Nestled between a law office and a beauty salon, the vacant Bluenose Gopher Brewery has become a well known Granite Falls feature, a remarkable feat considering that it has never even opened its doors! For many who walk past the dormant building, the chances of it ever opening seem low. “It’s never going to happen,” seems to be a common response, even among some supporters. But a recent change in direction holds the potential to dramatically alter Bluenose’s fortunes and profoundly change the Granite Falls downtown area.
The Bluenose Gopher was first launched about four years ago. The idea for a brewery in Granite Falls first arose among a small group of entrepreneurial at-home brewers and microbrew enthusiasts. Like many small town residents caught up in the growing popularity of craft breweries, they realized the potential for a community space in Granite Falls serving locally made beer.
Deciding to build a brewery, however, was only the first step. They still had to figure out the ‘how.’ Instead of creating a private company, the group decided to establish a co-op. In light of Granite Falls’ distinction as the hometown of Andrew Volstead, many in the group pointed out the irony of this combination. Although famous as the author of the Volstead Act (which set in motion the constitutional prohibition on the sale and consumption of alcohol under the 18th Amendment), Volstead was also a vigorous proponent of the cooperative, which he saw as his most important accomplishment. “It seemed like an appropriate way of honoring our history,” said Glenn Gelhar, a co-op member.
Creating a co-op was a difficult and legally complicated task to accomplish. The co-op leadership had to create a set of by-laws, establish a social media presence, and attract a membership base. The new organization also purchased a location in downtown Granite Falls. Within one year of establishing the co-op (in 2014), Bluenose had attracted over 150 members.
The nascent co-op next had to put in place a financing structure that would sustain their operations while they renovated their old building. They consulted with an attorney and created financial disclosure documents for their ‘investors’ (that is to say, the co-op members). This part was especially difficult because they had to navigate a complex web of legal regulations. “Everything took so long,” said Board Chair Sarina Otaibi, adding, “you’re learning along the way.”
By the summer of 2016, the Bluenose Gopher was ready to embark on a major fundraising campaign. They decided to take advantage of a recent law passed by the state legislature allowing crowdsourced investment funding for businesses and co-ops (the law is also known as MNvest). After completing the necessary paperwork, Bluenose launched their investment campaign at the start of 2017. Campaign organizers began hosting small events where they gave presentations outlining their vision for the co-op.
Within two months of the campaign, and despite considerable enthusiasm from members and investors, the co-op leadership realized that they weren’t on target to meet their fundraising goal. “It was really disappointing,” said member Ted Suss. Like many co-op members who attended the annual meeting in May of 2017, Suss urged the organization to continue with the MNvest campaign. Others felt it would be better to abandon the idea altogether or start from scratch. Ultimately, the board decided to let the members themselves vote on the future of Bluenose.
The members were faced with two questions. First, should they continue with the campaign? Second, if their existing plan fell through, what should be their Plan B? Members unanimously voted to continue the campaign. However, they recognized that their chances of success were slim. Despite their long odds, many members pushed back against hypothetical proposals to close down the co-op. “I didn’t want to do this all for nothing,” said Otaibi, capturing the sentiment of many members. “So much work had already gone into the project, and we continued to receive support from our members.”
Ultimately, members endorsed the idea of deviating from their original plans. Through a protracted conversation, they unanimously endorsed the idea of launching a public house selling local microbrews from across Minnesota rather than a brewery. “It was a very democratic process to address what happens if we don’t meet our fundraising goal,” said Suss.
While not ideal, the decision to embrace the public house concept instead of a brewery was seen by many members as a fulfilment of their original goal -- to create a space where patrons could enjoy local craft brews. The proposal also made financial sense. According to their original estimate, it would have cost roughly $200,000 to refurbish the existing space as a brewery (plus an additional $100,000 for the equipment alone). The public house, in contrast, is only estimated to cost $100,000 in refurbishment.
Although Bluenose was entering a new direction, they aren’t exactly starting from scratch. “We’ve learned a lot,” said Otaibi, adding that she’s hoping this makes them better prepared for the future.
Bluenose is also attracting new partners. Cathy Anderson, the EDA Director for Granite Falls and a longtime supporter of the venture, attended an August 17 meeting of Board and co-op members. Although she hasn’t reviewed any of the new plans, she strongly supports their efforts to open a public space. “Craft beer has a positive impact on rural towns, “Anderson explained. “Public houses are social spaces for people to gather, even for people who don’t drink beer.” She added that when spaces like Bluenose crop up, they have a ripple effect on the local economy, adding, “small rural towns need that spark of ignition.”
The Bluenose Board has also been talking with Scott Marquardt, who also attended the August 17 meeting. Marquardt serves as Vice President of the Southwest Initiative Foundation, a Minnesota non-profit that works with communities to foster economic development in southwestern Minnesota. Marquardt was also enthusiastic about the new plans, and showed interest in helping Bluenose overcome their financial obstacles.
Presently, the Bluenose Board is looking into ways to combine funding from several outside entities to help advance the project (this is in addition to money raised by the members themselves). “As they move forward, and as they have a bank ready to back them, I don’t see why the EDA can’t back them financially,” said Anderson.
The Board hopes to open before the end of the year. Before that happens, old plans will need to be redrawn, contractors hired, and volunteers mobilized. For Otaibi, assessing everything still left to do in order for this to happen can be a little overwhelming. “I’m a little freaked out,” she said, “but it’s super exciting.”