Ale Asylum plans new $6.75 million brewery near airport

2011-10-04T17:15:00Z 2011-10-05T20:11:17Z Ale Asylum plans new $6.75 million brewery near airportBARRY ADAMS | badams@madison.com | 608-252-6148 | @madnewsboy madison.com

Ale Asylum has found a new location that would move the craft brewery to a more visible site, increase the size of the business and provide enough room for significant expansion.

The company, currently located in a 10,000-square-foot building at 3698 Kinsman Blvd., is working with a developer to construct a $6.75 million, 46,000-square-foot brewery, tap room and restaurant at 2102 Pankratz St. on the North Side.

"This new location is just ideal," said Otto Dilba, one of the founders of the brewery, which primarily distributes in the Madison and Milwaukee areas. "With this move, we'll be able to make the jump and go statewide."

The building is planned for the corner of International Lane and Packers Avenue, one of the primary gateways to the nearby Dane County Regional Airport. The new location would provide the space typically found in an industrial park.

"This site has both of those. It's zoned for manufacturing, and it's a highly visible, highly exposed site," said John Schaefer, a DeForest developer and owner of CSI Construction Services, who is building the facility and leasing it to the brewery. "They've come a long ways in five years."

The brewery is owned by 23 investors with Dilba and brewmaster Dean Coffey serving as operating partners. The brewery has a 15-year lease with Schaefer and is financing $1.75 million in equipment through First Business Bank in Madison.

Ale Asylum opened in 2006 and began brewing 2,500 barrels a year. In 2010, the brewery made 7,200 barrels of beer compared to 5,500 in 2009 and is on track to reach 10,500 this year.

The new facility would allow for the production of 46,000 barrels a year and increase the number of employees from 22 to between 40 and 50 within the first two years. After establishing a statewide presence, the brewery plans for distribution in Chicago and Minneapolis.

"Obviously, we're really excited about the move," Dilba said.

The project is scheduled to go before the city's Urban Design Commission on Wednesday. If it is approved by the commission and ultimately the City Council, Schaefer said he would like to begin construction in November, which would allow brewing to begin by mid-summer.

The project has the support from more than a dozen business leaders, including Scott Heinig, chairman of the Northside Economic Development Coalition and executive director of the Northside Planning Council.

"The proposed facility presents an opportunity for incredible economic investment in north Madison and has the potential to serve as an economic catalyst for further investment in the future," Heinig wrote in a letter of support.

Eye to future expansions

The key in selecting a new location for Ale Asylum was the ability to grow, according to those working on the project.

The brewing company had seriously considered a 45,000-square-foot facility on the former Mautz Paint site on East Washington Avenue, but the location did not provide room for expansion.

That's why the brewery is teaming with Schaefer, who is leasing a 4.5-acre site from Dane County for the next 99 years for the construction of a 46,000-square-foot brewery.

The property is adjacent to a 4-acre site that eventually could increase the size of the brewery to 130,000 square-feet and allow production to surpass well beyond 100,000 barrels a year. That's more than 10 times the 10,500 barrels the brewery is scheduled to make this year.

"That was the key component," Dilba said of the extra land.

Matt Apter of Cresa Partners, a real estate company that helped Ale Asylum find a new location, said finding the right spot that allowed for exposure and growth was challenging.

"It was very difficult" Apter said. "They have some pretty great plans, so they needed that ability."

Many of the brewers in the area are brew pubs, but Ale Asylum — like New Glarus Brewing Co., Capital Brewery in Middleton and Lake Louie Brewing in Arena — is a production brewery focused on distribution.

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