Friday, February 24, 2012
WALLA WALLA -- A startup brewery will become the newest tenant at the Port of Walla Walla's wine incubator village after attempts to find a fledgling winery were tapped out.
Walla Walla Brewery, owned by Ben Grossman and Tim Reed, could open its doors at the Piper Avenue incubator complex by July, if all goes accordingly. On Thursday Port of Walla Walla commissioners authorized staff to enter into a lease agreement with the pair.
Port Executive Director Jim Kuntz said this morning staff is preparing a lease, which is expected to be signed in the next 30 days. After that, move-in can take place.
The new tenant mixes up the neighborhood, which has been exclusively dedicated to helping startup wineries get their legs in the marketplace since it was constructed in 2006.
A model for other startup incubator businesses across the region, the Port's winery village was built with a boost from state funds through the agency now known as the Department of Commerce. Nearly $1 million was earmarked for the first phase of construction, which included three 1,600 square-foot buildings, each with a 500-square-foot outdoor crush pad. Another roughly $100,000 for the project came from the airport budget.
In 2007, the state allotted roughly $500,000 more -- minus administrative costs -- for the final two buildings. The airport budget contributed $165,000 to complete the project.
The spaces were designed for bonded wineries that produce about 1,000 cases of wine annually. That will continue to be the focus in the long-term, Kuntz said.
However, numerous attempts through advertising and networking to find tenants for two vacant spaces at the incubators have been fruitless. Kuntz said that may be a result of fewer people starting wineries the face of an uncertain economy.
Grossman, winemaker for Yakima's Kana Winery, and Reed, a Walla Walla businessman and former owner of Barnaby's Pub, had approached the Port about moving into one of the incubator spaces. But commissioners said they wanted to exhaust search efforts to find winery tenants first before they agreed to a lease. Kuntz said he also called the Department of Commerce to see if a brewery would be an acceptable use of the space. "This is exactly within the realm of use," he said.
"I think it's a nice compliment to what the goal is of growing new businesses and getting these startup businesses a chance to lease space," Kuntz said.
The brewery will be under the same terms as its winery neighbors. The six-year lease starts at a monthly rate of $1,083.86 in the first year. With a leasehold tax of $139.17, the total comes to $1,223.03. The lease rate ratchets up each year after that until the final year, when it tops out at $2,242.21 per month. Tenants also pay for their own utilities.
After six years, tenants must move out. The goal is for new businesses to focus on product development, sales and distribution without the upfront costs of property investments.
Adamant Cellars and Lodmell Cellars are the most recent examples of wineries that have "graduated" from the incubator program and now operate at other locations.
Kuntz said wineries will remain the primary target of the incubator buildings. But when no wineries come forward to use the spaces, other businesses may be considered as tenants.
"The goal is still that these should be wine incubators in the long-term," he said. "But we will continue alternative types of value-added products."
Vicki Hillhouse can be reached at firstname.lastname@example.org or 526-8321.