved its budget for fiscal year 2027, which begins July 1. Read that story to learn more about BE NKY’s financial structures.