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Woodford County grills bond counsel over Castle & Key IRB; officials and farmer offer contrasting perspectives
Summary
The fiscal court heard bond counsel and Castle & Key representatives on an Industrial Revenue Bond that would temporarily abate local property taxes; counsel said the county would hold only nominal title and bear no repayment obligation, while officials probed school funding ‘pilot’ calculations and local taxing-district impacts; a local farmer described the distillery’s importance to county agriculture.
Woodford County magistrates spent a lengthy portion of their committee meeting questioning bond counsel and company representatives about an Industrial Revenue Bond (IRB) proposal for Castle & Key distillery.
Tim Eiffel, outside counsel for Castle & Key, explained that the proposed IRB would function as a conduit revenue bond: the county would hold nominal title while lease payments from the company would be pledged to repay the bonds. Eiffel said the county’s taxing authority and credit would not be pledged and that, in the event of default, a receiver (not the county) would be appointed to operate the facility and attempt repayment.
Eiffel also described an amendment to the draft ordinance giving the issuer (Castle & Key) — and thus the county a contractual early-termination right — after 20 years (replacing an earlier 40-year term). County Attorney recommended a new superseding first reading to incorporate that substantive change before advertising a second reading.
Magistrates repeatedly sought confirmation that the county had no financial obligation. The county attorney and bond counsel both said the county would not be on the hook for debt service. Several elected officials pressed for additional detail on how taxing districts (county, fire, library, extension, health) could be held harmless.
Counsel and company representatives explained the proposed school district payment-in-lieu-of-taxes (PILOT) structure: because Kentucky’s SEEK funding formula can reduce state aid when taxable property rises, the PILOT would pay a percentage (the proposal cited 22%) of abated school taxes to put the school district in the same net financial position it would have had if the property were on the rolls. Officials requested a formal calculation based on 2025 numbers so districts could verify the hold-harmless effect.
Eiffel provided a rough estimate that immediate local revenue foregone by issuance would total about $30,289 (2025 numbers) across taxing districts (county approx. $8,650; fire district ~$6,980; library ~$7,400; health ~$2,900; extension ~$2,300). He contrasted that with company-related local revenues in 2025 — including distilled spirits ("barrel") tax, net profits, and occupational license tax on wages — which he estimated near $796,000 and projected would continue to grow in the near term.
During public comment, Hoppy Hinton of Hinton Farms described Castle & Key as a major local buyer of county corn and urged the court to consider the symbiotic economic relationship between distillers and farmers. Castle & Key representatives outlined near-term job estimates for hospitality and long-term development plans including a hotel and restaurant, and they said they would continue to answer taxing-district questions ahead of the ordinance’s second reading.
The court did not act on final approval that night; the county scheduled a superseding first reading to incorporate the 20-year termination language and signaled stakeholder discussions (including with fire and school districts) would continue before any second reading and final vote.
