Breweries used to be shunned as nuisances. Now, politicians are courting them, as the largest craft brewers in the West seek East Coast base camps.
Virginia was slow getting into the game, losing Sierra Nevada Brewing, New Belgium Brewing and Oskar Blues to neighboring North Carolina before passing Senate Bill 604 in 2012. That measure allowed breweries to operate on-site taprooms and made the state much more attractive to out-of-town beermakers.
Last October, reps of San Diego’s Green Flash Brewing joined state and local officials, including Mayor William D. Sessoms Jr., in hoisting the first shovels full of earth in an empty field in Virginia Beach that by spring 2016 will be home to a 100,000-barrel-a-year brewery with a 4,000-square-foot tasting room and one-acre beer garden.
On March 2, the Richmond City Council approved a land transfer that will pave the way for an immense Stone Brewing complex to materialize, step by step, along the James River. The California-based brewery will fire up its kettles in early 2016, and a 30,000-square-foot restaurant and beer garden — the Stone Brewing World Bistro and Gardens — will follow after the brewery is functional.
“This competitive, high-profile project really puts Virginia on the map and cements our standing as a serious player in the craft beer industry,” crowed Virginia Gov. Terry McAuliffe when Stone announced the project last fall.
In a controversial sweetheart deal, Stone will receive a $31 million incentive package from the city in the form of general obligation bonds, plus a $7 million in state and local grants. What’s in it for Richmond? The prospect of 288 jobs plus an army of tourists who, according to Stone chief executive Greg Koch, “will spend money on hotel stays, local shops and local restaurants.” (The original Stone Brewing World Bistro and Gardens in Escondido, Calif., draws more than 600,000 visitors a year.) Plus, there’s “the benefit of us going into a decades-long neglected part of town, where we expect to spark additional development.”
What will Green Flash and Stone brew here? Pretty much the same beers they make in Southern California. Both are noted for their piquant, hop-forward pale ales. Will 3,000 additional miles from the hop fields of the Pacific Northwest affect quality? Koch and Green Flash chief executive Mike Hinkley dismiss that possibility: Both say they use pelletized hops that are vacuum-sealed and refrigerated to keep them fresh until the next hop harvest.
Koch and Hinkley stress that their branch plants will mean fresher and cheaper beer for their East Coast fans. As of Feb. 1, Green Flash has been eating freight costs to the state of Virginia, dropping the price of a six-pack of West Coast IPA from about $12 to $10. “We intend to be local right now, at least from a price standpoint,” says Hinkley.
But Virginia isn’t a beer desert. As of March 9, there were 104 licensed breweries in the commonwealth, according to Cassidy Rasnick of the Virginia Manufacturers Association.
How do they see Green Flash and Stone: as comrades or carpetbaggers?
“Maybe we should extend them an olive branch,” suggests brewmaster Jason Oliver of Devils Backbone Brewing in Roseland and Lexington. “We did a beer with Green Flash last year, East West India Pale Lager, that we released in 16-ounce cans. That was our idea: Let’s welcome them to Virginia.”
He admits that he can understand Richmond brewers grumbling about the deal Stone got, but adds, “Stone isn’t just another start-up. It’s a huge entity. They’re bringing lot of jobs and revenue to the city.”
Eric McKay, founder of Hardywood Park Craft Brewery in Richmond, says that “So far, our fellow Virginia brewers have expressed a mixture of trepidation and optimism.
“Stone brews more beer than the 100-plus homegrown Virginia craft breweries combined, representing a daunting scale for an imported competitor,” McKay says. “On the other hand, craft brewers of all sizes can achieve great things when working together.” Craft beer has only about a 3 percent share of the Virginia market, he notes, leaving “plenty of room for growth.”
Koch also sees great potential. “When we opened in San Diego in 1996, we were about the 15th brewery. Now there are over 100 breweries in San Diego County.”
“But we’re not San Diego,” cautions Michael Byrne. “Richmond has 212,000 people with a metro population of around a million.” Byrne is director of operations at the Tobacco Company Restaurant in Richmond’s Shockoe Slip neighborhood. He also operated Richbrau, the city’s first brewpub, for 15 years before the recession of 2008 “put a damper” on business and forced its eventual closing.
“We’re paying the city 6 cents on the dollar for a meal tax,” complains Byrne, and the city, as he views it, is using that tax money to finance a competitor.
“Richmond is one of the highest per capita restaurant cities in the U.S. It’s on fire right now, and we all compete against each other, but in a healthy way. Stone got a deal that none of us could get.”
Responds Koch, “Richmond is not getting into the restaurant business. The city is the landlord; we’re paying rent.” Stone, he adds, will repay all of the incentive money except for state grant money earmarked for roads and other infrastructure.
Stone scoped out the cities of Norfolk and Columbus, Ohio, before settling on Richmond. Without the restaurant, there would have been no deal, stressed Koch.
(Green Flash, meanwhile, has avoided this sort of controversy by eschewing the restaurant business altogether, although it might operate a food truck to serve visitors, says Hinkley.)
Stone might not be the last West Coast brewery to set up shop in the Old Dominion. Deschutes Brewery in Bend, Ore., began selling beer in the Washington area last winter, premiering a spiced saison, Zarabanda, that was formulated with the help of celebrity chef José Andrés. On June 27, Deschutes will bring its Street Pub to Arlington: a 185-foot outdoor bar with 40 taps.
But the brewer of Fresh Squeezed IPA and Black Butte Porter is seeking a more permanent presence. Twice, Deschutes has sent out teams to scout possible sites for an East Coast brewery in Virginia, Tennessee or the Carolinas. “We want to have purchased a second location by the end of 2015 and be up and running by spring 2019,” says brewery president and operating officer Michael LaLonde.
On March 12, the Richmond Times-Dispatch reported that Ballast Point Brewing & Spirits, a San Diego-based brewery/distillery, is eyeing Richmond for an East Coast base. The story cited a recent visit by Ballast Point officials to Mekong, a local restaurant in the process of adding a brewpub. Ballast Point declined to comment for that report.
Interestingly, no East Coast breweries seem to be prowling for West Coast sites. Delaware’s Dogfish Head Craft Brewery, for example, ships to 30 states including California, Oregon and Washington. But “we made a decision to make all our beer in Delaware,” says President Sam Calagione. He explains that most of the fruit and vegetables we eat are grown west of here and transported east. The trucking companies, rather than send their fleets back empty, are willing to offer competitive rates for shipping from east to west.
“But if gas prices rise, who knows?”
Kitsock is the editor of Mid-Atlantic Brewing News.