MassDevelopment — a public-private economic development agency that works to stimulate economic growth across Massachusetts — has issued a $7.7 million tax-exempt bond on behalf of Landreau Realty, LLC, a real estate entity for Tree House Brewing, to help the company build its new 150,000 barrel brewing facility.
MassDevelopment helped facilitate the issuance of the bond, which totals $7,740,000, on Tree House’s behalf. Country Bank, based in Ware, Mass., purchased the bond, according to Margaret Quackenbush, a spokeswoman with MassDevelopment.
Tree House co-founder Nate Lanier told Brewbound the $7.7 million represents only a portion of the financing for the 53,000-square-foot project. The entire expansion will cost an estimated $18.5 million, according to a June public hearing notice posted to the MassDevelopment website.
Tree House will fund the remainder of the expansion with an equipment term loan, also from Country Bank, SBA financing and cash flow, Lanier added.
In a press release, MassDevelopment said it enhanced Tree House’s bond with a “mortgage guarantee,” which increases the amount of financing a bank would typically offer to a borrower.
“With a guarantee, MassDevelopment covers the difference between a bank’s maximum allowable loan advance rate and up to 90 percent of the property value,” Quackenbush told Brewbound.
Tree House first announced plans to expand in March.
When finished, the new Tree House brewery will be capable of producing upwards of 150,000 barrels of beer a year.
Tree House could produce as much as 13,000 barrels of beer in 2016, Lanier said.
The beer company landed the MassDevelopment bond after two of the agency’s staff members read an article in the Worcester Telegram & Gazette detailing the brewery’s planned expansion in Charlton, Mass., Quackenbush said. Days later, a meeting between MassDevelopment, Tree House and Country Bank was set and initial plans to finance the project were set in place.
Since 2013, MassDevelopment has helped finance a number of New England craft breweries, including Notch Brewing (Salem), Idle Hands (Malden), Lord Hobo (Woburn), Newburyport Brewing Company (Newburyport), Night Shift Brewing (Everett) and Cape Ann Brewing (Gloucester).
Financing for those companies’ projects came primarily via equipment loans and ranged between $200,000 and $700,000.
Lanier said the company still plans on opening the doors to its new facility in 2017.
“We feel decent about our mid 2017 push,” Lanier wrote in an email. “But we have a tremendous amount of work ahead of us and the best construction crew you can imagine on our side.”
Tree House’s Twitter profile shows that much work is still to be done.
More hustle. pic.twitter.com/9koMLjt5gT
— Tree House BrewingCo (@TreeHouseBrewCo) September 29, 2016
Tree House has achieved cult status as a hyper-local brewery in the New England area. With that status comes scarcity for a brewery with such limited production capabilities. The answer for a brewery not looking to disappoint its dedicated followers? A 50-barrel brewhouse expansion and fermentation tanks as large as 240 barrels.
However, Tree House won’t be maxing out its capabilities from the start; the initial plans call for producing up to 30,000 barrels annually.
And don’t look for Tree House to deviate from its direct-to-customers business model.
“We still think we can sell at least 30,000 barrels to a hyper-local market — whether that’s all in house or limited distribution throughout Massachusetts,” Lanier told Brewbound in March.