Palisade board OKs expansion of distillery

Peach Street Distillers founder Rory Donovan at his establishment in Palisade.

A Palisade distillery that more than doubled its square footage in recent years without seeking approval from the town will be able to maintain those expanded operations and add on a little more. It also will try to minimize impacts on nearby residents.

The Palisade Town Board voted 6–0 Tuesday night — Trustee Penny Prinster abstained — to grant a conditional-use permit to Peach Street Distillers, 144 Kluge Ave.

The permit allows the distillery to keep the 5,750 square feet of space it added to the 2,362-square-foot business originally approved in 2005, plus tack on another 720 square feet that will be used for a small kitchen area for catering events, an outdoor tasting area for private parties and expanded bathrooms.

Other provisions and conditions of the permit include:

Town officials will review the permit in a year.

The distillery will construct an eight-foot, hay-bale fence on the north side of the business to try to reduce the noise that reaches homes on First Street.

The distillery can remain open until midnight Friday and Saturday and until 10 p.m. Sunday through Thursday. The town Planning Commission and town planners had recommended a 9 p.m. closing time Sunday through Thursday.

The town will work with the distillery to determine whether it should pay any transportation impact fee and, if so, how much. Town planners indicated the distillery should pay more than $33,000 in fees, but Peach Street Distillers co-founder Rory Donovan objected and called the fees unreasonable.

There are no limitations on how many outdoor special events the distillery can host. Town staff had recommended no more than six a year, but trustees chose to impose no restrictions.

The board’s decision also seeks to recruit the distillery to help subsidize a series of improvements to Second Street, a substandard road that runs between the business and the Union Pacific Railroad tracks that trustees said needs to be reconstructed and accompanied by sidewalks and street lights.

When the distillery opened six years ago, its operators were allowed a 450-square-foot indoor tasting area, with the remaining business space to be dedicated to storage and production. The distillery was supposed to close at 8 p.m. daily and have limited hours on weekends.

But as the business’ clientele swelled, so did its footprint. Without applying to the town to amend its conditional-use permit, Peach Street Distillers added 2,500 square feet of outdoor space, nearly tripled the indoor tasting area and expanded production and storage into two adjacent buildings.

Donovan told town trustees he never planned for the distillery to grow as much as it did and insisted he never intended to violate the town’s land-development code by not changing his permit.

Town Administrator Tim Sarmo told the board town planners understood that Donovan intended to apply for a permit amendment. But having never received the application until recently, he acknowledged the town erred by allowing Donovan to expand.

“There’s no doubt that some of what he did was probably stretching the original permit,” Sarmo said of Donovan. “We attempt to catch all of those, but there are circumstances we miss, and then we try to catch up.”

The town in September issued a violation notice to the distillery, which shut down all operations that weren’t part of the 2005 permit.

Some town residents expressed opposition to the expansion, citing concerns ranging from noise generated by the business to customers leaving the distillery intoxicated.

“This isn’t just about people having a cocktail in an outdoor area listening to some music. This is about public safety,” Diane Cox said.

Others, however, cited the economic benefits of the distillery in terms of the sales-tax revenue it generates and the customers it brings to other businesses in town.

“I don’t want us to kill the goose that laid the golden egg,” resident Robert Shuman said.

He noted he has three children, and “I feel very safe with them living in Palisade. The expansion of the distillery doesn’t tell me that my children aren’t going to be safe anymore.”

Town trustees said while they want to protect the integrity of the adjoining residential neighborhood, they also want to meet the needs of the business.

“I think it’s a good plan. I think it’s going to improve the area,” Trustee Jim Harkreader said.


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