Beermaker eyes Niagara
Nickel Brook Brewery considering relocation from Hamilton for $16-million facility
If all goes according to plan, John Romano wants to do for beer in Niagara what local vineyards have done for wine.
The president of Nickel Brook Brewery Inc. is eyeing Niagara as the new home for his operations and hopes not just to open another alehouse, but a multimillion-dollar “destination location” that includes the brewery and a dining centre that builds on the best practices of Niagara’s wine industry.
Romano’s Nickel Brook Brewery is leaving its Hamilton location — which is operated in partnership with Collective Arts Brewing — and is looking for a new home in Niagara, Romano said.
“Nickel Brook has quadrupled in size in the last three years,” Romano said. “So we are looking at a few locations in the St. Catharines and Niagara area. I am looking to build a 30,000-squarefoot, state-of-the-art brewery.”
Romano said unlike the smaller micro-brewery experience, he wants to have a location that provides the same alcohol and food experience that tourists find in wineries.
He said Nickel Brook produces a lot of fruit beer and makes regular trips to Niagara for produce.
“It makes a lot of sense to be here at the source,” Romano said.
Nickel Brook would hire about 50 people to start, Romano said, because staff in Hamilton are staying with the Collective Arts brewery. In a few years, he said, Nickel Brook will also move its Burlington operations to Niagara, which could result in another 50 jobs locally.
Romano is in negotiations with Niagara Region to purchase land. He said an agreement has not been finalized and did not want to discuss the project further until the deal is done. However, according to regional documents obtained by The Standard, Nickel Brook says it will invest $12 million to $16 million in the brewery. But the land sale under consideration may violate the Municipal Act.
A confidential regional report authored by regional director of economic development David Oakes recommending the sale to Nickel Brook says the brewery company has offered to buy nearly 11 acres of land (4.4 hectares) on Lakeshore Road in St. Catharines, currently a well maintained peach orchard, for $1 million, or about $93,000 an acre.
However, a market value assessment of the land said it is worth more than $130,000 an acre. At that value, the market value of the land would be more than $1.4 million.
“The risk associated with the current offer is that it could be found in contravention of Section 106 of the Municipal Act, 2001,” wrote Oakes in the Sept. 6 report.
That section of the act “specifically prohibits granting assistance to a manufacturing or commercial enterprise by selling any property at below market value.”
How serious that risk is will depend on “a factual analysis of whether a sale at the proposed price and land area constituted a prohibited benefit to the proponent.”
The report also says there has not been an appraisal of the land’s soil conditions and no environmental impact analysis has been done.
As a result, Oakes concluded the market value appraisal, which was done by D.J. Penwarden Appraisals, “is an indicator of fair market value but not determinative of the actual value … In the absence of a competitive market, the actual value remains unknown.”
Regional bylaws that govern the sale of public land do permit sales at less than public value under some conditions.
All sales of surplus land must be at market value, according to the bylaws. In a case where there is only one potential buyer, however, the Region “may negotiate a price with a view to obtaining the most favourable terms possible, but shall not negotiate a price discount of more than 50 per cent the market value of the land.”
The bylaw does not indicate how to navigate the discounted sale of public land with the provisions of the Municipal Act forbidding granting assistance to commercial enterprises.
In the report, Oakes pointed to four steps the Region could take to mitigate the risk of violating the Municipal Act: opening to the sale of the land to public bidding, “proceed to dispose of the subject property strictly in accordance with all normal steps per the bylaw,” propose an alternative land sale scheme with Nickel Brook, or seek further clarification between the proposed sale price and the land’s evaluated worth.
Oakes noted in the report these steps would reduce the risk of violating the act but “could result in a loss of the opportunity to capitalize on a significant investment attraction effort that delivers both new assessments and employment growth in Niagara.”
In an emailed statement, Oakes said he could not discuss a confidential report, but did say that council did approve regional staff moving forward with negotiations for the sale of the Lakeshore Road property to Nickel Brook.
“Any details regarding this direction are still being discussed with the proposed purchaser including a number of factors that would impact value and price, as such it is too early to comment,” Oakes said.
Oakes’s report points out that if left unused, the Region is missing out on at least $69,000 in property tax revenue annually. The report estimates the Nickel Brook brewery could generate $345,000 in tax revenue for the Region by 2019 and $690,000 by 2019.