Surly Bill Passes House and Senate

The "Surly bill," which would create a taproom license that would allow Minnesota breweries to sell pints of their beer on-site, passed in both the Senate and the House this week and is now poised to become state law.

Roughly three months after Brooklyn Center-based Surly Brewing Company unveiled plans for a $20 million “destination brewery”-plans that hinged on a change in state liquor law-the popular beer maker is two significant steps closer to making its project a reality.

An omnibus bill that calls for the creation of a new type of liquor license-a brewer taproom license-passed the state House on Tuesday with a 127-to-five vote. A similar bill passed the Minnesota Senate on Friday with a unanimous 60-to-0 vote, Surly said.

Under current law, small beer producers-like Town Hall Brewery in Minneapolis-can get brewpub licenses, allowing them to sell their beer on-site at their own restaurants, but they cannot distribute to liquor stores or exceed an annual 3,500-barrel cap. Conversely, larger brewers like St. Paul-based Summit Brewing and Surly-which has steadily increased its brewing capacity since opening in 2006-currently distribute beer to liquor stores and bars but are prohibited from selling beer at their breweries. The new bill is poised to change that rule.

“We were able to get it done because of the passion of Minnesota beer fans,” Surly founder and President Omar Ansari said in a Friday phone interview. The company garnered significant support from craft beer fans via Facebook, Twitter, and other social media platforms, where it shared information about how to contact legislators.

When Surly announced its brewery plans-which call for a beer garden, bar, restaurant, rooftop deck, and event center-it faced some opponents, including the Minnesota Licensed Beverage Association (MLBA).

MLBA Executive Director Frank Ball told Twin Cities Business in February that the proposal would harm the state's “three-tier system”-which comprises manufacturers, distributors, and retailers.

Ball also said at the time that changing the law would open the door for enormous national breweries to sell directly to consumers and undercut local retailers.

Ansari said that his brewery was able to alleviate those concerns. For example, the bill only allows breweries to have one taproom in the state, and it only applies to those that produce fewer than 250,000 barrels annually.

“The idea is to make sure that Coors, Bud, and Miller aren't going to show up and do something like that,” Ansari said.

The plans for the brewery remain the same as originally announced, and while the company awaits final approval, it will work on securing a location, architect, builder, “and a whole bunch of money” to help move the project forward, Ansari said. The company has been in discussions with banks and various investors to explore funding opportunities.

The House and Senate bills will now go to a committee that will reconcile the two versions before the final version hits the governor's desk and can be signed into law. Ansari said that Surly hopes the new law will become a reality sometime in the next few weeks.

When asked when Surly plans to build its new brewery-which is expected to create as many as 150 permanent jobs and up to 85 construction jobs-Ansari said that the company has put all efforts into getting the bill passed.

“If we have this thing open in a couple years I'd be thrilled, but there's a lot to accomplish,” he said.

If signed into law, the Surly bill will benefit other breweries in the state, Ansari said. For example, Stillwater-based Lift Bridge and Fulton Beer-which has plans to open a brewery in downtown Minneapolis, near Target Field-would be allowed to sell pints of their own beer on-site.