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Bardstown’s Fight to Remain ‘Bourbon Capital of the World’

Growing up in Bardstown, Ky., there was a statistic I heard time and again: 80 percent of the world’s bourbon came from within 15 miles. It was the sort of number — especially in the ’90s — that at best was tough to verify, and at worst a numerical stretch. (Especially tenuous if you count Jack Daniel’s as bourbon.)

Accurate or not, it correctly identified bourbon as the region’s economic driver. Barton, Willett, and Heaven Hill were all located within city limits. Jim Beam and Maker’s Mark were in smaller, outlying communities just down the road, as was a Four Roses warehousing and bottling facility. If you didn’t work for a distillery, chances are someone in your family did.

From post-Prohibition to the early 2000s, bourbon was omnipresent, but it certainly wasn’t a gold rush. So when the “Bourbon Boom” hit in the 2010s (or a little earlier, depending on whom you ask), locals were as surprised as anyone to see an influx of capital and distilleries to keep up with demand. Within a decade, a once-sleepy town became the focal point for $500 million acquisitions, $90 million-plus buildouts, and hundreds of millions more in distillery expansions.

“It is a massive economic catalyst,” says David Mandell, co-founder of Bardstown Bourbon Company and chairman of the Kentucky Bourbon Festival. “We have a river of money flowing down Bluegrass Parkway.”

For whiskey producers, a presence around Bardstown is a mark of authenticity in an industry built on commoditizing it. Bardstown is at the heart of bourbon country, and suddenly everyone wanted a piece.

But distillate doesn’t pop up out of nowhere, and growth has placed unprecedented strain on infrastructure. Over the past decade, local communities and residents have had to build a path — and water lines, trucking routes, and sewers — through uncharted landscape to keep up with hyper expansion.

There are also complex political issues afoot. A recent repeal of Kentucky’s barrel tax could gradually wipe out nearly 20 percent of the county’s annual revenue. An ensuing county moratorium on distillery expansion threatened bourbon’s growth around Bardstown — until a remarkable roundtable deal brought civic and industry leaders eye to eye.

Today, Bardstown’s government, distilleries, and citizens are mostly aligned in celebrating a continued economic windfall. They’re also bracing for its consequences.

The story of modern Bardstown is one of unparalleled economic growth; it’s equally a story of challenges that come with generational opportunity. Its characters are navigating problems without existing solutions. It’s about a unique, symbiotic relationship between business and government. And it’s a story of extraordinary, community-driven compromise to meet growing pains that lie ahead.

Bourbon Capital of the World

Chartered in 1788, Bardstown is one of Kentucky’s oldest cities. How it became bourbon’s most famous town is hotly debated, both in academic texts and on porch stoops.

Maybe it was the friendly religious and cultural climate, with a disproportionately Catholic (and pro-distilling) population. Or perhaps it was the region’s limestone water, as is often cited on distillery tours.

Whatever the case, by the 1950s Bardstown was already referred to as “Bourbon Capital of the World.” It’s a moniker the town has since trademarked and displayed on signage and water towers.

“The mayor and I were in a meeting with distillery leaders, and we were discussing the bourbon industry’s place in Bardstown. Bill Samuels from Maker’s Mark said, ‘Y’all gotta step up your game, because Louisville is going to eat your lunch if you don’t.’”

Before smartphones, bourbon tourism was limited. There were basically three options: You could ride on the Heaven Hill shuttle (a repurposed trailer) from the old courthouse to their bottling line. You’d be given a brief tour and maybe a leftover barrel bung. Or you could drive to Maker’s Mark in tiny Loretto, population ~700. They’d even let you dip a bottle — if you waited for the gift shop’s wax canister to heat up. Finally, there was the Oscar Getz Museum of Whiskey History, a small but densely curated collection including vintage bottles and a liquor license made out to one Abraham Lincoln.

