MUSKEGON — Pigeon Hill Brewing Co. wants to change up its operations and presence in downtown Muskegon.
As part of a three-part expansion plan, the microbrewery wants to buy a portion of a city-owned parking lot at Shoreline Drive and Terrace Plaza Drive for a new 15,000-square-foot production and office facility.
Co-founder and CEO Joel Kamp told MiBiz that Pigeon Hill wants to convert its current 10,000-square-foot production-only space at 441 W. Western Ave. in downtown Muskegon into a taproom and brewing facility once the lease ends for its current taproom at 500 W. Western Ave. The company would move large-scale production from 441 W. Western Ave. to a new location.
“We’re looking for some land to do another expansion and move production off-site,” he said. “Where we’re currently doing our big stuff, we want to turn that into a taproom. But we’ll need time to get (the production-scale equipment) out and get the system up and running off-site.”
Kamp said the company spent a year looking for another off-site location, adding that the company wanted to stay in downtown Muskegon rather that get “tucked away” in an industrial park out of the city.
Pigeon Hill had hoped to receive approval for the purchase agreement at its Tuesday City Commission meeting, but the motion was pulled to allow the city time to issue a request for proposals (RFP) for the site, located on the Muskegon Lake side of Shoreline Drive near the entrance to the Shoreline Inn Hotel.
City officials told MiBiz they expected to present a draft of the RFP at the next Muskegon City Commission meeting on Sept. 12, with a suggested one-month review period.
Under the terms of the original Pigeon Hill purchase agreement, the microbrewery would have paid $20,000 for a 38,550-square-foot section of the 4.5-acre parcel.
Despite the delay, Kamp said he’s happy the city chose to go through the RFP process.
“We want it all to be on the up and up. We don’t want people to complain that we didn’t get it fair and square. If someone has a better idea, that’s a win-win,” Kamp said. “We have an opportunity and need for land, and we’d like to build something up.”
If Pigeon Hill ultimately gets a chance to buy the property, Kamp envisions the new facility acting as a “showpiece” for the brewery and the city, with the tanks and equipment visible through windows to motorists on Shoreline Drive, similar to how Founders Brewing Co. is an integral part of the skyline along the S-Curve in Grand Rapids.
The facility would include 12,000 square feet for production space and another 3,000 square feet for offices, with a build-out targeted for the next six to eight months. The company could offer a small bar for tastings after tours, as well as small-scale retail at the site. The initial project would cost “more than $1 million,” according to city documents.
A second phase would have the brewery convert its current off-site production space into a 6,000-square-foot taproom spread over two floors, along with a downsized brewing system for smaller-batch varieties of beer destined for the taproom and space for barrel-aging, Kamp said.
“It’s a great space, we love it,” he said of the 441 W. Western property the company acquired in 2014. “We were strategic in acquiring that. It gave us the production space we needed at that time.”
A third phase could include adding 20,000 to 30,000 square feet of production space in the future at the Shoreline Drive facility if needed to meet demand.
The overall cost of the three-phase expansion plan would run about $2.5 million.
Pigeon Hill also received city support for a liquor license application as it seeks to add a small distillers license for both of its current locations. The company applied for a small distillers permit with the state earlier this year. A federal permit is also required.
According to Kamp, the distilling license would allow Pigeon Hill to “package and play,” or buy bulk spirits, blend them and package them. The intention is to offer draft cocktails at the taproom to give customers another drink option, he said.
“Our main focus is still on the brewery,” Kamp said. “But if we do get in a big group and someone wants a liquor drink, we can have a draft cocktail option for them.”
According to the Michigan Liquor Control Commission, Pigeon Hill sold 1,808 barrels of beer in the state last year. The company is on track to sell 2,400-2,500 barrels in 2017, Kamp said.
“Most of our growth has come through distribution and expanding our packaging reach,” he said. “With our cans, we can reach a bigger percentage of the market. As we develop a salesforce and marketing here, we want to open more territory and add more volume of sales.”