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Maker of Angel's Envy bourbon to open distillery

Bruce Schreiner, Associated Press

Lincoln Henderson, the master distillery for Angel’s Envy bourbon, talks about plans for a new distillery on Tuesday, July 9, 2013, in downtown Louisville, Ky. The company that makes the relatively new bourbon hopes to spread its sales across the country once production ramps up with the expected 2014 opening of the distillery in what’s now an empty building. (AP Photo/Bruce Schreiner)

LOUISVILLE, Ky. (AP) -- A Kentucky bourbon newcomer looking for its own niche in the highly competitive sector announced plans Tuesday to convert a century-old building into a distillery and visitors' center, a venture expected to further lift downtown Louisville's stature as a whiskey producer.

The makers of Angel's Envy whiskeys said the $12 million investment will significantly increase its small-batch production as the company looks to go nationwide with its bourbons and rye whiskey. The brands are currently sold in close to 30 states on a regular basis, along with a small presence in China.

"We're going to come up with some really neat stuff as soon as we get the distillery operating," said the brand's master distiller, Lincoln Henderson, who came out of retirement about four years ago to help launch the brand after decades in the industry.

The parent company behind Kentucky's latest bourbon-related venture, Angel's Share Brands LLC, is in line to receive performance-based tax incentives approaching $875,000, the state said. The venture is expected to create 40 new jobs and is seen as another stop for the state's burgeoning bourbon-related tourism sector.

"Today's announcement means more jobs, tax revenue and investment for the state," said Eric Gregory, president of the Kentucky Distillers' Association.

The company's name is a reference to the time-honored term "angel's share," which reflects the portion of bourbon lost to evaporation while aging in the barrel.

The new distillery is expected to begin production in December 2014. It will be built in a sprawling structure that's been empty for a quarter century, located across the street from the city's minor-league baseball stadium near Interstate 65.

The expansion plans got a recent financial boost, thanks to an investment from a Louisville-based private equity firm.

Gov. Steve Beshear noted the new distillery comes amid the Kentucky bourbon industry's largest expansion since Prohibition. Kentucky produces 95 percent of the world's bourbon, and Beshear jokingly called the other 5 percent "counterfeit."

"We take a lot of pride in this signature product," Beshear said.

More than 8,600 jobs in Kentucky are connected to distillery-related enterprises, generating about $413 million in payroll, he said. The 4.9 million barrels of aging bourbon in Kentucky outnumber the state's 4.3 million people.

The new distillery will include still operations as well as a bottling line and grain handling equipment. The distillery also will welcome public tours.

The company has added a twist to bourbon and rye whiskey production. After aging in white oak barrels for four to six years, the bourbon is finished by aging in port casks for several more months. Its rye whiskey ages for at least six years in oak barrels before finishing in Caribbean rum casks for up to 18 months.

"We broke the mold with our barrel finishes," said Wes Henderson, son of Lincoln Henderson and chief operating officer for Angel's Share Brands.

The company's whiskeys have won rave reviews from some aficionados, but Wes Henderson acknowledged the unique finishes raised eyebrows among some bourbon purists. He predicted the brand will win over purists, but said there are limits to its innovations.

"We can't go crazy," he said. "We have to protect the history of bourbon ... and we have to innovate respectfully."

Since launching three years ago, the company has doubled first-year sales, he said. It hopes to ramp up production in coming years.

The project adds momentum to efforts to revive downtown Louisville's whiskey tradition. Many of bourbon's biggest brands are made in rural Kentucky settings.

Michter's Distillery, a maker of premium bourbon and rye, is working to transform another historic Louisville building into a distillery that will offer tours and tastings. The company has said it hopes to open the distillery in the spring of 2014.

Heaven Hill Distilleries Inc., the company behind Evan Williams bourbon, plans to open a small downtown distillery this fall that's expected to become a popular tourist attraction. The attraction will feature a five-story-high Evan Williams bottle towering over the lobby.

"It's exciting to see others planning to produce along the traditional 'Whiskey Row' and to see Louisville regaining its historical place of prominence as a distilling location," said Heaven Hill spokesman Larry Kass.