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Will This Dog Hunt?

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Stone Brewing photo 140927StoneBrewing_zps0b59d19b.jpg Governor McAuliffe, stung by legislative setbacks that he foresaw when he campaigned saying that he didn’t want to be Governor if he faced a veto-proof General Assembly, is going to his advertised strong suit: jobs. It’s a gamble. And he’s playing a high profile hand with Stone Brewing.

“I’ve got to tell you, I’m excited. I have worked this like a dog.” – Governor McAuliffe

Stone Brewing wants to expand East Coast sales. A brewery located on our side of the Mississippi expands presence and reduces shipping costs. The potential sites for the new brewery have been narrowed to Ohio and Virginia. Each state has its own transportation advantages with Ohio arguably better situated. But only Virginia allows sales of Stone Brewing’s higher alcohol by volume (ABV) content brews.

There is something of an irony here. The competition is between Ohio and its Republican Governor, John Kasich and Virginia and our Democratic Governor. But it is Ohio’s Republican legislature that stands in the way of Ohio’s successful courtship of this employment plum.

“Stone Brewing expects to invest up to $60 million in its east coast brewery which will include a restaurant and retail area. The company anticipates 375 jobs would be created over 5 years.” – WOSU Public Media

Last December, Ohio state Democratic Representative Dan Ramos introduced a bill that would adjust the allowed ABV content, removing that obstruction, if it really is one, from consideration. It had bipartisan support and an almost equal number of the 21 cosponsors from each party. But this will be familiar to Virginians: Ramos’s House Bill (HB) 391 went to committee where it has since languished.

From what Stone Brewing has announced about the decision to locate, one can deduce that Ohio is the preferred location. The anticipated announcement allows time for Ohio legislative action on HB 391 but action has been slow coming. For once a Republican legislature may offer Governor McAuliffe an advantage. Sadly it isn’t Virginia’s.

As objectionable as this kind of thing is, there is wording in Ohio HB 391 that makes it clear that this is a contract between Stone Brewing and Ohio. It adjusts the ABV content from 12% to 21% which encompasses the range of Stone Brewing’s product line. It also doesn’t go into effect until a year after passage, about the time Stone could begin production. That ensures no other brewery could take advantage of a new niche market while Stone would be at a competitive disadvantage. If HB 391 passes, it is as good as or better than a tax incentive from the state.

The next session of the Ohio House of Representatives is scheduled for 12 November. Committee hearings are not scheduled until 25 November. From that, the earliest the Ohio House and Senate could possibly act if the bill is reported out of committee is 2 or 3 December. That falls within the decision window of “weeks to months” announced by Stone Brewing, further telegraphing Stone’s preference for Ohio.

So the Governor of Virginia has his work cut out for him if he is going to tree this prey. And to some extent, the bragging rights for his first year in office may rest on the outcome. Abandoning a number of constituencies along the way, there’s not a whole lot else to point to.  

  • Another Scott

    375 jobs over 5 years??

    Why is the governor engaged in a race to the bottom with Ohio?

    There were something like 3.9M jobs in Virginia in August.  Doesn’t it make more sense for the governor to do what he can to help existing employers expand than to grant special favors to an out-of-state company that is seemingly a tiny vanity project?

    There are countless examples of states bending over backwards to attract out of state companies, or keep existing companies from moving.  It often seems to end poorly due to increased infrastructure spending for them, coupled with a reduction in tax revenue.

    McAuliffe should spend more time, it seems to me, doing what he can without the legislature, and working overtime to change the composition of the House and Senate in the next election.  Yeah, it sucks that the legislature is so obstinate, but them’s the breaks.  Working “like a dog” on a tiny project like this isn’t a good investment of his time.

    But maybe I’m missing something???

    Thanks.

    Cheers,

    Scott.

  • Paba

    I’m from North Carolina. Lived there all my life til 2009. I can think of two very different instances of past governors throwing money after “hot” industries and the very mixed results they brought.

    In the early part of last decade, one of the hottest PC companies was Dell. They got millions to build an assembly facility in the Winston-Salem area. Today, that facility is gone, dead, buries. No jobs left, and the jobs that it created were not nearly what was promised. When’s the last time you saw someone buy a Dell?

    On the other hand, around 2007, they gave a similar subsidy to Google to create a facility. I don’t know specifics about that site, but it is somewhat of a selling point for bringing in and keeping other tech jobs, to have the Big Dog in town.

    Beer is having a big moment right now. These west coast breweries are following a boom trend right now and seeking quick distribution on the east coast. But the market is getting oversaturated. Read any travel journalism, and damn near every city in America has a “hot craft beer scene” right now. Are we on the verge of beer becoming as prevalent as sodas with meals in America (can you drink it at work yet? heh…)? Or is this a moment for beer right before it slips back into its usual spot (cupcakes, anyone?)? Stone isn’t MillerCoors. It’s not a conglomerate that’s always going to be sold at every restaurant and sports venue. It makes beers that necessitate slower production. Their sort of facility is less a factory than a workshop. It’s a big gamble.

    My .02? We’ve got a lot of “beer workshops” doing well that started right here. Why do we need a bigger one that’s not guaranteed to produce jobs past the end of this “beer boom.”