The Klamath Falls City Council will allow a downtown business to help pay for a bottling operation with city grant money, though the grant was not originally intended for that.

The council voted 3-1 Monday night to allow Klamath Basin Brewery to use money from a city building improvements grant to help build a new bottling facility at their property on Klamath Avenue. The $10,000 grant was first slated for kitchen expansions, new parking spaces and to “expand production capacity” in other areas.

The brewery and restaurant at 1320 Main St. opened in 2005. It employs 10 full-time and 40 part-time workers. A letter to the city says that the brewery first made a request to the city for a grant reallocation in late 2017.

City documents state that the city does not allow such a shift in grant allocations. Three councilors agreed to the switch, while Matt Dodson voted against it. Councilor Dan Tofell was unable to attend the meeting.

“I guess I felt like it should come before us before the work was done,” Dodson said Monday.

Brewery builds on

Klamath Falls first introduced its downtown improvement grants in 2016. At least $20,000 was made available for facade grants for front entrance enhancements, while another $30,000 was put toward interior building improvement funds.

Klamath Basin Brewery applied for both grants in October 2016 but was denied a facade grant. Business representatives also outlined their 2015 purchase of what they call the “Murco bulding,” an adjacent property at 1330 Main St.

The brewery’s expansion goals first called for an improved kitchen area, banquet spaces, off-street parking and more.

The areas that have since been completed include an enclosed bottling facility in what’s known as the “Bowman portion” of the Murco building along Klamath Avenue.

In a letter to the city, Klamath Basin Brewing Co. Board President Terry Wagstaff said they based their grant shift request on capacity needs, pressures in the beer market and financial limitations.

On Monday, Wagstaff told councilors that she met with city staff and current Planning Manager Joe Wall on several occasions.

Wagstaff described their first proposal as a “broad range of improvements” at the time that they hoped to accomplish in four to five years.

“I think, in hindsight, we were maybe a little naive and a little premature in the way we wrote that grant,” Wagstaff said. “But we also felt like the grant encompassed changes for re-purposes within the same exact building.”

In the brewery’s case, Wall said they needed to install an in-house bottling facility as soon as possible to help with their business. Beforehand, they paid for a bottling truck to come in from out of the area.

“They probably didn’t have the best capacity and costs were higher,” Wall said.

Future language concerns

Wall, who briefed city council on updates Monday, mentioned that the grant program was still in a “pilot” phase and that they still had several terms and conditions to work out.

He agreed that several steps should be taken in the future to assure that language stays clear in terms of what business owners can and cannot do.

“I think going forward we need to be far more specific,” he said.

Councilor Kendall Bell said the brewery’s intent made sense and that she saw no issue with the shift. She agreed with Wall that language should be better outlined for future grants in the next year.

“That’s still a learning process,” Bell said.

Dodson was the most outspoken on the issue, mentioning further concerns with project changes in the future.

“If you don’t perform exactly what you said you were going to do, you ask to change,” Dodson said. “You don’t just change, or you give the money back.”

Interim City Attorney Rick Whitlock said there were no immediate concerns of setting future examples since the grant programs were still on a case-by-case basis with the city.

“I don’t see any binding precedent in terms of if you grant this one, you’ll have to grant all others,” Whitlock said.

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City Approves $10K Grant Shift for Brewing Bottling Facility (H&N)