Slow Boil: Prospective Brewers Tied Up in Red Tape
All Justin Engle wanted was a good local microbrewery.
Engle missed the local microbreweries from his home state of Colorado. When he moved to Houston, he only knew of Saint Arnold Brewing Company and Southern Star Brewing.
“I really missed that, and so did my business partner,” Engle told Free Press Houston. “We really enjoyed living in The Heights. We’re like, ‘This is something that The Heights could really use.’”
Starting Town in City Brewing Company turned out to be harder than Engle ever imagined. Opening a simple microbrewery becomes a tangled mess when you start navigating the web of of federal, state and city laws. The city’s brewery code is a mess, and it’s hurting potential businesses.
Problems Launching
Any alcohol-related business has to run a gamut of federal agencies.
Ever since the United States repealed Prohibition in 1933, the government has used a three-tier system. Any one business can brew alcohol, distribute it, or sell it to consumers. They cannot do more than one of those functions. The idea is to keep alcohol distributors from reaching pre-Prohibition levels of influence.
For breweries like Engle’s, that means getting special exemptions from the federal government in addition to permits from the state of Texas and Houston itself.
Engle said every microbrewery he has talked to has a different story about getting tangled up in municipal red tape.
“The city doesn’t really know how to handle breweries,” said Matt Schlabach, another prospective brewery owner. “They basically just treat them like food service operations, but there’s a lot of little things they make you do that you probably shouldn’t have to do, just because they don’t understand the process.”
Schlabach has been trying to open City Acre Brewing for 19 months. A combination of brewery issues and trouble with his work site have held up development. He called the process “endless” and refuses to guess when City Acre will open.
“The city has burned me too many times,” he said.
Opening a microbrewery was hard for Engle as well. Starting Town in City in The Heights became a grueling process when he realized that the area was a patchwork of wet and dry sections.
He had to dig out the 1918 agreement that annexed The Heights into Houston to map out the boundaries. Finding a workable location alone took a year.
After that, it was fourteen months of work to get city permits. Putting plans together and submitting paperwork kept Engle tied up for more than a year.
“If we were outside the city limits, we would have already been in production by now,” he said.
All small businesses have to run a similar gauntlet to clear city ordinances. However, the extra restrictions on breweries make it even harder for them to open.
“For the city of Houston, it’s stipulated by city health that the brew house is separated from the fermentation tank side,” Engle said. “Which in my head doesn’t make a lot of sense, ‘cause all throughout the rest of the state, and throughout the rest of the nation, the brewhouse and the cold-side fermentation can be in the same building and not be separated by a hot room.”
Microbreweries’ Surprising Power
That extra foot of red tape could hurt Houston’s growth and its culture. Microbreweries are more important that you might think. As Houston grows, it needs more ways to attract young people in their 20s and 30s. They move in, patronize local businesses, and help keep the economy lively.
One way to attract those people is to open more microbreweries. As craft beer sales skyrocket, they remain most popular with people 25-34. People around that age want better-tasting booze than the national brands.
Plus, having microbreweries helps enrich the area. How cool would it be to bike a half-mile down from The Heights to a local brewery that serves unique beer?
Solving the Problem
In fairness to the city, many of the problems Schlabach and Engle describe are basic issues inherent to opening any small business. Stuff like flood codes are universal, and they’re stringent so we don’t have to worry about water sloshing around our toes while drinking craft beer. The city makes new businesses jump through hoops for customers’ safety.
All the same, its laws could use updating. Engle would like the city to sit down with brewers and straighten out a specific code for microbreweries.
“We have too many systems, too many other bits and pieces that make our plans very complex,” he said. “They did with the restaurants and bars. I think the next step would be the breweries.”
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