Historic James Pepper Distillery to reopen on Manchester Street

The James E. Pepper Distillery will be making bourbon again.

A businessman from the Washington, D.C., area who owns the James E. Pepper label plans to put a distillery in the historical home of the brand on Manchester Street, Mayor Jim Gray announced Wednesday afternoon.

“Our authentic history is distilling new jobs in the Distillery District, which has become an important area for economic growth and tourism downtown,” Gray said in a news release. “Congratulations to the Georgetown Trading Co. for honoring and growing the James E. Pepper brand.”

Work on the multimillion-dollar project already has begun. Amir Peay, who owns Georgetown Trading Co., hopes to have the still installed and operating by late 2017. He also plans to build a museum, using his collection of Pepper memorabilia, and a tourist destination.

The building that is to house the distillery is one of those built in 1936, after Prohibition, by the Schenley spirits company on the site of Pepper’s original 1879 distillery.

With a background in wine and food, Peay created Wine & Dine Santa Barbara magazine, then sold it. He moved to the D.C. area and began creating brands. His first big success was John L. Sullivan Irish Whiskey, based on the famous Irish-American boxing icon, using whiskey purchased from Cooley Distillery. Once Cooley was sold to Jim Beam in 2012, Peay’s supply began to dry up.

He turned to other options, and bought and revived the James E. Pepper 1776 bourbon label, and Pow Wow Botanical Rye, both using whiskey sourced from the MGP distillery in Lawrenceburg, Ind. Both labels are distributed nationally, he said.

But he was always interested in the Lexington distillery, and he researched Pepper at the Keeneland and Lexington libraries.

“I toured it many times,” he said. Engineers hired to give him estimates on the cost of revamping it told him to just build a new one.

But Chris Kelly, one of the distillery owners, called Peay in late 2014 and asked if he was interested in bringing a distillery to Lexington. He jumped at the chance and, after a lot of negotiation, they worked out an arrangement that will work for the distillery and the developers.

“Reviving the old distillery was something we were meant to do, and we were happy to discover that someone still cared about the Pepper whiskey brand and had not forgotten about its great legacy,” said Teri Kelly, one of the developers. “The James E. Pepper whiskey company will soon come full circle and be the newest and one of the oldest companies to do business in the heart of the Bluegrass.”

Once the building is reconfigured, the distillery will go into about 10,000 to 13,000 square feet. The distillery will anchor the west end of the Pepper campus, which has become a booming dining and entertainment venue for Lexington.

“It’s all about bringing back the Pepper brand. I want to be part of something timeless,” Peay said. “The only reason I’m here is the passion to bring the brand back.”

The entrance to the distillery’s gift shop, tasting room and bar will be face Town Branch Creek, which is why Peay recently asked that a mural on the outside of the building be covered up. But he supports public art and would love to have another mural on the property.

Many of the walls of the distillery will be opened up with windows so patrons in the tasting room and the bar, where he plans to serve liquor by the drink, will have a view of the bottling room and possibly the still, Peay said. He anticipates commissioning a 12- to 14-inch column still from Vendome Copper & Brass Works in Louisville that will be capable of producing about three barrels a day.

Another room, where the Schenley column still once stood several stories tall, will hold a mash cooker and fermenters. Next door, in a vast room, will be shipping and receiving.

Peay has been consulting with Dave Scheurich, retired general manager and distiller for Woodford Reserve Distillery, on his plans, Peay said, and he has been talking with instructors at the University of Kentucky’s distilling program to find an up-and-coming candidate to operate his still.

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.

The old-fashioned cocktail is said to have been invented in Pepper’s honor; Pepper brought it to the bar of the Waldorf-Astoria Hotel, where he was living.

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 colt 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. There once had been about 140 in and around the city. Pepper had huge stores of whiskey in bonded warehouses (one of which is still standing), and the product was bottled and sold as legal medicinal whiskey. After Prohibition, the plant was bought 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 in the 1970s. Although a James E. Pepper 1776 label has been revived, it had no connection to the old distillery until now.

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