Though the benefit of about $1,000 may seem small, it was the cherry on top of an already sweet deal for a new whiskey distillery.
Separate incentives packages were unanimously approved at Monday night’s council meeting for the Green Roof Inn and David and Joyce VanDyke, whose properties will be annexed into the city; Lazy Guys Distillery, a craft whiskey distillery slated to open for business later this year in a historic building at 2950 Moon Station Road, about a mile away from the Southern Museum of Civil War and Locomotive History; and Kandrac Kole, an interior design company that recently relocated from Acworth.
Bob Fox, the city’s director of economic development, said these fee reductions and other incentives are part of a program to help existing businesses grow and help recruit new businesses and specific types of development.
“It’s not the end-all and be-all, it’s just one of the things we use when we work with a business or developer to look at what’s really needed to help make this work,” Fox said. “But it also has to work for the city financially. It has to be a positive investment for the city or one of the (city’s) authorities.”
Fox said his staff typically goes through a quantitative, cost-benefit analysis to determine the economic benefit to the business and identify incentives that would help the project come to fruition.
“The staff will prepare that analysis, which is then reviewed by our economic incentive committee, which is made up of members of different departments within the city,” Fox said. “It then goes on to be recommended for approval to the mayor and council.”
In the spirit
of new business
For Lazy Guy founder Mark Allen the incentives clinched the deal in his decision to choose Kennesaw for his start-up micro distillery. He had previously looked at opening in Marietta, but ended up in Kennesaw partly due to the financial perks.
Fox said the distillery was provided a partial abatement of its business license fee for a five-year period which will save the company about $800.
That’s in addition to the $15,000 commitment by the Kennesaw Development Authority to help fund improvements to the historic cabin and barn on the property.
Allen said every little bit helps, especially in a costly endeavor that involves about $250,000 in start-up costs.
“Had those incentives not been there, I don’t know if we would be there,” Allen said. “It made a huge difference and continues to do so.”
The Kennesaw Downtown Development Authority also recently approved a facade grant to help pay for repairs to the log cabin, chimney and stained-glass windows.
As part of its grant approval process, the authority agrees to provide matching funds of up to 50 percent of improvements for a maximum of $5,000. Once the work is complete, the property owner will submit the actual cost and receive the matching funds upon approval from the board and the Historic Planning Commission.
In effect, the renovations will help lower Allen’s monthly rent payment and save him money in the long run, Fox said.
“We’ve been trying to assist them with this small incentive program,” Fox said. “The landlord for the property has been supportive. As part of the lease agreement, there were some tenant build-out improvements.”
Allen, who lives in Acworth, said he is in the process of renovating the 19th century building, which was last used as a pet crematory, and should be finished with the remodel by June 15. He said he expects the whiskey still, which shipped out from the manufacturer last week, to arrive around the same time.
But his primary focus is getting federal and state permits, which could take anywhere from four months to a year. Allen said he started the application process about three weeks ago, but his business can’t produce a single drop of whiskey until all permits are secured.
“If I had my way about it, we’d be operational by the end of the year,” Allen said. “I’m more anxious than anybody to get up and going.”
Allen said he’s in talks with the city to have Lazy Guy become an additional stop for tourists visiting local museums and cross-market the distillery as a tourist attraction. He said he’s also heard the city is exploring the possibility of installing directional signage to become a part of a museum tour.
“As far as we’re concerned, we’ll take whatever (incentives) we can get,” Allen said. “I hope incentives do come our way, but whether they do or don’t, we’re still pushing forward. We’re hoping to produce our product by late 2013 but it all depends on the federal and state permit process.”
The distillery may only hire three employees, but it has the potential to draw more tourism to the downtown district, Fox said.
“The three that opened in other parts of the state have really become tourist destinations,” Fox said. “At those places, you can take a tour of the distillery. Evidently there’s a lot of folks out there that are really interested in this. It gives us one other place for those coming to the nearby museums to visit.”
A stylish addition
Joanne Kandrac, co-founder of Kandrac Kole Interiors, said her business’s relocation from downtown Acworth to Kennesaw had a lot to do with her growing firm needing more space.
Fox said the design firm was offered a partial abatement of its business license fee over five years for a savings of about $1,400.
The property was also approved for a facade grant during last Tuesday’s Downtown Development Authority meeting to replace the front porch decking and railings as well as repairs to the siding and re-painting.
Alongside partner Kelly Kole, Kandrac moved into a historic building in the Fullers Chase Phase I development with seven other employees earlier this month. The 10-building community on Cherokee Street was designed as a mixed-use commercial and residential area, but has struggled to develop business activity, Fox said.
“For a whole host of reasons, that project just stalled and was never able to get the buildings sold or leased out,” Fox said.
With an ownership change in recent months, Fox said the new owners are making efforts to get properties leased and stabilized.
“It’s important to recruit good tenants into that location,” Fox said, adding his staff is in discussions with an insurance agency and retail business about relocating into the development.
Kandrac said the location was recommended to her and Kole by a client who recently moved into the development.
“We had come up on our lease in Acworth and had some parking issues,” Kandrac said. “We needed more space and asked if there were any more properties and there was this cute little house.”
Benefits to annexation
Though council members Bruce Jenkins and Cris Eaton-Welsh weren’t in favor of a variance request for the Green Roof Inn to potentially construct a digital billboard on its property, the entire council supported bringing the motel into the city, as well as the adjacent property where Shemin Nurseries is located on Cobb Parkway.
Green Roof Inn’s business license fee was abated for five years for a savings of about $1,100 and an abatement of potential future construction permit fees was offered if owner Arun Patel decides to expand in the future.
However, the real incentive was the approval of the variance allowing Patel to potentially lease land for a billboard company to install an electronic billboard, which would have the potential to offset additional taxes incurred by coming into the city. Patel said at the meeting he had not yet contracted with any billboard company.
For the Shemin Nurseries property, owned by David and Joyce VanDyke, the offer doesn’t apply to the current tenant but if the VanDykes established their own business on the property in the future, it would go toward that business, Fox said.
The abatement of the business license fee for five years would save the VanDykes, if applied, about $1,100.
Fox said savings are approximate because business license fees are based on actual annual revenue and city staff estimated savings based on historical information.