‘Opportunity brought me here’

Heidgerken: Brewhouse’s new owner working on future, not worrying about past obstacles

November 21, 2010 

TUMWATER – Centralia developer George Heidgerken and business partner Patrick Rhodes have acquired the historic brick brewhouse below Tumwater Falls and have made an offer on the remaining Olympia brewery property, two moves that have reversed seven years of inactivity at the site.

The sudden action has generated welcome relief after the brewery sat idle for years, and it’s raised a number of questions:

Who is Heidgerken, how did he do this and what are his plans?

Heidgerken and Rhodes paid $1.4 million in cash over the summer for the 200,000-square-foot brick brewhouse, 32 acres that surround the building and two parking lots. Heidgerken purchased the nearby 150,000-square-foot warehouse at 240 Custer Way S.W. a few years ago. The brewhouse and warehouse once were part of the Olympia brewery.

Ideas for the brewhouse property include improving public access, creating more park space, using nearby rail for possible trolley service and adding tenants such as restaurants, hotels and a winery, and creating a destination to rent bicycles and canoes.

Residents largely have been receptive to Heidgerken’s efforts.

“We’re helping him get the building stabilized and hope something will come out of that,” Tumwater Mayor Pete Kmet said after the sale closed.

Tumwater business and property owner Keith Thomas touted Heidgerken’s efforts at a recent Tumwater Chamber of Commerce meeting and said that the city should support that effort.

“It’s an absolute necessity that this is allowed to go forward,” Thomas said.

City Councilman Tom Oliva responded by acknowledging that the brewhouse is important to the city’s identity and economic potential. The property faces some development challenges, though, because it’s in a historic preservation area, and salmon swim nearby, he said.

Others have questioned Heidgerken’s past business practices, and in a conversation with The Olympian, he acknowledged some of those issues, one of which sent him to federal prison. Between showing before-and-after pictures of the work done so far on the brewhouse, Heidgerken talked about his past and current projects.

George, where are you from and where did you grow up?

I grew up in Eugene, Ore., and spent 10 years in Alaska. I was drafted and spent time in the Army. I since have lived in Hillsboro, Ore., and moved to Washington because of the timber business. I’ve been in Centralia for about 20 years and pretty much participated in commercial real estate through a lot of hard work.

What is your professional background?

Exporting timber and buying and selling large volumes of timber. I also have commercial and waterfront property throughout the state. And I ended up in a position to buy the Milwaukee railroad, and that consisted of 10,000 deeds of property, rights of way … all kinds of stuff that includes property in 12 states, from Chicago to Port Angeles. I also own a 50-acre hard rock quarry in Fall City that is currently on the market.

Why did you buy the historic brick brewhouse below Tumwater Falls?

The per-square-foot price of the acquisition was a very substantial, good buy. The numbers make a lot of sense, and they make a lot of sense to anybody who wants to work with us. We’re going to give it our best to make that site worth every penny to ourselves and to the public interest. We look forward to maximizing the value of the historic area and maybe, if we’re lucky, we can expand it. We were lucky enough to buy it where our capital outlay has a huge upside to it.

How is your Tacoma post office building coming along? (Heidgerken and Rhodes purchased the historic building in downtown Tacoma in May.)

Excellent. The post office occupies about 7,000 square feet on the first floor, and we have 70,000 square feet for rent. It’s an extremely well-built building. All we’ve done is paint and brought the restrooms up to code. The rest of the building is in really good shape. It has three courthouses. We’re looking for a coffee operation for the first floor, not unlike Starbucks or something like that. We have been busy maintaining, cleaning and working through the permit process.

Have any prospective tenants expressed interest in the brewhouse?

We have folks now who want to be there and are more than anxious to try and negotiate a position. We are right now just taking names. We want players who want to stay there and we want to be able to make sure they do the right thing and we do the right thing by them. What we’re doing right now is maintaining the structures to make it work. We’re walking the dog and seeing where it goes.

You acquired the brewhouse in an all-cash deal. How was that possible?

It’s not a difficult thing to do. It depends on the buy. There are a lot of folks with properties and things and they are just tired and want to get rid of them. If you’re in the right place at the right time, without a doubt, it’s an opportunity. Good ideas generate cash. All you have to do in any acquisition of any property is make an analysis of what you can do with it. Raising money is not easy, but it’s not impossible. Never say you can’t do it.

But is it fair to say you’ve had some success investing in real estate?

Oh, sure. Without a doubt. I’ve also had some disappointments.

Which were successful?

I assembled 160 acres in Fife and we brought about a sale that generated $45-$50 million. I bought the land through contracts, assembled and sold it to a gentlemen who was interested in building warehouses and who paid fair market value at that time, which was three, four years ago.

Which were disappointments?

I was involved with some farm property in Tenino when I was working with a Chinese company called Citifor. We bought the farm, logged it and filed a development plan with a full-blown environmental impact statement. Citifor just got fed up with (the process) and Thurston County and we sold it. It was a failure, because it should’ve gone through. You have to choose your battles, and you have to be careful.

Public information shows that you were sentenced to federal prison in the early 1990s. Why?

I acquired barrels of paint, stains, lacquer and varnish in a federal bankruptcy auction for use in some log homes I was manufacturing. We moved the barrels to Shelton, where I was later cited for storing hazardous materials by federal and state agencies. Prosecutors pushed for a minimum sentence, so I was sentenced to six months in a federal penitentiary in Oregon, not far from Lincoln City. I did 90 days and three months of home detention. I’m considered a felon because of it. When I got out, I realized I had to watch what I was doing from an environmental aspect. The worst thing was missing my son play basketball and the impact it had on my family. I didn’t enjoy it from the family aspect, but knowing what goes on in there and who’s in there and some of that stuff was not all bad.

Based on that experience, should the residents and the City of Tumwater be worried about your redevelopment efforts?

I think the folks who think like that should’ve stepped up a long time ago and done something (with the brewery), and then I wouldn’t be here. The opportunity brought me here. I’m too old to worry about it. I saw the opportunity and I’m taking advantage of the opportunity, and I’m giving (the public) the opportunity to step in and work with us. If they have any problem with my history, I can’t do anything about it. I can’t. I can’t change it.

Do you expect financial help from the City of Tumwater?

My business partner (Rhodes) does; I’m a realist. We expect to cooperate with the city and the Olympia Tumwater foundation and work with anybody else who has an idea of how to fund (a parking structure). We both agree on that. It could be used for the Schmidt House, the trail system and the parks.

Rolf Boone: 360-754-5403 rboone@theolympian.com www.theolympian.com/bizblog

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