To see how a small business can transform a neighborhood, just follow the barrels.
About 30 years ago, beer lovers wanting to create their own drinks started taking over abandoned old buildings in rundown city districts, refitted them with tanks, kettles and casks, and started churning out beer. The byproduct was a boom in craft beer drinkers: Barrels shipped have more than doubled in the past decade, according to trade publication Beer Marketer’s Insights. Craft beer now makes up nearly 7 percent of the slow-growing U.S. beer market.
But beer drinkers weren’t the only beneficiaries. The arrival of a craft brewery was also often one of the first signs that a neighborhood was changing. From New England to the West Coast, new businesses bubbled up around breweries, drawing young people and creating a vibrant community where families could plant roots and small businesses could thrive.
Marred by abandoned buildings and boarded-up stores after several hard decades, the downtown Ohio City neighborhood, just west of the Cuyahoga River, which divides Cleveland, was “perceived as dangerous and blighted” into the 1980s, says Eric Wobser. He works for Ohio City Inc., a nonprofit that promotes residential and commercial development while trying to preserve the neighborhood’s older buildings.
Enter Great Lakes Brewing, which opened in 1988. Over the years, it’s built a brewery and a brewpub from structures that once housed a feed store, a saloon and a livery stable.
“We resurrected all of them,” says Pat Conway, who founded Great Lakes with his brother, Daniel. “We’ve beautified the neighborhood, provided a stunning restoration.”
Other breweries and businesses — a pasta maker, a bike shop, a tortilla factory, as well as restaurants and bars — followed. Newcomers are flocking to the neighborhood, even though Cleveland’s overall population is still declining. The city repaved the quiet street next to the brewery, Market Avenue, with cobblestones, and poured millions into renovating the West Side Market, whose origins date back to the 19th century. Today, more than 100 vendors sell produce, meat, cheese and other foods there.
What’s going on in Cleveland is happening across the country. Trendy small businesses like breweries and younger residents have been returning to downtown neighborhoods in many cities across the U.S. The biggest cities are growing faster than the suburbs around them, according to Census data.
Another benefit of the brewery boom: Manufacturers like brewers typically pay workers more than service businesses like restaurants or shops do. That’s good for local economies.
But for some, the bubbles are bursting. In Brooklyn, N.Y., breweries are feeling the heat from rising real estate costs.
Outside of New York, costs are lower, and many brewery owners in other cities say they haven’t felt similar pressures from developers. But New York flashes a warning sign for what can happen when neighborhoods become popular.
One brewery, in Boston, is relatively protected. Harpoon Brewery opened on the South Boston waterfront in 1986, when it was surrounded by auto body shops and little else. Now the brewery draws more than 85,000 people a year for tours and tastings.
These days, the city is focused on redeveloping the area. New apartment and office buildings, restaurants and a convention center sit nearby. Harpoon recently negotiated a 50-year lease with the city. The rent will rise over time, but generally, long leases provide protection from spikes that can happen when an area becomes so popular that property values skyrocket.