Same dirt, new crop: how Kentucky tobacco fields became vineyards
A lesson on land and "highest and best use," using Kentucky as the example.
In 1798, a Swiss winemaker named Jean-Jacques Dufour raised money for America's first commercial vineyard by selling 200 shares at $50 each in the Kentucky Gazette. Basically crowdfunding, 225 years before Kickstarter. He bought more than 600 acres on the Kentucky River in Jessamine County and planted around 35 grape varieties on hillside terraces.
It failed. Disease and a hard freeze in 1809 ended it. The land sat for about two hundred years, until new owners dug through old deeds and surveys, proved it was the original site, found Dufour's terraces, replanted them, and reopened in 2012. The first use of a piece of land is never the last word on it.
Kentucky then went through grapes, tobacco, and bourbon. Even after Prohibition, wineries weren't allowed to operate here again until 1976. Then tobacco faded. After the 1998 tobacco settlement and the end of the federal tobacco program in 2004, farmers started looking for something new. Kentucky had about 40 acres of wine grapes in commercial vineyards in 1998. It's around 600 now, with 76 wineries counted by UK. Same dirt, new crop.
Here's how I think about it as an investor:
Ask what the property could be, not just what it is. Appraisers use "highest and best use," and it comes down to four questions. Is it legal (zoning)? Is it physically possible (lot size, slope, the building's bones)? Does it make financial sense? And of the options that pass those, which one earns the most?
When an old use dies, the value moves. Tobacco barns, churches with more land than members, strip centers emptied out by online shopping, old warehouses. The seller sees the use that died. The buyer who wins sees the next one.
Stack uses. A duplex where you live in one side and rent the other. A house with a basement apartment. A lot with room for a second building. Before you plan anything, check zoning. In Louisville that starts with Louisville Metro Planning and Design Services.
Budget time like you budget money. A new vineyard takes years to make good wine. Rezonings, renovations, and lease-up take time too.
Pick strong rootstock. Louisville is steady and affordable compared to most of the country, and it sits on a river, a highway crossroads, and one of the busiest air cargo hubs in the world. If you're investing here from out of state, that's what you want under your money.
What's the best repurposing of an old-use property you've seen or done, whether it was a barn, a church lot, a strip center, or a house that no longer fit? What did the zoning look like?
