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Sunday, 23 November 2014 22:00

Brewing Up Change: Microbreweries spur renewed interest in West Michigan’s Main Streets

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Brewing Up Change: Microbreweries spur renewed interest in West Michigan’s Main Streets RENDERING: INTEGRATED ARCHITECTURE

While development in West Michigan’s rural cities and towns has focused mainly on retail corridors close to major highways in recent years, those same communities often struggle to attract investment in their downtowns.
But a number of cities hope to buck that trend by enticing developers back to Main Street and away from sprawling strip malls. Increasingly, they’re also finding a partner in the state’s placemaking initiatives, as well as a common anchor tenant — microbreweries.

Case in point: Cedar Springs, a small city of approximately 3,500 people about 20 miles north of Grand Rapids, has had little to no investment in its downtown business district in nearly two decades as retail developers like Meijer looked to sites along 17 Mile Road near U.S. 131.

That’s about to change as entrepreneur David Ringler plans to open Cedar Springs Brewing Company LLC at 95 North Main Street, about one mile from the highway in the heart of the city.

Ringler had been looking for opportunities for years to open a craft brewery and restaurant, mostly in larger cities across Michigan. While he toured multiple locations around Grand Rapids, Cedar Springs barely even registered on his radar.

“I didn’t look at Cedar (Springs) because nobody looks at Cedar (Springs),” Ringler said.

His mind changed after doing some research on the area’s demographics. While Cedar Springs itself has a small population of residents, the surrounding northern area of Kent County has roughly 25,000 people to draw from, he said.

To prove his point, he cites the various fast food, grocery and gas station chains that have opened locations in recent years along the 17 Mile Road corridor just west of downtown. The same people that frequent those stores could also become his customers, he said.

“Major corporate money is going in up there, and (those companies) know something,” Ringler said.

That said, the city’s downtown area is not without its share of challenges, he acknowledged. “You have a downtown corridor that is older. This reminds me of Rockford 30 years ago,” Ringler said.

ANCHOR ATTRACTIONS

While microbreweries have helped spur additional development activity in neighborhoods in Grand Rapids and Kalamazoo, the nascent industry has also acted as a key driver for downtown revitalization in smaller Michigan cities.

Towns such as Bellaire and Hastings, home to Short’s Brewing Company and Waldorff Brewpub and Bistro, respectively, are examples of cities that have attracted continued investment after the opening of a craft brewery, Ringler said.

Indeed, since its opening in 2006, the Waldorff Brewpub has acted as an “anchor” for development in Hastings, said Valerie Byrnes, president of the Barry County Chamber of Commerce and the Barry County Economic Development Alliance.

“With (the Waldorff) serving as an anchor, we realized that we can attract people to our communities by the other types of businesses we have downtown,” Byrnes said.

Currently, downtown Hastings has approximately 15 apartment units in its central business district, Byrnes noted, as well as a good mix of boutique-type stores, coffee shops and even a movie theater.

With those features, the city of Hastings is ahead of many other local small towns in terms of development. Located about 40 miles southeast of Grand Rapids, Hastings has worked hard to attract investment in its downtown infrastructure since the late 1990s, said John Hart, the city’s community development director.

“It’s critical to keep mixed-use development downtown and to keep things vibrant,” Hart said. “One thing we have learned is to say ‘yes’ more than we say ‘no.’”

PROGRESS IN PLACEMAKING

As market forces continue to support development projects in larger metro areas such as downtown Grand Rapids, state agencies have also turned their focus to helping projects in smaller communities across Michigan that may need an extra boost to get off the ground.

Specifically, smaller downtowns are becoming a key focus for the Michigan Economic Development Corp. (MEDC) to use its suite of incentives and financing tools to support redevelopment, said Community Assistance Specialist Ryan Kilpatrick.

“Our priority is to focus on traditional downtown communities and projects that are expected to have a transformational effect on the community,” Kilpatrick said in an email.

Cedar Springs is a good example of that focus, he said.

“The added benefit of this project being located in a downtown is the potential for positive impact on adjacent sites,” Kilpatrick told MiBiz. “Our expectation is that once (Cedar Springs Brewing Company) has opened its doors and welcomed their first customers, the property owners next door and across the street might start to see a small increase in foot traffic and hopefully sales.”

Ringler, the startup craft brewery’s owner, agrees that his company could serve as a catalyst for other nearby businesses, an element of the project that was a major consideration in site selection. The brewery and pub will occupy the first major new building in Cedar Springs’ downtown area in decades, he said.

Once he decided he wanted to put the project in downtown Cedar Springs, Ringler ultimately selected a foreclosed city-owned parcel with an old building that needed to be demolished. The price was right, and so was its location in the middle of the city’s downtown, he said. The other attraction: The site sits along the Fred Meijer White Pine Trail, a mixed-use linear state park trail spanning Grand Rapids and Cadillac that’s popular with a range of users from bicyclists to snowmobilers.

The microbrewery’s location with access to the trail should help keep the pub busy year-round, Ringler said. He plans to host multiple events throughout the year catering to the various types of trail users.

“Cedar Springs is a perfect example of developers and economic developers recognizing the importance of placemaking,” said Summer Minnick, director of policy initiatives and federal affairs at Ann Arbor-based Michigan Municipal League, an organization that advocates on behalf of Michigan cities. “We are seeing communities realize that they need to invest in things that make them a unique, special place.”

Minnick also pointed to the town of Baroda in Southwest Michigan as an example of a small community that’s focused on placemaking. Communities in that area have embraced winemaking and “agritourism” to draw in visitors and contribute to its sense of place, she said.

FINDING FUNDING

Ringler’s Cedar Springs Brewing Co. project is also notable for another reason: He was able to put the deal together with traditional debt from a commercial bank.

Startup craft breweries across the state often struggle to attract traditional financing, which has led fledgling companies to turn to new sources to raise capital, whether via crowdfunding at Tecumseh Brewing Company LLC in Southeast Michigan or the co-operative model at High Five Co-op Brewery Inc. in Grand Rapids.

In the case of Cedar Springs Brewing Co., lender ChoiceOne Bank of Sparta liked what it saw in Ringler’s business plan, said Jason Parker, an assistant vice president for commercial lending at the financial institution.

A combination of Ringler’s growth plan — namely, the stated goal to distribute the company’s beers once it scales up operations — as well as his background in finance helped steer ChoiceOne toward granting the loan to the startup company, Parker said.

“The distribution is a big part of his business plan,” Parker told MiBiz. “His initial priority is to get people in the brewery eating and drinking. But the distribution is a significant source of revenue.”

The site the brewery will occupy should also allow for a good amount of space for future expansions, Parker said, noting that the company initially will be sized appropriately for a startup operation.

Despite the combination of private investors and bank financing that Ringler was able to attract for the project, there was still a bit of a financing gap, said Kilpatrick of the MEDC. That is where the MEDC’s Community Revitalization Program (CRP) hopes to step up and fill in the funding gaps, he said. CRP funding for the project still requires the approval of the Michigan Strategic Fund board of directors.

In the meantime, Ringler has tapped Grand Rapids-based Integrated Architecture Inc. for design, while Orion Construction will serve as general contractor on the build out of the project.

An official groundbreaking for the brewery was held in October, but Ringler said he remains unsure when the brewery will actually open. However, he is confident about his choice of location for the new company.

“I want and need Cedar Springs to continue to grow,” Ringler said. “The motivation is that these kinds of businesses are proven time and time again to be anchors for redevelopment.”

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