Brownfields to Breweries
July 8, 2022
The craft beer movement launched in the late 1980s and early 1990s as homebrewing became more mainstream. The industry continues to experience a nationwide surge in popularity, and Michigan breweries are no exception. Today, Michigan ranks fourth in the U.S. for total number of breweries (400); as a reference point, New York ranks first with 423 breweries. In 2020, the Michigan beer industry generated an economic impact of more than $9.9 billion, and brewers directly or indirectly employed 66,987 Michiganders (Beer Serves America).
As the Michigan beer industry has continued to grow, and fewer but more unique spaces are left available in downtowns, a popular solution has been to position new breweries at redeveloped urban brownfield sites.
Setting up shop in these locations can be surprisingly beneficial for brewers. Urban brownfield sites are often in close proximity to brewers’ target markets — more and more millennials live and work in walkable neighborhoods with a mix of recreational amenities, and most craft beer aficionados don’t mind driving to taste a new offering. Additionally, these properties offer more space for beer production in an already cramped downtown, can add unique architectural features from the more historic aspects of the re-purposed buildings, and can create instantaneous connections to their respective communities. For craft breweries, in particular, this last point is especially important as so many strive to be community focused; this connection to local identity is often reflected in their beer flavors, the structural design and decorations of their taproom and brewery, and their incorporation of local products.
Brownfield redevelopment is proving to be beneficial for brewers, but it can also bring significant improvements to urban communities. For this reason, these brownfield-turned-brewery projects often enjoy broad public support. Not only do these projects improve environmental quality and public health by cleaning up contaminated sites, they also increase neighboring property values, restore tax revenue to the community, and promote revitalization of urban areas by creating jobs and encouraging tourism (specifically through beercations, or vacations focused solely on brewery tourism).
Envirologic has experience conducting these transformational projects across Michigan. Notable past projects include Pigeon Hill Brewing Company (Muskegon), Barrel + Beam (Marquette), Cognition Brewing Company (Ishpeming), Dark Horse Brewing Company (Marshall), Latitude 42 Brewing Company (Portage), and The Landmark Taphouse & Grille (Three Rivers). Our work on the Pigeon Hill Brewing Company project is described below in further detail.
Pigeon Hill Brewing Company — Muskegon, Michigan
As part of a $2.5 million expansion, Pigeon Hill Brewing Company redeveloped this former, city-owned parking lot into a 15,000-square-foot, two-story building for beer production, offices, and a designated tasting area. Pigeon Hill relocated its production operations and offices into the new facility in the spring of 2019.
Contamination from historic fill material on the property represented a hindrance to financing the redevelopment. To support the site’s initial acquisition, Envirologic conducted a Phase I Environmental Site Assessment of the property on behalf of Pigeon Hill. Subsequently, Envirologic prepared a Baseline Environmental Assessment and Documentation of Due Care Compliance, which provided Pigeon Hill with liability protection and outlined Pigeon Hill’s due care obligations going forward. The main issues affecting this development were the management of excess soil generated from construction activities and the management of contaminated groundwater from dewatering activities. To help the developer manage these costs, Envirologic prepared a Brownfield Plan and Act 381 Work Plan. These Plans allowed the developer to receive reimbursement for eligible activities through tax increment financing.
This project benefitted the local community by bringing a previously publicly owned parcel back onto the tax rolls, generating tax revenues, and by creating a destination spot that will encourage additional public traffic to Muskegon’s downtown without furthering urban sprawl. The project also included temporary job creation for the construction of the facility and five new full-time equivalent jobs for brewery operations.
Craft brewer production volume grew about 8 percent nationwide in 2021 (Brewers Association), so it seems the upward trend is continuing. Our Envirologic team has found these locally focused, unique projects to be particularly appealing and influential. The owners and communities have a vested interest in the success of the business, the properties have compelling histories, and sites that are often blighted are transformed by the renovations. It may also be fair to say our team enjoys a good beer. Cheers!