Sunday, October 23, 2011

Brad M. Kelley: Southcentral Kentucky's Billionaire

I am not a smoker.  However, I used to be.  I remember when I could buy a pack of cigarettes for 45 cents at Dye's Store in Eudora, Miss., near Lake O' The Hills where my dad used to live.  It was in the late 70's and I was an teenager, an underage smoker like a lot of kids used to be back then.  I remember I could take Coke bottles to return them at the little country store and get a pack of Vantage menthol cigarettes, an RC cola and a Moon Pie with the bottles. I don't even think kids nowadays know what returnable bottles are, do they? Wow, those days are long gone and they are truly amazing now that I look back at them.
But these days, apparently smokers almost have to pay what like $5 a pack to smoke and some places like New York City, it's what like $10 a pack?  That's crazy! I understand a lot of that money for a pack goes to local, state and federal taxes.  However, at one time there was tons and tons of money to be made in cigarette manufacturing in the United States.  What do I know?  I know there's a lot of regulation with tobacco industry.  But in spite of all that, there's a Cinderella tobacco story that happened right here in Bowling Green, Ky.
I used to work for a certain service company that performed a monthly service for a placed called, "Commonwealth Brands Tobacco."  It was located in a former, old warehouse for Fruit of the Loom off Church Street and Double Springs Road in Bowling Green.  In the mid-1990's, I performed the service for the tobacco company that was started in 1991 by Brad M. Kelley who at the time was probably in his late 30's and was a self-made entrepreneur.  I noticed that the place was full of old cigarette manufacturing machines that seemed to always be breaking down.  There was an old guy or two working on the machines every time I went in there to perform the service.  One of the workers said Mr. Kelley bought the machines from a cigarette manufacturing in North Carolina.  Also, I used to see large cardboard boxes of imported tobacco from foreign countries like Africa and places like that.  The place was not the cleanest in the world either and looked like everybody in there smoked.  They even had a computer graphic designer in an office who designed the cigarette package labels as well as advertising.  I can honestly say that I had been in that particular office many times where such world famous brand names of cigarettes were created such as "USA Gold, "Bull Durham" and "Malibu." Mr. Kelley's office was really cool too.  He had a lot of stuffed wildlife animals in there and he was a tall, burly red headed and bearded man. I said "hello" to him several times and he seemed like he was pretty friendly fellow, at least he was to me.  It looked like he was trying to create some new BBQ, steak and wild deer sauces too.  They had even had labels created for the sauces that were laying around.  And I serviced a large old house near the Bowling Green airport that served as the sales office for the company and a large distribution center warehouse on Russellville Road in Bowling Green where he kept his million dollar Provost camper bus.
According to some internet searches, in 1991, when very few people wanted to be in the tobacco business, Kelly started Commonwealth Tobacco Brands from scratch.  While keeping his advertising budget sparse, Kelley out-performed big brands by keeping the prices of his good low. His company set out to undercut the big tobacco companies by producing discount "branded generics" cigarettes.  In 2001, just 10 years after starting the company, Commonwealth Brands was the fifth-largest cigarette maker in the country, with sales approaching $800 million.  It's top brand, USA Gold, was, and still one of the nation's top selling brands.  And then amazingly in 2001, he sold the company to another Bowling Green based company called, "Houchens Industries" for $1 billion dollars.
And according to some other internet searches, seven years ago, when Mr. Kelley was 48 years-old, he was worth about 1.3 billion dollars and was America's 258th-richest person.  He likes to keep a very low profile and stay out of the limelight.  So you really won't find out much about him on the internet.
I had been trying to think of this guy's name lately because I'd had forgotten it.  Fortunately, there was a story in Friday's (Oct. 21, 2011) Bowling Green Daily News where Brad and Kent Kelley purchased 322 acres of farmland on Interstate 65 at an auctioned that occurred in Bowling Green last Thursday at the Sloan Convention Center.  By selling off his tobacco company 2001, he has become of the biggest players in the property business along with Ted Tuner and only a handful of others.
Here's a quote from the Bowling Green Daily News. "Brad Kelley, who is one of the largest land owners in the country, purchased 322 acres contiguous to I-65 on its west side, while Kent Kelley purchased 190 acres on the far east side of I-65."
"Brad Kelley, formerly of Franklin, Ky., who is now a Tennessee resident but has land holdings across the country.  He formerly owned Commonwealth Brands Tobacco, which sold to Houchens Industries for $1 billion.  The tobacco company is now owned Imperial Tobacco Group which paid $1.9 billion for the purchase."
Besides being a significant stakeholder in various equine racetracks, including Churchill Downs, home of the Kentucky Derby and Kentucky Downs in his hometown of Franklin, Kelley owns more than 1.25 million acres of ranching and farm land across Tennessee, Kentucky, southwestern Texas, Florida and parts of New Mexico.  And he also dedicating a lot of the land to wildlife conservation who's spending millions of dollars conserving black rhinos, white rhinos, pygmy hippos, okapi, anoas, impalas, white-bearded wildebeests, Nile lech we, Eastern bongogs and Beisa oryx.
They say Kelley has never been on a yacht and still drives a white Ford pickup.  He has no college degree and he moved to Tennessee with his wife, Susan, of 26 years, to be close to his children's school.  Born and raised in Franklin, Ky. (pop. 8,000), which is about 20 miles southwest of Bowling Green and 40 miles north of Nashville, Kelley seemed destined to run the family farm in Franklin.  He graduated from Franklin-Simpson High School in 1974 and he was not athletic or nor was he especially handsome.  He was secretary for the Future Farmers of America, winner of the Courier-Journal Louisville Times Future Farmers of America contest and a member of Who's Who American High School Students and was named Corn Derby Winner.
To me, it's just a fascinating, all around intriguing story and always will be.  And to know and remember when Commonwealth Brands was in its infancy stages and where it all began firsthand makes it even more of an incredible story to me.  It's a totally major American success story.  Even though, Kelly was not poor growing up, it's not quite a "rags to riches" story but almost. However, if you ever see Brad M. Kelley out in public, you probably won't know who he is because apparently he's just a regular person like you and me. And you definitely won't know he's Southcentral Kentucky's billionaire either.