A Louisville Metro councilman says he has serious questions about the scuttling of a planned brewery and taproom project in Louisville’s Highlands neighborhood — and the city’s deal that made the project possible in the first place.
The project was planned for 1300 and 1306 Bardstown Road. In 2016, a local development company announced plans to build a Sterling brewery and taproom on the site, and bought the historic buildings from Louisville Metro government for less than they were appraised for. Now, the Sterling project is dead and the developer has resold the properties for a $525,000 profit.
“I don’t see how it is in any way equitable and not unjust enrichment for Louisville Sterling to simply pocket the difference in the sales prices and for us to not get the project that we bargained for,” said Eighth District Councilman Brandon Coan.
The properties were owned by the city, and were declared surplus property in 2015. Later that year, Louisville Forward — the city’s economic development arm — entered into an agreement to sell the properties to a development group called Louisville Sterling, LLC. The purchase agreement lays out the conditions of the deal: that Louisville Sterling or its affiliates planned to operate “a corporate headquarters, offices, brewery, microbrewery, retail store, production facility, product test kitchen and/or tasting room.”
The agreement also lays out the reason the city had agreed to sell the properties: “because the Project would create jobs, enhance the tax base of Louisville, enhance economic development and make use of an otherwise non-productive property.”
The agreement was finalized in December, 2016; the final purchase price was $425,000. The properties were appraised at $500,000.
Now, only a year-and-a-half later, Louisville Sterling LLC has canceled the project and sold the properties to another developer for $950,000: more than double the original purchase price. The new developer plans to use the space for mini-storage, a rental unit and some retail space, according to plans filed with the city.
Coan said he takes issue with a developer getting a deal from the city, then turning around and making money on it without delivering the promised economic benefits.
“In my mind, we’ve got a lot of needs in this community from food insecurity and opioid addiction services, mowing the parks, paving the street,” he said. “That’s a lot of money that in my mind and should be spent on public purposes.”
He also questions the new project’s overall economic benefit to the neighborhood. He said he has sought opinions about possible recourse for the city, and is waiting for answers.
“Our goal has always been to see this vacant and historic property be restored and put back into a use that brings people together on one of our most thriving commercial corridors,” said Louisville Forward spokeswoman Jessica Wethington in an emailed statement. “That remains our goal, and we’re working with the new developer to ensure these buildings are used in a way that complements the neighborhood.”
Calls to John Hollenbach of Louisville Sterling, LLC weren’t returned Wednesday morning. He told Courier Journal that his group has made “substantial financial investments” in the building, and he believes the new project will fulfill the original goals for the site.