Local Option Review Team

AGENDA LOCAL OPTION REVIEW TEAM Wednesday, October 30, 2019 1:00 p.m. Fremont Municipal Building 400 East Military Avenue Fremont, Nebraska 1. Call to Order 2. Approval of minutes from September 5, 2019 meeting. 3. Consider adjusting set meeting time. 4. Review Fund Balance and Summary of Local Option Economic Development Fund Projects. 5. Consider Local Option Economic Development Fund Application for 505 Brewing Company. 6. Adjourn. This agenda was posted at the Municipal Building and was distributed to the members of the Local Option Review Team on October 18, 2019. The official current copy is available at City Hall, 400 East Military Avenue. A copy of the Open Meeting Law is posted for review by the public.  CITY OF FREMONT LOCAL OPTION REVIEW TEAM SEPTEMBER 5, 2019 – 12:00 p.m. A meeting of the Local Option Review Team was held on September 5, 2019 at 12:00 p.m. in the 2nd Floor Conference Room at 400 East Military Avenue, Fremont, Nebraska. The meeting was preceded by publicized notice in the Fremont Tribune and the agenda displayed in the Municipal Building. The meeting was open to the public. A continually current copy of the agenda was available for public inspection at the office of the City Administrator, 400 East Military Avenue. The agenda was distributed to the Local Option Review Team on August 30, 2019 and posted, along with the supporting documents on the City’s website. A copy of the open meeting law is posted continually for public inspection. ROLL CALL Roll call showed Members George, Jacobus, Benson, and Oliva present. McClain, Vobejda, and Horeis absent. 4 present, 3 absent. Others in attendance included Lottie Mitchell, City of Fremont; Jody Sanders, Director of Finance; Dave Goedeken, Director of Public Works; Brian Newton, City Administrator; and Garry Clark, Director GFDC. APPROVE MINUTES Moved by Member Benson and seconded by Member Oliva to approve the minutes of the May 2, 2019 meeting. Benson, Jacobus, George, and Oliva = aye. Motion carried 4-0. REVIEW FUND BALANCE Mitchell reviewed fund balance. Moved by Member Jacobus and seconded by Member Benson to receive fund balance. Benson, Jacobus, George, and Oliva = aye. Motion carried 4-0. CONSIDER REQUEST TO PLEDGE ADDITIONAL LOCAL OPTION ECONOMIC DEVELOPMENT FUNDS FOR MORNINGSIDE BUSINESS PARK INFRASTRUCTURE IMPROVEMENTS Mitchell gave staff report. Moved by Member Jacobus and seconded by Member Benson to approve the request to utilize Local Option Economic Development funds in the amount of $1,000,000 for Morningside Business Park Infrastructure Improvements. Benson, Jacobus, George, and Oliva = aye. Motion carried 4-0. ADJOURNMENT Moved by Member Benson and seconded by Member Oliva to adjourn at 12:35 p.m. Benson, Jacobus, George, and Oliva = aye. Motion carried 4-0. 1  STAFF REPORT TO: Local Option Review Team FROM: Lottie Mitchell, Grant Coordinator DATE: October 30, 2018 SUBJECT: Adjust Regular Meeting Time Recommendation: Move to adjust regular meeting time for Local Option Review Team Background: The Local Option Review Team currently meets the first Thursday of the month if an application has been received. New deadlines for submitting agenda items to the City Council have been imposed. In an effort to continue to provide efficient service to applicants, please consider adjusting the regular meeting time. It is recommended that applications would be due by the 10th of each month and that the Local Option Review Team would meet the last Thursday of each month. This will allow time for staff to review the applications and publicize the committee meetings, committees to meet and review, and have the recommendations ready to take to the first City Council meeting of each month. If no applications are received, then the committee will be notified that there is no meeting that month.  505 Brewing Company Business Plan Tim Gesell, Owner Shawn Morrow, Owner/Head Brewer 505 Brewing Company 1 Executive Summary 505 Brewing Company is a start-up microbrewery targeting the 505 Main Street building as its home in downtown Fremont, NE. We have a passion for great beer and seeing downtown markets flourish. Our vision is to be Fremont’s brand, Nebraska’s brewery. Our mission is to build off of the German beer purity law of water, malt, hops and yeast while adding three more critical ingredients: Art, passion, and community. We plan to partner with a Lincoln, NE based brewing equipment manufacturer. This will bring the best equipment in the area to our brewery. This will allow us to offer the best in quality products. The byproduct and benefit of the brewing process is our grain can be given to local farmers for their livestock. Our products will be our core brews, specialty/seasonal brews, guest taps from local breweries, Nebraska spirits, and wine. Our non-alcoholic offerings will be our own root beer and cream soda. We plan to offer food through a partnership with the restaurant on the main level or area food trucks. Our plan in year one is to target local marketing and growth in our tap house along with local establishments. We want to build our brand in Fremont and engage the community to make our brewery theirs. In year two we plan on installing a canning line and branch out to distribution all around the state of Nebraska. The sky is the limit from there. Products 505 Brewing Company will have four core brews: ● Saison – Belgian golden ale. Fruity, spicy flavor and aroma with a crisp finish. ● American IPA – American take on the traditional India pale ale. Hop forward, citrus flavor and aroma with a crisp dry finish ● Pale Ale – Well balanced, golden in color and steeped with American hops. ● Coffee Stout – Dark ale brewed with roasted malts and coffee. Rich, smooth and well balanced with hints of coffee and