LADC Kentucky LLC does not have to pay the city of Paris, Ky., for the property that used to be Stoner Creek GC unless it fails to build a distillery within three years after a zoning change for the property becomes final. The city bought the course in October 2018 for $650,000.
The Paris, Ky., City Commission voted unanimously to give a 47-acre golf course it paid $650,000 to buy in October 2018 to a development group at no cost, the Lexington Herald-Leader reported.
On Dec. 28, 2018, the commission voted to transfer the Stoner Creek Golf Course to LADC Kentucky LLC, a group that is interested in building a distillery on the property, according to the Herald-Leader’s report. Dudley Webb, a Lexington developer with the Webb Companies, signed the deed on behalf of LADC.
Webb told the Herald-Leader that his involvement in the group has been recent and that he signed the closing documents on behalf of the group because no other investor was available to do so. The other investors of LADC have not been disclosed. The company was incorporated on December 27, 2018, 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 zoning change for the property becomes final, the Herald-Leader reported.
The zoning change was approved last year but is being challenged by neighbors of the Stoner Creek course, according to the Herald-Leader’s report. If the zoning change is reversed, LADC can return the golf course to the city.
The closing for the property transfer was December 31, 2018, one day before new Mayor Johnny Plummer assumed office, the Herald-Leader reported. Plummer defeated outgoing Mayor Mike Thornton in November. Two of Paris’ four commissioners were also defeated in that election.
“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.
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, the Herald-Leader reported. 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 generate $40 million in annual revenue.
It’s not clear if investors from the original group are still involved in the project, the Herald-Leader reported.
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 projects, the Herald-Leader reported.
“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.
Asked about the timing of the land transaction, Jordan said developers had approached the city to see if there was interest in reviving the project, the Herald-Leader reported. “As for the timing, it is the sole discretion of the elected body as to when to act on these, and other, matters,“ he said.
According to the agreement, the city has until December 31, 2021, to finalize a zoning change from conservation to light industrial for the property, the Herald-Leader reported. Residents of the Wyndamere neighborhood, which is adjacent to the golf course, filed an appeal of the zoning change last year.
The Bourbon County Joint Zoning Commission voted against the zoning 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 zoning change was approved, the Herald-Leader reported. It had a nondisclosure agreement with an entity that was interested in purchasing the property, but would not identify the potential buyer.
A group announced in November it wanted to build the Jacob Spears Distillery on the property, the Herald-Leader reported. 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 zoning change as one of the reasons 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 zoning change is finalized to apply for incentives, the Herald-Leader reported. The agreement also says LADC has three years from the time the zoning 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, the Herald-Leader reported. 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, the Herald-Leader reported. 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, the Herald-Leader reported. John Vance, who lives in the Wyndamere neighborhood and challenged the city’s approval of the zoning 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 December 28, 2018 meeting.
The city was interested in other offers for the land, City Manager Jordan told the Herald-Leader, but 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 Herald-Leader reported. The Decemember 28thmeeting of the City Commission meeting was a special-called meeting, and most citizens didn’t know about it until after it happened, he added.
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 December 28 meeting, the Herald-Leader reported.
“They took $650,000 from the general fund and purchased a property and then gave it to a developer,” Vance added.
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, the Herald-Leader reported.
“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, the Herald-Leader reported.
You can view video of the Herald-Leader’s report HERE.
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