(Asheville, NC) – Earlier in the week, Lagunitas Brewing Founder and Owner, Tony Magee, called out New Belgium for accepting incentive packages totaling $13 million in publicly-funded financing. Lagunitas is building a brewery in Chicago (much different in scope from New Belgium’s Asheville brewery) and Magee noted earlier in the week that he has only sought private financing for the project.
New Belgium Co-Founder and CEO, Kim Jordan, wrote into BeerPulse on Thursday.
To the Readers of BeerPulse,
You can imagine that we have a different perception of the process we are going through as we develop our brewery in Asheville. First I want to line out the technical aspects of this agreement. This incentive money is incremental and thus, money that is not already part of the existing tax base. It is new money that will come in from New Belgium’s payment of property tax. The money is paid out variously by the three entities (city, county and state) through 2024. I.e., New Belgium pays its taxes annually and is reimbursed based on our investment and hiring over the course of 12 years. The money that New Belgium will get is based on performance. We are required to invest $140 million by 2024 or we will forfeit, pro-rata, any money we received. We are also required to hire 125 new people. Again, if we don’t, we get less money pro-rata.
Asheville will take in more in tax receipts with New Belgium located there than if we were not. New Belgium will pay more in property taxes through 2024 than it will receive in reimbursements which means that the area will receive more money in tax receipts from New Belgium than it spends on incentives. Property taxes from our employees and increased sales taxes would go under economic multiplier effect. City, county and state officials made this decision because when they added up the economic benefit, having New Belgium in North Carolina will be fiscally beneficial to the community. When the economic multiplier effect was included, it was even more impressive.
In Tony’s earlier post he writes that we (craft brewers?) are growing into the people we don’t want to be. In our case at New Belgium, we feel really fortunate to grow as we have. Specific to Asheville, we are developing a site that is listed as a Federal brownfield. This means it has hazardous waste issues as well as a history of being a landfill. There were easier sites to develop but we chose this site because it’s beautiful, we think we can do a lot to restore it, and we believe that breweries, classified as light manufacturing, can help revitalize a neighborhood, while providing great live-walk-bike opportunities for employees who will, in large measure, come from Asheville. The leaders of the city felt the same way and were excited to have a business with so much enthusiasm for stewarding a difficult property. This incentive money enables us to do just that.
We will also create many new jobs that will pay well above the county average. After a year, these employees will become partial owners of New Belgium through our ESOP program. (New Belgium’s coworkers own 41% of the company.) We provide full insurance and half of the cost of insuring their dependents. In addition we have a host of progressive co-worker benefits: maternity and paternity leave, adoption assistance, domestic partner benefits, paid sabbatical, profit sharing, free beer… They will also participate in a culture where open book management and an extremely high level of transparency and honesty are the norm. These are all practices that have made us well known as a great employer.
Except for Enterprise Zone credits which are a pretty pervasive development credit offered throughout the United States, New Belgium has never received any funding from Fort Collins, Larimer County or the state of Colorado. We grew organically over 21 years and that’s generally the nature of startup growth: Jeff Lebesch and I started New Belgium in the basement of our house. In the beginning we were not on the city’s radar because we were so small, by the time they figured out we were a significant presence, it was too late: they knew we weren’t moving a whole brewery! In the case of Asheville, we’re building a brewery that is nearly the size of the one in Fort Collins – all in one chunk. The agreement created by New Belgium, Asheville, Buncombe County and the state is an example of what communities are doing to attract progressive employers.
New Belgium invests in renewable energy and sustainability. In our philanthropy program we have donated more than $5 million in cash and probably an equal amount in in-kind and proceeds from events to date. We intend to continue to practice this company ethos when we move to Asheville.
I love that craft is weird. I love that craft brewers have a high degree of affection and camaraderie for one another. I am honored to be a part of the ancient tradition of brewing.
Here’s to beer and to brewers and to trusting one another to do very good work.
New Belgium Brewing Company
Fort Collins, CO (and soon to be Asheville North Carolina)
Below, Jordan discusses the company’s forthcoming Asheville brewery at the time that the announcement was made back in April.