Bourbon County

City of Paris gives away $650,000 golf course to group proposing a distillery

Just three days before a new mayor took office, the Paris City Commission voted unanimously to give a 47-acre golf course it paid $650,000 to buy in October to a development group at no cost.

On Dec. 28, the commission voted to transfer the Stoner Creek Golf Course to LADC Kentucky LLC, a group who is interested in building a distillery on the property that fronts Main Street in Paris.

Dudley Webb, a Lexington developer with the Webb Companies, signed the deed on behalf of LADC.

Webb said his involvement in the group has been recent. He signed the closing documents on behalf of the group because no other investor was available to do so, he said. The other investors of LADC have not been disclosed. It was incorporated on Dec. 27, according to records with the Kentucky Secretary of State.

According to the development agreement and deed transfer, the group does not have to pay the city for the property unless it fails to build a distillery within three years after a zone change for the property becomes final.

The zone change was approved last year but is being challenged by neighbors of Stoner Creek Golf Course. If the zone change is reversed, LADC can return the golf course to the city.

The closing for the property transfer was Dec. 31, one day before new Mayor Johnny Plummer assumed office. Plummer defeated outgoing Mayor Mike Thornton in November. Two of the city’s four commissioners were also defeated in November.

“I have been advised by the city attorney to not discuss this at this time due to the litigation going forth at this time,” Plummer said in a statement to the Herald-Leader.

Stoner Creek Golf Course.jpg
Stoner Creek Golf Course Ron Garrison

Under terms of the agreement, the developers do not have to spend a minimum amount on the project nor do they have to provide a minimum number of jobs. A previous investor group had said its proposed distillery project on the property would create 75 jobs with an average salary of $75,000 and would generate $40 million in annual revenue.

It’s not clear if investors from the original group are still involved in the project.

In various documents related to the project, the city has said the property transfer is legal under a state statute that allows for the transfer of property at no cost “for economic development purposes.” The city also said the project will “eliminate blight in the city.”

Daron Jordan, the Paris City Manager, said the city has opted in the past to give property at no cost to other businesses for economic development project.

“That option has been utilized on other occasions by the City of Paris and was the option the city commission elected to utilize as it relates to a portion of the properties,” Jordan said.

In response to questions about the timing of the land transaction, Jordan said developers had approached the city to see if there was interest in reviving the project. “As for the timing, it is the sole discretion of the elected body as to when to act on these, and other, matters. “

According to the agreement, the city has until Dec. 31, 2021, to finalize a zone change from conservation to light industrial for the property. The Wyndamere neighborhood, which is adjacent to the golf course, filed an appeal of the zone change last year. The Bourbon County Joint Zoning Commission voted against the zone change in August but the city commission, which has final say, voted to overturn the commission’s decision and approved it.

The city had an option to purchase the golf course when the zone change was approved. It had a nondisclosure agreement with an entity that was interested in purchasing the property but would not identify the potential buyer. The city purchased Stoner Creek for $650,000 in late October.

A group announced in November it wanted to build the Jacob Spears Distillery on the property. The distillery would also include a restaurant, visitor’s center, event space and possibly other tourist-related attractions. But in mid-December, the group backed out, citing the neighborhood’s appeal of the the zone change as one of the reason’s why the property was no longer viable.

According to the latest agreement, LADC also plans to put a distillery on the property. The developer has six months after the zone change is finalized to apply for incentives. The agreement also says LADC has three years from the time the zone change becomes final to substantially complete the project but the “developer is not required to meet nor substantially meet the financial projections related to the development for the construction of the development to be considered substantially completed.”

If LADC does not have the project “substantially completed” in three years it can buy the property for $650,000 plus other costs. It can then use the property for something else, although it still must be used for economic development purposes, the agreement said. Or LADC can transfer the property back to the city and pay some costs — roughly 4.25 percent annual interest on $650,000.

Tony Mills, who was the only known investor in the original distillery proposal, said he was no longer involved in the project but predicted the latest distillery project will be a boon for the city of Paris. Mills said he could not name the other investors.

“It’s going to be a real positive for this community,” Mills said. “I think a lot of people are rallying behind this project.”

Though many in Paris have supported the distillery project, several nearby neighbors have not.

John Vance, who lives in Wyndamere neighborhood and challenged the city’s approval of the the zone change, said he approached Jordan, the city manager, and offered to purchase the property from the city after the Jacob Spears Distillery group backed out in November and prior to the Dec. 28 meeting.

Jordan said the city was interested in other offers for the land but that Vance never came back with a final offer.

“Since that meeting, neither Mr. Vance, nor any other entity besides the LADC group, ever presented an offer for consideration,” Jordan said.

Vance said he and other investors were willing to pay the city $750,000 for the property. The Dec. 28 Paris City Commission meeting was a special-called meeting. Most citizens didn’t know about it until after it happened, Vance said.

If he had known about the proposed transfer of property to the LADC group, Vance said, he and other investors would have pressed the city to consider their offer prior to the Dec. 28 meeting.

“They took $650,000 from the general fund and purchased a property and then gave it to a developer,” Vance said.

Bruce Simpson, a lawyer for the Wyndamere neighborhood, said he doesn’t understand why the city has been so secretive about the Stoner Creek property from the beginning.

“It’s the most bizarre set of shenanigans I’ve ever seen,” Simpson said. “If there was ever an example of how not to do planning and zoning, this would be an instructive case.”

Jordan has said the city did nothing wrong and that the distillery could bring much-needed jobs to downtown Paris.