Feb. 27, 2018

MIDDLETOWN, N.Y. — As Equilibrium Brewery opened for business here on a recent Saturday morning, fans were already lined up outside for a fresh batch of its hazy-colored ales.

The travelers, who came from Massachusetts, New Jersey, Pennsylvania and Rhode Island, snapped up as many cans and bottles as they could buy, at $16 a four-pack. After a sip or two by tailgates, some headed out in search of a meal, their tourist dollars funneled into a downtown betting on a rebound.

“We are having an impact on the community, for sure,” said Ricardo Petroni, a co-owner of Equilibrium, which opened in 2016 in a former meatpacking plant that had been seized over nonpayment of taxes. “When we moved here, you could see old scars of bad times,” Mr. Petroni added, “but you can tell that now, new things are flourishing.”

Across the country, in once-bustling manufacturing centers, breweries are giving new fizz to sleepy commercial districts. If alcohol-based businesses were blamed for a breakdown of society in the Prohibition era and beyond, breweries are now being seen as a force for good.

“The economic ripple effects are definitely there,” said David Barnett, a Chicago-based senior research analyst for JLL, the commercial brokerage firm. Breweries “create a cool tourism aspect for out-of-towners, but it’s been good for residents as well.”

In 2016, there were 5,301 mom-and-pop beer makers, which are typically known as craft breweries. That figure rose from 4,548 in 2015, when the country surpassed its historic high-water mark of 4,131 breweries, set way back in 1873, according to the Brewers Association, a trade group. (Zero were recorded from 1920 to 1932, during Prohibition.)

Although they are small, those breweries pack an economic jolt. In 2016, they contributed about $68 billion to the national economy, the association said.

In recognition of their importance, craft breweries received an unexpected gift in the recent rewrite of the tax code. The Senate included a provision that lowered the tax rate on beer produced in the United States, particularly for small breweries. That special treatment comes on top of generous subsidies from local communities eager to bring business to their struggling industrial districts.

The Northeast, Midwest and West still represent much of the industry, but 36 states doubled their production of craft beer from 2011 to 2016, according to Mr. Barnett, who last year wrote “The Craft Beer Guidebook to Real Estate,” a JLL report. “It’s hard to ignore an industry that has grown this much,” he said.

In searching for places to make specialty beverages like sour beers and stouts, breweries seemed to adhere to a formula. They like early-20th-century buildings with up to 10,000 square feet and lofty ceilings, said Sandy A. Barin, a vice president with the commercial real estate firm CBRE based in Minneapolis who counts brewers among his clients.

Usually renters instead of owners, breweries in Minneapolis typically sign five-year leases and pay $4.50 a square foot annually, Mr. Barin said, although tenants are usually on the hook for renovations, even if landlords offer credits for finishes like paint and carpeting. “The setup is usually pretty expensive,” he said.

Breweries also seek up-and-coming locations that are within walking distance of houses and apartments, according to Mr. Barin, who added that the popular neighborhood in his city is North Loop, a former manufacturing district that churned out plows and threshers.

Courtesy of the New York Times