Wednesday, February 19, 2014

Tumwater Brewery: A Contract Brewery for Samuel Adams or Sierra Nevada?

Above: The brewery and the swollen Deschutes River as seen yesterday from Tumwater Falls Park.
Positive Prospects Emerge For Tumwater Brewery Property

 By Janine Unsoeld

The last few years have been frustrating for Troy Dana, commercial real estate agent and property manager for the former brewery in Tumwater. Selling 800,000 square feet of cold, empty, dark and decrepit looking buildings is not easy, but recent prospects may be looking more positive.

No doubt, the removal of the covenant restricting production of alcoholic beverages at the property last June helped, but recent rumors brewing in the rainy South Sound air can now be confirmed to be based on truth.

In response to an inquiry from Little Hollywood, Dana offered tantalizing hope yesterday in exclusive interviews just before and during last night’s Brewery District Plan open house. A public hearing was held after the open house by the Tumwater Planning Commission and Tumwater city council.
“I can’t make a comment on specific companies, but several large brands are interested in the possibility of utilizing a contract brewery in Tumwater. It’s safe to say there are four that have expressed interest and would like to know more. I’m ready. It’s time.”

And no, it’s probably not MillerCoors time. The Miller days are gone, having blown the last whistle here in 2003, putting 400 people earning family wage jobs out of work.
Above: A Miller Brewing Company advertisement from a 2001 Lacey Thurston Chamber of Commerce membership directory.
Dana says the 31 acres involving the brew house and warehouse have been appraised at $16 million, and the building still has 300 barrel tanks, infrastructure, and plumbing to support a viable contract brewery here.

Dana says he receives, on average, about two inquiries a week about the property from around the world. Tumwater’s slogan, “It’s the Water,” comes from the production of beer since 1896 until 2003, with the exception of Prohibition.

In early February, Dana told the council that he is working with a developer from California who has redeveloped breweries and constructed breweries. The developer is reviewing the brewery property and considering the facility as a 250,000 barrel contract brewery.

Current Craft Beer Trends

According to the Brewers Association, a not-for-profit trade group, the craft beer industry is defined by four distinct markets: brewpubs, microbreweries, regional craft breweries, and contract brewing companies. Contract brewers hire underutilized but well-equipped regional breweries to produce a recipe with the contract brewer's own ingredients and formulas.

The Brewers Association tabulates production statistics for the U.S. brewing industry, and says that of the top 50 overall brewing companies, 39 are small and independent craft brewing companies.

“In 2012, craft surpassed six percent of the total U.S. beer market, with volume and dollar sales reaching record levels,” said Paul Gatza, director of the Brewers Association. “Increasingly, beer lovers are turning to craft brewed beer from small and independent producers to satisfy their thirst for bold, innovative and flavor-forward beers.”

The top five U.S. craft brewing companies based on 2012 beer sales volume are: 

1. Boston Beer Co. Boston, Massachusetts
2. Sierra Nevada Brewing Co. Chico, California
3. New Belgium Brewing Co. Fort Collins, Colorado
4. The Gambrinus Co. San Antonio, Texas
5. Deschutes Brewery, Bend, Oregon

Dana declined to comment yesterday when asked about a particular company or brand. Samuel Adams is an American brand of beer brewed by the Boston Beer Company and its associated contract brewers.

Sierra Nevada is based in California. According to an upcoming March issue of Forbes magazine, Sierra Nevada will host a participatory “Beer Camp Across America” traveling festival this summer to highlight its place within the broader craft-beer movement.

Other Offers

In early February, Dana also shared information with the Tumwater City Council about an opportunity that came and went last year.

He said he was contacted by a man representing a national company that provides short-term storage for vehicles for soldiers deployed overseas, who asked about the potential of utilizing the brewery warehouse and parking lot. The individual received a federal contract and faced a tight timeline on whether it could be used. The rate the company was prepared to pay would have been satisfactory for a developer to offset the cost of acquiring the facility.

Dana advised the individual that he didn’t believe it was possible under the interim zoning but contacted Tumwater city administrator John Doan and met with staff to explain the situation. City staff advised Dana that under the provisions of the interim zoning, the use wasn’t allowed. Dana had offered to meet with the council to request reconsideration of the request but learned the company had moved forward to select another site. He asked the council to consider exceptions to the interim zoning, which is mixed-use.

Dana said the situation was frustrating, because “it was the right opportunity for the right reason.”
Dana said one of the most lucrative, attention getting ideas he’s been approached about has been interest expressed by local and national marijuana growers to use the facility and use the beer tanks.

“I’ve been told they would be perfect, hermetically sealed vessels for growing marijuana.”

The budding pot market aside, Dana says his focus has always been to bring another brewery back to Tumwater. He even thinks the brewery could attract 500,000 barrel contract brewery.

Asked if the building wasn’t too old and decrepit, Dana said, “We need to find that developer with experience with mixed use, brew pub tasting, who knows how to redevelop a site, identify that developer, and introduce them to this opportunity....We need to find out what kind of market opportunities are out there, and face the realities of what we have. Given what we know today, a contract brewery makes a lot of sense.

“A contract brewery here would be a strong logistical advantage....Breweries ship their product from the East Coast, with plenty of transportation costs. The brewery is a complex site. It’s going to take a visionary to take the next step to mitigate the risk.”

Dana, a resident of Thurston County since 1973, says he’s lived through the cultural changes of the area and remembers when “your manliness was determined by how many beers you could drink in five minutes,” he says, laughing.

Dana has attended previous Brewery District Plan open houses. “They’ve been good, and create community involvement, but at the end of the day, it will take viable capital solutions. Until then, it’s still a lot of good ideas.”
He says Centralia and Port Townsend are great examples of communities with downtowns that have come back from the brink of economic decay.

“Their downtowns are remarkable. I went to Centralia in December for the Christmas Tractor Pull and thousands of people were lining the street at 7:00 p.m. to see 40 to 50 tractors decorated with Christmas lights. I held hands with my wife, drinking coffee, and at no point ever did we feel uncomfortable with the quality of people there.

“We’re at the tipping point…at some point, somebody has to step up and we’re going to turn this around. I have invested endless energy and countless resources trying to create an economic interest in this. There’s still extraordinary brand equity in that complex. Bring it back and you’ll have substantial community support,” said Dana.
Above: Proving It's Still the Water, the mighty Deschutes River runs through Tumwater yesterday afternoon. The former brewery is in the distance. The Falls Terrace restaurant can also be seen in the video.
Above: Close up of easel poster on display at last night's Brewery District Plan open house in Tumwater. The circles indicate proposed roundabouts.
For more information about Tumwater businesses, land use, environmental issues, or the draft Brewery District Plan, read other articles at Little Hollywood at and use the search button.


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