Set on Stone?
Richmond lands craft brewery, but not everyone is sweet on the deal
- March 1, 2015
After months of controversy, one of the nation’s largest craft breweries is moving forward with plans to start a brewery and eventually, a restaurant, in the River City.
This month, the Richmond City Council approved a land transfer to its economic development authority of an old warehouse, which will eventually serve as the site of a restaurant for Escondido, Calif.-based Stone Brewing. The city plans to fund the restaurant’s construction, a move that has caused contention with some of Richmond’s restaurant owners who say Stone is receiving an unfair advantage. Proponents of the project see it as a public-private partnership that will, among other things, help revitalize one of the city’s blighted neighborhoods.
Stone has said it will invest at least $41 million in the venture and create 288 jobs. The brewery will be located in the city’s Greater Fulton neighborhood, which was mostly torn down during a failed 1970s Urban Renewal plan. The restaurant will be situated by the nearby James River.
While the project wasn’t the largest economic development announcement made last year in Central Virginia, it was one of the most coveted. When Stone put out a request for proposals in early 2014 for a brewery location East of the Mississippi, it received 200 responses from more than 20 states. The company eventually made 40 site visits and narrowed its list to three finalists — Columbus, Ohio; Norfolk and Richmond.
The city’s incentive package is valued at more than $30 million. It includes $23 million in bonds for the facility’s construction, $8 million in bonds for Stone Brewing’s restaurant and beer garden and $2 million in grants, matching contributions made by the Governor’s Opportunity Fund. Stone says it will repay the city’s investment through lease payments on the property, which will include interest, and is matching $7 million in state and local grants.
Michael Byrne, director of operations at the Richmond-based Tobacco Company Restaurant, formed a group with 35 other restaurants aimed at stopping the city’s funding for Stone’s restaurant and beer garden. He says Richmond is not being transparent about the incentives package it is giving Stone in that part of the deal.
“Nobody in my group has ever said that Stone Brewery shouldn’t take the deal,” says Byrne. “No one should ever be offered that deal outside of the brewery itself.”
But Greg Koch, Stone’s CEO and co-founder, says any suggestion that the city’s financial assistance is a gift is inaccurate since Stone will repay the money with interest, making the venture a viable investment for the city. “If it wasn’t, the city wouldn’t be making it, and these kind of deals are not uncommon in the worlds of cities and businesses,” Koch says.
Greg Wingfield, CEO of the Greater Richmond Partnership, also thinks the Stone plan was a good deal for all parties involved. He says that about 10 years ago, Richmond was thinking of giving away the Fulton Gasworks site so it wouldn’t have to deal with environmental concerns. The site is part of the 14-acre parcel where Stone will locate.
Richmond Mayor Dwight Jones also backs the deal. “Mayor Jones views the Stone opportunity as a chance to jump start development in an area that is undeveloped,” said the mayor’s press secretary Tammy Hawley. “The city has also been focused on increasing our tourism draw, and we view increased tourism in the city as to everyone’s advantage. Efforts to expand the city’s tax base, create jobs, and attract other investment will ultimately benefit the whole of Richmond’s economy. A strengthened overall economy will benefit all businesses.”
Stone expects to begin operation of the brewery by early 2016, but the restaurant and beer garden won’t open until a few years down the road, Koch says. The restaurant will include organic, local products and guest taps featuring a large number of local craft beers.
Koch says Stone will need a diverse level of skill sets when it ramps up hiring, from entry level to executive level positions. Jobs will range from brewers to management and sales staff.
“When it’s all said and done, we are going to have quite a place that we believe will bring people in from far and wide to experience our unique characteristics, and also simultaneously people will get to experience the uniqueness of Richmond, Va., bringing people into bars and restaurants and hotels and artisan products and, you know, we’re just glad to be a part of it,” Koch says.