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VOL. 125 | NO. 202 | Monday, October 18, 2010

Yuengling Expansion Could Bring Tourism, Wider Beer Distribution

By Tom Wilemon

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A brewery in Memphis will allow D.G. Yuengling & Son Inc. to introduce its beer to new markets in the South and Midwest, said David Casinelli, the company’s chief operating officer.

The Pottsville, Pa.-based company has signed a letter of intent to buy the former Coors brewery from Chism Hardy Enterprises LLC, but representatives of both parties are still negotiating the terms of a possible sale.

An asset purchase agreement would be the next step in the process.

“We’re certainly working on this, hoping that we can get this deal done some time in the near future,” Casinelli told The Daily News.

Carolyn Hardy, president of Chism Hardy Enterprises, had not returned a telephone call to The Daily News before press time.

Although Yuengling is the nation’s oldest brewery, it currently sells beer in only 13 states. It has two breweries in Pennsylvania and one in Florida.

The Memphis facility would give Yuengling a foothold to expand into middle America, including highly populated states such as Illinois and Texas.

And, if it opens in Memphis, it also could bring tourism potential, as the brewery could eventually open for tours.

The 1 million-square-foot facility is larger than what Yuengling currently needs, but it would provide room for future growth, Casinelli said. He could not provide an estimate for the number of jobs.

“Over time, it’s our hope to grow into that facility,” he said. “It’s a big facility. It’s well beyond our means, but we think we can get in there, start it up and in time properly grow into it. It’s going to take us some time obviously to evolve that place.”

The company bought a former Stroh Brewery Co. plant in Tampa about 10 years ago. About 65 people now work there.

“We started out very small,” he said. “Over time, we’ve grown that plant. Basically, our strategy is to do it within our means and continue to grow.”

Yuengling’s existing breweries are open for tours, and the company would look to make any Memphis facility a tourist attraction.

“We’re an old-line, family-run company,” Casinelli said. “Our intent would be to make our brands and our presence very visible and become a part of that community.”

However, the tourism component would come later.

“Obviously, there’s a lot of work we want to do on the physical facility,” Casinelli said. “We have to decide what it is going to take for us to start up that kind of facility again. It’s a very, very big facility for somebody of our size. It’s a daunting task. I don’t know what we would start out with. We don’t sell any beer in the surrounding states. It’s not like we can start that thing up and automatically start shipping. There’s a whole process involved in delivering your brands and opening up new markets.”

Chism Hardy Enterprises last week received a six-month extension from the Memphis and Shelby County Industrial Board for a payment-in-lieu-of-taxes (PILOT) incentive.

“Ms. Hardy made a presentation to the Industrial Development Board regarding her PILOT,” said Charles Gulotta, director of the Memphis and Shelby County Office of Economic Development. “She was short on jobs based on the PILOT award. The Industrial Development Board gave her a six-month time period to carry out issues in her business plan and come back and give a report. We look forward to hearing back from her in six months on the progress she has made to carrying out her business plan.”

The property was a brewery for Schlitz and Coors before its incarnation as a bottling plant. Coors closed it in 2006.

Hardy, who had been a vice president at Coors, bought it as the lead investor in Chism Hardy Enterprises LLC. That’s when the company received the PILOT.

But the plant was heavily damaged in a set of tornadoes that hit the Hickory Hill area in February 2008.

The way back to production was hard and as Hardy struggled, DeSoto County economic development leaders began trying to entice her to relocate the company there.

Then-Shelby County Mayor A C Wharton Jr. and the Greater Memphis Chamber worked with Hardy to keep the plant in Memphis and in Hickory Hill.

This year, Chism-Hardy sought to upgrade equipment at the plant to give it the capacity to fabricate bottles. For the effort, the company has been approved for a portion of $17 million in federal recovery zone facility bonds, $3.5 million in all.

The bonds to come through Tennessee have been approved by the IDB. The bonds for private development amount to a federal subsidy on the interest.

The IDB last month extended the inducement resolutions for the project and two others as each of the three projects move toward an end of the year deadline to secure private financing.

Senior reporter Bill Dries contributed to this report.

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