Of course, the distilleries themselves were impossible to miss. My elementary school sat just downwind from Barton. The wafted smell of fermenting mash was as much a fixture on the playground as swings and monkey bars.

There were also occasionally terrifying reminders of the town’s industrial lynchpin, including the Heaven Hill fire in 1996 and (smaller) Jim Beam fire in 2003.

For most locals, the only focused celebration of whiskey was the Kentucky Bourbon Festival, held each September. For much of the 1990s and 2000s, the event’s bouncy castles and beer garden showed more of a family focus than spotlight on bourbon. (My first job was emptying festival trash barrels with Boy Scout Troop 147.)

At the time, it was commonly said the festival drew over 50,000 visitors, a number that, according to Mandell, is laughably apocryphal.

“There was no way you could actually put 50,000 people in Bardstown,” he says.

The Bourbon Boom

Bourbon has seen meteoric growth since the late 2000s. It’s tough to overstate that impact on Bardstown and surrounding communities.

Since 2010, brands started or expanding into the area include Bardstown Bourbon Company, Lux Row, Preservation, Old Steelhouse, and Log Still; Stoli Group has also planned a site for the Kentucky Owl distillery and visitors center.

Willett has planned a $93 million expansion in neighboring Washington County. Pernod Ricard is underway on a $250 million facility for Jefferson’s in Lebanon, a few miles past Maker’s Mark. Heaven Hill recently broke ground on a new $135 million operation, which brings its distilling operations back to Bardstown for the first time since 1996. (Even after the fire, the company kept much of its bottling and aging facilities in Bardstown.)

What’s still unclear is the exact economic impact of the area’s new distillery buildouts, expansions, and tourism.

Kim Huston, president of the Nelson County Economic Development Agency, says the local tourism commission is assessing how much money bourbon is really bringing to the area. In the meantime, she cites statistics from the Kentucky Bourbon Trail, which attracts roughly 2 million annual visitors and estimates nearly one-third stop in Bardstown. For a town of just over 13,000 residents, that’s an impressive chunk of traffic.

Bardstown hasn’t been the only city getting attention from whiskey producers and bourbon-obsessed customers. Louisville, Kentucky’s largest city, got a jumpstart on investing in bourbon tourism, along with expanded food and lodging capacity. Given Louisville’s position as a major highway and airport hub, its critical mass of bourbon destinations could distract visitors from making the 40-minute drive down to Bardstown.

Huston has served in her role for 21 years, enough time to witness the full timeline of bourbon’s comeback. (She recently authored a book titled “The Rebirth of Bourbon: Building a Tourism Economy.”) And while the industry’s rapid expansion took hold in the early 2010s, it took an August 2015 reality check to get community leaders focused on bourbon’s real potential.

“That 2015 meeting was something that really set a lot in motion. ‘Bourbon Capital of the World.’ OK, we trademarked it. What are we doing to actually live up to it?”

“The mayor and I were in a meeting with distillery leaders, and we were discussing the bourbon industry’s place in Bardstown,” Huston says. “And Bill Samuels from Maker’s Mark said, ‘Y’all gotta step up your game, because Louisville is going to eat your lunch if you don’t.’”

“He basically took us to the woodshed.”

Huston continues that the town had been somewhat complacent in drawing dining and lodging options to support bourbon tourism — which Louisville was prioritizing at a fast clip.

Out of that 2015 meeting came the Bourbon Capital Alliance, a jointly funded effort between the local tourism commission and nine partner distilleries: Maker’s Mark, Heaven Hill, Lux Row, Old Steelhouse, Preservation, Barton 1972, Log Still, and Bardstown Bourbon Company.

“That 2015 meeting was something that really set a lot in motion. ‘Bourbon Capital of the World.’ OK, we trademarked it. What are we doing to actually live up to it?” says Sam Lacy, who has served as the Alliance’s full-time executive director — and only full-time employee — since 2021.

