Monthly Archives: December 2013

Finally, answers to our Electrical Nightmare ….

I have begun to realize that not everyone who is helping to get this brewery off the ground is willing to work until 2am, or makes this job the sole focus on their day.  In other words, answers that I expect within a couple weeks, sometimes take the better part of a month.  Sometimes these answers are not needed, so the time to get a response is not important.  But it seems like we need most of these answers in a timely fashion, and they set in motion a cascade of changes elsewhere, and each successive change is just as important as the last.

One of these huge considerations is the electrical issues for our space.  I have blogged about it, and it seems like we have been close to an answer for the past few weeks.  This is likely the biggest and most important answer we have been waiting for throughout this process, as our decision to lease the space rests on the advice and information we gather.  A bill of under $100,000 and we are golden to carry on.  Anything over this and we have a tough decision to make, and anything well over this means our dream is going to be dead in the water.  Additionally, we have already extended our contract to lease our space with the landlord past what we agreed to.  We were supposed to give our landlord an answer if we wanted the space by the end of November and we asked for a month extension, given the electrical issues and the lack of an answer around our Development Permit.

So here we are at this point.  We have 2 weeks to decide if we want the space, as the landlord requires an answer by the first week of January.  We have received our development permit from the City of Vancouver, so we are able to brew beer in this space.  We need to submit our building permit drawings to the City of Vancouver, and we need to find a solution to the lack of electrical power our space has.

Well as of yesterday, we found a solution to our electrical problem.  It looks like we are going to cut the power to the whole building, and re-run new power that will be sufficient for everyone, including our brewery.  This means that instead of getting a bill for well over $100,000, we should now come in around $60,000-$80,000 on this fix.  We are still a little upset by the amount we have to spend, but it beats the alternative, which is a pad mounted transformer, and the cost of which is about $250,000.

This means that all we have to do is hammer out the final details of our lease with the landlord, and we are going to lease this space.  I can’t actually believe this is about to happen!  Its almost like I have to pinch myself.  I know there are a few key points to be ironed out with the landlord, like tenant versus landlord improvements, personal guarantee (not unlike a kick to family jewels) length, but most of the important items have already been agreed upon.  In fact, our landlord has been very helpful and accommodating in working with our needs and challenges.  While his patience has started to wear thin, we hope that he still wants to complete a deal with us, and dot all the i’s and cross all the t’s.

I don’t want to get ahead of things, so I will leave our latest bit of good news at that.  I have learned from my mentors and peers that a deal is not done until you get a key to the front door, so I will not presume anything.  What I do know is this:  The lows we felt about things after our floor issues popped up, and then our electrical issues came to the front, have all been offset by the development permit we received, and then the answers around the electrical.

With any luck, we will have a firm deal in early January, submit our building permit application in 8 days, and start working on our brewery sometime in early March.  Should all this come together as we hope, we should be open for business sometime in August 2014.  Thats right, in about 8 months our brewery will be producing beer and slinging it to eager locals before you know it.

Given the amount of work to do, and the mountain we need to climb in order to get everything ready, I am going to take this Christmas break to relax and enjoy some time with my family.  The way things are shaping up, I may not see to much of them from February to August of next year.  Happy holidays to everyone that reads this blog and I hope you have a fantastic end to 2013.

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Success …. Development Permit! Now what?

Today was a great day in our world:  We received news first thing this morning about the status of our Development Permit that was submitted to the City of Vancouver about 14 weeks ago.  Our permit was approved via rubber stamp by the City, which paves the way for us to move forward with permission to brew beer at our desired location.  In other words, from the City of Vancouver’s point of view, brewing beer in our chosen location is something we can do, should we want to do it.

I often hear that it is important to celebrate your successes, no matter how small, as you need to draw upon these when you are slugging it out in the trenches.  So tonight I have a smile.  Tonight, I feel like the dream of opening my very own craft brewery is one giant step closer to reality.  Tonight, I still feel in control of my own destiny.  Tonight, I feel re-energized and ready for the next challenge that I will face.  Tonight …… well if I keep going on it will soon be tomorrow morning.

While this success is great, we still have other challenges that are right before us.  The most important of those is finding a solution to this electrical issue.  We are underpowered at our space, and we are searching for economical ways around it.  It is painful to know that every conversation you have with electrical engineers and other professionals costs money, but what other options are there?

The latest update on the power is that we should know this week about what options are available, and then we can decide whether or not we want this space.  If we can keep the bill under $100,000, then I think we are going to move forward.  However, if we can’t find a way to keep the bill under this number, then I think we walk away.  Hydro and our electricians are busy scurrying around getting answers.

All the while this is going on, we are still working away on our building permit submission.  We have (rightly or wrongly) assumed that we will find an answer to the electrical issues, and given that we need to have a full set of plans ready for building permits ASAP.  Time is the big enemy here, as every delay in submitting our building permits is another day more that money just goes out the door.  If we can’t get our brewery up and running by August 1st, then we run the risk of needing more loans and lines of credit, and we also run the risk of missing out on the busiest time of year for breweries …. Summer.

Needless to say, with this small win, we are one step closer to making this dream a reality.  Tonight we celebrate, as tomorrow there is even more work to do.

