Accelerated Opportunities: Kentucky's Product Development Initiative Delivers Results

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Accelerated Opportunities: Kentucky's Product Development Initiative Delivers Results 


Kentucky Association for Economic Development (KAED)The Kentucky Product Development Initiative was created in statute by the Kentucky General Assembly in 2022 after seeing the success of a three-year pilot project that was developed through a partnership with the Kentucky Association for Economic Development (KAED) and the Kentucky Cabinet for Economic Development (CED). Between 2019 and 2021, the pilot project used roughly $3 million per year in economic development bond funds to invest in site development in communities throughout the Commonwealth. The program was coined the Kentucky Product Development Initiative, or KPDI.


KAED worked closely with Site Selection Group, a nationally renowned site selection consultant, to develop metrics that would score projects based on expected return on investment. The program required a dollar-for-dollar match by local communities to ensure all parties had "skin in the game." The PDI pilot project was a success and played a key role in landing Pratt Paper, a $700 million investment in Henderson, Kentucky on a site that received a PDI grant award.


The success of the pilot led to interest by the Kentucky General Assembly to expand the program and invest in communities across the Commonwealth. The program's scoring metrics consider the relative impact of a community, which ensures that both rural projects and urban projects are weighted accordingly as projects are scored. And that was appealing to Kentucky policy makers. Moreover, all applicants, funded or not, receive actionable and specific feedback to make their next request more strategic and positioned for future financial support. 


In 2022, the Legislature created a statutorily authorized program, the Kentucky Product Development Initiative (KPDI) and inserted the structure and scoring system of the pilot into law. Additionally, they appropriated $100 million for the two-year budget period to invest in site-development in communities both large and small. A key element to the new program also provided for regional projects. Regionalism, especially in rural Kentucky, is a strategic way to combine funds and resources to attract investment that can serve those areas and create generational change. The Governor supported and signed the bills and the Kentucky Cabinet for Economic Development has been a great partner with KAED and the third-party site selection consultant to approve project awards and assist in all aspects of KPDI. 


The success of the 2022 program and funding led to the Kentucky General Assembly, in the 2024 session, including an additional $70 million for the upcoming biennium, fiscal years 2025 and 2026, and extending the program for another two years. Also in this legislative session, HB13 was introduced, which would amend the original legislation to allow ranking of the counties by population and correlate their required match relative to the population data.  


In addition to the funds made available through legislation, sponsors of this initiative include Ky Power, Big Rivers, KU & LG&E, TVA, Duke Energy, Ky Touchstone Energy Cooperatives, Atmos Energy, and Louisville Water. These partners have been instrumental in the promotion of regional development strategies and in supporting continued development throughout the Commonwealth via this program and their participation in KAED. 


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. 

Colby Kirk

Colby Kirk, President & CEO, One East Kentucky
 “In my own region, we have used PDI to make vital improvements to an existing industrial building, purchase property to expand a rail-served industrial site, and I have three projects in the works with round two funding to develop certified Build-Ready sites. I know these investments are going to pay for themselves in the future and our communities could not be making these investments if not for the KPDI program.”