Monday, October 27, 2014

Stone Wins First Approval

Brewer lays on pressure, hinting it could still build elsewhere.

Posted By on Mon, Oct 27, 2014 at 4:00 AM

click to enlarge stone-brewing-go-to-ipa-6-600xx7500-5000-0-600_1_.jpg

Richmond City Council unanimously approved an economic development package worth $7 million for Stone Brewing Co. on Monday night.

The vote came quicker than some council members would have liked: Several balked at being asked to weigh the package before they had more details about the overall deal, which, in addition to the economic development incentives, calls for the city to invest $31 million to build Stone a brewery and restaurant.

But Stone officials pressured council to act quickly, saying they have a “plan B location” for their new brewery and hinting that they’d reconsider Richmond if City Council delayed its vote until next month.

“We have to know if we’re on,” Craig Spitzer, Stone’s chief financial officer, told council Monday afternoon during its informal meeting. “We want to leave here knowing that this project is moving forward at this stage.”

Six residents spoke in favor of the project. No one spoke against it.

Under the contemplated deal, the city would take out general obligation bonds to finance construction of the brewery and restaurant. Stone would pay that money back over 25 years in the form of lease payments.

City officials have presented it as a break-even proposal for the city. But the city’s financial adviser, Davenport, said in a draft analysis that the city faced a financial risk if Stone left the city after 10-15 years.

Councilman Jon Baliles, who represents the West End, said he understood Stone had deadlines related to its business needs. But, he said: “We have to answer to the people who elected us. … I’m just asking for a few more weeks.”

Stone’s chief operating officer, Patrick Tiernan, pushed back against the possibility of a delay, telling council he needed to begin site work in November. “I need an address to send $40 million worth of equipment to. … That’s our practical reality.”

Tiernan said he needed to start placing fermenting equipment “either here or our plan B location” in order to get operations up quickly enough to keep up for demand for his company’s beer.

The incentive package council approved Monday night is the first of 15 ordinances it will consider related to the Stone project, according to Lee Downey, the city’s director of economic development.

Stone said approving the first ordinance would signal to them that the city is serious about following through on the rest.

Councilwoman Cynthia Newbille suggested that if an issue arose with any part of the plan, council would be able to address it through future ordinances.


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