Even before the initial three-year enterprise zone designations expired on their new production facilities, two of the mid-valley's most successful craft beverage manufacturers say they have outgrown those spaces and are ready to grow again.
Block 15 Brewing Co. and 2 Towns Ciderhouse went before the Benton County Board of Commissioners on Tuesday to request enterprise zone status for their proposed expansions, which will involve financial investment in new facilities and are expected to create two new jobs apiece.
Both applications were unanimously approved by the commissioners. Last week, the Corvallis City Council gave its approval to the requests, which confer three years' worth of tax benefits with an option to extend them for two more years. Both companies are still operating under the original three-year enterprise zone agreements for the facilities they plan to expand.
Block 15 Brewing Co., which opened a brewpub in downtown Corvallis in 2007, added a 7,000-square-foot brewery and taproom at 3415 S.W. Deschutes St. in the Corvallis Business Park in July 2015. Now, just 18 months later, the business has outgrown that space as well.
“It’s a good problem to have,” said Chris Heuchert, Block 15’s general manager.
The brewing industry measures production in 31-gallon barrels (twice the size of a normal 15½-gallon keg). Before adding a second brewery, Heuchert said, Block 15 was producing 1,200 barrels a year. Last year’s total was around 4,000, and the company expects to brew about 6,500 barrels this year.
Block 15 plans to invest just over $1 million in improvements to its Deschutes Street property, with most of the money going into a new 5,000-square-foot warehouse with a 1,200-square-foot walk-in cooler. The additional storage area will make the company’s distribution operations more efficient while also freeing up space for more brewing equipment and expanded bottling and canning lines. That, in turn, should allow Block 15 to continue expanding its customer base in Oregon and Washington, Heuchert said.
“Right now we get requests for new accounts that we can’t fill,” he said. “We get something in the neighborhood of six to 10 requests a week for our beer in the Seattle area alone.”
2 Towns Ciderhouse is also enjoying a growth spurt. In early 2014, the company opened a 15,000-square-foot production facility in leased space at 5123 S.W. Hout St. in the Corvallis Airport Industrial Park, greatly adding to the capacity of its ciderhouse and taproom in the Eastgate Business Center on Highway 34 east of Corvallis.
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“Over the past three years, we’ve pretty much taken that current space up to capacity,” said 2 Towns CEO Lee Larsen.
The company has gone from producing 4,000 barrels of hard apple cider in 2013 to just under 20,000 barrels last year. While most of its business is concentrated on the West Coast, the company now distributes in nine states and has recently expanded into several international markets, including Japan.
2 Towns has worked out a deal with its landlord to lease an additional 12,500 square feet in the same building. The company plans to spend about $70,000 on renovations, including knocking out a wall between the adjoining units.
The project will allow 2 Towns to bring some offsite storage in-house while still leaving room for more growth in the future.
“The new space allows us to continue to grow and expand our output,” Larsen said.
The new three-year enterprise zone approvals are expected to save 2 Towns $1,200 a year in property taxes on its planned improvements, while Block 15 should see $17,000 in annual savings.
Benton County Chief Operating Officer Dennis Aloia called the tax breaks a good investment for the county.
“The enterprise zone, with those tax abatements, allows companies to reinvest money into an existing property and expand it,” he said.
“Both are thriving new businesses that are growing,” he added. “I wish it were technology companies, with higher-paying jobs, (but) I think we have to take advantage of anything we can grow.”