Craft breweries have been a key to urban revivals

Joel Warger tends to a batch of beer at Great Lakes Brewing Co. in Cleveland's Ohio City. Craft breweries have changed neighborhoods, drawing young residents and small businesses.
Joel Warger tends to a batch of beer at Great Lakes Brewing Co. in Cleveland's Ohio City. Craft breweries have changed neighborhoods, drawing young residents and small businesses. (MARK DUNCAN / Associated Press)
Posted: July 09, 2013

NEW YORK - To see how a small business can transform a neighborhood, just follow the barrels.

About 30 years ago, beer lovers wanting to create their own drinks started taking over abandoned buildings in rundown districts. They refitted them with tanks, kettles, and casks, and started churning out beer.

The by-product was a boom in craft-beer drinkers; barrels shipped have more than doubled in the last decade, according to trade publication Beer Marketer's Insights. Craft beer now makes up nearly 7 percent of the slow-growing U.S. beer market.

But beer drinkers weren't the only beneficiaries. The arrival of a craft brewery was also often one of the first signs a neighborhood was changing. From New England to the West Coast, new businesses bubbled up around breweries, drawing young people and creating a vibrant community where families could plant roots and small businesses could thrive.

It happened in Cleveland. Once an industrial powerhouse, the Rust Belt city has been losing residents since the 1950s. Manufacturing jobs disappeared. The city nearly went bankrupt in 1978.

Marred by abandoned buildings and boarded-up stores after several hard decades, the Ohio City neighborhood, just west of the Cuyahoga River that divides Cleveland, was "perceived as dangerous and blighted" into the 1980s, says Eric Wobser. He works for Ohio City Inc., a nonprofit that promotes residential and commercial development while trying to preserve the neighborhood's older buildings.

Enter Great Lakes Brewing, which opened in 1988. Over the years, it's built a brewery and a brew pub from structures that once housed a feed store, a saloon, and a livery stable.

Other breweries and businesses - a pasta maker, a bike shop, a tortilla factory, as well as restaurants and bars - followed. Newcomers are flocking to the neighborhood, even though Cleveland's population is still declining. The city repaved the quiet street next to the brewery, Market Avenue, with cobblestones, and poured millions into renovating the West Side Market, whose origins date to the 19th century. Today, more than 100 vendors sell produce, meat, cheese and other foods there.

What's going on in Cleveland is happening across the country. Trendy small businesses such as breweries and younger residents have been returning to downtown neighborhoods in many cities across the United States. The biggest cities are growing faster than the suburbs around them, according to Census data.

Another benefit of the brewery boom: Manufacturers such as brewers typically pay workers more than service businesses like restaurants or shops do. That's good for local economies.

But for some, the bubbles are bursting. In Brooklyn, N.Y., breweries are feeling the heat from rising real estate costs.

When Brooklyn Brewery opened in the Williamsburg section in 1996, its neighbors were mostly deserted warehouses and factories. Today, Brooklyn Brewery is surrounded by modern apartment buildings, trendy bars, shops, and restaurants.

There's still some graffiti, but that has not deterred the influx of new residents willing to spend a lot of money to live there. In the past decade, home values in the brewery's neighborhood have more than doubled - up 145 percent, according to real estate appraiser Miller Samuel.

Rising prices might force Brooklyn Brewery to exit the trendy scene it jump-started. It has two buildings in Williamsburg, the brewery and a building across the street where it stores and ages its beer. Leases are up in 2025, and Brooklyn Brewery's cofounder and president, Steve Hindy, is worried that the company will get kicked out of its warehouse. Once an iron foundry, the building, built in 1896, has been bought by developers who Hindy says will not renew the lease. He suspects that they want to convert the space into apartments.

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