San Diego's vaunted craft brewing industry has just gotten a tempting "market signal" from City Hall.
It says, in effect, expand your operations, hire more people -- and you'll wind up paying no permit fees.
Permit fees for the new breweries that AleSmith and Ballast Point are rolling out in the Miramar District would have gone well into six figures.
But on Monday, the City Council decided that reimbursing those costs is an investment worth many times over, to taxpayers and the local economy.
And the beneficiaries are thrilled that their enterprises have been deemed worthy of being extended municipal “economic development” agreements.
"Eventually, the craft beer segment couldn't be ignored,” says Peter Zien, owner of AleSmith Brewing Co. “We were bringing so much income to the city, so much attention to the city. For years we were just muddling here, doing our thing without much help from anyone. But to have the city on board -- very important.”
And to say the least, very helpful to AleSmith’s planned expansion nearby on a shuttered factory site on Empire Street, which eventually will carry the AleSmith name.
The brewing company has been in business 19 years – according to Zien, only the most recent were really profitable.
But now things are so vibrant that the city is waiving $175,000 in expansion permit fees -- because San Diegans will reap $50,000 a year in property and sales tax income 'going forward'.
Same scenario for Ballast Point's new facility under construction on Carroll Way, where the permit fee waiver is worth $150,000.
With Ballast Point and AleSmith enjoying this first round of hospitality, their compatriots in the microbrew industry can "hoist a cheer" and hope for the same kind of fortune.
"Opening a brewery or growing a brewery in San Diego is much like opening a restaurant in a big city like New York or San Francisco,” Zien said. “Sure, there's plenty of great ones already -- but there's always room for more. You bring your 'A' game, practice integrity, great business practices, and I think you have a shot."
The city had been getting less than $40,000 a year in property taxes from the owners of the two vacant factory sites.
Both breweries will be in a hiring mode to staff the suds-making operations, restaurants, tasting rooms and other amenities.