What is New Belgium’s real price tag?

July 4, 2014 Asheville , News Stories 1590 Views
What is New Belgium’s real price tag?

A good deal more than either New Belgium or city officials originally predicted, if recent numbers obtained by the Tribune are accurate.

Originally, an incentive package totaling $8.5 million was put together to entice New Belgium, headquartered in Ft. Collins, Colorado, to locate its expansion facilities in Asheville. However, ancillary services, especially improvements to Craven Street at New Belgium’s brewing site, have nearly doubled that price tag.

The Craven Street project comprises about 3,400 linear feet – roughly two-thirds of a mile – of street realignment and reconstruction, together with an 84-space “low impact” parking lot, more than 2,000 feet of water main “betterment” and 375 feet of stream restoration and storm water management improvements, plus curbing, sidewalks, signage and such amenities as a kiosk, benches and a bike repair stand.

In December, 2013, when the New Belgium project was still in its initial budgeting phase, the price tag for the Craven Street improvements was set at $2.4 million. However a city staff report dated June 24 reads:

“The design budget for the project, which was previously approved by Council, totaled $852,604. The construction contract amount, along with the 15% contingency that is being approved and budgeted … totals $6,901,570.66, which brings the total budget for the project to $7,754,174.66. As mentioned above, the City has secured $1,787,401 in funding from partner agencies for this project. The remaining budget amount of $5,966,773.66 will be divided between the General Fund, Stormwater Utility Fund, Parking Fund, and Water Resources Fund based on the cost of the various elements of the project.”

From early on, proponents of the New Belgium project hailed it as a generator of jobs (with associated income from employees) and a healthy source of property tax revenue. The brewery and distribution plant, they have repeatedly said, represents an investment by New Belgium of between $175 million and $177 million in Asheville and Buncombe County.

During last fall’s election campaign, then candidate (now Mayor) Esther Manheimer stressed that New Belium would be paying about $250,000 a year in property taxes. However, the covenant with New Belgium indicates the corporation will receive about $364,000 in tax breaks over a period of 13 years, creating a net loss of about $1.48 million over that length of time.

Observers have pointed out that most of the $175-$177 million figure often cited as New Belgium’s stake in its latest home actually represents the company’s expenditure on itself: land acquisition, construction, equipment, payroll and other internal costs associated with setting up shop from the ground up in a new location.

As to jobs, New Belgium has said that it expects to employ a total of 140 workers and executives by the time it begins turning out product in late 2015. Of these, it says 30 will staff the distribution plant, with 50 more installed at the brewery by early 2015.

Adding the revised Craven Street improvement costs to the amount of the original incentive package, and factoring in the projected difference between property tax payments and property tax breaks yield an apparent gross expenditure/investment on the part of the city and county of about $17.73 million, or about $126,600 per job created.

Back in the ‘hood: A case of piles

Site preparation on Craven Street is proceeding, with its most noticeable feature – noise from extensive pile driving has entered its sixth week, and residents say no realistic timeline for relief appears to be in sight, given that New Belgium’s own schedule continues to be shuffled and updated.

The hill above Craven Street is home to one of Asheville’s oldest cohesive neighborhoods, a warren of narrow, winding streets dotted with modest homes, from 1920’s bungalows to early ‘50’s ranchers. On weekdays, the process of sinking steel H-bars into bedrock (necessary to stabilize the site’s footprint because it lies in a flood plain) begins about 7:15 and continues all day. On Saturdays the work begins about 8:00 a.m. Sundays are quiet. “It’s a good thing,” one resident says. “That banging is like Chinese water torture, only a whole lot louder.”

Prior to beginning work, New Belgium candidly let residents know, mostly by means of its Asheville website, that they were going to be making a lot of noise once this phase of site preparation started. The company rated the noise level as a 4 on a scale of 5, though no values were assigned to the numbers and some neighbors have wondered aloud what a “5” might be, if what they say they’re contending with only rates a “4”.

But, they say, New Belgium has been less candid about when the banging will stop. The company’s own timeline still reads, “Site Preparation: November 2013 – Spring, 2014,” and “Building: Late Spring 2014.” But observers have pointed out that the bidding process was only completed last week. (See above.)

One thing residents and others say they have learned is that questions or criticism of New Belgium do not play well among brewery supporters, to whom New Belgium is the jewel in the crown of Asheville’s title, “Beer City, USA.”

A group of citizens, mostly living in West Asheville, maintain a Facebook page called “New Belgium Watch,” which serves as an exchange of information about the brewery’s progress and promises. The site, members say, is also closely monitored by New Belgium proponents and by the company itself. Jonathan Wainscott, a resident of the neighborhood, co-founder of “New Belgium Watch” and a former candidate for Asheville City Council, said in a recent post:

“All we have ever wanted is for the full costs to be included in the public discourse, along with all the benefits everyone is eager to applaud. In that pursuit, we (I) have been called bullies, an incredible liar, petty fascists, knuckleheads and crybabies. We have been told to shut up, get earplugs, and move. New Belgium wants respectful communication, but deals exclusively with people who have used this language in their support.”

Wainscott even received one e-mail from a man who had obviously taken time to do some homework on Wainscott’s own residence. The sender said, in part:

“I would like to help out by purchasing the two pieces of property that you own near the brewery site, since you are so displeased and would clearly like to relocate. Although a combined .23 of an acre isn’t much, I could certainly use a small rental in the West Asheville area, once the New Belgium project is finished and the area skyrockets in popularity. Perhaps it would make a good starter home for a brewery worker, with easy commute to work. The Buncombe County GIS lists the house at less than 800 square feet, so I can certainly understand your attachment to such an opulent domicile but I’m prepared to offer you 75% of current tax value.”

Wainscott did not speculate as to what would happen if he asked to see the color of the man’s money.

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