The Alliance’s goal is to promote Bardstown’s bourbon legacy while fostering bonds between industry and community. So far, projects have included the Bourbon Capital Guild (the area’s first official bourbon society), as well as aesthetic projects. (Increased “Bourbon Capital” signage and painted water towers were early efforts.)

In June 2023, the Alliance and partners opened the Brindiamo Penthouse in historic Spalding Hall, which also houses the Oscar Getz Whiskey Museum. It features a bar, event space, and classroom dedicated to bourbon education.

“We said we wanted to become the Napa Valley of the bourbon industry.”

To build a new tourism economy, it’s not enough to just have more distilleries. Visitors need food, lodging, and experiences to hold their attention and capture their almighty dollars. Lacy and Huston both cite Bardstown Bourbon Company, founded in 2014, as a pioneer for building trip-worthy destinations in the area.

“Bardstown Bourbon Company wasn’t just doing bourbon. They were focused on restaurants, the visitor experience, making it a whole package,” Huston says. “That had not been done, that full experience.”

In recent years, Jim Beam, Willett, and Maker’s Mark have followed suit and expanded into new dining, shopping, and tour options; similar plans are underway at numerous other distilleries.

Even the Kentucky Bourbon Festival has renewed focus. Mandell — who stepped down as Bardstown Bourbon Company CEO in 2019 — is now the festival’s chairman and has shifted the spotlight back to distillers and their product. Once targeted at locals, the event now sees 75 percent of its 7,000 annual ticket buyers come from out of state.

Scarce Resources

At scale, distillation requires immense resources.

“Bardstown was not built with infrastructure in mind to have all these massive distilleries with their huge pulls on water, sewer, and gas,” Lacy says. “So that’s the issue that we’re dealing with right now. Our infrastructure is trying to catch up.”

That means Bardstown, Nelson County, and surrounding governments have to work with whiskey makers to play catchup on utilities. “We said we wanted to become the Napa Valley of the bourbon industry,” Huston says. “Be careful what you wish for.”

Distillery demand for water — especially expansions at Lux Row, Bardstown Bourbon Company, and the new Heaven Hill location — is skyrocketing. After years of planning, a new water line to Bardstown will soon be underway, with financial support from Covid-related grants as well as the distilleries that will draw from it.

“We simply wouldn’t have enough water otherwise,” Huston says.

Another sticky issue is sewage. While spent mash was traditionally used as livestock feed, agricultural demand can’t keep up with supply. Tons of leftover grain ends up in sewage treatment plants. The county has invested heavily in adding new sewer lines while updating waste management plants.

Completing the trifecta of infrastructure challenges is Bardstown’s road system. Today, barrel-laden semi trucks pass through or close to the historic downtown, creating traffic unimaginable years ago. A new bypass is planned to break ground in 2024, which will ease congestion on the town and surrounding area’s roads, many of which have single lanes each way.

There is light at the end of the tunnel for the area’s utilities puzzle. While no one is entirely sure when or if bourbon’s growth will slow, expansion in Nelson County is quickly approaching a limit.

“We’ve sold the very last tract of industrial land we have,” Huston says. “Now, we’re pointing people who want distilleries to places outside Nelson County. There just isn’t more land.”

Whiskey and Taxes

Though the full scale of whiskey’s impact is still unknown, taxes are easier to track. Until this year, Kentucky had a unique “bourbon barrel tax” on aging spirits. In 2022, the law generated nearly $40 million for state and local governments.

As the state’s largest repository for barrels, Bardstown and Nelson County received about $8 million annually for schools, courts, the fire department, and other services. (For comparison, the county’s total proposed budget for 2024 is just under $50 million.) Bardstown is a population and cultural center for surrounding Bullitt, Marion, and Washington counties, which also face big tax losses.

The whiskey-industry-backed Kentucky Distillers’ Association (KDA) advocated for the tax’s repeal, citing competition from states without a similar tax. After successful lobbying, House Bill 5 outlined a gradual, tiered repeal of the tax over 20 years. In late March 2023, it was approved by the Kentucky legislature and signed into law by Governor Andy Beshear.

