Construction Update: December 31st

I figured we might as well cap off the year with an update. Right?

Our hope last time we updated the blog was that construction would wrap up before Christmas. Well, we’d like to wish you a happy new year while giving you another update of our ongoing construction…which is to say, we’re still working.

Inspections have gone remarkably well and we’re getting ready to cover the walls. Plumbing, electrical and mechanical are approved. These are the big money areas, so we’re thrilled to have them in place. That said, a few key areas have been delayed and required further tweaking to our design. Redesigns mean added delays, and in this case, it was major work to our bar layout. So, with the necessary tweaks in place, we can move forward with the health department approval and get our cabinetry ordered. That is hopefully this week, but given the holidays…we’ll see.

Since we last spoke, our cold room has been installed and just needs the floor treatment put in place. Other than some damage in shipping everything looks great. We decided to tolerate some dents on the inside of the cooler in lieu of waiting for replacement panels which likely would have taken close to a month. 

Oh, and we managed to get a surprise audit from the liquor control board. It turns out that they are random and we’ll get them every 5 to 7 years, but damn if the timing wasn’t poor. We passed easily, but gathering all of the paperwork was a huge task and it pulled us away while we prepared for it.

And… and… the big deal of the month was getting the tanks up from Oregon. They look amazing! And it was nothing short of surreal to get them into position so we could start taking positioning measurements off of them.

Full disclosure: delivery of the tanks was a complete pain (with some awesome parts sprinkled in there too). They shipped on a Friday and late Tuesday we were given a window by the shipping company between noon and 5pm for the next day. Awesome. A five-hour window and we had to arrange for a forklift to be delivered so we could unload the truck. They showed at 4:10 with a completely full truck. We lucked out on parking it (see below). We thought that we’d need to block 55th Ave W (the street just east of our building) as it was the least busy, but in order to do so we’d need active flaggers, coning, etc. And, we’d be blocking some of the building’s residential neighbors on their way to the residential garage. 

3:30pm. I parked my car on 56th Ave W. There’s room for four cars to park there in a mix of 15-minute and 90-minute spots. I managed to get one of those spots, but with three other cars parked behind me…this was unlikely to work out.

3:50pm. Still full.

4:02pm. One car moves… still, two others are parked there. Meanwhile, we’re looking for a truck preparing to flag this guy down sometime in the next hour.

4:06pm… Another car moves… time to grab cones. We block the two spots behind me, but honestly, with a 30-foot trailer (plus cab - thats important) it still didn’t matter.

4:08pm… Whoa!!! The final car moved.

Okay… you didn’t need a play-by-play, but damn if we didn’t need a break. I’m not ready to call this a biblical parting of the Red Sea, but for Mountlake Terrace… in 2018… with a brewery project… yeah, we’ll take it.

From there, it took almost two hours to unload everything. Which, creates another issue. The City’s noise ordinance goes into effect at 10pm. And, we’d only unloaded everything to the sidewalk. (by the way, thanks for the grace folks…we met tons of you with all our stuff out there…and you were all super nice about us taking up your sidewalks) Our tanks didn’t fit through the doors while still crated. So, we had to break down all of the crates in the middle of the sidewalk, disassemble several components on the outside of the tanks, lift the tanks out and carefully tilt them through the door. 

9:43pm… the last tank is inside and in place. 5.5 hours.

We’ve been having a ton of fun putting the system together, and of course can’t wait to mount it, clean it and finally start brewing on it.

Which leads to the last update. Again, we’ve got nothing but great things to say about Mountlake Terrace. They folks at City Hall have been the best. We got a call from them a couple of weeks ago letting us know that if we could get the brewing area finished and a single bathroom finished, they may be able to cut us an occupancy permit for just those areas - which means… we can start brewing! 

This will give us time to finish up the final details of the rest of the space while starting to build inventory. Which means… no big delay once all of that is ready.

So… the numbers of the month… 1 random audit. 3 inspections passed. 15 shipping crates from Stout Tanks. And 3 tired (but smiling) brewers. We’re still making progress. And this is still awesome. We’re still pinching ourselves.

Construction Update: December 2nd

So much for weekly updates. Sorry. We’ve done what we could to keep our Facebook and Instagram pages up-to-date with more photos of the progress. We’ve been incredibly busy. Once thing we’ve continually learned is that this is a lot of work. You’ve gotta keep the plates spinning and there are a lot of plates to spin.

Our biggest news in the last couple of weeks was flying through the approval of our MEP (mechanical, electrical, plumbing) engineering drawings. The mechanical and plumbing drawings came in incredibly behind schedule. For those of you who have renovated your house or done a commercial project like this before, you know where this is going. Without approved permits, you can’t request permit inspections. And without inspections, those walls sit framed, but unfinished.

When we filed our permit drawings with the city, our assumption was that they would take somewhere in the neighborhood of 8-9 weeks, just like our building and structural permits before them. Instead, they blew our minds and finished them in 6 days. We made a few phone calls and did what we could to ask for help. We feel like we benefitted from some of our investment reaching out to the city and starting to build relationships. Relationships matter.

