Striking A Deal For More Water
Growing breweries depend on local governments for a wide range of necessities, from zoning changes to promotional activities to utilities, like water. But the last time Bear Republic Brewing Co. asked Cloverdale, CA, for approval to expand its production facility, the city didn’t grant building permits because it didn’t have the water infrastructure to support the expansion.
Cloverdale looked into a loan from the U.S. Department of Agriculture to add more water pumps and wells. To be approved for it, the city raised its water and sewer rates by 25 percent, “still a very competitive rate,” Bear Republic founder Richard Norgrove Sr. said. But that meant waiting until 2015 before the brewery would have access to more water. No growth until 2015? No way. Norgrove refused to put the success of Racer 5 IPA and his company’s other popular brands on hold until then.
He wanted to work with Cloverdale to expand the city’s water infrastructure so that the brewery could make more beer in its current location, so he offered to front Cloverdale the money. Taxes notwithstanding, governments can’t take money just like that. Bear Republic and Cloverdale needed to create a “private-public partnership” in order to get the water flowing faster. But Norgrove knew that would take time, if it happened at all. So he followed a “parallel path”: looking for a site elsewhere in Northern California with enough water for a new brewery, one that he could “push the go button” on if work in Cloverdale fell through.
Finally, after six months of Bear Republic and Cloverdale inching towards each other, the two struck a deal. Bear Republic will pre-pay for future water credits as a method for Cloverdale to build the water infrastructure that the brewery needs to keep growing. Future residents of Cloverdale should be able to reap the rewards too. Norgrove expects more water for more beer by the summer of 2014.
But in the meantime, Cloverdale has limited the brewery’s water use. Since Norgrove doesn’t want that allotment to be “zeroed out by Thanksgiving,” his brewers have been keeping very close tabs on production. It also means less Racer 5 than its fans would like to be able to drink in some parts of the United States. But don’t worry. It’s only temporary, thanks to this unique partnership between Bear Republic and Cloverdale.