The repeal didn’t sit well with many local officials who represented communities reliant on the tax for funding.

“We tried to compromise with the KDA,” says Tim Hutchins, Nelson County’s judge-executive since January  2023. “They never one time included us at any of their meetings with the General Assembly, with the state leadership, to get our input when they first proposed this bill. …  And the distillery leadership never included us, never called us, in any conversations regarding that.”

Just weeks after House Bill 5, Hutchins proposed a three-month moratorium on construction permits for distilleries in Nelson County, which passed the Fiscal Court in a 5-to-1 vote. Hutchins wrote a draft of the moratorium while House Bill 5 was still being debated in the legislature.

According to Hutchins, a 2015 loosening of Nelson County zoning regulations meant there has been little oversight on new construction for the bourbon industry. County tax incentives for distillers — particularly 30-year industrial revenue bonds, which eliminated some property taxes — were widely seen as possible only because the barrel tax created additional revenue.

“This benefits the interests of Nelson County and Bardstown where our employees live, work and thrive.”

“We want [bourbon] to grow,” Hutchins says. “This county has been a good partner with them for years, but to take that bourbon tax away from us and then think you can build anywhere you want around the community … I want to give the citizens a voice here.”

Reactions from the bourbon industry were swift and displeased. The resulting rift caused many to worry about bourbon’s future around Bardstown, according to Huston. “I’m going to be honest, it was tough there for a while,” she says. “That was a very difficult time for a lot of the folks involved on both sides.”

That worry didn’t last long. Through the tensions, local government and industry leaders came together over a series of face-to-face meetings. The result was a succession of rapid, extraordinary compromises that provided new guidance on proximity, sight lines, neighbor approval, and public hearings for new distillery and warehouse buildings.

The new ordinances are expected to be fully approved this summer.

The Kentucky Bourbon Festival’s Mandell calls it a “testament to the power of communication.” Meanwhile, Heaven Hill executive chairman Max Shapira reflected positively on the compromise.

“This benefits the interests of Nelson County and Bardstown where our employees live, work, and thrive,” he says. “We thank the judge-executive and mayor for working with us to achieve this positive solution.”

Judge Hutchins says he and his colleagues are working on a series of cost-saving measures, coupled with longer-term investments, to help replace the outgoing barrel tax.

He thinks that despite some differences, local governments and distillers know their futures are tied — even if incentives aren’t always perfectly aligned. “Bardstown is the Bourbon Capital of the World. We want to work with them,” he says.

“But I’ll tell you right now,” he adds, “I don’t trust the KDA.”

Bourbon in the Blood

The Bardstown of my youth is a far cry from what tourists see today. It’s more diverse, more energetic, and inescapably busier. Without whiskey, Bardstown wouldn’t exist — couldn’t exist — in its current shape and form.

That doesn’t mean the town lacks other charms, and there’s more to it than just whiskey. (I’m biased, of course.) In 2012, Rand McNally and USA Today named it the “Most Beautiful Small Town in America.” The downtown is on the National Register of Historic Places. The region has immense natural beauty. And if you can find the right pond or stream (I’ll never divulge my secrets), the fishing is absolutely world-class.

The real battle isn’t to put anyone out of business, or to monopolize the Kentucky Bourbon Trail. It’s to accomplish what any Kentucky host worth their salt wants: Convince folks to stop and stay awhile.

“When people come here, we tell them to go to Frankfort to visit Buffalo Trace, and on your way, stop by Wild Turkey in Lawrenceburg,” Huston says. “If anything, our competition might be Louisville. But that’s not for distilleries, that’s for experiences: high end hotels, bars, and restaurants.”

“We need to keep working to make Bardstown a destination,” she says. “Not just a pass through.”

The article Bardstown’s Fight to Remain ‘Bourbon Capital of the World’ appeared first on VinePair.

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