Sunday, June 28, 2009

Smuttynose Builds its Dream House - Part 4 - Newmarket Mills (a)

In July, 2003, my partner Joanne and I took a drive to Newmarket, where our friends Peter Hamelin and John Pasquale were developing their plan to purchase and reopen the famous Stone Church music club. Located about twenty minutes from Portsmouth, Newmarket is an old mill town situated on the Lamprey River, a tributary of the Great Bay. Compared to other thoroughly gentrified communities up and down the Seacoast, Newmarket has always been refreshingly, even defiantly, down-to-earth, populated with a diverse mix of people: folks with roots that go back generations, along with recent immigrants; working-class people, professionals, college students, artists and random bohemian types. It is both well-grounded and artsy in an appealingly unpretentious way.

Although Joanne and I were in Newmarket that day to hear about Peter & John's plans for the venerable Stone Church, the conversation eventually drifted to our own vague ideas for a new facility for Smuttynose. John, who lives in Newmarket and was involved in local politics, asked if we would consider looking at the mill buildings that dominate the center of town. He told me that they were vacant and that the town was actively looking for someone to come in and develop them. In August, 2003, we took our first tour through the old, abandoned mills and we were astonished by what we saw.

Newmarket's mills are a relic of New England's early, water-driven industrial revolution. Built from quarried split granite between the 1820's and the early 1900's, these massive structures were originally used to mill cotton. Later uses included shoe manufacture (Timberland got its start in the mills next door), hydro-electric generation, distilling, and most recently, the manufacture of sheet mica and electrical insulating material, but regardless of the use, they have always been the economic heart of the region, employing thousands at their peak. By 2003, the mills on Main Street housed a single small manufacturer; the mills across the Lamprey River had been converted into residential condominiums; but the bulk of the space - over 70,000 square feet in buildings in a picturesque setting alongside the river - had been vacant for more than a decade.

It is easy to see how seductive the idea was of breathing life back into these beautiful structures, especially with a traditional manufacturing use such as artisanal brewing. Walking through their vast, empty spaces, you can imagine when these buildings were filled with workers operating clanking machinery and pulsed with energy. And although these buildings did not perfectly meet the criteria outlined in the previous post, the notion of transforming these historic mills had an irresistable appeal. John introduced me to the Newmarket Community Development Corporation (NCDC), which owns the mill property on behalf of the town, and we embarked on what would turn out to be a two year-long journey that ultimately did not bear fruit.

Our plans generated a considerable amount of excitement in the community and the region, with a fair amount of positive press. Here's an example from the Exeter Newsletter in June, 2004, shortly after we signed an option to purchase the property. Here's another from the Portsmouth Herald on the same topic. It's obvious that everyone was swept up in the possibilities at this point. We had over sixty thousand square feet of buildable space to work with, even after removing large portions of floor to make room for our two-story high brewing vessels. And because of the location, in the heart of Newmarket, our
plans evolved to encompass more public uses than we have originally envisioned, including not only a new brewing facility and a pub, but other uses that these buildings and their location seemed to call out for - a cafe, office and studio space, and even a small boutique hotel. Conceptually, it all made sense, with all the parts fitting together to form a whole.

But the hard work or making all those pieces fit into the larger scheme of things was just beginning. We had hired an architecture firm in Boston to help us do a feasibility study, and we commissioned some early engineering studies of the site. Over a two year span, I attended countless meetings with various parties who had an interest in our project, and was met with a consistently high level of enthusiasm. Yet, in retrospect, there were clear signs from the very outset that our plans to redevelop the Newmarket Mills were doomed, if only I had been able to recognize them.

Next post - things fall apart...

Tuesday, June 23, 2009

Smuttynose Brewing Builds its Dream House - Part 3 - Our Criteria

At the end of the last post, I said that I’d next write about our exploration of the mills in Newmarket. I lied.

It has occurred to me that now would be a good time to lay out the criteria that a new Smuttynose facility must meet. They are straightforward and relatively simple, but once you spell them out, you can see how some locations easily meet most of these requirements, but how few locations truly meet all of them.

