What’s the beef between Encinitas and the brewing industry?

ENCINITAS — When a representative from the Encinitas 101 Main Street Association asked Tom Nickel to donate a few barrels of his popular beer for a local beer festival, Nickel said he was taken aback. Why, some might ask?

Because it was Encinitas.

The craft brewing industry in San Diego County has exploded in recent years, with the number of breweries growing from 37 to nearly 100 in just four years, with annual sales of $847 million and production breweries popping up in almost every major city in the county — except for Encinitas, which last had a production brewery in 1993.

“It is a commonly talked-about thing in the brewing industry that Encinitas doesn’t have a brewery,” said Nickel, a San Diego brewer who runs several popular establishments, including O’Brien’s Pub, Nickel Brewing Company and West Coast Barbecue and Brew. “The stigma is that it is anti brewery and an anti- craft-beer industry.”

Nickel declined the request in the following email:

“While I appreciate the invite, I can’t in good faith do anything to support Encinitas when the city is so hostile to the brewing industry.  Encinitas is the last major city in the county without a brewery — and that is because of the city government.  It feels very disingenuous to not have any breweries and then reach out to the brewing community for donations.  And I know that breweries have tried to open there and been turned down.”

The Coast News spoke to several major stakeholders in the region’s craft brewing industry, all who confirmed that Encinitas’ has an unfavorable reputation within its circles.

Many point to at least one instance in which a high-profile brewer attempted to open a “brew pub” in town only to abandon the plans and instead wound up in Oceanside. They also point to the well-documented struggle between downtown’s alcohol serving establishments and residents as a potential reason for the perceived indifference toward breweries.

Encinitas officials said they were unaware that the city had such a reputation, but acknowledged that a number of factors make it difficult for a production brewery to be established in the coastal community, including a lack of industrial space and an arduous process to re-zone other areas to accommodate such activity.

“What I can say is that this is news that I have never heard that we are ‘anti-brewery,’” Encinitas Planning Director Jeff Murphy said. “I was surprised to hear the word “hostile” to describe our stance against breweries. It is not that we prohibit them, we limit them to certain areas of town.”

Space Matters

As Murphy alluded to, unlike many of its North County counterparts, Encinitas does not have a very large amount of industrial space, where many breweries throughout the county are located because of the nature of production and delivery.

Encinitas’ industrially zoned properties are generally along either side of Westlake Street, a quarter-mile strip between Encinitas Boulevard and Requeza Street.

In contrast, Carlsbad and Vista have large business parks where breweries have popped up with high frequency. Oceanside’s Coast Highway has become a popular location for breweries. Escondido and San Marcos also have adequate industrial space.

Production breweries aren’t allowed in the Encinitas commercial locations, generally El Camino Real and Coast Highway, but a brew pub — where beer is made and served on site — is allowed with a major use permit.

In order to open breweries in other areas, Murphy said applicants would have to apply for a zone change — which, as a result of Proposition A passed several years ago, would require a public election.

“It definitely makes it tougher, and more time consuming,” Murphy said.

The San Diego Brewers Guild, the region’s advocacy organization for the craft-brewing industry, said it doesn’t take positions on individual cities and their so-called reputation with industry members. However, its president, Mother Earth Brewing Co.’s Kevin Hopkins, echoed Murphy’s sentiments about Encinitas’ zoning and available brewing space.

“I don’t think there is a race or competition out there that every municipality has to have a craft brewery,” Hopkins said. “Encinitas isn’t really laid out to have a production brewery, it doesn’t have a manufacturing light industrial district like some of the other cities.”

Dustin Hauck, a San Diego architect who has designed a number of San Diego’s breweries, said while Encinitas limited industrial space and added restrictions makes it tough to get a brewery off the ground, other locations, such as San Diego, have interpreted their codes to allow them to open up in other areas.

For example, San Diego city considers beer production along the same lines as bread production — which contains the same ingredients — so a brewery could open in a residential area in a location where a neighborhood bakery would open.

“It is all a matter of a jurisdiction’s understanding of what a brewery is and putting it in the code,” Hauck said. “To some extent, some jurisdictions have had their head in the sand understanding what they are and what they can do for their city economically. Encinitas is definitely behind the curve in that respect.”

Murphy said he was unaware of any proposals or plans for breweries that had failed or currently being proposed.

“Not to my knowledge,” Murphy said.

Missing Out?

When Jeff Bagby left the Carlsbad Pizza Port brew pub to open his own brewery, the brewing industry was in anxious anticipation as to where he would wind up.

During his six years with Pizza Port, Bagby had established himself as one of the nation’s top brewers, collecting a slew of medals at the Great American Beer Festival, the nation’s largest brewing competition.

