Incentives passed for expansion of local breweries

SAN DIEGO (CNS) – The City Council's Economic Development and
Intergovernmental Relations Committee gave tentative approval Wednesday to a
package of incentives that will help San Diego craft brewers Ballast Point and
AleSmith to move into larger manufacturing plants.

The new facilities will be between 70,000 and 100,000 square feet –
among the largest in California. While San Diego has become nationally known
for its craft brewing industry, none of the individual companies rank among the
biggest producers.

In a ranking of craft brewers by the amount of sales in 2013, Ballast
Point ranked 29th while AleSmith was not in the top 50.

Under the plan, tax revenues generated by the new breweries will be
reimbursed under a formula until they equal the amount of municipal fees paid
by the companies to move into their new facilities.

After around three years, the companies should each generate about
$50,000 in annual sales tax revenue, far in excess of what was paid by the
previous occupants of the properties, according to city staff.

“I believe this is a great deal for taxpayers and for craft beer
enthusiasts,” Councilman Mark Kersey said. “The breweries get their fees back
but only after generating new tax revenue that we would not have received
otherwise, and that is the key point here.”

Kersey said it is estimated that every new brewery job indirectly
results in the creation of 4.7 other positions. City officials said Ballast
Point plans to add 100 jobs, while AleSmith will add around 25 positions. On
top of that, each project to prepare the new facilities will employ 25
construction workers for one year.

Ballast Point makes beer in a 23,000-square-foot plant in Scripps Ranch.
City officials said its only alternatives to expand were the Miramar location
or a spot in neighboring Poway.

Kersey said the city dropped the ball several years ago when the largest
craft brewer in the county, Stone Brewing Co., was planning to move out of
San Marcos. Stone ended up in Escondido.

“Craft beer represents a growth industry – very successful small and
medium-sized companies that are providing good, well-paying jobs,” Kersey
said. “We need to be looking for other niche industries like this and
supporting them with similar agreements.”

Committee Chairwoman Sherri Lightner said another deal like these two –
which need final approval from the entire City Council – is in the works.

With the state having taken away enterprise zones and redevelopment, San
Diego officials have been looking for other ways to assist local businesses
and stimulate the area economy.

According to a staff report, deals like the ones being given to Ballast
Point and AleSmith have been provided four times in the past, but not since
2001.

Twenty-two breweries and 19 brew pubs now operate in San Diego, and
three other breweries are under construction.