In simple terms, a new Smuttynose brewery must meet five basic criteria:
1.) Space - we’ve been running out of room here on Heritage Avenue for a long time. The first post in this blog described the reasons for this. Starting with 12,500 square feet in 1994, we doubled our space when we took over our entire building in 2006. We’ve also constructed several additions to the outside of our building to house new tanks, and this summer we're raising the roof to accommodate still more tanks. Before the year is out, we’ll be forced to lease off-site warehouse space as well. You get the picture: the simple fact is we need a bigger facility.
2.) Energy efficiency - the building we currently occupy is appallingly inefficient, from an energy standpoint. But more than that, the way our brewery is engineered is also quite wasteful. Here’s a simple example: during the winter, even during the coldest weather, our fermentation tanks are cooled using a big, industrial chiller which throws off a considerable amount waste heat into the atmosphere, while at the same time we’re running space heaters indoors to warm up the building! We can design amazing efficiency into a new facility by taking advantage of simple synergies between the different parts of our process and the structure itself. “Waste” heat is no longer a waste product, but a way of preheating our brewing water. Interior spaces that need to be cooled can be done naturally in the wintertime. Daylight can be brought into interior spaces, reducing the need for electric lighting. Simple stuff, but difficult to implement in an existing facility, especially one where the landlord has no incentive or desire to participate.
Much ink has been spilled about our efforts to build a “green” facility and seek LEED certification. Frankly, the direction we’re taking is one we embarked on some time ago. Most of the choices we’re making are driven by common sense and a desire to be part of the solution, not part of the problem. Plus, in addition to reducing our footprint, we stand to save a good deal money operating our new brewery, which will help us become more competitive.
3.) Logistical efficiency - In our existing brewery, the inflow of raw materials & packaging and the outflow of finished products & waste material is not nearly as efficient as it should be. This really didn't matter much as long as we were producing a small amount of beer in a relatively small space, but what used to be mildly inconvenient has the potential to cripple us as we grow. A purpose-built facility designed with process flow in mind will improve our productivity in significant ways both large and small.
4.) Public Access - We want to build a brewery that is a visitor-friendly destination, a place where we can offer tours and share the craft of artisanal brewing with people who enjoy our beers. As longtime brewpub operator through our sister company, the Portsmouth Brewery, we have always wanted to operate an onsite restaurant & pub, as well. Put another way, the site has to have sex appeal. Some places have it; some don’t. And usually you know before you’ve even set foot out of your car. Unfortunately, the places with the most romance tend to fall short in other areas.
5.) Favorable Zoning - As we've learned though sad experience, few things get people’s undies knotted up like a good old-fashioned zoning dispute. Because of our project’s particular needs, we must choose a site that is zoned to permit both light manufacturing and commercial uses. And that, my friends, is easier said than done, as you will see when we talk about our experience trying to build a new brewery in our home town of Portsmouth. But that comes later.
In conclusion... Using these five criteria, it is easy to grade each of the locations we’ve considered over the years. Some had the potential for space and efficiency, with absolutely no charm. On the other hand, some sites were dripping with romance but failed on every other count. The old Frank Jones brewery buildings were a good example of this. Existing structures, especially old mills, do not lend themselves well to logistical efficiency and good process flow. And any city officials or politicians who say they can “fix” problematic zoning restrictions to fit your plans is blowing smoke up your skirt. It’s never that easy - run the other way!
Next time, we’ll travel back to Newmarket in 2003.

Sunday, June 14, 2009

Smuttynose Brewing Builds its Dream House - Part 2 - Early Explorations

One afternoon is the summer of 1995 or '96, my ex-partner Paul Murphy and I drove across town from Heritage Avenue to Islington street and, armed with flashlights and screwdrivers, let ourselves into a vacant mill building with a key that had been lent to us by the building's owner, Joe Sawtelle. We had been warned to beware of rotten floorboards in the upper floors, so we trod very carefully through what appeared to be a 35,000 square foot pigeon coop. (And yes, there are baby pigeons - we saw lots of them that day.)

Although Smuttynose Brewing was still in its infancy - our production was just a few thousand barrels a year- and we did not distribute outside of New Hampshire - the microbrewery segment of the beer industry had experienced explosive growth from the mid-eighties through the mid-nineties, and we were already wondering if we'd need to seek out new digs before long. How Mr. Sawtelle knew that, I have no idea, but he contacted us and encouraged us to look over his building at 1001 Islington, which he said he'd sell for $500,000. But although it was fun to fantasize about building a new facility in an old mill located a stone's throw from downtown Portsmouth, common sense told us that the time was not right and we did not pursue the idea any further than a few self-guided tours through the musty old hulk of a building. Eric Chinburg purchased the building shortly thereafter and converted it into a very nice apartment complex.

