That's Chapter One, Would You Like To Have Chapter 2?
You better you son of a b*tch I know the way.
We sure hope you do, Raleigh.
In July we incorporated Wiretap Brewing in the State of California, funded a bank account, and got to work looking for a "warehouse."
Historically Matt and I have started a few businesses and in each of those cases finding a place to call headquarters has been a product of picking a location, setting a budget, and leasing some space. In July when we began our search for 'just a warehouse' we had no idea we were setting out on what some people have told us would be the 'hardest part' of starting a brewery. They were not wrong.
Perhaps some of your entrepreneurial sorts will find this interesting but I thought it would be a service to anyone considering opening a brewery in California, or perhaps anywhere in America, to hear a little bit about the cliff you face in your first steps of entering this business. This is of course based on the concept that you're two guys, or girls, or a handful of folks, who gave up good jobs (in tech, as it were for us) to do something you believe in; you have a budget that you care about deeply since it involves your checking account and you just really want to make this work. If you're rolling in with a loan for half a mil and a slew of investors... cool. Throw money at things, and you will have to throw a lot. But if you're grassroots and trying to make it as a small business then welcome to the fireside chat.
First off, in California currently and probably for some foreseeable future, know that inventory of industrial type spaces is at an all time low. There are a lot of very big buildings (like 10,000sq.ft. or more) still available but unless you plan on a >$15,000/month rent this wont work for you. But before you even start using services like Loopnet or Craigslist to peruse what's sort of available you'll need to check the zoning first.
If you were like us the concept of zoning was something that you thought dictated what types of buildings were built. Well, that's still true but zoning has a major impact on what kind of businesses are allowed to operate in those buildings. So if you have a multi-tenant building somewhere there could be restrictions that say you can operate a nail salon but not a dentist office; or you can have a car wash on this corner but not a recycling center. Sometimes the zone is clear, sometimes the zone is very ambiguous. Sometimes and in some cities the zone defines what you're doing exactly -like "microbrewery" or "brewery"- but in other cases you're a "beverage manufacturer."
So before you even bother looking at a map of what your options for a place might be you need to first look at a zoning map to figure out where your options can be. Let's take some cases in point:
We received some excellent advice that we should consider incorporated cities outside of the City of Los Angeles during our search. One of those cities was Glendale, California. If you look at Glendale for industrial type spaces you'll see there's quite a few -not as many as others, but a lot- but the problem becomes that unless that building sits in a 'IND' 'IMU' 'IMU-R' or 'SF/MU' you can't operate there. Why? Well, Glendale defines a microbrewery as a 'beverage manufacturer.' A beverage manufacturer sits in the defined category of 'Light Industrial' and that category of operation is only allowed in those zones. 😬
Here's a quick snapshot of Glendale's current zoning map:
I clipped the top portion which included most of the legend but that's OK. Industrial and Industrial Mixed as well as the San Fernando Mixed Use are coloured aqua blue, purple-ish, and a bright yellow which you almost can't see at all. That image btdubs is clickable to the actual file if you'd like to have a look around.
The moral of the story in this case is that while Glendale currently offers massive economic and business development support to specifically breweries, unless you're right along the San Fernando Road corridor you're not zoned to operate. Bummer. Glendale FWIW at this time is offering cash incentives for naming beers after them, expedited use permits, concierge services for permitting process, and dedicated staff in economic development to help you. Major kudos to them.
Yep. So lets take a look at the next case in point:
Based on our existing research and after failing at a few lease offers elsewhere and not finding much in general we focused in on a few parts of LA and areas we knew either had existing breweries or just sort of 'fit the type' for expecting what the zoning would be. Ie. the Garment District probably didn't have a lot of options (and it doesn't). So we looked around The Arts District, Chinatown, Lincoln Heights, Boyle Heights, Frogtown, Atwater, Highland and Glassell Park, and sort of the general swath of land moving northeast from downtown LA, rich with industrial and commercial zoning. But what exactly about the zoning should you know? Great question.
