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San Diego's Ballast Point Marks Virginia's Fourth Craft Brewery Score

Tara Nurin
This article is more than 7 years old.

At first, it was North Carolina.

In somewhat quick succession, three of the country's most beloved craft breweries chose to build much-ballyhooed east coast production plants in the Tar Heel State, launching a 21st century wave of eastward migration and establishing North Carolina as not just the preferred but the only destination for such large-scale expansions from west to east.

But then around two years ago, something changed. North Carolina's immediate northern neighbor loosened a few laws and started offering whopping incentives to entice western breweries to build in Virginia instead.

Three west coast breweries accepted the invitation and evened the score. Today, after months of speculation, San Diego brewery Ballast Point Brewing and Spirits has broken the tie. Virginia Governor Terry McAuliffe (who it's been reported is under FBI investigation for campaign finance fraud) has announced that Ballast Point is the fourth brewing entity to choose Virginia. The brewery and distillery, which sold to Constellation Brands last year, will hire 148 employees and spend nearly $48 million to buy and turn a commercial building near Roanoke into a factory and eventual tasting room.

“Winning this significant project was a top priority," McAuliffe said in a statement. "Virginia has truly become a leader in the industry and a destination for craft beer lovers. Today is another milestone of our ongoing success in diversifying and building a new Virginia economy."

McAuliffe met with Ballast Point executives at a West Coast Marketing Mission in September and further demonstrated his commitment to luring craft breweries by attending the annual Craft Brewers Conference (CBC) in Philadelphia earlier this month. Representatives from the commonwealth's economic development office staffed a booth at the CBC trade show, as well.

In exchange for its investment, the nation's 11th largest craft brewery will receive $1.4 million in tax incentives from Botetourt County, performance grants estimated at $650,000, a potential $250,000 grant from the state's agriculture and forestry industries development fund and waivers to permit fees. The state awarded a $2.4 million grant to the county to help offset the losses.

Local and national craft brewers have called these practices unfair in the past but according to Roanoke Regional Partnership officials, the project should have an overall annual economic impact of $376,442,866 on the region and spur creation of more than 540 secondary jobs.

“We see this project as key to our goal of attracting young people to live, work and play in Botetourt,” Joyce Kessinger, chair of the Botetourt County Economic Development Authority, said in a statement.

The Richmond Times-Dispatch reported last spring that Ballast Point representatives had been scouting the Roanoke area but expansion plans grew uncertain once Constellation later bought the brewery for $1 billion. However, Constellation, which is outperforming expectations, doesn't run any brewing operations in the U.S., and Ballast Point needs space to accommodate its 100% year-over-year growth. As of now, it distributes in more than 40 states.

Ballast Point spokesperson Hilary Cocalis says:

We have a great partnership with Constellation Brands, while we continue to operate as a standalone brewery. In other words, our own employees brew all of our beer out of our own facilities. As demand for our beer has grown, we have expanded (and continue to expand) our brewing production in San Diego to follow suit. We are seeing incredible growth on the East Coast, and we realized that an east coast brewing operation will better help us to ensure the freshest, highest quality beer is reaching all of our customers.

There's no timeline for the expansion yet.

Additional reporting by Andy Coppock.