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PROPOSAL — “BREWTINERIE”

Item #L-37/12

to buy 637 Princess Ave. and redevelop it into a brewpub

Proposal — “Brewtinerie”

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The century-old former fire hall in downtown Brandon is well-suited to become a brewpub. It has the space, the ambiance and the location to not just be a successful venture on its own, but to contribute meaningfully to the neighbourhood around it. This photo was taken shortly after the fire hall’s construction, in 1911.

1. INTRODUCTION
The former fire hall at 637 Princess Ave. is a unique property in downtown Brandon, with obvious advantages that make it well-suited for a brewpub. Brewtinerie — a portmanteau between “brewery” and “poutinerie”, or poutine restaurant — will brew and serve its own beers in-house, along with a selection of other draught and bottled beers. Along with signature poutine, the full-service restaurant will also offer a selection of lunch and dinner items ranging from salads to sandwiches, appetizers to desserts. The menu and drink selection will give preference to local products, particularly those from Manitoba or Canada, and the atmosphere of the pub will be welcoming and neighbourly. Approximately 50 jobs will be created, including several full-time skilled positions, and the brewery portion of the brewpub will revive an industry in Brandon that was lost decades ago. The Brewtinerie steering committee intends to incorporate as a multi-stakeholder co-op, leveraging the support of the community and the building itself to create an anchor development in downtown Brandon.

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2. PLANS FOR THE BUILDING
The building, more than a century old, is a municipal heritage site, and our plans for its redevelopment put a premium on preserving and restoring its historic features. Although showing signs of age, the walls and floors are still sturdy, and much of the work required is preventative. However, most of the building will require some renovation before it is suitable for new purposes. We do not anticipate requiring any variances or changes to the city’s Zoning By-law, nor to the HUB Secondary Plan. The Brewtinerie steering committee strongly endorses the vision of the Secondary Plan and will make every effort to exceed the plan’s requirements as we do the following work: 2a. Third floor and roof The third-floor gym, with a large secondary room carved out of the southeast portion, is in immediate need of remediation. A section of leaking roof has begun to cause damage to the concrete on that floor. We anticipate undertaking immediate stop-gap repairs of the roof, enough to halt further damage. A full roof repair would be required in the short- to medium term (approximately five years) before this floor could reasonably be renovated or rented out. However, in the meantime, it could be used as additional space for tenants on the second or main floor.
The ceiling on the third floor shows signs of water damage that will require immediate attention.

2b. Second floor The second floor suite of offices is in reasonable shape, with considerable preservation of historic woodwork and other features. Members of the Brewtinerie steering committee have received substantial interest from tenants who express an interest in renting apartments on the second floor of the building, and we calculate that approximately four apartments could be crafted out of the offices. However, we anticipate that the expense of creating multiple kitchen and bath areas, coupled with the difficulties of Spaces on the second floor of the renting apartments above the late-night business of a pub, make former fire hall have excellent potential as offices or studio space. A priority this option less than ideal.
would be preserving the heritage features of the building, and in maintaining some level of public access.

A better set of candidates would be those looking for small offices or for daytime studio space.

Proposal — “Brewtinerie”

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Best, however, would be a medium-sized business that could rent the entire second floor, and perhaps even make use of shipping facilities at the back of the main floor. Renting the second floor would be a significant business asset, and is a three- to five-year goal, but Brewtinerie does not rely on that income for profitability.

2c. Main floor and basement The extensive main floor of the building, and its attached annex, provide substantial space for renovation. There are five large parking bays fronting Princess Avenue, along with several door entrances. We will replace the five overhead doors with ones made of transparent panes, similar in style to the ones on the new fire hall, located on Fred Brown Way. Uniquely among downtown buildings, the former fire hall is set back nearly 30 feet from the sidewalk, and we would turn four-fifths of the driveway area into a summer patio. The west-most overhead door, nearest Seventh Street, will become the main entrance to the Brewtinerie restaurant and pub area. Matching red brickwork pillars and black wrought-iron fencing would set the rest of the driveway — the patio area — apart from pedestrians on the sidewalk while visually extending the fire hall’s already-imposing presence forward to the street. Propane heaters could extend the useable season of the patio into the spring and fall. Counting from the west, garage doors 2 and 3 could roll up in the summer, extending fresh air inside. Behind overhead doors 4 and 5 (the east-most two doors) would be the brewery proper and they would be locked shut, although their glass panes would allow pedestrians and patio patrons to observe brewery operations.
Our plan for the fire hall would move the main entrance to nearer the Seventh Street side, creating a more welcoming entrance, while reserving the current main entrance for tenants of the second floor and for employees. All modifications would treat the building’s well-preserved heritage as a priority.

