March 8, 2018

How Craft Breweries Are Helping to Revive Local Economies

NY Times Square Feet by: C.J. Hughes

 

Equilibrium Brewery in Middletown, N.Y., drew a crowd of craft brew fans from several states recently for a can and bottle release. Credit Eva Deitch for The New York Times

MIDDLETOWN, N.Y. — As Equilibrium Brewery opened for business here on a recent Saturday morning, fans were already lined up outside for a fresh batch of its hazy-colored ales.

The travelers, who came from Massachusetts, New Jersey, Pennsylvania and Rhode Island, snapped up as many cans and bottles as they could buy, at $16 a four-pack. After a sip or two by tailgates, some headed out in search of a meal, their tourist dollars funneled into a downtown betting on a rebound.

“We are having an impact on the community, for sure,” said Ricardo Petroni, a co-owner of Equilibrium, which opened in 2016 in a former meatpacking plant that had been seized over nonpayment of taxes. “When we moved here, you could see old scars of bad times,” Mr. Petroni added, “but you can tell that now, new things are flourishing.”

Ricardo Petroni, a co-founder of Equilibrium. “When we moved here, you could see old scars of bad times,” he said, “but you can tell that now, new things are flourishing.” Credit Eva Deitch for The New York Times

Across the country, in once-bustling manufacturing centers, breweries are giving new fizz to sleepy commercial districts. If alcohol-based businesses were blamed for a breakdown of society in the Prohibition era and beyond, breweries are now being seen as a force for good.

“The economic ripple effects are definitely there,” said David Barnett, a Chicago-based senior research analyst for JLL, the commercial brokerage firm. Breweries “create a cool tourism aspect for out-of-towners, but it’s been good for residents as well.”

In 2016, there were 5,301 mom-and-pop beer makers, which are typically known as craft breweries. That figure rose from 4,548 in 2015, when the country surpassed its historic high-water mark of 4,131 breweries, set way back in 1873, according to the Brewers Association, a trade group. (Zero were recorded from 1920 to 1932, during Prohibition.)

Although they are small, those breweries pack an economic jolt. In 2016, they contributed about $68 billion to the national economy, the association said.

In recognition of their importance, craft breweries received an unexpected gift in the recent rewrite of the tax code. The Senate included a provision that lowered the tax rate on beer produced in the United States, particularly for small breweries. That special treatment comes on top of generous subsidies from local communities eager to bring business to their struggling industrial districts.

The Northeast, Midwest and West still represent much of the industry, but 36 states doubled their production of craft beer from 2011 to 2016, according to Mr. Barnett, who last year wrote “The Craft Beer Guidebook to Real Estate,” a JLL report. “It’s hard to ignore an industry that has grown this much,” he said.

Brittany Rudy, Clemson Brothers’ pub room manager, pouring the brewery’s Lionheart Imperial I.P.A. Credit Eva Deitch for The New York Times
Pouring MC2, a double India pale ale, at Equilibrium. Credit Eva Deitch for The New York Times

Though breweries are plentiful, none were on the city’s west side, a blue-collar former furniture-making center, when Mr. Andrus and his partner, Max Trierweiler, sought to open one in a dormant 1891 firehouse. Neighbors who were worried that another bar would hurt the struggling area spoke out at zoning meetings, he said.

But opponents may have come around since the brewery opened in 2012. Mitten closes earlier than bars in the area, Mr. Andrus said, “and we attract a lot of families.” The brewery, which is profitable, seems to have also attracted investment in the neighborhood. Across the street is a gin distillery, in a former clothing store, and another corner has a barbecue joint, in a former hamburger stand. Other breweries have also arrived in the area.

Perhaps unsurprisingly, property values are also on the rise. Mitten’s 6,000-square-foot firehouse, which cost $220,000, is worth about $600,000, Mr. Andrus said, which is “largely because of us.”

Whether craft breweries are a fad or will endure may come down to drinkers’ tastes, but evidence suggests passion for the product is high.

On that January day in Middletown, Bob Helligrass and Jaime Loughridge, friends from the Albany area, sat eating lunch at Tapped, a bistro next to Equilibrium that opened around the same time.

Before buying India pale ales at Equilibrium, the pair had also hit up the two-year-old Hudson Valley Brewery in Beacon, N.Y., to buy some of its beverages, while also snagging a meal along the way. “Breweries,” Mr. Helligrass said, “have benefits all down the line.”