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Could beer help the Twin Cities?

Craft breweries have the potential to boost the Twin Cities economy and tourism — and create fun places to hang out.

Minneapolis Mayor R.T. Rybak, center, tending bar at the opening of Indeed Brewing in Northeast Minneapolis.
Photo by Andy Holmaas

It only takes a menu in a local restaurant listing exotically named concoctions like Fulton Lonely Blond, Left Hand Chainsaw Ale and Rush River Double Bubble to let you know that craft beers are booming.  

There are now 2,126 breweries in the United States – about 350 more than last year – according to the Brewers Association, a national trade organization. Most of them fall into the “craft” category, which means that they produce fewer than 6 million barrels a year, have ownership that is predominantly independent, and emphasize malt brews. The industry employs 104,000 people nationwide, full- and part-time. And that’s not even counting their microbrew and brewpub cousins, which are restricted to under 15,000 to 35,000 barrels a year.

Minnesota has been a stalwart in the beer boom. Clint Roberts, spokesman for the Minnesota Craft Brewer’s Guild, says his group now has 50 members, including 35 breweries and brewpubs. Membership grew by 30 percent just in the last 18 months. In 2010, the industry provided 17,554 jobs statewide and paid $156 million in sales tax.

Regulations have eased

In an effort to nurture the still young industry — 91 percent of Minnesota drinkers are still choosing mass-produced beer, according to Roberts — local governments have eased up on regulations.

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Surly Brewing asked for and won a major concession from the Minnesota Legislature: the right to operate taprooms out of its manufacturing plant. Planning is already under way for a $20 million restuarant and beer garden — though Surly hasn’t decided where it will be. (Both Minneapolis and St. Paul mayors have said they want it.)

To help fledgling breweries that can’t get shelf space at liquor stores, Minneapolis’ City Council now permits sale of half-gallon jugs or “growlers” directly to the public. Jon Messier, co-owner with Eric Biermann of Lucid Brewing, which opened recently in Minnetonka, says that city planners worked together with him and his business colleagues for a fast startup, even though “it was the first brewery in Minnetonka and there was no formal licensing procedure.”  

Still, maybe it’s time to do more.

How breweries could help the local economy

I’m not advocating that the Twin Cities encourage these enterprises merely to delight beer dilettantes — or to create a populace of the permanently sozzled. I’m looking at breweries as tools that could help boost the economy and tourism and create fun places to hang out, which could enliven areas of the metro that now look to be dull, if not dead.  

Here’s why:

Craft breweries are original. They provide a unique sense of pride and place where people want to come to spend money, especially if the plants open their doors to tourists, sponsor tasting rooms and operate tap rooms or beer gardens. So much of the American landscape is covered by chain stores of one sort or another that people hunger for places and products with character, not just templates that are replicated everywhere.

A proliferation of such businesses would help to keep the Twin Cities from what I consider the horrible fate of Orlando, Fla. Very nearly every store, restaurant and bar (that isn’t part of the Disney empire) belongs to a national chain. Sure, chains can be good, providing customers with a predictable quality of goods or service, but after a steady diet of them, you can’t help but hanker for something with a little local flavor. 

Breweries get our cities’ names circulating. It would be preferable if the brewers helped to publicize us by connecting the place to the brand with names like St. Paul Frozen Tundra IPA or Minneapple Chain of Lakes Ale — but that may be asking too much. The label specifies the beer’s place of origin, and that on its own could add to our cities’ reputations as generators of unique items.

Craft breweries have the potential to juice up the economy. While beer consumption dropped by about 1 percent last year, sales of craft beer grew by 15 percent in 2011 and another 14 percent in the first half of this year. Considering that craft beer represents a bit less than 6 percent of total production, it has plenty of room to grow. And when breweries grow, they “export” their products to other parts of the state and region. Doing that brings new dollars into the area.

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What’s more, breweries are good light industries. They do send pollutants into the air, but nothing on the order of pesticides from agriculture or lead spewing from industrial parks. Relatively speaking, brewing is a clean manufacturing enterprise that can exist in a city. Yes, breweries would increase traffic, but remember, places without traffic are usually places without economies and jobs.   

Beer tourism is becoming ever more popular. According to the New York Times, both Bend, Ore., and Asheville, N.C., which proclaims itself Beer City USA, have promoted their craft beer businesses as attractions. And, while the Twin Cities have plenty of interesting museums and theaters for tourists and business travelers to visit, craft breweries could be another draw.

Other cities are way ahead of us in trying to draw breweries. Asheville, for example, persuaded Sierra Nevada, a Chico, Calif., brewer, to build its East Coast plant there. New Belgium Brewery of Fort Collins, Colo., which makes Fat Tire Amber Ale, also moved there. To lure them, the city gave out aid packages that included loans and infrastructure improvements: $4 million to New Belgium and $6.1 million to Sierra Nevada.

Create incentives, ditch old rules

What could we do that we haven’t to help this industry along, aside from handing brewers gobs of money? Well, one way might be to create a TIF or tax incentive financing district for craft brewers along Hiawatha Avenue, as one example, where they could start businesses. The cost of improvements to any buildings used there would be assessed to increases in property taxes due to the improvements. Although city plans now call for housing and retail along this light-rail corridor, not a lot seems to be  happening there. So maybe the area should allow businesses like breweries.   

Finally, it may be time to ditch all those antiquated rules about how far apart liquor establishments and bars have to be from each other. They are inhibiting growth for no good reason. One group of investors trying to open a small craft brewery near Uptown in Minneapolis couldn’t, says Andrew Schmitt, the director of Minnesota Beer Activists, “because they intend to sell growlers (64 oz. jugs) [and] would be held to same off-sale restrictions and zoning requirements as any off-sale liquor store. These are two totally different entities that are held to the same standard by antiquated rules.”

When the brewer contacted Meg Tuthill, the local councilwoman, about his efforts to get his business off the ground, she left a snooty response on his voicemail. “I don’t work on changing ordinances for one business,” she concluded. Well, sure, but council members  could work on changing the ordinance for all of them. 

Look for a better model

Just why governments should concern themselves about this mystifies me. My experiences living in New York City tell me that such regulations lead to corruption — to maintain hegemony in a neighborhood, a liquor store or bar bribes (or donates to) members of the state liquor board, his city rep or whoever else has any say. That’s not a model that we here should copy.

Further, cities don’t specify the number of dry cleaners that can operate in an area, or dress shops, restaurants, groceries — or balloon stores, for that matter. Burger King cannot stop McDonald’s from opening up across the street. Our free-market credo lets every business compete. Whoever does the job best, cheapest and fastest wins. It seems to me the liquor business should be subject to the same rule.

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A couple of weeks ago I wrote about the effort to re-open Nicollet Avenue at Lake Street  where a Kmart and Sullivan’s Supervalu straddle what once was a cross-street and a lively intersection. At the time, I tried to reach John Sullivan, the supermarket owner. He was on vacation but called back yesterday.

His take on the matter: “I think it [reopening the street] would be good for the neighborhood.” People who live in the area, he points out, have to go around the Kmart-SuperValu complex to get to Lake Street, at great inconvenience. His store, he adds, is in a 35-year-old structure. “I’m not servicing the community as I wish,” he says. His hope: to be able to build a new store on the redesigned intersection.