Around the same time, we were contacted by the owner of the old Frank Jones brewery buildings, which were located a bit further down Islington Street. This complex of late 19th-century buildings had housed until recently Schultz's hot dog factory. The Schultzes where looking for potential new users for some or all of these buildings and thought we might fit into their plans to revitalize what they called Schultz's Brew Yard. Though the romance of relocating our brewery into the remnants of the historic Frank Jones Brewery was appealing, we did not give it serious consideration, given the magnitude of such a project. Ten years later, in 2005, we would take another look at the same buildings, which had recently been sold on auction and still remained vacant (and still are). But in the interim we had turned our focus to surviving the brutal shakeout that hit the craft beer business in the late nineties. In the meantime, finding a new home for Smuttynose Brewing would have to wait.

In the next post, I'll write about our exploration of the mills in Newmarket. As always, your comments and questions are welcome.

Wednesday, June 10, 2009

Smuttynose Brewing Builds its Dream House - Part 1 - Introduction

A couple of weeks ago, I received an email from a fellow who has been following the news of our proposed new brewery for quite some time. A resident of Hampton, our future home town, he was writing to ask about the status of the project and pointed out that we were doing ourselves and our fans a disservice by maintaining a sphinx-like silence on the topic. "I was hoping to see construction begin this spring but it looks like there is nothing going on at the site," he wrote. "Rumours are spreading in town that the project has been scrapped due to the economy. If it is hasn't been scrapped you need to get out ahead of things on a PR basis and let your fans know what is going on. The lack of any discussion of the project on your website only fuels the rumours further."

Yes, the writer is correct - a lot of people have been wondering what's going on with Smuttynose and our future home at Towle Farm in Hampton, and here, at last, is our response. The purpose of this blog, with apologies to Mr. Blandings , is to provide not only ongoing updates on our progress, but also some background and history of our brewery and its plans for expansion. The short answer is Yes, we are moving ahead with our plans to build a new facility at Towle Farm in Hampton. We plan to start construction in the first half of 2010 and will be moving in about a year later, in 2011. But getting to that part of the story is actually a rather long and involved tale, so I'll start by asking for your patience and indulgence in advance. I'll post here from time to time in hopes of presenting this in bite-sized pieces. Let's begin with a quick thumbnail sketch of our growth and expansion up till now.

In 1994, the year we opened for business, Smuttynose Brewing owned only the six 40-barrel tanks that we purchased with the assets of the bankrupt Frank Jones brewery. Although none
of these tanks was rated to hold pressure, a previous owner with little money and even less common sense had jury-rigged two of them to serve as pressured conditioning tanks. The brewery, with its small, twenty-barrel brewhouse, had a capacity of about 2,500 barrels a year. Within less than a year, we added four 50-barrel fermenters, purchased from Harpoon, which had outgrown them, two horizontal 100-barrel dairy tanks to be used for conditioning, and two vertical 180-barrel conditioning tanks that we acquired from a brewery in Buffalo which had closed its doors. This tripled our capacity, giving us the potential output of about 7,500 barrels a year. We grew into this capacity within four years.

By 2005, our tank inventory consisted of the original six 40-barrel, nine 50-barrel & one 20-barrel fermenter, plus four horizontal and two vertical conditioning tanks. In 2006, we outgrew microbrewery status when our annual output exceeded 15,000 barrels. That year we purchased our first 200-barrel fermenter, whose 23-foot height required us to build an addition attached to the existing building. We have since purchased two more 200-barrel fermenters, building a new outside addition each time. In early 2006, we leased the other half of our building, adding about 11,000 square feet of warehouse space to our existing 12,500 square feet. We filled that space in a matter of weeks with packaging, raw materials and finished product.

In 2001, we replaced our old 20-barrel brewhouse with a 50-barrel brewhouse purchased from a brewery in Miami that had gone out of business and have since upgraded that brewhouse substantially, adding a whirlpool as well as a new mill and grain handling system. We've replaced & expanded our refrigeration system, and replaced & upgraded virtually all of our bottling and kegging lines.

This year, 2009, we expect to produce about 23,000 barrels, or about 310,000 cases’ worth of beer. To accommodate this growth, we will add two more 200-barrel tanks, a fermenter and a new conditioning tank, early this summer. Since we no longer have room outside the building for more additions, we now must find space inside the building, raising the roof by ten feet and reinforcing the floor to carry the weight of the new tanks (50,000 pounds apiece, including beer). The only spot inside the building with enough space for these tanks is where our hospitality room is currently located, so visitors to Smuttynose this summer will be greeted with a much smaller place to gather for tours. This space will accommodate only one additional tank, another 200-barrel fermenter, which we expect to add next spring. After that, expanding this facility will require a whole lot of creativity.

In my next post, I'll write about some of the early sites we considered for a new facility. As always, your comments & questions are welcome.