By a 7-1 vote last week, the Henry County Planning Commission denied a rezoning request by KBP, LLC for construction of 21 rickhouses that each could store up to 24,000 53-gallon barrels of aging bourbon. The developer proposed the rickhouse complex at 8375 La Grange Road in the Smithfield/Pendleton area.

Commissioner Minice McAllister made the motion to deny the request to rezone the 140-acre property from agricultural to industrial use. He said the conceptual plan presented by the developer left too many questions unanswered about the potential impact the development could have upon neighboring property owners.

“With all the uncertainties that I hear, I make a motion that we deny it,” said McAllister.

Before the vote to deny the request, commission attorney Josh Clubb advised the commissioners to include grounds for denial in the motion.

“We need to have a few findings to support the motion,” said Clubb.

The findings in support of the rezoning denial included:

• Inconsistency with the Henry County comprehensive plan for land use

• Unwarranted based upon the lack of major social or economic changes in Henry County

• Inappropriate because of the correct zoning currently in place for the property

After the denial, Clubb announced that the commission decision could be appealed for hearing by the Henry County Fiscal Court if written notice to contest the decision is received by the county within 21 days of the denial.

KBP, LLC attorney Chip Hamm presented the rezoning request to the commission and a crowd of more than 100 people who gathered at the 4-H building of the Henry County Fairgrounds for the three-hour public hearing.

Hamm outlined the conceptual plan for the property that featured construction of the 21 rickhouses in five phases with a valuation he claimed of $3 million for each rickhouse. Hamm also estimated that the rickhouses would annually generate $675,000 in county property tax revenues upon full buildout.

Hamm further addressed the potential Henry County revenue if Kentucky legislators retain the current barrel tax for bourbon storage. He estimated $3 million in revenues for Henry County in seven years with full rental of the facilities by distillers seeking to store their bourbon at the site.

“We’ll be one of the largest taxpayers in the county,” said Hamm.

Hamm also said that KBP, LLC would not lobby against the barrel tax.

“If that’s the law, we’re happy to do it,” he said.

Currently, the barrel tax is under consideration for repeal by the Kentucky legislature, which Hamm said involves a 15-year phase out of the tax.

“I have called a lobbyist friend of mine to see if this (the repeal) will pass, and he said he doesn’t know one way or another,” Hamm said.

In addition to the tax revenue boost for the county, Hamm also contended that the development fit within the vicinity because other properties within proximity to it also are zoned for industrial or commercial use and one of the boundaries for the property is Interstate 71.

Hamm remarked that the KBP, LLC property differed from other properties in Henry County with rickhouse construction, like the previously agricultural property near New Castle that Angel’s Envy is developing.

“In the past when you’ve had to look at this, you’ve had to look at it out on its own in a field, and that’s not what we’re offering,” said Hamm.

However, Hamm’s pitch for a boost in county revenues and property compatibility for the proposed use failed to sway the commission, which had tabled the rezoning request from February after the KBP, LLC group and adjacent property owners couldn’t resolve potential air pollution issues related to black fungus associated with barrel storage of bourbon in rickhouses.

Rather than resolution of those issues, the month delay from the tabled request only seemed to widen the distance between KBP, LLC and adjacent property owners.

The public comment part of the public hearing last week featured multiple speakers who opposed the rickhouse development. Foremost among the issues raised by the opposition remained the potential impact of ethanol-produced black fungus, which Hamm addressed through an Indiana study about the fungus impact.

“They didn’t find any harmful effects, as far as any humans or animals,” said Hamm.

Hamm also said he reached out to Rabbit Hole Distillery about any black fungus impact upon neighbors of the distillery’s rickhouse operation in Campbellsburg.

“The reality is that there just isn’t any evidence out there to support this, at least what we’ve seen,” Hamm said.

Hamm said that KBP, LLC would remediate any black fungus issues that arise for the 11 property owners adjacent to their property.

“We will pay to have that cleaned off,” Hamm said.

One of the adjacent property owners with whom KBP, LLC could not reach an agreement, Roger Taylor, cited references that claim the black fungus can form on surfaces more than a mile away from the rickhouse source of ethanol evaporation.

Taylor named several businesses, subdivisions, farms and other entities within proximity of this claimed potential black fungus range: Shain Industrial Park, Anderson Acres, Lake Jericho Firehouse, Stonehurst Subdivision, Walnut Hills Subdivision, the two Pilot plazas off the I-71 Pendleton exit, the United Citizens Bank branch, Nationwide Fence & Supply, two auto repair shops, four cattle farms and five horse farms.

“That may be a good tax revenue source, but what happens to the value of all our properties?” Taylor asked.