After we got those back, we were able to distribute the electrical components in the unit and quickly passed inspection. We’re hoping that we can knock out some adjustments to the plumbing drawings this week and get those inspections taken care of as well.

Once we do that, the drywall goes up, floors get finished and we can get to work on the bar itself.

This is a quick note to other brewers using SBA loans: We had to work with our bank on cutting a check before the equipment arrives on site. From what we understand, this all comes down to liability. If we pay for the equipment up front, liability for damage in transit shifts to us. In other words, as long as our equipment is handed off to the freight company, Stout Tanks, our manufacturer, is done. Any damage in transit? We’ve gotta figure it out. And, with additional tariffs now active on this type of equipment, the price will jump to replace any of it - and the bank needs us to have working, complete equipment. Regardless, the bank let us know Friday that they were willing to work with them on it. And for sure, the equipment is insured for its replacement value.

Our brewing equipment is due to ship in the next week or so. We can’t wait to get it in our unit.

Floors are also a big part of moving forward. We worked with a local vendor (originally we were working with a well-known brewery floor vendor in Oregon, but their price jumped from what we’d understood their bid to be last year) and found a good solution for our front of house floors. We also lucked out and took advantage of another job’s over-purchase and got a great deal on an incredibly high-quality floor for the brewing area and cold room.

So, that’s where we’re at in the first week of December. Our original completion date was November 26th. Current estimate: December 20th. (Just remember, we still have to brew beer before we can open, but we’re getting closer.)

Also, I’ll expand on this someday in another post. We’ve had a number of political issues this week. We firmly believe in dialogue over lawyers. We’re working it out as best we can, but unfortunately, this is part of running any business.

Construction Update: October 14th

We had it in our heads that we’d have these posts come out weekly… you know, with all the progress. Things are coming along, but the visual side of it always takes a bit longer.

All of the demo is done and we’re getting ready to start the framing. Our contractor started “snapping lines” (marking up the floors) to set locations for the framing. That revealed a few things and we went back to our architect for more drawings before we go and start making holes. Better to change these things now…

Our structural contractor started his work as well. He’s working below the unit to shore up the sheer strength of the columns in the brewing space. Those columns are holding almost 20 tons when our brewing equipment is fully loaded and cars are parked underneath. We like their cars and we like our floors to remain structurally intact.

Framing on that work will begin mid-week and they’ll do a concrete pour with a bunch of rebar to strengthen things.

Our brewing equipment is starting to roll in. Most of it is coming north from Stout Tanks in Portland, Oregon. Lots of logistical details, but it’s coming together. Our biggest fear was needing to move it ourselves because of how expensive shipping can be. As it turns out, crating (preparing for shipment) and shipping a 7bbl brewhouse and 6 fermenters up the road by roughly 200 miles will run you about $3100. (That note is for any of you who have similar thoughts in mind)

CONSTRUCTION UPDATE: OCTOBER 1ST

Optimal has made significant progress on their reconfiguration of the bathrooms. There were two existing spaces for bathrooms that needed to come down to make room for the four that our space requires.

Our MEP (Mechanical, Electrical and Plumbing) drawings are still pending, but we trust they’ll be ready soon. We got draft versions of the electrical to work from and started work engineering our WiFi network and determining where we wanted speakers.

The big hurdle over the last week has been resolving the location of our glycol chiller. When we first looked at the space (18 months ago), we’d determined that we couldn’t hang the chiller. This unit is massive (6ft tall x 5ft wide x 4ft long) and it needs a ton of airflow. We’d rented a closet which looked like it had sufficient room, only to learn last week that achieving the airflow requirements was gonna be difficult.

So, thanks to our awesome team of engineers, contractors and architects, they got drawings into the building the next day to start figuring out where it can live.

Either late this week, or early next week, we’ll start the structural retrofit underneath our unit. Our brewhouse, fully loaded, is… ummm… really heavy. Time to make sure we avoid cracking that slab.

Permitting for Dummies

Permits in retrospect are one of those things that we should have been more knowledgable about. We really appreciated everyone who stepped in to help with our project from the outside, but in practice we ended up with some loose ends that we weren’t expecting late in the game.

We had a huge advantage in getting our project started. Networking.

  • First, we have a great friend, Cari Mullaney, who had a ton of great experience as a commercial interior designer. She’d previously worked on projects that far exceeded our scope and though she’s since transitioned to being a kick-ass stay-at-home-momma, she was willing to dust off her design apps and get to work. Other than the three partners, Cari has invested the most time in getting this project off the ground. We honestly cannot say “thank you” enough.
  • Second, our architect, Tony Shapiro, was phenomenal. He had a ton of experience working on TI (tenant improvement) projects like ours and his ability to foresee obstacles ahead of us was priceless. Tony is like that father-figure that has the serious talks with you sometimes, but at the end of the day, you know this dude’s in your corner (and he’s the one you want in your corner).
  • Third, we had Jon Krombein, a friend who Mark used to pastor with who was willing to do our electrical drawings pro bono. Oh, and he also found someone interested enough in the project to do the mechanical and plumbing (Thank you, Robby!). Collectively, these are known as our MEPs (Mechanical, Electrical and Plumbing) and they are the major part of your permitting.

