November 8, 2013 3:34 pm Published by

Bear Republic Finalizes Historic Deal With the City of Cloverdale

Source: Cloverdale Reveille, Kerrie Lindecker – Reveille Editor

Bear Republic Brewing Company and the City of Cloverdale finalized a unique public-private partnership last week — the first of its kind, at least in the area.

Bear Republic will front the city nearly a half-million dollars so it can move forward with construction of water wells, and in turn, the city will build those wells faster so the local brewery can make more beer.

The advanced payment of the water capacity fees will enable the city to complete two new wells in advance of its project schedule and funding ability. Bear Republic can then move forward with plans to expand its facility — all subject to the city permitting requirements.

Bear Republic initially approached the city with their plans to expand earlier this year, as the craft brewing industry mushrooms in Sonoma County and across the state and nation. The successful business couldn’t keep up with demand for its beer. But, the city didn’t have enough water to give them, or any other future developments within city limits.

While owner Richard Norgrove Sr. would have just handed over a check to the city to upgrade its water capacity, it wasn’t quite that simple.

“This has been a very long process for us. When we tried to pull permits to grow our business, we were told there was no water, which was one heckuva shock. We had to either pack up and leave or work with the city to find a solution,” Norgrove said.

Even the solution didn’t come easy.

“There was no template for an agreement like this,” said Cloverdale interim city attorney Jose Sanchez. “We had to look at what is the situation, what are we trying to accomplish, and how do we get there?”

Essentially, the city and Bear Republic agreed that the business would make advancement payments on water capacity fees that they would later be charged anyway, but that would give the city the cash on hand to get construction underway and speed up its well project. The payment — $466,143.57 — is the equivalent of an additional 9.5 million gallons of water per year.

“This is a great advancement in order to go ahead and construct those wells,” Sanchez said.

With the new agreement, wells 13 and 14 will come online by July 1, 2014 and produce between 600 and 1,000 gallons per minute, according to City Engineer Craig Scott.

Bear Republic is set to grow its business exponentially over the next three years, and Norgrove said not having the water they need now has already put them in a bind.

“For the last nine months, and until the water starts to flow, we are losing about $4,500 every single day in revenue. We’ve had to pull out of 15 territories in the United States and one European country. It’s had an extremely negative impact on our growth.”

Bear Republic is estimating its water need to grow from 8 million gallons of water per year in 2013 to 17.5 millions gallons of water per year at the end of 2016.

But, Norgrove said, they plan to grow smart.

“We have to be good stewards of what we are attempting to do. We aren’t trying to take water from anyone else, we are willing to pay for it,” he said.

In fact, the city said, the deal with Bear Republic, will also allow other businesses to use the increased water capacity for development. Calling the local business a “major economic development driver for Cloverdale’s future,” the city’s councilmembers unanimously approved the agreement at last week’s meeting.

City Manager Paul Cayler adds, “I am super happy that the City of Cloverdale and Bear Republic have come together to make this deal happen. Bear Republic is a critical partner in the economic development of the Cloverdale and we are happy that Bear Republic is going to stay here. This deal brings badly needed water not only to Bear Republic, but to other businesses in the community as well. This deal is an investment by Bear Republic in the future of Cloverdale and our community and Bear Republic’s brand is helping bring attention and notoriety to Cloverdale.”

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