Hardwick Distillery May Enter Deal With City

by Carla Occaso

MONTPELIER/HARDWICK — For a company that started in Hardwick in 2009 making 235 cases of gin and vodka by distilling raw honey, Caledonia Spirits has come a long way. The company quickly expanded, won two international awards, and is now looking to set up shop distilling gin, vodka and whiskey — possibly in a proposed new 30,000-square-foot facility on Barre Street out on property at the foot of Sabin’s Pasture.

The company is owned by Ryan Christiansen, who bought it from founder Todd Hardie in 2015. According to the website caledoniaspirits.com, Hardie started out as a beekeeper who made honey and sold it for many years, but in 2009 he started distilling the honey and making Barr Hill Gin and Barr Hill Vodka. This caught on among consumers, causing Hardie to expand operations, bring on workers, and even start selling to urban centers such as Washington D.C. and New York City.

Now, the company is looking to create a distillery and customer showroom in Montpelier.

City Manager William Fraser announced in his written May 21 city council meeting agenda memorandum that he has a “draft agreement between the City and Caledonia Spirits for their proposed project on Barre Street. I am outlining the key terms of the agreement, the underlying thought process and benefits/risks of the agreement.”

The company is aiming to expand production and become a tourist attraction. Fraser writes in his memo the distillery would be on Barre Street “on a parcel currently owned by the Aja/Zorzi family.” The project would generate about $72,000 per year in real and personal property tax and $17,000 to $22,000 a year in water/sewer revenues.

This new development would generate revenue and would also bring “vitality to an underutilized section of the city and may spur additional development in that area, including Sabin’s Pasture.” And finally, it would combat an outside perception Montpelier is not business-friendly. Actively welcoming Caledonia Spirits would “demonstrate that businesses can and will invest in Montpelier and that the city is willing to be active partners.” Challenges include “soil issues, rail crossing complications, need to accommodate the city’s bike path, stormwater issues for both this project and the bike path, sewer connections over two other properties, issues with discharge into the city’s sewer system based on quality of effluent and a property owner who has insisted that bike path easements, Sabin’s accommodations and this project’s considerations all be tied together.”
But  Caledonia Spirits doesn’t want to get caught up in a bunch of bureaucratic snags.

“Caledonia Spirits needs to make a commitment to purchase the property in the very near future. They do not wish to buy the land without immediately proceeding with the project. They are facing a key business decision whether to invest in some improvements in Hardwick and mothball this project for at least three or more years or to make the commitment to Montpelier.”

The company wants to get a development agreement in place in order to move forward with financing. Fraser warns that waiting to iron out every last detail would delay an agreement and likely cause the overall project to slip through the City’s hands.

Therefore, a preliminary version of an agreement has already been drafted.

The City would have to help out by contributing toward upgrading the water/sewer infrastructure, which is already in the City’s master plan, according to Fraser’s memo. Caledonia Spirits would pay to relocate the water line to suit their needs as part of construction plans, but the City would fund the rest of the water line at a cost of around $21,700. The City would also provide a public road to the distillery at a cost of around $50,000 — and would involve building a rail crossing to access Caledonia Spirits. A rail crossing could possibly cost around $250,000.

Caledonia Spirits would build their own sewer connection to the existing system, but the agreement calls for a $40,000 City contribution towards the cost — expected to be recouped in future revenue. In addition, the distillery would likely need a sewage pretreatment plant that could cost around $100,000, with an added $5,000 to fund a preliminary study.

Revenues should exceed costs, though, according to the memo. A total of expense to the City is an estimated $466,700 compared to a total projected revenue of $536,000 within 10 years.

In weighing the pros and cons of the project, Fraser writes it would be an economic success and get work going on the bike path. It could also attract more business. However, the rail crossing and the pretreatment facility come with unknown risks. But overall, pushing the project through the process would keep in line with the City’s desire to welcome business and development.

Further information can be found at http://montpelier-vt.granicus.com/GeneratedAgendaViewer.php?view_id=2&event_id=1121.

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