I suspect that we inadvertently led each of the parties to believe that someone else was handling another part of the project. Each knows their stuff and they are unbelievably qualified. Lesson #348 of owning a brewery: Ask questions until you know for sure that you get it. Ask them even if they make you seem incompetent. A little bit of loss in pride saves a surprise in the end.

We all assumed that the MEP drawings that the engineers did were sufficient for the project. They weren’t. They needed to be stamped, which means that insurance is backing them. And the insurance was held by the firms that employed these guys. And, they weren’t about to back our project for free. 

What the drawings did do was allow us to accurately bid and contract the project without a lot of risk. While you’re waiting to sign a lease, you’re potentially putting out a lot of money in planning. If that lease falls through, you’re out the money for your planning and the drawings are in effect, worthless. These guys set us up without a lot of risk and that was really valuable to us.

When you do a TI build, you need stamped drawings and you need several of them. In Washington State, you’ll need the following:

  • Building Permit (think of this as the wrapper for everything else);
  • Structural Permit (this may have been required because of the weight of our fully loaded equipment (roughly 38,000 lbs.)
  • Mechanical Permit (think HVAC or how you’re taking care of equipment heat or getting your cold room cold)
  • Electrical Permit
  • Plumbing Permit
  • Fire Permit

All of these permits set you up for your inspections. You pay a fee. The City reviews your plans and eventually issues you a permit to build. They then inspect after your contractors do their work and verify that everything was done up to code.

We found out late in the game that our drawings weren’t adequately stamped. We also learned that another firm couldn’t simply review and stamp the drawings. Their insurance is insuring “their” work on the project, and if we ran into issues, that insurance would be worthless. So, we had to have the drawings re-done, granted, with our other drawings close by. $14,000 later. Damn.

Construction Update: September 2nd

This is a process. We have to keep reminding ourselves of this. This was a week of nailing down insurance policies and build schedules. Boring, but essential. As of Friday, we were all on the same page. Mountlake Terrace was awesome last week and through the work of our architect, we got clearance to start work without our MEPs in place. We have our building and structural permits approved. Mechanical, Electrical and Plumbing (collectively the MEPs) and Fire permits are in process.

We'll say more about this in another post, but the permitting process (figuring out what we needed and what we didn't) was one of the most confusing parts of this whole project. It's all a learning process.

Our vinyl cutter is making it all seem more real. Nothing felt more satisfying than throwing our "coming soon" graphics up in our storefront. 

Next week: Demo of the existing hallway/bathroom area to convert one bathroom into four. Everyone wants to pee. At the same time.

Financing Your Brewery

(Disclaimer: We're not attorneys or bankers. This is free advice from our own experience with the process. Take it at your own risk.)

Every brewery is unique and the financial needs that you'll have for your expansion are unique. Let's just say that we came from the worst case scenario in that none of us come from money or have killer jobs that make a lot of money. We started this with a lot of patience and on a shoestring budget.

Investors. We briefly explored taking on investors. The positive of private investors: generally there's no interest on the financing and the money you do get comes with fewer strings attached. The negative: you've gotta make it worth their while, which generally means that you're giving up equity and giving up a portion of your profit.

Bank Loan. The common alternative is a bank loan (generally an SBA loan). Like an investor, you've gotta convince them that your project holds muster, but you'll retain all of your equity.

Here's a quick rundown:

  • Loans are either 10 years (tenant improvement) or 25 years (typically for building construction);
  • Interest is generally 2.25% to 2.75% above prime and the rate adjusts quarterly;
  • There's no pre-payment penalty on the 10-year loan; It's progressive on the 25-year loan (In the first three years: 5%, 3%, 1% respectively);
  • During construction, you can elect to pay interest-only as you progressively withdraw funds (up to 12 months);
  • Anyone with more than 20% equity in the company needs to act as a personal guarantor of the loan;
  • Collateral is necessary (generally real estate, rental properties, etc.);
  • There are packaging fees paid to your bank (ours was roughly $2,500) and there is a 2.5% fee paid to SBA at funding;
  • Your project categories matter. Once you set a budget for a given category and the bank approves it, you need to fully satisfy that category before moving those funds elsewhere;

Don't let this intimidate you. It's a big hurdle, but it's doable. Your banker can make all the difference. We worked with John Weber at Coastal Bank in Everett, WA. His willingness to walk us through this process was the difference maker. He reviewed our business plan, helped us see the deficiencies and gave us checklist after checklist to work us through the process. We owe John a ton.