Tobacco in Transition

Carrollton warehouses demolished

New uses sought for land
as tobacco industry wanes

By Ruth Wright
Staff Writer

(February 2004) – Not far from downtown Carrollton, Ky., on Hwy. 42 is a vacant lot where just three months ago stood a piece of the town’s history.

Carrollton cover 2-04

Carrollton edition cover.

Tobacco warehouses Brite Lite Nos. 1 and 2 occupied the spot where area tobacco farmers once gathered to seek the highest bid for their annual crop. The last auction took place there three years ago.
The warehouses, owned by Don Taylor, W.R. Greene and Bill Dugan, were razed last November. Now for sale is the 4.6-acre lot, marketed by Welty Realty with assistance from the Carroll County Community Development Corporation. The property is zoned commercial and lends itself to many different uses, said CCCDC executive director Joey Graves.
Like Brite Lite Nos. 1 and 2, many of Carrollton’s once flourishing tobacco warehouses have outlasted their intended purpose. Most have been closed or redeveloped. Of the 18 that still stand, only one, Golden Burley at 409 11th St., maintains active sales.
Decline of the auction
The trend, typical of Kentucky’s burley belt where more than half of the tobacco warehouses have closed in the past three years, says much about a change in the way tobacco is now marketed. Only about 25 percent of the state’s farmers still take their crop to auction, according to Donna Graves, executive director of the Burley Marketing Association in Lexington, Ky. The majority of farmers now take out direct contract with major tobacco companies, such as Philip Morris, Brown & Williamson, and Southwestern.
As a result, cities like Carrollton that were once thriving tobacco trade centers have all but given up the ghost of the tobacco auction.
“I have lived here all my life, and my family was connected with the tobacco industry, so I have seen quite a change” said Carrollton Mayor Ann Deatherage. “I know that each warehouse at one point had a sale every day. You couldn’t find a place (downtown) to park,” she recalled.

Brite Lite tobacco warehouse

Photo by Don Ward

Brite Lite Nos. 1 and 2 warehouses come down during demolition last November.

The large concentration of Carrollton’s tobacco warehouses, mostly downtown, is a testament to the county’s burley heritage. “Carrollton was a trade place,” said Carroll County agricultural and natural resources extension agent Tim Hendrick. “You brought your crop in, traded at local stores, bought your sundries and materials and some of your food stuff, and probably did most of your banking here.”
Tobacco, in addition to beef cattle, still dominates the county’s farming enterprises, according to the University of Kentucky’s College of Agriculture. But while tobacco remains an important part of the county’s economy, a shift in the way the crop is marketed has affected the number of operating warehouses. During the 2001-02 tobacco marketing season, 80 auction warehouses operated statewide. By 2003-04, that number had dropped by more than half, to 35.

Shift to contract sales

The trend toward contracting began in 2000, when Philip Morris introduced its pilot Tobacco Farmer Partnering Program. The reason, said Graves, was that “the companies wanted specific quality and specific grades that they could buy direct from the farmers.”
Now all major companies contract with farmers.
Contracting, unlike auctions, guarantees a buyer – considered a plus for most farmers. The downside, according to Graves, is that a buyer is the only guarantee. “There are no price supports on contracts,” she said. Conversely, co-ops, like the BMA, set price supports for particular grades and guarantee a minimum price, Graves said.
Still, the farmers who contract typically receive more for their crops than those who auction. “They give up price support, but they receive a better price for their tobacco and don’t have some of the fees that would come from going to auction at a warehouse,” said Graves.
With fewer farmers going to auction, fewer warehouses are needed.
In Shelby County, which once competed with Carroll for area tobacco trade, most of the tobacco warehouses have also closed. Only one, Growers, still operates.
“I stayed in business one year after they started contracting, and I saw pretty quick that there wasn’t a way to compete with them,” said Jimmy Chappell, whose Big Shelby Tobacco Warehouse in Shelbyville closed in 2000. On his 150-acre farm in Shelby County, Chappell still raises tobacco, which he now contracts to Burley Service Inc., a representative of Philip Morris.

Exploring options

Henry County warehouse 76

Photo courtesy Jim Fothergill

This photo was taken in 1976 at the Henry County Tobacco Warehouse, which once stood in Carrollton. It burned in 1984.

