Pepper Distillery to come back to life along Town Branch

jpatton1@herald-leader.comAugust 11, 2014 

  • Who is James E. Pepper?

    The James E. Pepper Distillery was once hugely successful, widely advertising Old Pepper whiskey around the country. Pepper himself, from one of Kentucky whiskey's first families, became a famous Thoroughbred horse breeder, founding Meadowthorpe Stable and Meadowthorpe Stud on Leestown Pike, where his barns were some of the first to have electricity and telephones.

    Pepper combined his two interests — horses and whiskey — with the filly Pure Rye, who won the 1886 Kentucky Oaks. His Miss Dixie won in 1892. And in 1893, world-famous black jockey Isaac Murphy rode Pepper's Mirage in the Kentucky Derby to a fifth-place finish.

    The distillery was the only one in Lexington to survive Prohibition, according to the National Historic Register. It had huge stores of whiskey in bonded warehouses (one of which is still standing) that were bottled and sold as legal medicinal whiskey. After Prohibition, the plant was purchased by Schenley and rebuilt, but by the 1950s the combination of overproduction and changing consumer tastes put it out of business.

    The final Pepper whiskey stocks apparently were sold off in the 1970s. Although a James E. Pepper 1776 label has been revived, it has no connection to the old distillery, although owner Amir Peay has expressed interest.

    Janet Patton

Another historic bourbon distillery is coming back to life in Lexington.

The James E. Pepper distillery on Manchester Street, along Town Branch, dormant since the late 1950s, is being transformed into a restaurant and entertainment campus.

"We are in the process of refurbishing it for multi-use," said Tony Higdon, owner of Iron Horse Forge. He and his partners — Chris Casey, Chris Kelly and his wife, Terri Kelly, and Deleena Spencer — bought most of the distillery property from Barry McNees in December and paid to get the property on city sewer lines.

Of the approximately 55,000 square feet at the site, about 10,000 square feet are almost ready for tenants, Higdon said.

It's all a far cry from where many people thought the Distillery District would be 10 months after the city of Lexington withdrew the tax-increment financing plan for the district from the Kentucky Economic Development Financing Authority.

Derek Paulsen, commissioner of planning, preservation and development for the Urban County Government, said the city is about to begin a crucial survey of the floodplain, which could make it easier to redevelop the area.

The city is excited to see the changes and is eager to work with the developers to bring more activity to the area, Paulsen said.

One building on the site has been leased to two tenants: a restaurant and a microbrewery with taproom. Fourth-generation chef Mark Jensen, of Fork in the Road food truck, will be opening Middle Fork Kitchen Bar, on the site. Through a Kickstarter campaign earlier this year, Jensen raised $24,000 to go bricks and mortar, and chose the Pepper site for its historic beauty.

"It's got a history that is really undeniable," Jensen said. "That was a major distillery from the late 1800s, all the way to 1950s, and then it just stopped. And it hasn't been touched since then. It's got this ineffable beauty to it; you can see all the craftsmanship, the history that went in."

Jensen and the others hope to make the most of that atmosphere and attract interest from bourbon tourists, too.

Town Branch Distillery, Alltech's stop on the Kentucky Bourbon Trail, is just up the road, and Barrel House Distilling, on the Kentucky Bourbon Trail Craft Tour, is in another building on the Pepper Distillery campus.

"They're our neighbors, and they capture a lot of the bourbon tourism, and we hope to, too," Jensen said.

Middle Fork should appeal to foodies and bourbon lovers alike.

"It's an open-space restaurant," Jensen said. "We really want to be transparent in what we do, invite the guest to see how the kitchen works, see the theater of the kitchen."

So Middle Fork — Town Branch is the middle fork of the Elkhorn Creek, by the way — will have a chef's counter that seats 12 or so people around the kitchen and 50-plus more seats inside.

The menu will be seasonal, Jensen said, with nearly everything locally sourced, a more sophisticated upscale version of the plates he serves from his mobile galley.

"I'm going to do ingredient-driven food, showcasing what we are putting on the plate.

"And we want people to order for the table, for communal dining."

There also will be a long bar, with a deep bourbon program and wine program, he said.

"We will have a strong craft brew and bourbon presence," Jensen said. "Lexington's on the bourbon trail, so hope people will start their tours or finish their tours with us."

Jensen said he hopes to open by mid-September.

In the other half of the building will be a new microbrewery, Ethereal Brewing. Andrew Bishop and a partner have tanks and equipment and even have a temporary brewer's permit to start working the bugs out of the system, Bishop said.

"We have everything lined up, just need to connect all the plumbing," he said. The group hopes to have the doors open and have American and Belgian style ales to serve by Labor Day, he said.

Both businesses will share a large patio behind the buildings right on Town Branch.

The patio will seat almost 150 when completed, Jensen said.

"We're really hoping to make that a place to go, where you can hear the babbling brook," he said. "That will be more phase two, the outdoor dining, probably for next year."

Another building on the campus also will have a creek-side patio. Jonny and Lisa Cox, owners of Sidebar on Limestone, are readying the Break Room at Pepper, a bar in the distillery's old machine shop and employee break room.

In a couple of weeks, they hope to light the old water tower and welcome people to their bar by the creek, which Lisa Cox spends a lot of time keeping clean.

Besides a deck overlooking Town Branch, where one day a biking and walking trail will go, their bar will feature a beer garden, fire pit, and horseshoes and cornhole under the tower.

Except for the areas that are being renovated for the restaurant and brewery, much of the old distillery remains untouched. Higdon has set aside some space for his sculpture studio and the old column still is long gone.

But there are large areas awaiting future development if the site takes off, including the old boiler room.

"We've started dismantling the boilers," said Higdon, a metalworker. "They have some really cool architectural details, and we're going to save some of those components. ... We're saving everything we can, to put on display, hopefully in some kind of museum type setting."

Janet Patton: (859) 231-3264. Twitter: @janetpattonhl.

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