Municipal bonds fund construction of brewery.

• Author: Lawler, Ryan
• Position: News & Numbers - Brief article

The City of Richmond, Virginia, recently completed a general obligation issuance supporting the construction of a brewing facility for Stone Brewing Company. The public-private partnership is expected to be the first of its kind in which a municipal entity issues debt to support beer production by a private company. The $23 million issuance is dedicated to the redevelopment of a property near the James River that has remained vacant since a flood in the 1970s. City officials anticipate the creation of 288 jobs once the brewery is fully operational.

Similar tax-supported agreements exist elsewhere, using traditional tax incentives, but this arrangement is significantly more involved, as Richmond taxpayers are ultimately responsible for repaying the debt. The city will own the facility, and Stone Brewing will operate it under a lease agreement The company's payments are expected to match or exceed the required principal and interest payments on the debt.

Historically, craft breweries have been solid...