Thursday, April 14, 2016

Ag-review panel votes 3-1 in favor of warehouses; fiscal court wants more in-lieu tax payments to issue bonds

UPDATE, May 4: The Board of Adjustment voted 3-1 May 2 to issue the permit. Marjorie Evans voted no and David Prewitt recused himself due to a possible conflict of interest, The Woodford Sun reports.

UPDATE, April 27: The Fiscal Court voted April 26 to issue $120 million in industrial revenue bonds for the project, with payments in lieu of taxes to be made to the county. The company also agreed to pay for new nozzles and hoses for the county fire station in Midway and up to $25,000 worth of training for firefighters.

By Aayat Ali
University of Kentucky School of Journalism and Media

The Woodford County Agricultural Advisory Review Committee voted 3-1 Wednesday to recommend that the Board of Adjustment grant Brown-Forman Corp.’s request for a conditional use permit to build whiskey warehouses just north of Midway Station.

Brown-Forman fared less well the night before, as the Woodford County Fiscal Court voiced unhappiness with the company’s plans for payments in lieu of taxes on the warehouses and whiskey as part of its request for tax-exempt bonds to finance the project.

The Louisville-based distiller is seeking to build the 12 warehouses on 113 acres of Homer Michael Freeney’s 400-acre farm as an agricultural enterprise, but the main concern among the committee members was how bourbon can be considered an agricultural product.

Committee member John Wilhoit, the dissenter, expressed his concerns over the definition of agriculture and said it was “a stretch” to consider bourbon an agricultural product.  Committee member Lindy Huber shared similar concerns.

“I’ve thought about a lot of other agriculture products and how they can be interpreted in the finished product,” she said.  “If someone were to grow cotton in Woodford County and wanted to set up a textile mill, is that an agricultural product? To me, food and fiber is what agriculture is, and bourbon does not fit into that category.”

But committee member Skip Philips said if only food and fiber fell under the definition of agriculture, “Where do you fit in tobacco?”  He said that he considers bourbon and tobacco to be agricultural products, especially with no processing facility to create a distraction amid the farmland.

Steve Rushell, attorney for Brown-Forman, drew a distinction between this project and a more intrusive industrial or manufacturing project, saying it has no noise or air emissions.  He also said Brown-Forman is purchasing about 50,000 bushels of corn a year and would prefer to buy most of it in Woodford County if it meets Brown-Forman’s standards.

Lynn Martin, a tenant on Freeney’s farm, said he supported the project.  Brown-Forman said it would make arrangements for Martin to cross the access road at certain points so he can continue operating the farm.  The 113 acres would not be acquired all at once, so over the 12-year development of the warehouses, two per year, Brown-Forman would lease to Martin the land it does not use. 

Brown-Forman’s Woodford Reserve Distillery is located off McCracken Pike in Versailles and is a popular tourist site.  For the new warehouses in Midway, Brown-Forman says the barrels would be shipped to Georgetown Road over New Cut Road to U.S. 60 and down Interstate 64 to the Midway exit.  This would be shortest route between the two locations without using back roads and coming through downtown Midway.

Ruschell introduced a list of conditions of the permit.  He said they would help preserve the land and make sure the warehouses don’t become a distraction, by:
•             Using own-box lighting that will not illuminate beyond the farm
•             Using signage to make it clear that no visitors are allowed on the site
•             Limiting truck traffic to 7 a.m. to 7 p.m. Monday through Friday
•             Limiting construction traffic from 6 a.m. to 7 p.m. Monday through Friday
•             Requiring outdoor activities to be conducted at least 300 feet from surrounding properties
•             Not using reflective roofs
•             Building a three-million gallon retention pond to prevent spillage into South Elkhorn Creek

“The first warehouse will be well over 1,100 feet from Georgetown Road,” Ruschell said.  “The reason it’s being located there is to make sure the pastoral setting is preserved.”

Fiscal Court meeting

On Tuesday, other Brown-Forman attorneys, Timothy Eifler and Mark Franklin of Stoll Keenon Ogden, returned to the fiscal court for more discussion of their request for $120 million in industrial revenue bonds to purchase the land and build the warehouses.

The issue for the court is the proposed PILOT (payment in lieu of taxes) agreement that the company presented.

“We negotiated with the school district and worked out a PILOT formula,” Eifler said.  “Typically these are designed to cover situations where a project is going to cause additional costs or burdens imposed on a local government, so the PILOT is there to deal with that.” Industrial revenue bonds create a property-tax exemption.

Some members of the court felt that other county functions, such as the fire department and the county government itself, deserved more of the payments.  The annual payment per barrel would be about $2.50.  The school district would receive 70.2 percent of the payments and the county would get 7.4 percent.

“The county has not raised its tax rates,” Judge-Executive John Coyle said.  “We have made cuts, we have laid off employees, we have done everything to provide everything that is needed for the citizens of Woodford County.  The school board, on the other hand, raises its tax rates to the maximum every year.”

The court deferred further discussion of the matter until its April 26 meeting.

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