LA has commercial and industrial zoning and increments the types of uses by a numerical factor. So a commercial place could be zoned C1 or C1.5 or C2, etc and the same goes for industrial which starts with M1 (manufacturing) and includes M1.5, M2, and M3 with M3 being the heaviest of industry. So how does one navigate this code? The first place to start is by understanding definitions of zoning code and what your business is defined as. In this case as we saw before where Glendale called a brewery a beverage manufacturer the City of LA actually defines a "brewery" in one of its zones and it's in zone MR2.
Wait, "R?" Yeah, LA also splits up certain zone levels into more complicated levels like this one where MR means Manufacturing Restricted, 2. This is the only zone in all of the code that defines a "brewery" and if you just search for MR2 zones in LA you'll be really disappointed, which leads to our next lesson. Zones often cite other zones to offer a blanket inclusion of certain uses into their zone. Fortunately for a brewery zone M2 includes all uses allowed in MR2, making zone M2 a candidate zone, and M3 calls all uses from M2 as OK as well so now your candidate zone list is MR2, M2, and M3. Phew.
Awwwww shit. What? Also wtf why isnt M1 permitting a brewery? If you look at the types of buildings in M1 they can be identical to M2 and M3, same goes for the neighborhood, streets, and everything else. Well welcome to navigating a big city and its zones. It just gets better from here.
We found a really cool spot at 341 S Avenue 17. Warehouse that was a carpet mill that got revamped into smaller warehouses with new electric, plumbing, roof, and windows. Goldmine. We checked LA's awesome zoning tool for that address and it comes up "UI". WTF. It turns out LA is making real progress revitalizing formerly heavily industrialized parts of town through the help of zoning that actually makes sense. I know, seems like a conflict in terms, but when I said it gets better I wasn't kidding this time.
The new zone called Urban Innovation is a part of a major project overlay and specific plan called the Cornfield Arroyo Seco. It provided revamped zoning making a lot of lighter uses of industry available but also including more commercial uses like retail and restaurants. It also revamped residential parts under Urban Village "UV" zone and open spaces under Greenway "GW". There's one more called Urban Center but you get the idea. Urban Innovation permits things like "beverage manufacturing including alcohol", things like bars and restaurants being directly permitted as "ancillary" to another major use -like a brewery, and fixed supercritical things like parking -requiring 0 spaces if none previously existed. Cool. Very cool.
So this all sounds good but how do you know for sure? If a brewery is defined in MR2 why isn't it specifically defined in this new zone? Well, at some point you need to define you own concluding factors so that when certain stars align you'll make the plunge to go navigate the awesome halls of city departments downtown. For us that time had come. We found a great space at a great price, the landlord wanted us there, we wanted to be in this up and coming part of town newly benefiting from revamped zoning, and to top it off the zoning seemed to indicate we were good.
Step 1: LA's Department of Building and Safety. They offer many "counters" to go and do a variety of things like just ask questions, talk to planners about zones, review plans, get plans approved, and navigate many other mountains of ministerial processes. FWIW just about every city has this. Glendale actually had an online appointment system which was cool. LA has a webpage with live stats on wait times based on enquiry type.
The Zoning Counter: this is pretty much where you want to start once you've nearly finalized on a building you think will work. In our case we came with two, one we knew was in a vanilla M1 zone, and our now home, in UI. The first address fell flat and most of our beliefs and concerns were validated that M1 just doesn't permit breweries. Lame. Okay so what about UI? Blue screen of death. The zone was so new the folks at the counter basically couldn't tell us anything except that we needed to talk to an actual City Planner. Right.
The City Planner: if you have the opportunity to meet with an actual city planner before anyone else you'll probably feel better about life but they'll probably ask if you talked to the zoning counter prior. You need to keep in mind it is a constant waterfall of people coming to the zoning desk and the answers can get a bit automated without consideration. Talking to a planner who is a part of the system and gives a shit can be a real gamechanger. In our case, it certainly was. The twist was that when we sat down with a planner rather than jumping straight into questions about UI and the specific plan of the zone we backpedaled and asked more about breweries and why only M2 and M3? Well, as it turns out there's an actual use definitions list on the planning website and it's updated annually. In the 2016 edition (dont know about prior) there's a "brewery" which again is permitted in the zones we said before, but there's also "microbrewery". 😂 And guess where that's permitted?
