Louisville, Kentucky's Bourbon Renewal

In a state where the number of aging whiskey barrels outnumbers residents, Louisville, Kentucky, is betting its economy can get a serious buzz by better exploiting its world-famous bourbon heritage. Novel strategies for funding preservation, generous incentive packages and, most crucially, surging international interest in premium bourbons from the Bluegrass State has city leaders and developers plotting Louisville’s future as the bourbon world’s answer to Napa Valley. Big-name brands have announced multimillion-dollar new visitor centers and micro-distilleries on downtown’s West Main Street, while on East Main, developers and preservationists are teaming up with the city to redevelop a row of historic buildings, where the distillers of yesteryear plied their trade. The developments make Louisville the world's first, and no doubt, only city to mix its hopes for urban renewal with bourbon.

Whiskey Row Lofts was the first major redevelopment to bring new life to Louisville’s Whiskey Row, a historic block of cast-iron-façade buildings that once served as the bustling heart of the region’s bourbon trade in the latter 19th and early 20th centuries. Historic “Whiskey Row” is a one-block stretch on East Main, while the broader “Bourbon Row” rebranding initiative encompasses a longer stretch of both East and West Main streets in the Central Business District.

The recently completed Lofts, once home to L&N Railroad and turn-of-the-century distillers such as Bonnie Bros. and Old Times Distillery Co., include several dozen apartments, offices and live-work spaces, a small live-performance theater, and five restaurant spaces — popular Doc Crow’s taps the block’s liquid-amber past with a bar featuring more than 60 bourbons.

An interior shot.

One of the restaurants.

The rising international popularity of bourbon alone wasn’t enough to jumpstart the rebirth of Whiskey Row. Valle Jones, who co-developed the Lofts with her brother Stephen Jones and CITY Properties, says some $7 million in federal and state historic tax credits were crucial, but the project also exists thanks to the arrival of the KFC Yum! Center, a new sports arena across the street. Completed in 2010, the arena and its promise of fresh waves of downtown visitors helped thaw the credit pipeline that made the Lofts financially feasible. “We could not have done that if we hadn’t had that arena, and I don’t know if we could’ve had restaurants go in without that arena,” Jones says.

Michter’s made the first commitment to open a distillery on Main Street’s still-aspirational “Bourbon Row” last July. The high-end bourbon maker says it will spend about $8 million over the next couple years to overhaul the historic-but-crumbling Fort Nelson building (across from the Louisville Slugger Museum), where tours, tastings, and distilling will comingle.

As with the Lofts, the state sweetened the deal by promising Michter’s up to $380,000 in tax incentives and benefits. Jeff McKenzie, a Louisville attorney whose clients include Michter’s, Heaven Hill, and Angel’s Envy distillers, says those incentives are crucial to remaking Main Street into Bourbon Row. “It wouldn’t even come close to making sense without it,” he says. “Every one of the projects will require some sort of incentives.”

In late April, Heaven Hill Distilleries announced it would spend $9.5 million to turn its West Main Street property into the Evan Williams Bourbon Experience. Set to open in September 2013, the attraction will school tourists in the history of Louisville bourbon and showcase an artisanal distillery that will produce about a barrel a day of super-premium single-batch bourbon. Heaven Hill expects the Experience, which will benefit from $480,000 in state tax incentives and benefits, to lure some 100,000 visitors a year and add 14 new jobs.

Lest visiting bourbon hounds can’t find it, the building’s front will be graced by a five-story-tall inverted bottle of Evan Williams — the second best-selling bourbon behind Jim Beam — pouring forth a river of amber nectar into a giant tumbler in the lobby. No comment yet from the world’s largest baseball at the Louisville Slugger Museum, two blocks west.

What’s driving the recent wave of investment in Louisville’s historic whiskey district? Larry Kass, spokesman for Heaven Hill, says the bourbon renaissance began in the mid-'90s, when consumer interest in premium bourbons took off. Over the following decade, that interest spilled over into the places bourbon was made, with distillers such as Woodford Reserve, Heaven Hill, Maker’s Mark, and Jim Beam opening their doors for tours and tastings throughout the Kentucky countryside. Suddenly words like “terroir” were being used in the same room as bourbon. Now Louisville is looking to rebrand its long-languishing Whiskey Row past into a longer Bourbon Row theme trail along Main Street. The city is betting those whiskey-themed attractions will boost the goals of preserving historic architecture, adding jobs, boosting tourism, and luring ever more convention dollars downtown. “Kentucky is bourbon, bourbon is Kentucky, and Louisville is the center of it,” Valle Jones says.

Whiskey Row was the epicenter of Louisville’s whiskey trade in the latter half of the 19th century, a block-long row of cast-iron-façade buildings that housed the barrel rooms, blending houses, and headquarters of Louisville’s bourbon barons. The five buildings had been mostly abandoned and were facing demolition when developer and art collector Laura Lee Brown, an heir to the spirits giant Brown-Forman Corp., and her husband Stephen Wilson (the couple behind the burgeoning 21C Museum Hotels) led a group of preservation-minded investors who bought them for $4.85 million last summer. Last month, workers had to take emergency measures to stabilize some of the buildings, and renovation work is set to begin in June. It won’t be cheap: The cost to stabilize the buildings ballooned from $2.5 to $7 million, and total redevelopment costs are projected to crest $40 million. The city announced it would pony up $500,000 for the project in its latest budget last week, as Mayor Greg Fischer tries to match donor Christy Brown’s $1 million challenge grant. Private investors and donors have already pledged nearly $4.6 million.

To raise the nearly half-million dollars still needed for initial preservation, Brown’s group, Main Street Revitalization, has partnered with the National Trust for Historic Preservation, which is helping the group start a nonprofit revolving equity and loan fund called the Heritage Conservation Fund. The fund, to be created this fall, could eventually fund other downtown preservation projects as well. The Trust sees Louisville as a case study: If the fund is successful here, it could then be replicated by other cities looking for new ways to fund preservation. What will come of the Whiskey Row buildings? Jones, also a member of the Main Street Revitalization team, says the row will likely house commercial and residential on upper floors, with restaurants, entertainment and “some distillers” down below. “Bourbon and entertainment oriented,” she says. McKenzie, who also sits on the local chamber of commerce board, says he already has more clients in the bourbon industry looking to hang a shingle on the rebranded Bourbon Row. “It’s an incredibly tourist-friendly use that preserves historic buildings, that resurrects a chapter of history where Louisville had these distilleries all up and down Main Street,” McKenzie says. “It becomes the Napa Valley of bourbon.”