Bagby, who attended San Dieguito High School and lived in Encinitas most of his life, settled on a spot in a commercial zone in downtown Encinitas, but about four months into planning he abandoned the plans for that location and set up shop in Oceanside, where the Bagby Beer Co. is thriving in its location on South Coast Highway.

Several stakeholders in the county’s brewing industry cite Bagby’s experience in Encinitas as a prime example of the city’s standoffish attitude toward beer makers.

“I understand if the city doesn’t have the infrastructure to host an operation like Stone Brewing, but for something like Jeff wanted to open, it would bring so many people from outside of the area, expand the tax base and provide jobs,” said Nickel, a friend and former colleague of Bagby. “When someone that high profile, one of the all-time medal winners at the Great American Beer Festival, is basically turned down by the city, that is mind boggling.

“Any other municipality would be begging for someone of his caliber to open a business,” Nickel said.

Bagby said his experience with Encinitas was not one of rejection necessarily, but not necessarily acceptance.

“They didn’t say ‘no,’ but they didn’t say ‘yes,’ and they certainly didn’t make it easy,” said Bagby, referring to a meeting he had in 2012 with representatives from the city’s planning, public works, engineering and other departments. “We never really came to a yes or a no, it was pretty much ‘you have a lot of work to do.’”

Bagby said that the city issues were compounded by issues with the landlord, who changed his mind about the use he wanted at the location.

Bagby said he thought the city’s indifference was strange, considering the city had just approved a winery, Solterra Winery & Kitchen, just a mile up the road in downtown Leucadia.

This attitude is in contrasts to nearby Vista, brewery representatives said, which is selling itself as a brewery-friendly city and has cut bureaucratic red tape in an effort to bring more breweries to town.

“It brings hundreds, if not thousands of people from outside of their community to their town, and they understand this,” Nickel said.

Bagby said he isn’t sure why the city was cool toward his proposal, but opined that perhaps city officials are reluctant to add any more alcohol-serving establishments in commercial areas — especially downtown Encinitas — due to the outcry of a group of residents over the problems associated with the bar scene.

Residents for years have complained about rowdy patrons who spill out of bars and dump trash, urinate and do other unsavory activities in the surrounding neighborhoods. The City Council has grappled with this, most recently boosting enforcement during last summer, with mixed results.

“To give the city credit, they are under pressure from people who don’t want more bars, or alcohol establishments downtown,” Bagby said. “But if you go east in Encinitas, there are tons of spaces in general commercial zones that would be great brewery locations. Why that hasn’t happened, I don’t know.”

Nickel, however, said it would be unfair if the city is allowing its problems with the downtown establishments to effect its acceptance of breweries.

“Breweries attract a totally different clientele than the bars,” Nickel said. “Breweries are family friendly, and the people that are there are there to enjoy the flavor and really savor the beer. People who are going to bars are there to get drunk, and they are causing noise and other problems, and that is not what the brew pub industry is all about.”

Bagby said, ultimately, he found a location in Oceanside that fits his business needs. He’s part of a rapidly expanding restaurant and craft-beer scene along Coast Highway that has led to a well-documented renaissance along the street once populated with automotive repair and sale shops.

“I love what we’ve been able to create here,” he said. “Do I wish I could have done it in my hometown? Sure, but it wasn’t meant to be. Maybe the right person with the right amount of money hasn’t come into town yet.”

Murphy insists that the city would vet a production brewery or brew pub proposal in the same manner it would any other project, and points to Solterra and the recently approved Lost Abbey tasting room in Cardiff-by-the-Sea as a testament to this pledge.

Lost Abbey, for the record, does not produce beer on site.

“From what I have been told, these businesses not only received their approval, but they are thriving as well,” Murphy said.

At least one council member, however, said a brewery might have a tough climb in Encinitas.

“I don’t feel we are missing the boat on anything; I think we have a great restaurant structure, and in terms of the hospitality industry, I think we’re fine,” said Councilman Tony Kranz, who added that he was unaware of any brewery proposals being nixed. “I don’t think we need to increase the footprint of alcohol serving establishments in the city, but who knows, if a proposal comes in and it makes sense, maybe we’ll reconsider.

“As it stands, we are challenged by some of the issues related to alcohol serving establishments downtown, and I’d like to continue to focus on addressing those concerns.”

Nickel said Kranz’s statement underscores his point: the city doesn’t realize what it is missing out on, which is one of the fastest growth industries in the region.

“The economic impact of beer on the region is staggering, it is in the hundreds of millions of dollars, and it is one of the largest revenue generating industries in the county,” Nickel said. “To deny the economic impact is to cover one’s eyes.”