Tumwater slowly preparing brewery district for revitalization

Despite a financial snag, Tumwater’s quest to open a craft brewing and distillery center — and revitalize its brewery district — is moving forward.

Recent progress includes hosting a spirit-tasting event, finishing an environmental impact report and negotiating a possible donation of the historic old brewhouse to the city.

The grand vision is to build an economic hub that capitalizes on a blossoming industry in Washington, which has the most distillers in the nation and is second to California for the number of craft brewers.

In the meantime, the city is trying to create incentives for development in the long-dormant brewery district where the world-famous Olympia Beer was once produced.

One incentive is a planned action ordinance. This identifies all the regulations for the brewery properties on the north side of Custer Way and basically clarifies what a developer can and cannot do.

As part of the ordinance, the city has completed an environmental impact statement, which describes the positive and negative environmental effects of development in the area.

The ordinance will go before the Tumwater City Council for approval at a date to be determined. City Administrator John Doan said the ordinance will offer predictability and save time for any developer who pursues a project at the site.

This year, Tumwater sought $3 million from the state capital budget to buy about 3.5 acres on Capitol Boulevard to develop into a craft brewing and distillery center. However, lawmakers did not include the request in their capital budget.

Doan said the money would have provided a “jump start” for the proposal, but it’s not a major setback.

“Does it slow us down? Yes,” he said at a work session Tuesday. “It also affords us some time to figure out how to make it a better project.”

The city’s momentum-sustaining efforts have earned praise from George Heidgerken, who owns the historic old brewhouse on the Deschutes River. Heidgerken’s company, Falls Development, is working on a way to donate the 111-year-old building to the city.

“That probably will happen because it’s the right thing to do,” Heidgerken said at a Feb. 16 council meeting. “The city wants to have an influence on the site itself, and we’re all for it.”

Jon Potter, a consultant with Falls Development, said the proposed brewhouse donation would help both parties achieve a mutual goal. Preserving the historic brewhouse from further deterioration would cost an estimated $5.6 million.

“We have the same objectives and that is to get the historic brewery back to its original grandeur,” Potter told The Olympian. “It’s not just private property. It is a community treasure, so it has got to be looked at in that way.”

Another facet of Tumwater’s long-term plan is to cultivate the city’s reputation as a destination for craft brewing and distilling.

With that in mind, the city persuaded the Washington Distillers Guild to let it host the annual South Sound Spirits Gathering, which was Saturday at the Olympic Flight Museum. The city approved using $3,000 in lodging tax money for marketing the event and attracting tourists.

At least 18 craft distillers signed up to pour samples at Saturday’s event, including Tenino-based Sandstone Distilleries.

Sandstone co-owner John Bourden, who has won awards for his whiskey and vodka, said part of the appeal of Tumwater’s proposal for a brewing and distillery center is the educational component. Partners in the center, such as South Puget Sound Community College, will implement industry-specific research and training opportunities.

“There’s going to be a real need in the not-too-far future for skilled people in such a growing industry,” said Bourden, who opened his business in 2014. “It would be a real attraction.”

Lesa Givens of Blind Pig Spirits in Olympia likes the idea of the area becoming “the Leavenworth” of brewing and distilling. She was referring to the Chelan County city that has established a thriving tourism niche by modeling itself after a Bavarian village.

“If it’s something that will bring people from out of the area to Olympia, I don’t see how that can hurt anybody,” she said. “If you are a destination for something, that has to be good for the community.”

Holly Robinson, vice president of the Washington Distillers Guild, is co-owner of Captive Spirits Distilling, a small operation in Seattle that specializes in gin. Aside from paying the highest spirit tax rate in the nation ($35.22 per gallon), another challenge is the high cost of rent for her Ballard distillery.

Robinson praised Tumwater’s zeal for the industry and its potential as a more affordable location to do business.

“You want a city behind your product when you’re small and starting out,” she told The Olympian. “You want to be in a place where you’re going to be supported.”

This story was originally published March 13, 2016 at 9:00 AM with the headline "Tumwater slowly preparing brewery district for revitalization."