Tag Archives: Warehouse

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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Everything rests on the floors … Literally!

When you start out with the dream of opening a brewery, there are a bunch of things that you dream about.  For instance; where you are going to brew your beer, what your brand will look like, how good it will to be your own boss, and most importantly what kind of beer you are going to brew.  Further down the list, you think about other details like cans vs bottles, unitanks vs fermenting & conditioning tanks, or what kind of delivery truck you are going to have.  Then there is a bunch of items that you generally don’t give much thought to:  When to have your fiscal year-end, do you want your coasters to be printed on one side or both, and who your accountant is going to be.

Even further below this is flooring, one of the things you tend to not think about at any stage of starting a brewery, other than when you are looking at warehouses to lease.  Well you probably guessed it, we are at that time and place now.  We have submitted an offer on a space to lease, and we are currently negotiating back and forth with the landlord.  We are hopeful that things are going to move ahead, so we have really started to focus on the details about this space.  Important considerations when you think about having a lease for 10 years.

You see, a floor in a warehouse is nothing like a floor in a house …. which is the only real reference point I have for this kind of thing.  A floor in a house is usually flat, and if it isn’t, you make it flat, put in the flooring and underlay of your choice and voila!  A floor in a warehouse is a much different beast.  Most importantly, the floor in a warehouse needs to take a load.  The floors usually have a PSI rating, and that determines how much of a load you can put on the floor.  In other words, a higher PSI rating for a floor is a good thing in the world of brewing, as you are putting several metric tonnes of tanks and other equipment onto it.

Well the floors in the warehouse that we want to lease aren’t the greatest.  They have settled in several areas, and they don’t have a high enough of a PSI rating.  This means we are going to have to fix this problem if we lease the space, and that costs a lot of ‘jack’.  The most important question we have to ask is why have the floors settled?  There are 3 possible reasons for this:  1) The preparation for the floor was done poorly in the first place.  2) There was organic material left in the ground (like old trees and roots), and they have wasted away to nothing causing the floor to settle  3) There is some problem that is slowly washing away the substrate leaving a nothing where there was once material.

Well this is the point that we are at now.  Do we move forward with the space, knowing that the bill for the floors could be somewhere from $50,000 to $200,000 (and by the way we only have $75,000 in our budget), or do we say everything else seems really good about this space, but the floors are too much of a question mark, so we walk away.  This is the question that we are faced with this week.  It is both an emotional decision for me (I love the space and want to get this brewery off the ground) and also a business decision (I have to do what is right for my investors).

I am hopeful that we have the wisdom and support from engineers and other professionals to make the right decision.  As you can tell, the road to starting a brewery is full of pot holes and hazards.  But if you can successfully navigate those things, then the reward is greater than most anything else in the world.

Making an Offer and Finding the Right Brewing Space

Well its official, we have made an offer on a space in East Vancouver.  This will be our 5th property that we have made an offer on, and I hope that its 5th time lucky.  My friends who know me well, and have been kept abreast of the past 3 or 4 years of this process, are the ones who encouraged me to start this blog, as there always seemed to be so many ups and so many downs throughout the process.  None more than finding a space to call home!

In my opinion, the biggest and most important decision a brewery can make is the space you lease.  Sure other decisions are important:  Like, the name of your brewery, the beers you make, the employees you hire, the way you disperse your cash, and the image you present to the marketplace.  But what I have learned is the space you are going to be married to, for better and for worse, is the most important decision you can make.

For starters, finding a good space for brewing is difficult as the list of requirements is long, making an ideal space unique.  You benefit from having high ceilings (18 feet is ideal), a good water supply, good floors for taking the load of full fermenters, about 400 amp/3 phase power, and solid overhead loading doors.  If the list were limited to just these items, the search would be difficult in itself.

But lets not forget some of the other key items in a warehouse that are important in starting a brewery.  In Vancouver, M2 Zoning is the only commercial zone where brewing is an outright use.  All the other zones (for instance I1 and I2) are conditional use, which means you need to apply for a Development permit from the City of Vancouver.  This costs about $5,000 and takes anywhere from 8 to 16 weeks.  I heard Brassneck took 16 weeks, and I have heard rumours that Bomber brewing got their DP in 8 weeks.  Most importantly, you can’t apply for a development permit until you have a signed lease on a space.  That means you have to take a giant leap of faith you will get a development permit.  Why you ask?  Well inEast Vancouver good quality commercial real estate is so hot, and you likely won’t deal with a landlord who will let you have getting a development permit as a subject of the offer.

The list doesn’t end there …. Another key component is the size.  Small breweries need at least 2,000 square feet, and the size can go all the way up from there, depending on how ambitious the brewery is for sales.  I think a space of about 6,000 square feet seems good for starters, but it comes down to how much beer do you think you will sell?  Will you follow the path of Storm Brewing, and have sales that are modest, and keep the operation small?  Or do you plan on having higher sales, like Parallel 49 Brewing, thus requiring more space for production?  Like everything, there is a direct correlation between the size of the space you lease, and the risk an owner takes.

With the new Tied-House rules in the City of Vancouver, another huge aspect is the Tasting Room and Retail Area within the brewery.  It is hard to explain to people how oppressive the bureaucracy is when starting a brewery, and the ability to have a tasting room on site is huge bonus. It not only allows for a tangible connection with consumers to gauge their opinion and interact with, but it also helps to add a few dollars in sales to the bottom line of a brewery.  As such, the location of your warehouse, along with the design, aesthetic and interactivity with the brewery is huge.

The last big point that comes to mind is scalability of the space.  It costs about $500,000 to retrofit a space for brewing.  In other words, this whack of cash goes to upgrading power, floors, water, pipping, cooler/cold room, installation of brewhouse, offices, tasting room, grain handling, etc, etc, etc.  You essentially never get this money back, as its an investment you make in the landlords building.  Hence, its important that you find a space that works now, but also for 5 and 10 years down the road, as you need to avoid having to move spaces because you have outgrown your current facility.  This is of course a good problem to have, but at the same time, its important to be mindful of this fact.

There are obviously other factors like the quality of the landlord, the neighbourhood you locate in, the look and feel of the space, and the lease rate you pay.  All of these items go into making a space for brewing difficult.  However, if patience and an ability to pounce on the right space when it comes available are kept at the front of everything, it is possible …. just ask 33 Acres and Brassneck who both did very well with their spaces.

I hope today is the first day in securing the right space for my brewery.