O.Z. Tyler Distillery has been planning a major expansion for several months now, but complications involving a zoning ordinance have placed a speed bump in the company’s path toward building new warehouses to store bourbon barrels.
The Owensboro Metropolitan Planning Commission (OMPC) rejected O.Z. Tyler’s request to rezone the property that would be used to store the barrels. O.Z. Tyler Master Distiller Jacob Call said the zoning ordinance, which was written decades ago, involved an oversight that makes it difficult for the distillery to widen its territory.
Call said O.Z. Tyler is currently an I-2 heavy industrial zoning site. But if a new distillery was built in the same location today, it would be in an I-1 light industrial zone, even though Call believes distilleries are more hazardous than the warehouses where barrels of bourbon are stored.
“When the original plan was created, we were kind of grandfathered in. New distilleries fall into an I-1 light industrial zone, but barrel warehouses fall into an I-2 heavy industrial zone,” Call said. “I could build a distillery that’s more dangerous [than a barrel warehouse] in an I-1 zone.”
Call said O.Z. Tyler’s plans for expansion include two warehouses on-site at the current distillery location, six off-site to be located at 3515 Parrish Avenue and seven more after that.
Brian Howard, director of OMPC says the zoning ordinance in Daviess County comes from the Kentucky Building Code, which is adopted from the International Building Code. Each state is able to make amendments to their building codes to fit or tailor the code to their state.
“The storage of barreled bourbon falls under ‘high hazard,’ an I-2 zone. Both Glenmore and O.Z. Tyler are zoned I-2,” Howard said. “The I-2 zone is required because of that high hazard, and we as a staff aren’t able to recommend approval of rezoning that.”
Howard said Michael King, whose business, Normal King Electric, partnered with O.Z. Tyler, spoke with members of the OMPC board, discussing methods O.Z. Tyler could use to overcome this zoning ordinance. However, Howard said adjoining property owners showed up to speak in opposition of the rezoning.
“[The OMPC staff] listened to testimony from the applicant and from the adjoining property owners. Our staff met with Michael and went over options,” Howard said. “We want [O.Z. Tyler] to stay in Daviess County too. We were up front with them that we wouldn’t be able to approve that zoning.”
The process toward expansion has been somewhat arduous for the staff at O.Z. Tyler as Call said they’ve been working on this expansion since September 2018.
“Last year our organization was looking at property at the Airpark. The Greater Owensboro Economic Development Corporation (GOEDC) didn’t think barrel houses fit their master plan,” Call said of the land marketed by GOEDC. “They didn’t think it would bring enough jobs. It didn’t check all their boxes. So then we looked at property in the zoning dispute. Once that didn’t get approved, we were up against the wall.”
Call said the zoning commission with Daviess County Fiscal Court will have to approve the rezoning so that Call and his staff can continue with their expansion. For now, Call said things are looking much better than they were previously. In fact, Call hopes that a resolution will be reached sometime this week.
GOEDC is also working with O.Z. Tyler and city and county officials to create a resolution for the zoning issues faced by the distillery.
“Greater Owensboro Economic Development Corporation has been working collaboratively with O.Z. Tyler to locate available properties that will fit their upcoming needs,” said Brittaney Johnson, GOEDC president and CEO. “We appreciate their commitment to Daviess County and look forward to their future success for years to come.”
Call said O.Z. Tyler’s expansion provides an economic incentive that he feels some county officials didn’t fully grasp prior to the rezoning issue.
“I don’t think they [county officials] fully understood the tax benefits for Daviess County — more specifically, the school system,” Call said. “Barrels are basically inventory. They get taxed by county and state. Each county has their own tax rates for barrels. With four or six warehouses, we’re looking at $400,000 in new tax revenue in Daviess County. Around 70 percent of that goes to the school system. With a major expansion completed by 2020, we’ll be paying an additional $1.1 million in additional tax revenue to Daviess County.”
Howard said Daviess County Fiscal Court officials could modify the text in the zoning ordinance to fit the needs of O.Z. Tyler. While the re-wording of the ordinance would be decided by county, city and Whitesville officials, Howard said his staff at the OMPC would work alongside them in creating a well-worded, fully-functional rezoning ordinance.
Without the inclusion of warehouses for bourbon barrel storage, some say the future of O.Z. Tyler could hit more than a speed bump in the road.
“If we don’t figure this out as soon as possible, this will directly hurt the business,” said Daniel Hewlette, director of visitor experience at O.Z. Tyler. “We will shut down. We’re going to continue to produce bourbon until our current facility can’t store anymore.”