As the number of active auctions continues to decline, warehouse owners are seeking other uses for their buildings. Some have been renovated, like the former R.M. Barker Tobacco Co., located at 671 11th St. in Carrollton. The 20,000 square-foot brick building is now owned by Vernon States, who purchased it a year and a half ago. States uses a portion to house his rental and construction businesses, States Inc. The rest is available for lease. States said the building, mostly open, could potentially house fabrication, warehousing, construction contracting or similar businesses.
Other warehouses, like Brite Lite Nos. 1 and 2, have simply been torn down. According to Chappell, the Big Shelby Warehouse, because of its construction, probably faces a similar fate. Now for sale, the large warehouse contains under roof 2.5 acres but has limited potential because of its construction.
“There’s not much we can do with it that I know of,” said Chappell. He noted that the wooden floor lacks the strength for heavy machinery that might be used in a different kind of warehouse, like Independent No. 2 in Maysville that will soon house manufacturing companies related to the food and automobile industries.
Most of the tobacco warehouses in Carrollton are similar in construction to the Big Shelby Warehouse: metal, with wooden floors and no heating or cooling systems. They are basically, according to Hendrick, “unimproved, over-sized barns.”
But centered downtown along Polk Street, the location of many of the warehouses presents several options. Moderate housing is one. “Some of these areas would be excellent as far as patio homes, apartment houses and developments,” said Mayor Deatherage. Small businesses, like retail shops, are others. “I would love to see the buildings downtown filled,” she said.

Identifying Brownfields

Because of the age of many of these structures, environmental concerns like lead paint and other hazardous materials have discouraged development. To address the issue, the Kentucky General Assembly passed in 2002 legislation to help return tobacco warehouses and other contaminated areas back to productive use. The Targeted Brownfields Site Assessment Program was established to assist in determining the extent of contamination and what should be cleaned up prior to reuse. Brownfields are properties with real or suspected environmental contamination, according to the TBA.

2003: Statewide burley tobacco production
203.8 million lbs. (est.) (Kentucky Agricultural Statistics Service)
According to the KASS, total belt-wide auction sales through December 2003 totaled $45,624, 960 pounds, averaging $196.40 per cwt. Total contract sales totaled 147,525,986 pounds, averaging $198.85 per cwt.

Carrollton Tobacco Warehouses

Name or Current Owner; Address; Type of Construction; Known Use or Condition
• Growers, 3354 Hwy. 42 E. Masonry, Receiving Station
• Kentuckiana, 514 Park Ave., Steel, Receiving Station
• Melvin Lyons, Schurman Ave., Steel
• Big Burley, 612 Seventh St., Brick/Steel, Steel portion to be dismantled
• Big Burley #2, 810 Polk St., Steel, Auction House
• S&H Storage, 11th St., Steel
• Craig, Polk St., Steel, Willhoite Garage in portion
• Eugene Pennington, 1020 Polk St., Steel
• Golden Burley, 409 11th St., Steel, Active Sales
• Vernon States, 11th St., Brick, RemodeledWarehouse/Rental
• Kemper, Steel, Poor condition
• Jerry Stafford, Clay St., Steel
• Mary Greenrose, 915 Polk St., Masonry
• Golden Burley LLC, Polk St., Brick, Tobacco Storage
• Kemper, 11th St., Steel, Large truck repair
• Craig, 805 Polk St., Steel
• Johnson & Harris, Steel, Apartments (2)
• Golden Burley, Polk & Sixth St., Masonry, Tobacco Storage
– Source: Joseph Graves, CCCDC

Program coordinator Herb Petitjean said that many tobacco warehouses could be eligible for the program. And while limited in funding, the TBA does provide some guidance for persons attempting to develop Brownfields properties, Petitjean said.
Programs like TBA could help bring new life to some warehouses. “That would be great,” said lifetime Carroll County resident and realtor Jim Fothergill, whose brother-in-law owned the Marshall-Harris “Henry County” tobacco warehouse that burned in 1984. Fothergill admitted a sense of sadness to see the wane of the tobacco auction, but said he would like to see the warehouses used for something else. Otherwise, “through the years they will just deteriorate and be an eyesore for the community,” he said.

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