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Tuesday, 06 June 2017 13:00

Dutton craft brewer to expand in move to new location

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Rendering of the proposed new taproom and production facility for Railtown Brewing Co. in Dutton. Rendering of the proposed new taproom and production facility for Railtown Brewing Co. in Dutton. COURTESY RENDERING

DUTTON — Railtown Brewing Co. will be moving next year, but thirsty patrons won’t have to travel far to get to the company’s new location.

The craft brewery expects to close in the next couple of weeks on the car wash property immediately east of its present site on 68th Street. According to cofounders Gim Lee and Justin Buiter, the company will build a new 3,750-square-foot restaurant and taproom and a connected 2,500-square-foot production facility at the site, with a groundbreaking in September and occupancy in the first quarter of 2018.

After more than two and a half years in business, the company faced a dilemma at its current location in a stripmall at 3555 68th St. SE.

“We’re up against a number of walls,” Buiter said. “We looked at what we needed to do to add more seats and to add more brewing capacity and fiscally speaking, it just made more sense to put a new building up.”

The company expanded its taproom last year to address concerns over standing room-only crowds turning away evening business on Thursday through Saturday, but the founders say the additional 30 seats have not been enough to keep up with demand.

Currently, Railtown is maxed out for seating capacity at 99 at its current location without adding a $40,000 fire suppression system, he said. Given that the partners lease the site, they opted not to make the investment in physical improvements “in a space that we don’t own.” They’re also restricted from operating an on-site restaurant for another three years because of an agreement their landlord signed with a nearby restaurant.

Given the recent addition of Switch Ltd.’s new data center at the former Steelcase Pyramid Building at 60th Street and East Paris Avenue and the momentum for development in the southern Kent County area, the partners also realized they needed to stake out their next steps sooner rather than later.

“Dutton is a growing area. For us to be able to stay in Dutton for the long term, we have to make a move now,” Lee said. “If we wait too much longer, there won’t be any spots for us.”

[RELATED: As competition heats up, Michigan craft brewers focus on business practices, taproom sales]

Buiter said the brewery has been in ongoing talks for about a year with the Dutton Car Wash owner, who is nearing retirement age. Those discussions naturally started “over the bar” at Railtown, according to Buiter.
According to Gaines Township records, the 1.29-acre lot is owned by Ronald Kamminga of Caledonia. The car wash facility was built in 1989.  

With the new location, Railtown expects to offer a full kitchen focused on “gastro-street food” served at lunch, dinner and late night and via catering in the southern Kent County area. The industrial-vibe taproom will seat 100 people on the main floor and another 50-90 on a mezzanine level. Eventually, the company plans to open an outdoor patio, where it will be able to accommodate an additional 40-70 guests, Buiter said.

Railtown will add 10-20 full-time and part-time employees with the move, he added.

The company is working with Grand Rapids-based The Design Forum Inc. for architectural services; Beer City Metal Works & Construction, a division of Wyoming-based D&D Building Inc., is serving as the general contractor.

The partners remain undecided as to whether they will buy new brewing equipment immediately or max out their existing 3-barrel system, with which Railtown expects to near the 1,000-barrel threshold of beer production next year.

According to Michigan Liquor Control Commission data, Railtown sold 414.2 barrels of beer last year, a nearly 59-percent increase from 2015.

“Our current plan is to step up to a 7-barrel system fairly soon and that will allow us to get pretty close to 2,500 barrels,” Buiter said.

Even if they add production capacity, Lee and Buiter say they plan to keep the focus on producing beer for the taproom, not widespread expansion into the ever-crowded distribution market.

“We’re focusing on the taproom,” Buiter said. “Getting food going is gonna be really important for taproom sales. It hasn’t really limited us — we’ve blown away our expectations so far, but we could have accomplished more if we had food. But we haven’t had any regrets. It’s allowed us to focus on the beer.”

To date, the company has bootstrapped its operations and focused on organic growth, but will need to take on bank debt for the new location.

“We’re beyond our organic means now,” Buiter said.

The partners declined to disclose the investment in the new site or their financial institution, noting they’re still finalizing many of the details for the project. Lee and Buiter say they will remain the sole co-equal equity partners in the business on a go-forward basis and have no plans to bring on investors for the project.

“This really completes our vision of what we wanted this place to be,” Lee said. “Not doing food allowed us to do the first stage out of our pockets and we were able to test our market, our clientele and our product. Now that we have some confidence in our product, we’re willing to make a commitment like this.”

[RELATED: Michigan’s craft beverage industry: A comprehensive MiBiz report]

As part of the expansion plans, the company will make available lifetime mug club memberships for the first time in its history in a promotion running through July 15. In the coming weeks, Railtown will also start selling to-go 16-ounce cans filled to order with a new on-demand canning system at the taproom.

The Railtown founders say they expect to bid out the new taproom project in the next two weeks, which will require planning and zoning approval. They expect to present their plans to the township in the next six weeks.

With a number of details remaining up in the air, the partners said they decided to go public with their plans to quash the “rumor mill” that had kicked into gear after word started to spread that the company was looking to move.

“The whole crux of the project is we’re staying conservative with it — we’re phasing everything,” Buiter said, reaffirming Railtown’s commitment to Dutton. “Our focus is going to be getting the doors open on the taproom, getting the food cooking and the beer flowing and then we’ll start knocking out more and more of these projects.”

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