You can actually have a microbrewery in a WHOLE BOATLOAD OF ZONES. Major WTF now. After the planner pulled up this document and we picked our jaws up from the floor we asked what's the major disconnect? Well, as you'd expect there isn't really one except the city isn't as broken as you'd began to expect. Updating zoning is a very extensive process but what the city considers types of uses to be can be defined inside of actual 'definitions' like this here. Just like Glendale could specifically define a brewery but doesn't, LA drew a distinction between big and small. In almost verbatim from the planner "...microbreweries are a place people want to go to. They should be located next to other similar commercial uses and in proximity to residents." Amen. He further explained that the more traditional brewery classification is something you might think of in a large industrial operation where the public probably would not go.
But, like everything has been thus far, there are more wrinkles. The planner further explained that while zoning for our size of a brewery could work in a lot of places we ultimately needed to consult the local director of any specific plan overlays since -not in his words- they seem to have a sort of rule or say on what happens in their plan areas.
So now to the source: a conversation with the folks over at City Hall who manage the Cornfield Arroyo Seco Specific Plan. Initially this seemed daunting but the planner gave us a giant list of all the plans and what people are assigned to them. He also advised us on the username nomenclature for City emails which turned out to be incredibly fast and helpful. After a long winded introduction and attempt to explain our good intentions we got an email back that was very positive, pointed us to zoning information online, and informed us that any change of use within the zone 'generally' required an "administrative clearance" and further instruction on how to do that. Thinking that an administrative clearance had the possibility of going south we prodded a little more on what that was and what it did. Remarkably we got another clear explanation about the intent of the clearance and validating our use within the zone is permitted -which it is fortunately, but the need for the process to validate what's happening in a place the city obviously cares about.
In now what felt like an eternity of searching, finding, validating, invalidating, trying, failing, going forward, going backward, we finally had something conclusive. The landlord was good, the space was good, the contract was good, the city was good, the zone was good, so we inked the deal.
We are yet to finish the admin clearance and following that will still need a conditional use permit, a license from the state for a brewery subject to the completion of a CUP, and a federal alcohol tax certificate which is estimated to take up to nine months to receive. But as experts of pushing paper that now seems to be the easy part. If you're considering opening a brewery or have already embarked on the adventure and are questioning life our advice is a) be prepared that absolutely nothing will be simple, and b) do the work. Digging through zoning codes sucks. Going to various city agencies sucks. Permits cost money. Looking at buildings takes time.
Work hard, stay positive. Email us if you want help. A lot of people have given us tidbits of info along the way so far and it was all in a general positive spirit for one another to be successful. We'd be more than happy to pass that along.
 "sort of" is a reference that services like Loopnet are sorta like what Redfin or Zillow are for homes but for commercial spaces. However, Loopnet is not totally free. The free version lets you see about maybe half of whats really out there. For a cool $300/month you can get full access or you can get yourself a broker who already has access to that and better things like a different service called CoStar. We recommend the latter.
 If you're in the LA area we were fortunate to run into Mike Lanzarotta with NAI Capital. He's been a commercial broker for the last half decade and prior to that spent 20 years running a brewery called Crown City Brewing. Which, if you're from around the San Gabriel Valley should resonate. If you're a newcomer to the area then the current home of Congregation Ale House at Del Mar and Raymond in Pasadena has a nice tribute to Crown City inside (the former tenant). You should use a broker and using one who has experience on both sides of the equation and has so far found space for a lot of startup breweries means that things like nuances with cities, zoning, and various people you should talk to come as part of the expertise. If you want Mike's info send us an email.
 Her name is Zimas.
 You'll want to head to the Department of Building and Safety which is over at 201 N Figueroa in downtown. NOT City Hall!
 If you just read this and got bummed out and quit keep reading.