Installing glass-paned overhead doors will allow much more natural light into the space, and is an option popular among patrons of other brewpubs.

Proposal — “Brewtinerie”

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The current main entrance, a steel door adjacent to the overhead doors at the east, would be reserved for employees and as an entrance for tenants on the upper floors. Inside the garage bays, approximately 60 per cent of the space (garage bays 1, 2 and 3) would be used for restaurant service. There would be room for about 100–150 seats, depending on configuration. This would be doubled in the summer months by the large patio outside. A wall between garage bay 3 and garage bay 4 would separate the restaurant from the brewery. The wall would have large windows, or even be made of plexiglass, to allow patrons the opportunity to observe the brewing process.

Brewtinerie will feature a large glass viewing area from the dining room into the brewery portion, giving patrons an opportunity to see the brewing process. The large copper or stainless steel fermenters will fit well into the industrial heritage of the building.

There is ample space in the garage bays to install brewing equipment, while still maintaining enough room for a bar and a 100–150 seat restaurant. Spaces in the rest of the building will be converted to the kitchen and washroom facilities for patrons.

There would be about 1,000 sq ft of space for brewing, allowing for approximately 7 barrels (8.5 hL) of production, along with six fermenters, sufficient to supply a brewpub of this size with three regular styles of beer. Grundy tanks located in the basement, to take advantage of passive cooling, would allow the restaurant’s bar to serve directly, without kegging. Space to the north of the garage bays would be used for the restaurant’s kitchen and washroom facilities, as well as cold storage of malted barley and hops.

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This floor plan shows proposed use of the main space on the first floor. We calculate room for between 100–150 seats in the main dining area, to which another 100 or so seats could be added in the patio.

There is plenty of additional space along the back and east side of the building for any needed company offices. The back annex, which also has a garage-style door, could be used for eventual expansion of the brewery, or rented out to tenants on the second floor who may require it. Ideally, some of the additional space would be used for historical displays of Brandon’s brewing heritage. Many samples of “Empire Brewing” and “Brandon Brewing” memorabilia and bottles exist. The building would also be a natural fit for firefighter heritage. Brewtinerie would be particularly interested in providing a home for the historic “Coronation Bell,” which once rang from the tower. That tower, with some renovations, could become Brandon’s most exclusive private dining room — an intimate space, competely private, with the best possible view of downtown, the riverbank and the vista beyond. We anticipate heavy demand for that space.

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3. BREWING
Beer is one of humanity’s oldest agricultural products, and is the world’s third most-popular beverage, after water and tea. In brewing’s simplest form, malted barley is soaked in hot water to convert the starches into sugar. Then it is boiled while hops are added for flavour and to offset the sweetness. Finally, it is cooled, yeast is introduced, and the mixture is left to ferment. Building off this basic recipe, countless variations and beer styles are possible. In Canada, beer remains the most popular alcoholic beverage. Although its popularity is declining, much of that decline is in the massmarket brands. There has been a trend in the Like this brewpub, also located in a converted former fire hall past few years towards consumer preference for (in Tacoma, Wash.), the Brewtinerie would benefit from a craft beers and for local beers.
large patio area at the front, naturally connected to the restaurant space through glass-paned garage doors.

Until fairly recently, all beer was local. Innkeepers would brew their own beers for the consumption of their guests. In early Brandon history, a number of breweries came and went. The two biggest names were the Brandon Brewing Co. and Empire Brewing, but a brief flirtation with Prohibition left breweries in dry Brandon struggling. Although sale of ale by the glass was re-approved in 1928, many of the prairie’s small breweries had already begun to merge into larger conglomerates. Empire Brewing was the last local brewery to close, in 1931. Since then, Brandon has relied on imported beer to quench its thirst.

Brewing equipment can be custom-designed to fit in nearly any space, but the former fire hall at 637 Princess Ave. benefits from having a large open area that is easily reconfigured. Traditional brewing vessels were made of copper; modern ones are often stainless steel — although they may include copper touches for décor.

However, recent changes to the Manitoba Liquor Control Act have made it easier to start a microbrewery, by explicitly allowing a brewpub for the first time.

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4. THE MARKET
Brewpubs, which brew and sell their own beer in an attached restaurant area, are a growth industry in Canada. The Brandon market is a favourable one for this proposal. The Brewtinerie would be the first brewpub in the city — its closest brewpub competitor would be the Farmery, a brewpub in the process of opening in Neepawa. There are a number of other pubs in Brandon, including downtown. Brewtinerie’s main competition would be the nearby Double Decker, Remy’s lounge in the Town Centre, and perhaps a re-opened Clancy’s. Secondary competition from downtown establishments would come from Komfort Kitchen’s new patio, the nearby Town Centre and bus depot restaurants, or from the City Centre and Crystal Hotel bars on Pacific Avenue.
At Bellwoods Brewery in Toronto, patrons can eat and drink right next to the fermenting tanks. Brewtinerie envisions something similar, attracting customers by also offering a behind-the-scenes look at the brewing process.