chocolate. Specialty/seasonal brews Root Beer and Cream Soda made in house Other: ● Other local brewery guest handles ● Nebraska spirits ● Wine ● 505 Brewing Company apparel and logo product 505 Brewing Company 2 Market Analysis Summary Overall U.S. beer volume sales were down 1% in 2018, whereas craft brewer sales continued to grow through year end at a rate of 4% by volume, reaching 13.2% of the U.S. beer market by volume. Craft production grew the most for microbreweries. Retail dollar sales of craft increased 7%, up to $27.6 billion, and now account for more than 24% of the $114.2 billion U.S. beer market. Now three quarters of the way through 2019, projected at-the-brewery sales growth estimates are slated to close out the year at 13% (about 400,000 barrels), to as much as 3.5 million barrels in 2019. Of this total growth, 4.5% is due to new products released or launched in 2019. Currently Fremont has over 26,000 people and is in close proximity to Omaha and Lincoln markets. This makes Fremont a prime location for market success. Sales Strategy, marketing and Forecast 505 Brewing Company plans to establish itself to the local market by primarily focusing on tap room sales and growth in year one. We also plan to market and sell products to local establishments. Our focus will be on engaging the community and generate excitement over our brand to make it Fremont’s own. We plan to get involved in as many activities and events around Fremont as possible. Creating an experience through our brewing and tap house. Marketing will rely heavily on engagement with the Fremont business community and the Fremont public at large. Partnerships, special events, product sharing, product raffles, “Mug” clubs, limited releases and locally sourced ingredients and goods are at the heart of the outreach to both other local business and the community. Our plan will be to carry both a strong physical presence in the city and also rely heavily on digital outlets and social media. The goal is to draw both digital and physical traffic to our brand and to downtown. Starting in year two we plan to install a new canning line and branch out further in to distribution. This will allow us to make a presence across Nebraska and beyond. The plan is to be available in local/regional bars as well as retail outlets, such as local markets and corner stores. We will also aim to distribute through supermarkets, but we envision getting shelf space in national supermarkets will be more difficult and more expensive. 505 Brewing Company 3 The following is the sales forecast for the next three years. Management Summary The following is the management summary for 505 Brewing Company: ● Tim Gesell – Owner – Will manage financials of the business. ● Shawn Morrow – Owner/Head Brewer – Will manage the day to day operations and is responsible for market growth. 505 Brewing Company 4 Personnel Plan 505 Brewing Company's personnel plan is as follows: Financial Plan The following is the financial plan for 505 Brewing Company: 505 Brewing Company 5 505 Brewing Company 6 Tim Gesell - Owner 1 Shawn Morrow – Owner/Head Brewer October 30, 2019 Agenda: Main Street (looking south) Fremont, NE  Introductions  Why a Brewery?  Business Case: 505 Brewing Company  Financial Ask  Questions? 2 It creates a catalyst to generate excitement and downtown growth  “Craft breweries are on an impressive upswing in Nebraska, contributing $465 million annually to the state’s economy and contributing jobs at a faster clip than for the manufacturing sector as a whole. It is important to understand the contributions this growing business sector is making on the economy, community vitality and Nebraska tourism.”  Source: Omaha World Herald  Toppling Goliath – Beer Release Events: “The events are big business in Decorah, too. The brewery estimates its release events add about $1 million to the local economy, including money spent at the brewery, and on food, gas, lodging, and other shopping.”  Source: Des Moines Register  Michael Sothan – Executive Director Main Street in Beatrice: “Our brewery has had a very positive impact. It has increased foot traffic, increased bike traffic, has spun off several new shops, and makes downtown more of a destination. It has provided for fun partnerships for us and them and fellow businesses. They have become a gathering places.”  Source: Cortney Schaefer  Haymarket – Empyrean Brewing Company – Shawn Morrow • Editorial Staff (2019), ‘Craft breweries open up new opportunities for Nebraska communities’, Omaha World Herald, July 18, 2019 • Austin Cannon, ‘How Iowa’s Toppling Goliath Became a Must-Stop Destination for Craft Beer Fanatics’, Des Moines Register, August 27, 2019 3 • Cortney Schaefer provided quote from Michael Sothan - Executive Director Main Street Beatrice, September 9, 2019  Key piece of the 505 Main Street Revitalization Project Historical Renovation 4  505 Brewing Company  Drives tourism and downtown growth Beer  Projected revenue of $1.2 million in Year 1 Guest taps from other Nebraska breweries Product Offerings − Increasing to $2.5 million in Year 3 Select wine  Creates 10 above average paying positions with benefits  5 full-time and 5 part-time Non-alcoholic beverages  Partner and collaborate with local businesses Food from main level  Engagement in the community restaurant Local Food Trucks 5  Total proposed investment: $1.25 million  Breakeven point on investment: 24 months Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Order Brew Equipment Architect Activity Construction Move-in/Furnish Brew 6  $165,000 Grant  5 full-time positions  5 part-time positions  Increased tax revenue for city  Profits to be given back to employees and invest in future projects for 505 Brewing Company and the downtown Fremont revitalization efforts 7 8