Trouble brewing: Charlotte beer-makers say zoning holds back untapped market

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CHARLOTTE — In 2011, Todd Ford quit his job as an airline pilot to turn his hobby of home-brewing beer into a legitimate career.

Ford said he saw Charlotte as a future hotspot for microbreweries, and he wanted to help make a name for the Queen City in small-batch craft beer.

“We recognized what we thought was an emerging market for craft beer in Charlotte,” said Ford, 50, who owns NoDa Brewing Co. with his wife. “There was just this vast untapped market here for beer.”

There was just one small problem: The city of Charlotte didn’t — and still doesn’t — have a definition for microbreweries in its zoning ordinance. So in order for Ford to open his business, the city’s zoning staff had to fit a relatively new use into what Ford called an “ancient” zoning definition that was restricting the ability of microbrewery owners to operate their businesses.

“They were trying to put breweries into the same category as heavy industrial uses,” he said.

In what seems like good news for brewers who have lamented the city’s zoning shortcomings, this month the city began a series of meetings on the topic of microbreweries as a zoning use and the possibility of creating a text amendment to the city’s zoning ordinance that, according to Ford, wouldn’t restrict breweries as much.

Joe Padilla, executive public policy director for the Charlotte-based Real Estate and Building Industry Coalition, a lobbying group, said there’s a lack of all kinds of definitions, not just for microbreweries, in the city’s zoning ordinance. That creates confusion among beer-brewers and others trying to follow the ordinance, he said.

“When there isn’t a clear definition for some type of use in the zoning regulations, it’s impossible to know where you can do business,” Padilla said. “And that, in and of itself, restricts those businesses.”

Kurt Hogan learned that lesson early on in his effort to bring a brewpub, a restaurant that brews its own beer, to Charlotte.

Hogan, 31, was a student working on a Master of Business Administration at Vanderbilt University in Nashville, Tenn., when he decided he wanted to make beer for a living.

He began doing extensive market research on cities and states where the beer market hadn’t been saturated. He said he knew the Pacific Northwest — with its hundreds, and maybe thousands, of craft beer-makers — was out of the question. Other markets, such as New England and California, were almost equally swamped in suds, Hogan said.

The Southeast was the one part of the U.S. that Hogan determined was most ideal for opening a brewery. After studying the region further, he settled on Charlotte as the place to open his brewpub.

But Hogan was in for a surprise when he tried to get his business started in Charlotte.

“I had no idea that it was going to be such a process to open this thing,” said Hogan, who owns Heist Brewery in NoDa. “I had to fight for two months with the zoning people before they would even let me open my doors.

“And, even then, I’m still not allowed to distribute.”

Industrial label

The city’s zoning ordinance restricts breweries to an industrial use.

Bridget Dixon, a planning coordinator in the city’s zoning department, said breweries fall under either the I-1 or I-2 zoning categories. I-1 allows “light industrial” uses, such as a bakery, while I-2 allows “heavy industrial” uses, such as tire-manufacturing.

Ford said microbrewers would be happy to fall under I-1 except for one big drawback: Under the zoning ordinance, if a brewery comes under the I-1 label, it must be 5,500 square feet or smaller, which brewers say is hardly enough space.

“5,500 square feet is nothing for a brewery,” Ford said. “We can’t possibly expect to make any money on distribution of our product if we are restricted to that size.”

Therefore, he said, microbrewers are essentially being forced to accept an I-2 zoning, but that’s not ideal, either: According to the zoning ordinance, the edge of a building on an I-2 property must be at least 300 feet from the nearest residence.

“We are pretty much restricted to the old industrial sites in NoDa or South End,” Ford said.

The problem with such sites is they are often removed from the residential areas where breweries thrive, Ford said, adding that I-2 zoning also limits expansion options.

In the case of Heist Brewery, since it serves food it couldn’t be zoned as an industrial use. But the zoning department didn’t want a brewery in a restaurant, either.

That, Hogan said, almost killed his dream of opening the brewpub.

“(The zoning staff) didn’t understand the use at all,” he said. “They kept telling me, ‘This is manufacturing. You can’t serve food here.’

“It’s not manufacturing, though. I’m making the beer to serve in-house.”

In July and August of 2011, Hogan said, he was in contact with Charlotte’s zoning manager on an almost daily basis, trying to figure out a way to open Heist.

On Aug. 31, 2011, Hogan said, he was finally able to reach an agreement with the city. It would allow him to open Heist Brewery — to brew and serve beer — but with a major concession: Hogan wasn’t, under any circumstances, allowed to distribute his product.

“It was huge to be able to open (Heist),” he said. “But, with that stipulation, they really killed any plans for my expansion.

“It’s all a matter of getting them to understand what I’m trying to do, but it seems they’re being very shortsighted about the growth of this industry.”

‘The city is receptive’

Such concerns, and perhaps others stemming from the handful of brewers in the Charlotte area, will be up for consideration during the stakeholders meetings, for which Ford is grateful.

“I get the feeling that the city is receptive to changing the rules as they are and bringing more of our business to town,” said Ford, who is a member of the stakeholder group.

Dixon, the city planning coordinator, is the zoning staff member responsible for overseeing the stakeholders group and, if necessary, drafting a zoning ordinance text that would limit restrictions on microbreweries.

Dixon wouldn’t elaborate, but she said she expects the stakeholder group — to which Hogan also belongs — to help bring about changes in the city’s zoning ordinance when it comes to microbreweries.

For now, Hogan said, the zoning ordinance is causing Charlotte to fall behind other places and could be hurting the city’s chances of producing more breweries.

“I would like people to recognize this is a growing industry,” he said. “Look at the rest of the country. I hope they open the doors for us.”

GUION can be reached at [email protected], (704) 817-1344 or on Twitter at @paytonguion.