Elsewhere in the city, potential patrons could also choose to visit places like Tavern United, Montana’s, Boston Pizza or Gondola Pizza. However, Brewtinerie would have several key advantages. Each new restaurant/pub downtown increases the chances that a Brandon resident or visitor will think of downtown when they are looking for a place to eat or drink. Brewtinerie benefits from the proximity of places like the Double Decker or Clancy’s, which offer a similar ambiance to Brewtinerie. The Brewtinerie patio is unique in its size and historic environment. As well, the garage door — which can be opened, allows for the patio atmosphere inside, and is a “big city” perk that we believe would be a first in the province. As the only brewpub in Brandon, the Brewtinerie would have a significant first-mover advantage. Brewtinerie could be the first in the city to offer a “Princess Avenue porter”, “Wheat City ale” or “Brandon lager.” In fact, those beers would be available literally nowhere else.

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Brewtinerie would be located in the “Mixed Use” zone envisioned by the HUB Secondary Plan.

People interested in beer or the brewing process would also come to Brewtinerie, which would allow a unique-to-Brandon window on the behind-the-scenes making of one of their favourite beverages. Regular tours of the brewery portion would also be offered. The size of the restaurant, between 100–150 seats in the winter, and between 200–300 seats in the summer, depending on precise seat/table setups, would add significantly to the restaurant stock downtown. The “Renaissance District” in central Brandon boasts about 170 businesses and about 1,000 residents, all in easy walking distance of lunch or after-work drinks at Brewtinerie. Located in a landmark building near the outskirts of the popular conception of “downtown,” Brewtinerie would also be wellsituated to capture business from people in the rest of the city, or those from out of town — even those who don’t normally venture downtown. New developments adjacent to the building include the Dood Crystall Family YMCA, and a pending move of several city departments into the former call centre. Each of these is expected to bring significant traffic to the area. Brewtinerie would be able to draw from a large population of potential consumers, and would be wellpositioned to take advantage of its location and unique advantages.

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5. THE COMPANY
The Brewtinerie steering committee intends to incorporate as a multi-stakeholder co-operative. Since advertising this aspect of the plan, there has been a large amount of public support for the cooperative. Westman residents, who may shop or get gas at “The Co-Op,” bank at a credit union, and get their telephone, internet or television service from Westman Communications Group, are familiar with and comfortable with co-operatives. In emails, phone calls, and personal conversations, they have been eager to support the idea of a brewpub and happy to see that a historic building will be preserved, but they have saved their strongest support for the co-op idea. Our proposal would allow interested persons to take an equity stake in the brewpub, at an extremely affordable price point. Our goal is to generate the highest possible membership rate in Brandon and area. A co-op, which prioritizes concern for the community, is an excellent fit both for Brandon and for the brewpub model. Several other brewpubs have used the co-op model to launch successul ventures, including the famed Black Star Co-op in Austin, Tex. As well, 2012 has been declared the Year of the Co-op by the United Nations. The multi-stakeholder model, which would allow both consumers and workers to become members, appears the best fit for Brewtinerie. We anticipate selling a large number of memberships to would-be consumers. Of course non-members would also be welcome at Brewtinerie, but members could receive advantages like loyalty patronage, the ability to influence beer recipes or personalized mugs.

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6. COSTS
We estimate startup costs of approximately $1 million. Although this is not a detailed business plan and should not be interpreted as such, the following conservative estimates are based on preliminary quotes and are a bare-bones breakdown of our anticipated opening costs. Renovations Brewpub installation Restaurant kitchen General contracting Patio and overhead doors Roof remediation Startup costs Staffing / supplies costs Initial food / drink stock First six months cash Contingency fund Insurance TOTAL COSTS

$ 250,000 150,000 100,000 50,000 25,000

50,000 75,000 200,000 75,000 25,000 $ 1,000,000

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7. PURCHASE
The Brewtinerie steering committee proposes to buy 637 Princess Ave. for the sum of $1, to take possession of the property on April 1, 2013, and to open within 12 months. This proposal is contingent on completing due diligence on the property to our satisfaction and may be withdrawn at any time. Because of our intended incorporation as a co-operative, this property transfer would see the historic former fire hall remain in the hands of a wide segment of the community. We will fund the needed renovations and startup costs by leveraging the property itself, taking advantage of the numerous grant and loan programs for startup businesses, for co-ops and for downtown heritage development. However, we anticipate that a large amount of our initial funding will come from various membership tiers in the co-op, as well as the sale of investment-grade shares. The following is a not an official revenue projection and should not be interpreted as such. Once the brewpub is up and running, the bulk of our income will come from food and beverage sales. However, these conservative estimates provide a possible breakdown of how we will finance our startup.

