Great Lakes Brewing Co. is pushing the boundaries of its tight Ohio City footprint, raising questions about the company's long-term ability to grow in place.
CLEVELAND, Ohio -- With another expansion under way and new equipment en route, Great Lakes Brewing Co. is pushing the boundaries of its tight Ohio City footprint, raising questions about the company's long-term ability to grow in place.
On Monday, Cleveland City Council approved legislation that gives Ohio City Inc., a neighborhood nonprofit, the opportunity to buy part of a public parking lot on West 26th Street, next to the Great Lakes production facility.
On its face, the legislation appears to have little to do with the brewery. But the real estate deal came about because of a $7 million expansion that Great Lakes recently launched. And the potential transaction points to broader challenges in Ohio City, where leaders are trying to encourage development while managing a parking crunch that spans several blocks near the West Side Market.
Great Lakes has been growing almost continuously since it opened in 1988, and owners Pat and Dan Conway have talked for years about even bigger plans.
"It's no secret they've been desirous for a while," said Councilman Joe Cimperman, who represents the neighborhood. "Obviously there's a great willingness to work with them. They're a neighborhood stakeholder and a major employer. We recognize their growth needs."
The current project at Great Lakes won't change much in the neighborhood. And it won't eliminate parking in the West 26th Street lot, which is operated by Ohio City Inc. For now, Great Lakes just needs to put electrical equipment on the northern edge of the lot, to support a new chiller that will keep beer cool as the company adds brewing capacity.
Great Lakes, which shipped 142,673 barrels of beer last year, says the ongoing expansion will help it boost capacity by 20 percent. The company recently moved its offices out of the brewery complex and into the second floor of the old Gehring building on nearby Market Avenue. The former office space on West 28th Street soon will house towering fermentation tanks, set to arrive by boat from Germany in July.
View full sizeBoxes of Great Lakes Brewing Co.'s Burning River Pale Ale wait to be filled at the company's Ohio City production facility in 2008. Founded by the Conway brothers in 1988, the brewery now employs 212 people and sends beer to 13 states and Washington, D.C. For now, the brewery is finding ways to do more with its existing real estate. But Great Lakes has been posting 20 percent annual growth, measured by the barrel. The company employs 212 people, most of them working in Ohio City.
At some point, the beer will have to spill onto nearby property. Or the company will need to expand to other sites, farther afield from its landlocked headquarters.
Marissa DeSantis, a company spokeswoman, said Great Lakes is looking at many options near downtown Cleveland and elsewhere for warehousing, extra storage and more brewing capacity.
"[The Conways] obviously have a lot of respect for this neighborhood and the merchants that share this tight and crowded neighborhood with us," she said. "Parking's a huge deal around here, and people tend to get pretty heated about it. For that reason, we're considering options outside of our immediate footprint for our production facility."
She wouldn't elaborate on those locations. And she wouldn't discuss whether Great Lakes hopes to buy the West 26th lot, one possible expansion site.
The Conway brothers were traveling this week and were difficult to reach. In a voicemail message Monday evening, Pat Conway said the parking-lot agreement between the city and Ohio City Inc. will allow Great Lakes to obtain a much-needed easement to install an outdoor electrical transformer. That arrangement will support the company's short-term growth without cutting into parking.
He referred any follow-up questions to DeSantis.
"That lot is as public as you can get, and it supports the work of Ohio City Inc.," Cimperman said of the West 26th property. "If there is any discussion in the future, it will be very public and very open."
Ohio City Inc. maintains and operates the 0.83-acre lot but owns only 40 percent of the land. The city owns the rest and leases it to the nonprofit group. Under the legislation approved by City Council this week, Ohio City Inc. has the ability to buy the city's portion in 2017 or 2018 for $977,000.
"We really looked at this as just trying to work with the parties over there so that we could move some things forward," said Tracey Nichols, the city's economic-development director. "We're still in discussions with all the parties."
That deal does three things: First, it gives Ohio City Inc. a chance to buy out the city and keep all of the parking revenues - a steady and valuable chunk of cash that otherwise would be split in 2019 under the terms of a long-running lease.
"This gives our organization long-term certainty that, come the end of 2018, we're not going to take a major revenue hit," said Eric Wobser, Ohio City Inc.'s executive director. "This gives us the flexibility to continue to operate the lot."
Second, the deal gets Great Lakes its easement. Ohio City Inc. was willing to allow the brewery access to part of its land if the city signed off on the purchase option. This convoluted horse-trading gave both parties something they wanted. And any dramatic change to the West 26th lot still would require public vetting and approval from Ohio City Inc. and the city.
Third, the real estate transaction sets a timeline. If the city wants to sell its piece of the parking lot to a different buyer - Great Lakes or anyone else - officials have a few years to negotiate and plan before Ohio City Inc. steps in and takes control of the property.
Meanwhile, neighborhood leaders can tackle the bigger parking problem, a side effect of more residents, more businesses and heavy traffic at the West Side Market. Potential solutions could include a lot reconfiguration at the market and construction of a new garage somewhere in the Market District.
"We recognize the parking issue in the neighborhood," Cimperman said. "You cannot have a conversation about one pebble on the mountainside without talking about the whole mountainside. There's a huge need. Ultimately, we're going to be having a very public discussion that I'm sure will be ... I will use the word 'energetic.'"
Nichols wouldn't comment on whether Great Lakes has an interest in the West 26th lot. "I think you realize that when you're negotiating real estate, that's not really something in the public domain," she said. "I can just say at this time that Great Lakes needs an easement, and they're getting it. Ohio City wants to know that if nothing goes forward, at a certain point in the future that lot comes to them.
"This parking lot is not the only thing that we're looking at in this neighborhood, with regard to parking," she added. "We've got a lot of irons in the fire."