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BREWERY LOSES FINANCIAL FIGHT

Restaurant and pub will close today

By Scott Graves

and Fred Obee

Triplicate staff writers

The Jefferson State Brewery a symbol of Del Norte Countys hopes for economic growth closes for good at the end of business today, a victim of a unsurmountable debt and too little capital to expand.

We know how important that brewery is to that town, said Fran Adkins, who owns the restaurant and microbrewery with Bob Adkins and daughter Danny Adkins.

We hate to see this happen, but were not sorry we did it, Bob added.

On Monday, the family will hand the brewery and the land over to Humboldt Bank, which loaned nearly $1.4 million to the business. The brewery is located on the corner of Front and D streets.

The Adkins had received loans totaling more than $2 million dollars from the bank, the Small Business Administration, the county, the city, and the Tri-Agency Economic Development Authority.

The brewery also received start-up money from the Del Norte Economic Development Corporation and the Arcata Economic Development Corporation.

The family said they did everything they could to save the business. So did the city, county and other investors.

Most of the agencies had deferred the brewerys loan payments for more than year. Several agencies refinanced the loans several times and even tried to find outside investors to help rescue the brewery.

The brewery was an investment in the communitys future, and we did everything we could to keep it afloat, said Del Norte County Chief Administrative Officer Ben Angove.

The owners put a lot a sweat equity and their own money into it. Everyone worked real hard to keep it open, Angove said.

City Manager Dave Wells said the closing of the brewery was a disappointment.

We were hoping it would be a major boon to the downtown area, but were not giving up on the idea, Wells said. While this round didnt work, theres still some good possibilities for a business at that location.

During the last few months, Del Norte County officials worked with the Del Norte County and Arcata economic development agencies to find a white knight, to invest in the brewery, said Mike McKenzie-Bahr, the countys economic coordinator.

The group hired a professional analyst and accounting firm to crunch numbers and create an investment package, McKenzie-Bahr said.

We shopped the package around, but the debt was just too big. No investor was willing to take the risk, he said.

The county was the smallest investor, giving the brewery $50,000 in start-up money from its state-funded revolving business loan program, Angove said.

The City of Crescent City loaned the brewery $100,000 for operating expenses. Approximately $97,400 is still unpaid, said City Finance Director Carol Leuthold.

The money came from miscellaneous state funds the city could use to help support new and existing business, Leuthold said.

The citys redevelopment agency sold the land on which the brewery sits for $135,000, Leuthold said. The original loan agreement deferred payments for the first two years, she said.

As for getting any of the money back, Leuthold said, I dont have a clue whats going to happen.

Losing the money would mean there is less to loan to other businesses, she said.

Its the same for the Tri-Agency, which loaned the brewery approximately $75,000 from its revolving loan program; and the Del Norte County Economic Development Corporation, which loaned the brewery about $135,000, officials said.

McKenzie-Bahr said the loss of money to the individual agencies pales in comparison to the loss of jobs for the brewerys 27 employees.

The brewery paid its employees a total of $30,000-$35,000 a month, he said.

In the end, the community leaders did the right things in trying to keep the brewery open, McKenzie-Bahr said.

They helped start the business, they refinanced when they had to, and they deferred payments when they had to, he said. It was just a bad turn of events.

Many city and county officials hope that another investor will buy the brewery back from the bank and start it up again.

Hopefully, its just a dream on hold, McKenzie-Bahr said. I hope all the lenders will hang together until an investor can be found.

The owners put a lot a sweat equity and their own money into it. Everyone worked real hard to keep it open, Angove said.

City Manager Dave Wells said the closing of the brewery was a disappointment.

We were hoping it would be a major boon to the downtown area, but were not giving up on the idea, Wells said. While this round didnt work, theres still some good possibilities for a business at that location.

During the last few months, Del Norte County officials worked with the Del Norte County and Arcata economic development agencies to find a white knight, to invest in the brewery, said Mike McKenzie-Bahr, the countys economic coordinator.

The group hired a professional analyst and accounting firm to crunch numbers and create an investment package, McKenzie-Bahr said.

We shopped the package around, but the debt was just too big. No investor was willing to take the risk, he said.

The county was the smallest investor, giving the brewery $50,000 in start-up money from its state-funded revolving business loan program, Angove said.

The City of Crescent City loaned the brewery $100,000 for operating expenses. Approximately $97,400 is still unpaid, said City Finance Director Carol Leuthold.

The money came from miscellaneous state funds the city could use to help support new and existing business, Leuthold said.

The citys redevelopment agency sold the land on which the brewery sits for $135,000, Leuthold said. The original loan agreement deferred payments for the first two years, she said.

As for getting any of the money back, Leuthold said, I dont have a clue whats going to happen.

Losing the money would mean there is less to loan to other businesses, she said.

Its the same for the Tri-Agency, which loaned the brewery approximately $75,000 from its revolving loan program; and the Del Norte County Economic Development Corporation, which loaned the brewery about $135,000, officials said.

McKenzie-Bahr said the loss of money to the individual agencies pales in comparison to the loss of jobs for the brewerys 27 employees.

The brewery paid its employees a total of $30,000-$35,000 a month, he said.

In the end, the community leaders did the right things in trying to keep the brewery open, McKenzie-Bahr said.

They helped start the business, they refinanced when they had to, and they deferred payments when they had to, he said. It was just a bad turn of events.

Many city and county officials hope that another investor will buy the brewery back from the bank and start it up again.

Hopefully, its just a dream on hold, McKenzie-Bahr said. I hope all the lenders will hang together until an investor can be found.

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