Loans and grants Building mortgage Business development loan Credit union business loan Redevelopment grants Membership revenue Normal shares 3,000 @ $50 ea Premium shares 500 @ $200 ea Ultra-premium shares 100 @ $500 ea Investment revenue Investment shares 20 @ $5,000 ea Steering committee shares 5 @ $10,000 ea TOTAL FUNDS

$ 250,000 100,000 100,000 100,000

150,000 100,000 50,000

100,000 50,000 $ 1,000,000

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8. CONCLUSION
We invite the evaluation committee to consider the following strengths of our proposal: 8a. Financial benefit to the city Although the direct financial benefit to the city is minimal, our proposal also doesn’t make any imposition on the city. Both the E-911 backup centre and the rooftop antenna are welcome in Brewtinerie, and we could also make accommodation for the Brandon Police Service evidence room in the short-term. We also require no variances or changes to the city’s Zoning By-law, nor to the HUB Secondary Plan.

8b. Value or benefit to the community The Brewtinerie proposal will ensure that this landmark building downtown will be renovated and maintained in keeping with its heritage. It will develop into a vibrant location that draws pedestrians and consumers to the downtown, encourages their circulation in the area, and contributes to the revitalization of Princess Avenue. Incorporated as a co-op, the brewpub will invest back into Brandon — through ventures such as food bank donations, community brews and sponsorship of local groups like sports teams and charities — ensuring that profits are put to the best possible use for this city. Even as a proposal, the Brewtinerie has attracted significant attention from elsewhere in the province and the country. Brewpubs elsewhere have proven to be tourism generators, particularly if there are several in a nearby area. Given that the legal framework for starting a brewpub only recently changed, accepting this proposal now would send the message that Brandon is a city ready to act decisively and take advantage of opportunities that present themselves.

8c. Economic growth opportunities Brewtinerie aims to start modestly — a medium-sized brewpub and restaurant — but there is reason for optimism. Should the brewpub be successful, it is natural that the co-op consider expanding to craft brewery size, which would allow for bottling brews, and for selling kegs to other locations. Brandon has supported multiple breweries in the past, and is surrounded by agricultural crops that could easily supply Brewtinerie with raw materials to make a truly local product for export elsewhere in the country. The building itself has the potential for a large number of secondary uses on the second and third floors. An underused parking lot to the north offers a natural site for even further expansion.

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8d. Job creation Initially, the Brewtinerie will create approximately 50 jobs. Many of these will be part-time wait staff and bussing jobs. However, the kitchen will require trained cooks, and the brewery itself will hire fulltime skilled labour.

8e. Compatibility with the existing uses of the neighborhood The immediate neighbourhood is in transition, but a brewpub will be an excellent addition to the block. In the wider downtown area, a brewpub — with a mix of meal options, beverages and manufacturing — will bring vibrancy and texture to the area.

8f. Date of possession We anticipate a possession date of April 1, 2013, to allow for due diligence and the fulfillment of legal requirements like incorporation. We are open to adjustments on this date.

8g. Financial sustainability of organization Restaurants can be risky ventures. However, recent studies show that brewpubs are much less risky than other types of food-service ventures. Seven out of eight brewpubs are successful. The building is also well-suited to rent out upper floors, which would diversify the income of the business and reduce the risk from any one area. We believe that the combination of community support, unique local location, and the fact that this will be Brandon’s first brewpub makes Brewtinerie a good bet to succeed.

8h. Promoting the vision for the Downtown HUB We enthusiastically support the city’s vision for the downtown, and believe a brewpub is a natural fit. Downtown should feature a mix of small retail with office space and residences, along with a healthy dining and entertainment scene. The Brewtinerie concept contributes precisely that, and its large, attractive patio will do much to enhance the pedestrian environment along Princess. As an anchor development in a landmark building, Brewtinerie will be a showcase for the city’s downtown vision.

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9. CONTACT
The Brewtinerie steering committee welcomes questions from the city. Please contact: Grant Hamilton 204-725-6047 info@brewtinerie.ca **NOTE: Email preferred after Oct. 1 or Chris Noto 204-761-5782 cgnoto@gmail.com

10. CHEERS!