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VOL. 126 | NO. 64 | Friday, April 1, 2011

Brewery Traveled Long, Winding Road

By Bill Dries

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Memphis Mayor A C Wharton Jr. made it clear this week that his latest economic development announcement wasn’t like the others he’s made in the last four months.

The move of City Brewing Co. into the Hardy Bottling Co. in Hickory Hill starting this summer isn’t a company starting from the ground up in Memphis or an existing company expanding in Memphis.

And it isn’t the first time City Brewing Co. had considered Memphis and the 40-year-old brewery that had made Schlitz, Stroh’s and Coors beer before it began bottling non-alcoholic beverages.

Just before the Memphis Coors plant was sold to Chism Hardy Enterprises LLC in September 2006, City Brewing tried to buy the plant from Molson Coors Brewing Co. The deal never materialized.

Labor talks bogged down and George Park, chief executive officer of City Brewing said the timing probably wasn’t right for the La Crosse, Wis., company anyway.

“The industry has changed. I think City Brewing is much more well capitalized,” he said. “Before it was sort of a leap of faith. Now I think it’s very real.”

City Brewing Wednesday won approval from the city-county Industrial Development Board for a 15-year payment-in-lieu-of-taxes program. It will invest $41 million in the plant and create 500 jobs paying an average annual wage of $41,705 without benefits and $68,027 with benefits.

The project will aid a major expansion for City Brewing, which had reached capacity at its plants in La Crosse and Latrobe, Pa., and needed to find a third brewery.

Park said that brought his company to Memphis where Carolyn Hardy, a former Coors plant manager, led the group of investors in 2006 who bought the plant at 5151 E. Raines Road from Molson Coors.

The formal announcement Wednesday of a sale that will rename the plant the Blues City Brewery caps a rough three years for Hardy Bottling Co.

It began with the February 2008 tornado that heavily damaged the plant. Half of the roof was torn away. The plant couldn’t operate and thus was unable to meet its contracts. Wharton, who was then Shelby County mayor, called the plant’s recovery “our poster child for how the community can come together and support our locally owned businesses and minorities.”

The Greater Memphis Chamber was enlisted to help locate a temporary plant to meet the critical spring months – the most productive at the plant.

In Mississippi, economic development recruiters watched and for a time were making offers to Hardy. Wharton and chamber leaders were aware of the offers.

The Memphis plant reopened in April 2008 with some repairs still under way. Hardy lost several of its big clients – even its biggest – but picked up some new ones.

Two years later, Hardy hoped the bottling plant could increase its packaging line and bottle and sell Memphis water. Chism Hardy Enterprises was among the local ventures applying for a share of federal stimulus recovery zone facility bonds.

Chism Hardy was in the top three projects for the interest free financing last fall when D.G. Yuengling & Son Inc. signed a letter of intent to buy the plant and convert it back to a brewery. Executives at the seventh largest beer supplier in the U.S. described the Memphis location as “ideal.”

But it never happened. Hardy disputed the reports of the pending sale and continued to seek the federal stimulus funding for the expanded bottling operations.

This week, she said a non-disclosure agreement she signed prevented her from talking in detail about what derailed the talks. “Deals are very complicated,” she added.

Hardy also said she has a 10-item checklist for prospective buyers that included such items as being well capitalized as well as being someone she liked and could trust.

Meanwhile, the federal bonds had an end of the year deadline in 2010. And neither Chism Hardy nor any of the other finalists or alternates were able to secure the private financing necessary to get the recovery zone facility bonds by year’s end.

Wharton said there were numerous times in the last three years when he wondered why Hardy didn’t walk away from the business after several setbacks.

“Had she not persevered, none of us would be here today,” he said. “She kept coming back.”

PROPERTY SALES 23 23 1,365
MORTGAGES 21 21 1,068
BUILDING PERMITS 117 117 3,173