The Woodford County Fiscal Court continued discussions and debate on a proposed Industrial Revenue Bond (IRB) being sought by Peristyle, LLC (Castle & Key Distillery) at its regular meeting on Tuesday.
At its last meeting, the court heard the first reading of an ordinance for the $90 million IRB with a 20-year term. IRBs are authorized by Kentucky law for local governments to use as economic development incentives. Once the bonds are issued, the county would formally hold title to the land for the bond term.
According to Woodford County Attorney Alan George and Castle & Key bond attorney Timothy Eifler, there is no financial risk to the county in the event of a default on the bond obligations. As part of the bond agreement, the county would forego collection of approximately $30,000 a year in property taxes during the 20-year term, but the distillery would still pay the bourbon barrel tax, county net profits tax and payroll tax.
According to Eifler, Castle & Key paid $673,000 in barrel tax, $7,500 in net profits tax, $62,000 in payroll tax and $30,000 in property taxes in Woodford County in 2025.
Recognizing the barrel tax is being phased out, and it is expected to begin shrinking in the early 2030s, Castle & Key agreed to shorten the bond term from its initial ask of a 40-year term – a concession Magistrate John Gentry negotiated according to Eifler.
Castle & Key, in its proposal, is doubling down on the tourism piece of its business. In an information sheet provided to the court, Castle & Key states the bond funds, of which it estimates using approximately $70 million, will be used to renovate existing buildings, known as the “Founder’s House,” transform a dilapidated building into a second cistern, provide overnight accommodations and a small-bites pizza style restaurant for tourism purposes.
As part of the Kentucky Bourbon Trail, the distillery is located near Millville on McCracken Pike at the historic Old Taylor Distillery, built in 1887 as a castle-like complex with formal gardens abutting Glenn’s Creek. It was bourbon’s first tourism project when it was built. The distillery had, essentially, been abandoned and become an eyesore, with only its long rick-house used by Jim Beam Distillery prior to Will Arvin and Wes Murry purchasing it in 2014 and completely restoring and modernizing it before reopening in 2018.
In an interview last fall concerning the impact of new tariffs directly impacting bourbon, Eric Gregory, the president of the Kentucky Distillers Association and a Midway resident, described to the Sun their significant impact on the industry and said tourism had become a significant part of the puzzle for Kentucky distilleries to remain viable and profitable.
There were questions posed to Eifler about the impact on the school and fire district budgets with the property tax abatement. Eifler explained that he had met with representatives of both, and a hold harmless agreement with the school district had been reached in principle, but the fire district rejected the proposal from Castle & Key. In 2025, the fire district received $6,098 and the school district received $8,650 of its share of property tax proceeds.
Following the discussion, the vote on the first reading was held during the regular meeting, during which no magistrate explained their votes. The motion carried 5 to 3, with Magistrates Gill, Darrell Varner and Jackie Brown voting no. The second, and final reading, will take place at the first Fiscal Court meeting in June.
Rural Development Rights
At the request of Magistrate Liles Taylor, $250,000 was appropriated for the Woodford Rural Land Program, which is a board created by the court to approve the purchase of rural development rights.
As Taylor explained, the program had been in existence for several years, but had not been funded and worked like the Purchase of Development Rights (PDR) program in Fayette County – a fund to purchase the development rights of rural land. The board decides who and how much to pay for those rights. “I don’t want to get in front of the board or tell them what to do,” he said. “But, given the amount, this could be focused on smaller farms.”
Gill raised the question of whether this was an appropriate budget item. “Agencies usually come here and ask for a specific funding amount, and (the board) has not come. We have a lot of ongoing expenses this year, a lot of fixed and increasing costs like personnel. I’m just wondering, knowing this, whether now is the time (to do this). I wonder about it.”
Taylor responded that there was a high community interest in preserving rural land based on the interest generated by the in-family conveyance debate and a strong desire to save farm land. He also pointed out, unlike the example of an outside group used by Gill, the board was a part of the court and created by the court, and it just had not been prioritized before.
“I think we need something to help farmers face these uncertain economic times; in my opinion, it is a value judgment we need to make here,” he said.
Magistrate Darrell Varner expressed concern that the issue needed further discussion and consideration of other options to help farmers in addition to, or instead of, a program used to purchase development rights. “The $250,000, I understand (the argument for it), but my feeling is we need more discussion on what farmers need, how we can help them now,” he said. “This will help some (farmers), but not all. With economic pressures like the markets and weather, we need more discussion in the direction we go.”
Kay pointed out that approving the funding does not mean it has to be spent in the fiscal year.
Taylor made a motion to include the funding, and on a voice vote, it was approved 5-3.