The Boyle County Industrial Foundation made the decision not to offer land that could have been the home for a multi-million-dollar project from international distilling company Diageo because its board decided the project came with too many costs and not enough benefits.

That’s what Industrial Foundation Treasurer Alan Turbyfill told members of the Develop Danville Board of Directors Wednesday morning, during a meeting that at times grew confrontational. Danville Mayor Mike Perros and City Commissioner Denise Terry, both members of the Develop Danville board, were critical of how the Industrial Foundation handled the situation.

Turbyfill was chosen by the Industrial Foundation to provide context to how the non-profit makes decisions about prospective businesses, after reporting from The Advocate-Messenger last month revealed that Diageo had been considering Danville as a finalist before the Industrial Foundation withdrew its 100-plus-acre tract from consideration. Diageo announced in December it would be making a $130 million investment over three years and eventually employing 30 people full-time in the neighboring community of Lebanon.

“It was a lot of acreage for a relatively low number of jobs,” Turbyfill told the board. “It would have taken all the remaining industrial land west of Corporate Drive.”

Turbyfill noted that when the Industrial Foundation made its decision, Diageo was not providing information on whether it would use the land to warehouse bourbon in rickhouses — an activity that can lead to substantial personal property tax revenues for local governments on the warehoused inventory. There was also not going to be any bottling done on the site, nor would there be an opportunity for the site to attract tourists, he said.

“We felt the opportunity cost of that project was very high, not only because of the usefulness of that land — that developed industrial land — for future projects … but also because there’s so little of that developed industrial land anywhere in the county,” he said.

Jody Lassiter, president and CEO of Develop Danville and former president and CEO of the Industrial Foundation, noted another major prospect codenamed Project Eagle had looked at the same land last year before the project was shelved indefinitely. Project Eagle was interested in bringing 400 jobs and wanted 40 acres.

Foundation history

Turbyfill said since it was founded in 1961, the Industrial Foundation has always worked to achieve its purpose of supporting industrial and commercial advancement and development for Danville and Boyle County.

The Industrial Foundation was formed with shareholders, but those shareholders were paid back — with no interest — over the years, until the organization was officially created as a modern non-profit. It has an all-volunteer board and has never received any government funding, Turbyfill said.

“Because we’re private, because we’re non-profit and because we’re self-sufficient, we can focus on the long-term, and focus on our commitment and purpose and not be influenced by short-term influences and short-term financial pressures,” he said. “… We’ve always been able to step back and make measured decisions based on the long-term and considering opportunity costs of other options that might be out there.”

Turbyfill said the Industrial Foundation always considers the number of jobs a prospect would bring and how it would affect the diversity of the local economy. It tries to make “environmentally sensitive” decisions, and it’s more interested in companies with strong financial positions and good reputations.

“We do have standards of the types of companies we want to work with,” he said. “… But the first and foremost factor has always been jobs.”

Other distillery projects

Turbyfill defended the Industrial Foundation’s role in bringing three other distillery projects to west Danville.

Wilderness Trail Distillery was the first to open on former Industrial Foundation land; it bought 13 acres and brought 30 jobs to the land, he said. It has since expanded to 39 acres and more than 45 jobs.

Turbyfill said the presence of a historic building on the land made it less attractive for many other industrial businesses, but it was actually a plus for Wilderness Trail. Combined with the potential tourism draw of the business, it made the deal a “great win-win for us, for them, for the community,” he said. “… we thought this was the best possible scenario for that property for a long, long time.”

Last year, IJW Whiskey purchased land from the Industrial Foundation west of Wilderness Trail’s property. That project doesn’t bring with it a large number of jobs, but “they’re basically locating on an agriculture farm buffer” that was never expected to generate any jobs, Turbyfill said.

“We never envisioned or planned on using (that land) for industrial,” he said. “So not a lot of jobs, but very little opportunity cost that we’re giving up by letting them develop there, because basically the other potential for that land was to continue to farm it.”

A third distillery, Ambrabev’s facility on Techwood Drive, wasn’t built on land owned by the Industrial Foundation, but it still had to sign off on the subdivision plans. That facility also came with low “opportunity cost” because “I’m not sure what that land would have ever been used for otherwise, except possibly an expansion of medical facilities,” Turbyfill said.

Shrinking potential for jobs per acre

Turbyfill acknowledged that the number of jobs created by new industrial projects has been shrinking for a long time. At one point in time, a factory with 1,000 workers would be the target; two decades ago, Caterpillar was a big get for Danville when it brought 85 jobs.

The Develop Danville board discussed the potential for “dark warehouses,” where everything is automated and no lights are turned on because no employees work there.

Mayor Perros and City Commissioner Terry both questioned why the Industrial Foundation would turn away Diageo, given the fact of the shrinking potential for jobs per acre. They expressed frustration that the city may have missed out on tax revenues from bourbon stored at the site, even if there weren’t many jobs created.

“I don’t mean to be combative, but that is completely contradictory to what you have just said about jobs,” Terry said. “… I feel like the Industrial Foundation made a unilateral decision without consulting this board about withdrawing their land from consideration.”

Turbyfill said while industrial projects are generating fewer jobs, there are still opportunities out there to attract better options with more jobs than what Diageo was bringing to the table. He said the Industrial Foundation can do a better job communicating, but it was also a “we gotta know now type of decision” that had to be made.

Develop Danville board members continued to debate the issue, and when Terry again made the point that the Industrial Foundation did not consult Develop Danville before withdrawing the land, Industrial Foundation Chair John Albright responded.

“There are times that the city or the county makes decisions on property they own and they do things with it and they don’t consult with the community either,” Albright said.

Develop Danville Chair Ben Nelson backed Albright up.

“If we want to run down the unilateral decision game, I can point at everybody in this room. There’s too many unilateral decisions going on by every one of these partners. Shame on you, shame on you, shame on you,” Nelson said beginning to point at each person sitting around the table. “I can do that if you want to play that game.”

“That’s just uncomfortable for you to stand there and say shame on me,” interjected Jennifer Kirchner, executive director of the Convention and Visitors Bureau and one of the people Nelson had pointed at. “I don’t know what you’re talking about. Please absolve me from that.”

“If you believe in the partnership, there’s an opportunity to talk to each other before we move out and make unilateral decisions,” Nelson said.

“The Industrial Foundation was very courageous when they joined (Develop Danville) because they knew they were going to expose themselves to this type of dialogue,” added Develop Danville board member David Williams.

“Of all the partners that are leaning into this new structure, this reorganization, the Industrial Foundation is doing the most to try to change its way of doing business, to try to help this community,” Nelson continued. “… They’re willing to say the decision-making needs to happen as a community. I mean, they’re trying to do that.”

SO YOU KNOW

Develop Danville is the marketing identity of the public-private Danville-Boyle County Economic Development Partnership, whose members include the governments of Boyle County, Danville, Junction City and Perryville; the Boyle County Industrial Foundation; and Chairman’s Circle donors, including Farmers National Bank, Centre College and Ephraim McDowell Health.