One property owner echoed the potential impact upon property value.

“I just paid an arm-and-a-leg to have a home put in, and this could destroy my home,” he said, adding that the black fungus could also impact the health of his family.

Another commentator voiced concerns about the impact of black fungus on cattle:

“These cows are going to be eating this black mold, and then these cows are going to be going off to market.”

A beekeeper cited concerns about black fungus impact upon businesses across I-71 from the proposed rickhouse site, like Starview Greenhouses, Nursery, Garden Center & Gift Shop in addition to his own beekeeping enterprise.

“I can’t pressure wash bee combs,” he said.

Tish Mosvold recommended that the commission consider environmental impact studies before voting for approval of a development that she said could result in decades of environmental damage.

“If we don’t, we’re setting ourselves up for another East Palestine,” said Mosvold, adding that the black fungus could even damage unique creatures like hellbender salamanders.

In addition to questions raised during public comment, the commissioners had questions of their own.

Commissioner Terry Rowlett questioned why the applicant presented a conceptual plan rather than a development plan with certifications.

“This is not the actual way it is going to be,” he said of the plan presented.

Planner Mike Ray also commented about the conceptual plan for its lack of certification.

“If it’s not stamped, it’s not certified,” said Ray, who also questioned why the containment capacity for stormwater was set at a 25-year storm event of 5.2 inches of rain over a 24-hour period rather than six hours.

Additionally, Ray asked if KBP, LLC would expand the parameters for black fungus remediation for nearby properties potentially affected by the fungus.

“Would you expand this to not only adjacent landowners, but to all residences and all commercial buildings within a half-mile radius?” asked Ray.

Furthermore, Ray asked KBP, LLC if the group would consider payment in lieu of taxes (PILOT) in the event the state legislature phases out the barrel tax because “counties with barrels are going to get less than they did before.”

Commission chairman Sam Adams commented that the barrel tax has existed for over 80 years.

“I would say most of these distilleries, that has been a cost of doing business,” Adams said of the barrel tax.

Adams also addressed the black fungus issue in relation to Kentucky distilleries that have stored bourbon in barrels in the state for a long time, like Old Crow, Castle & Key and Woodford Reserve.

“Every one of them has probably been there for over 100 years,” Adams said, adding that some of the distilleries may have stored over a million barrels at a time on site.

Ray also addressed the density of the project for Henry County and its unprecedented scope of rickhouse concentration.

“I think the identified number of barrels and concentration of barrels is something we should be looking at,” said Ray, specifying that the “warehouses were spread out more and weren’t as concentrated” for rickhouse approval like that of Angel’s Envy.

Hamm said KBP, LLC would agree to expansion of the range for black fungus remediation to a half-mile radius from the site but did not agree to a fixed fee of payment to cover Henry County revenue losses if the barrel tax is phased out over 15 years.

“I’m really not sure it would be constitutional,” Hamm said of such a fee.

Hamm cited the 16 covenants that HBP, LLC accepted as binding elements for their development plan, including construction of a lagoon system until sewer connection with the proposed Pendleton sewer project materializes. In addition to the covenants proffered, Hamm also said that the development plan presented effectively showed the proposed use of the property.

“This is pretty well fleshed out,” said Hamm. “It’s engineered. It’s scaled.

“This is not an incomplete plan.”

However, Ray did not view the plan as complete because it lacked certain details.

“And besides lacking a lot of details, it’s not certified by an engineer,” Ray said.

Ray then reiterated that the density of the development remained an issue for him.

“I think from what we know at this point, that 21 warehouses is too many for this area,” he said. “It’s too dense.”

Ray asked KBP, LLC to agree to table the application once again for another month so that the group could provide more information about their development plan and how the company would address expressed commission and public concerns.

Ray requested that the group reduce the number of rickhouses from 21 to five for an initial phase that would include certified engineering and state highway department approval of the two entrances to the site.

KBP, LLC agreed to table the application, but the commission defeated Ray’s motion by a 6-2 vote.

Subsequently, the commission cast their 7-1 vote to deny the rezoning with Ray the lone vote against the motion.

For all the opposition voiced during the public comment for the rezoning request, the lone voice of public support for the project came from Henry County resident Bill Tapp.

“I do support it,” said Tapp, citing his previous support for the Rabbit Hole Distillery and Angel’s Envy developments. “I believe it’s good for the county. It’s money the county needs.”

Tapp also attempted to allay concerns about the potential of black fungus issues in Henry County, referencing the lack of black fungus in Campbellsburg near the Rabbit Hole rickhouse operation and the elevation of Henry County above sea level.

“The mold’s not going to be a big issue,” Tapp said. “We’re up too high.”