Electrical Follow-up … Even more “Shocking”

When you sit at home thinking of what it would be like to open a craft brewery, you don’t think about stuff like this.

If you read my last post on the electrical issues with our space, you would know that our electrical bill went from an anticipated $30,000 for a simple upgrade the transformer on the power pole, to almost $120,000 for a pad mounted transformer.  It turns out we can’t put a pad mounted transformer in the parking lot, as our landlord needs to keep these spaces for tenants in our building and other buildings he owns in the area.  In fact, he has already received a variance from the City of Vancouver for the number of parking spaces he must to have, and anything that takes away from this number is not permitted.

This results in messing this situation up even more, just when I didn’t think it was possible for this process to go off the rails any further.  Now instead of a $120,000 bill, which believe it or not we think was actually doable, we are now looking at a substation.  Holy crap, I think building an actual Submarine station would cost less than this thing.  Initial estimates for a sub station in our building are about $250,000.

Unless we can find a economical solution to this problem, there is no question about it, we are done with this space.  When you consider that we spent about 8 months on this space, hundreds of hours of time and effort laying out the space, getting quotes, planning equipment, designing tasting room, etc. it seems almost surreal that this is happening.  It doesn’t end there.  Financially, we spent over $30,000 in fees, permits, lawyers, engineers, accountants, architects and other misc items.  When you add all this together, it’s really painful to have reached this conclusion after so much.  But at the end of the day, it is better to walk away without $30,000 than it is to walk away with a business that failed to get off the ground.

We have our last ditch effort to find a solution on Wednesday of this week.  I hope that the people we have relied on so much throughout this process are able to come up with a creative idea that works for everyone involved.  One thing is for sure, I won’t be getting much sleep tonight.

The Damn Electrical Nightmare that is our Space

Just when you think all is well, and you are about to move onto making things work and realizing your dream, something comes up that threatens to derail all that we have worked for …. for the time being.  We have recently discovered that we don’t have enough power to our space.  We thought that 400 amps was going to be enough, but it appears that we will need more than this.  What does this mean to our ability to lease this space?  What does this mean to my dream?

The process of leasing a space is filled with many potholes and roadblocks.  Finding a space in the right location, with the right layout, at the right price, with a landlord that wants a brewery in their space, for the right amount of term, in a city with limited quantity and quality of commercial space is not unlike finding a 4 leaf clover:  Tough on the best of days.

We really thought we had found the right space for our project.  We found a commercial space that is located exactly where want to be, with the perfect amount of space for our operations, a decent rate, with an amazing landlord, who would like us to be there for up to 20 years.  It felt really good to find this space.  We negotiated a lease for the better part of 4 months, and finally came to an agreement on terms about 4 months ago.  Our agreement allowed us a 3 month period that we could apply for a DP, and carry out some due diligence on how this space would work for us.

Our first hurdle was to apply for a Development Permit, which we have successfully done.  Though we haven’t officially heard back from the City of Vancouver on the outcome, we don’t see any reason why we can’t move ahead.  Our second hurdle was the floors.  Oh yes, the floors.  Essentially, the substrate of our floors was subsiding, which means that our floor is dropping and dropping.  Like all problems, you can fix anything if you throw enough money at it.  We had some contingency in our retrofit budget , so we figured that we could overcome the flooring problem with more money.  About $30,000 to be exact.

Well we just came across our third hurdle, and it is a little bigger of a nut than our second.  We thought we were free and clear with the electrical in the building.  We have 400 amps available, and we always thought it would be enough for our needs.  In the past week it has become apparent we need at least 500 amps and preferably 600 amps.  It would be simple to say why the hell didn’t you know that 400 amps was insufficient?  The problem is until you make choices on your space, you don’t know what your exact load is going to be.  Draws on power are HVAC, Refrigeration, Tasting Room, Offices, Kitchen, etc.  The problem is that we made assumptions for this power based on a 6,000 sq ft space.  Now that we are entertaining a space about 9,000 sq ft, you can basically multiply all your power needs by about 1.5.  You can see how we ended up here.

OK, so no problem for a power upgrade but just running more power to the building from the pole out back!  Wrong.  The power poles that supply our building already have 3 transformers on the pole, which means that this pole is maxed out.  Crap.  This leaves our option to get additional power either putting in a Pad Mounted Transformer for about $120,000 or putting one on the roof of the building for even more.  What the F#$%!  This absolutely blows.  So now, after all the time and work (never mind money) we have put into this space, it looks like we are about to walk away.  While we would like to make this space work, we just can’t afford an extra $120,000 bill.  We might be out about $30,000 so far, but it is worth it to lose this money in order to not lose our shirts down the road.

So we now have a huge decision to make!  Option A is to drop another $120,000 and push ahead with this space, realizing our dream.  Amortizing $120,000 over 20 years is only $6,000 per year, which in the grand scheme of things isn’t that much.  Option B is to walk away and find a space without the number and cost of upgrades this space needs.  We would go into this process knowing full well that it could be another 6 months before we find another space that works really well for us.

We have another 2 weeks to make our decision, before the subject period on our lease expires. In other words, our landlord will want us to piss or get off the pot with regards to his space in 14 days.  Looks like there will be a lot of sleepless nights coming up.  If you have any advice for us, please contact me to pass it along.  It would be greatly appreciated.  Until next time …..