By Tom Brown
It won’t be long before customers will relax along the banks of the Winooski River in Montpelier and sip a Bee’s Knees cocktail made from spirits produced on site at Vermont’s newest distillery—and Montpelier’s newest tourist destination.
The walls are up and the five large stills will soon be in place at Caledonia Spirits’ 27,000-square-foot distilling, research, and bar facility on Barre Street, where owner Ryan Christiansen aims to open, hopefully, by Memorial Day.
In addition to attracting visitors from around the Northeast, the $10-million project will triple Caledonia’s production and provide space for research and development of new spirits, Christiansen said. The plant will replace the company’s current facility in Hardwick, which did not have the space needed for tours and tastings.
“That’s part of the design of this facility,” he said of the spacious bar area, which will also be available for community events. “Hardwick is a very small tasting experience, and it’s really important to us that everything is being distilled here. There’s nowhere else where you can see spirits being produced all the way to the cocktail except our facility.”
Caledonia currently makes three honey-laced spirits—Barr Hill Gin, Barr Hill Vodka, and barrel-aged Tom Cat Gin. The expansion will allow the company to add a rye whiskey and explore new formulas in its research lab, Christiansen said.
All of the barley and rye used in the distillery is locally sourced from the Greensboro farm of Caledonia Spirits’ founder Todd Hardie, who hired Christiansen as head distiller in 2011. Hardie sold the company to Christiansen in 2015 to focus on farming. The honey is purchased from a family apiary in New York state, as Vermont beekeepers can’t provide the necessary volume, Christiansen said.
With the expansion, company officials hope to create more opportunities for Vermont growers. As demand grows, farmers might be willing to expand or diversify their production, knowing that there will be an identified market for their crop, the theory goes.
Caledonia employs 46 full- and part-time workers and plans to reach around 50 once the Montpelier facility is up and running, Christiansen said. The Hardwick distillery produced 16,500 cases of spirits in 2018, and the new facility will enable a much greater output.
One of the key features of the new distillery is the 32-foot Barre granite bar, crafted by Barre Tile. Comments from customers while they knosh on bar snacks and sample Montpelier-made premium spirits will provide direct feedback on product quality. That information is hard to get when there are distributors in between the customer and the maker, Christiansen said.
“It’s a hard business,” Christiansen said. “You sell to distributors, who sell to markets, so you are removed from your customers. That’s the importance of this operation. When we actually get to engage and serve a cocktail to a customer and hear their feedback, it’s an incredible value for us. This center is going to allow folks to come in and tell us what they like about our product, what they don’t like, how you drink it, when you drink it, that sort of thing.”
City Deploys Development Strategy
For a city sometimes criticized for not being friendly toward developers, Montpelier is making significant investments to lure new businesses of late. In addition to Caledonia Spirits, TimberHomes recently opened a new headquarters on Elm Street, a new downtown hotel and voter-approved city parking garage is planned, and more projects are expected under the city’s new tax district structure. (The garage/hotel project is currently on hold due to a permit appeal filed in court by a group of city residents.)
“We are hoping to create an atmosphere where good, responsible development that fits in Montpelier will feel welcome and be supported,” City Manager Bill Fraser said, pointing to the creation of the Montpelier Development Corp., which focuses on housing and economic development.
The city set aside $466,700 for public infrastructure improvements and offered Caledonia Spirits 10 years of reduced municipal property taxes as an incentive to locate here. The city estimates it will recoup $536,000 in the first 10 years from the new taxes and water and sewer fees on the facility. The tax incentive reduces the company’s tax bill by 50 percent to about $360,000 a year for the first 10 years, after which it will pay an estimated $720,000 a year, Fraser said.
“There is a very clear payback scenario,” Fraser said. “It’s in the long-term financial health interest of the city when that $360,000 jumps to $720,000 in taxes that 720 is coming in as revenue, same with the water and sewer bill.” All of that is money that would not exist if the company built elsewhere, he said.
Caledonia Spirits also intends to separate and ship the 200,000 gallons a year of stillage remaining from production to the city’s soon to be built biodigester at the sewage treatment plant, which will turn the organic waste into energy.
The city provided a road to the Barre Street property, improved a railroad crossing, and upgraded a water line that was scheduled to be replaced, among other public items. The company paid the extra cost of routing the water main around its buildings and agreed to provide public access to the river on its property.
The Barre Street site is on the eastern end of the city’s recently approved Tax Increment Finance (TIF) district, but the project was started before the TIF status was approved. Fraser said that the project is nonetheless representative of TIF-funded initiatives that may follow, and other businesses might decide to fill in the area between the new facility and downtown, which is roughly parallel to the proposed extension of the bike path.
“It was clear to us that it wasn’t just a factory to make gin,” he said. “It was clear that they want people to come to Montpelier, and we want to attract people to the community. These new businesses are consistent with Vermont values, and we think they are going to be a great addition to the community and may stimulate other activity in that area.”
Christiansen said the city has been welcoming throughout the process. “Montpelier showed that they wanted us to be in the neighborhood. We looked at a lot of towns before we settled on Montpelier,” Christiansen said. “I grew up in Plainfield so I’ve heard that Montpelier is a hard city to work with, but we had great support from the city. They have been progressive in solving problems.”