Blue Lake Council bails out brewery By Matt Kapko Eye Reporter The Arcata Eye March 2, 2004 The Blue Lake City Council offered its support last week to two longtime locals: the Mad River Brewing Company and City Attorney Richard Platz. Because of the growing competition in the brewery business, especially for microbreweries, the Mad River Brewing Company, which has been in Blue Lake since 1989, needs more cash flow to maintain its presence in the market and reverse its production cutbacks. The brewery’s owner, Bob Smith, came to the Feb. 24 meeting seeking a $25,000 loan from the city to help thwart the lull in production that his company is bearing. The emerging competition is forcing the need for more capital, he said. To do this, he is especially interested in pursuing the peak beer-buying season that is approaching and plans to increase prices soon. “I want to continue to be an active member of the Blue Lake community,” Smith told the council. “If we are unable to ramp up production, we will have to continue scaling back our production.” Another possibility is further cuts in staff. Smith said job retention is a major concern. Making his case for the loan, he reminded the council that the company has performed exceptionally on loans from the city in the past and that all have been paid back on a timely basis. Mayor Dave Nakamura said that loaning money is somewhat out of the city’s typical role. “But, I’m not saying this is a bad thing at all,” he said. He later joked, “I think I have a Steelhead beer in my fridge.” To secure the loan from the city’s non-program income funds, the brewery is guaranteeing three stainless steel fermentation tanks as collateral. “My general take on this is really favorable,” City Councilmember Brian Julian said. “It is an established company that has been here for a long time.” City Councilmember Marlene Smith agreed. “I too am in favor of this. I appreciate the burden you’ve had with regard to the wastewater system and I appreciate you being in Blue Lake,” she said. The brewery shelled out $50,000 in wastewater charges to the city up until summer 2002, when it finalized a $50,000 five-year project to build its own wastewater treatment facility. Bob Smith noted that previous loans from the city helped the company fund that project, as those costs were a tremendous financial burden for the company. The council approved the $25,000 loan unanimously. Platz stays on board Another longtime Blue Lake resident, City Attorney Richard Platz, was rewarded for his time with the city and got a contract extension to continue offering his legal aide. Platz has been working for the city for almost 30 years, starting in 1976. “You know, I was 5 at the time,” City Manager Wiley Buck said. It seemed that the council’s approval of the contract was a mere formality, as there is little chance Platz will be replaced. Nakamura said, “he’s very fair and he’s good for the balance.” As the council discussed Platz’ fee, he told the council, “I feel even worse that you guys aren’t getting paid anything.” Marlene Smith replied, “We do get $15.” Home