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AMS Brewery. Report and Recommendation. Context . 2010: start of idea 2011: feasibility report (positive for a brewpub) Dec. 2012: unclear direction, Brewery committee struck Members: Elin, Phaidra , Kathy, Mike. Context. December Committee started work

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ams brewery

AMS Brewery

Report and Recommendation

context
Context
  • 2010: start of idea
  • 2011: feasibility report (positive for a brewpub)
  • Dec. 2012: unclear direction, Brewery committee struck

Members: Elin, Phaidra, Kathy, Mike

context1
Context

December

  • Committee started work
  • Worked with First Key on new costing for a microbrewery
  • Worked with management to determine an operational model
  • Started re-engaging with potential partners
context2
Context

January/February

  • Worked towards more detailed costing
  • Continued talks with more potential partners: lots of interest
  • Worked with Michael Kingsmill & BIRD Construction to determine building costs
  • Finalized costing, potential options, and a final recommendation to council
challenges
Challenges
  • Allocated space not enough for a significant capacity: limits business potential
  • No room for storage of kegs in the 737 sqft brewery: need to get rid of another commercial tenant

Solutions: 4 options!

options
Options

Option I: Obtain space from UBC to build a bigger facility in the OLD SUB

Option II: Obtain storage space from UBC and combine with 22

Option III: Build a Brewery in the New SUB, find storage in the New SUB

Option IV: Build a brewery in the new Farm Centre (est. 2017)

options1
Options

Option I: Obtain space from UBC to build a bigger facility in the OLD SUB

Option II: Obtain storage space from UBC and combine with 22

Option III: Build a Brewery in the New SUB, find storage in the New SUB

Option IV: Build a brewery in the new Farm Centre (est. 2017)

option iii
Option III
  • Brewery-ready shell: $530,775
  • Soft costs (design, etc): $98,300
  • Taxes: $44,447
  • Total: $637,522
option iii1
Option III

Other costs/opportunity costs:

  • Rent from 737 sqftbrewing space: $36,850/yr
  • Rent from 1300 sqft storage space: $65,000/yr
  • 10yr payback of initial investment: $81,722/yr
  • Total: $183,572/year (for a limited 1500 hL capacity brewery)
option iv
Option IV
  • Farm currently building a $20 million Farm Centre (completion 2017)
  • Growing hops and barley
  • Can use the waste product from a brewery
  • Also will have aqua farms, etc.
  • OPPORTUNITY: add a new brewing facility to the Farm Centre
option iv1
Option IV
  • Strong interest from the Farm
  • Sustainable
  • Cheaper building costs: $350/sqft
  • Flexible design
  • Much higher capacity

unanimous support from the Brewery Committee & Exec Committee

ams role
AMS role
  • AMS would pay for the construction cost of the brewery (up to $1.1 million)
    • $275,000 set aside from the Student Spaces Fund over 4 years
    • Investment recovery from lease to a brewing partner
  • Agreement with the Farm/UBC on the governance of the facility
ams funding
AMS Funding??
  • Student Spaces Fund will collect: $2,833,608 over next 5 years
  • Outstanding commitments:
      • New SUB: $250k
      • Child Care: $500k
      • Design office: $400k
      • Total: $1,150,000
  • Investment revenues from saving $275k/year:$114,488
good business sense
Good Business sense?
  • Definitely the best of the 4 alternatives
  • Long term investment: lease/business revenue from a brewery
challenges1
Challenges
  • Need UBC (C&CP) approval
  • Need to negotiate a partnership model with the Farm
  • Need to coordinate the design of the brewery
motion
Motion
  • Save up $275k over 4 years (2013/4-2016/7) for a brewery
  • Select a permanent group to lead the process
    • 5 members total, 2 permanent
  • AMS council to make a final decision after the presentation of an agreement