Del Mar Fairgrounds craft brewery proposal moves forward

By Joe Tash

A proposal to convert an underused satellite wagering facility at the Del Mar Fairgrounds into a craft beer brewery with a restaurant, tasting room and other amenities moved forward on Monday, June 2.

The board of the 22nd District Agricultural Association, which runs the state-owned fairgrounds, voted 4-1 to issue a request for proposals to the brewing industry, to see if any companies are interested in bidding for the project. Director David Watson cast the lone “no” vote, expressing concern that smaller local breweries might not have the resources to compete with larger, better-funded national brands.

In February, the board rejected a proposal by the fairgrounds’ food and beverage provider, Premier Food Services, for Blue Moon Brewery, a subsidiary of MillerCoors, to build and operate a micro-brewery at the fairgrounds. At the time, some directors said fairground staff hadn’t done enough to solicit proposals for the project, especially from San Diego-based breweries.

The project is being considered for the Surfside Race Place, a satellite wagering facility built at the northeast corner of the fairgrounds in 1991. Originally built to handle crowds of 5,000 people per day to bet on horse races around the country, attendance has dwindled from a high of 2,900 daily visitors to about 300 to 350 currently, according to fairgrounds officials,

The brewery project is intended to draw more visitors to the facility and increase revenue from food and beverage sales and betting, said fairgrounds general manager Tim Fennell after Monday’s board meeting.

Fennell said he hopes to issue the request for proposals within the next couple of weeks, and have a proposal to the board for final approval in September or October. If all goes smoothly, he said, the craft brewery could be open in time for the 2015 San Diego County Fair.

“It’s optimistic but it’s a possibility,” he said.

The request for proposals states that the 22nd DAA is committed to financing up to $1 million for construction of the brewery, and bidders would have to guarantee lease payments to the agency of at least $1.5 million over five years.

Fennell said the 22nd DAA would also spend $2 million to $3 million on upgrades to the satellite wagering center’s restaurant, construction of a tasting room and a museum on the history of beer brewing in San Diego.

The agency expects to recoup those costs through increased food and beverage sales over a period of three to five years, Fennell said. The project could also benefit North County businesses, as well as local government agencies through increased tax revenues, Fennell said.

At Monday’s meeting, Watson asked whether the board had approved spending $1 million on the brewery. Fennell and other directors said the expenditure has been discussed and would have to be approved by the board before an agreement with a brewing company could be finalized.

Watson also objected to the wording of the request for proposals because he said smaller local breweries might not be able to compete with larger companies for the contract.

Director Stephen Shewmaker, who is leading the effort to find an alternative use for the satellite wagering center, said it’s true that very small companies might not be able to take on such a project. “We need someone who’s got financial backbone,” he said.

Fennell said the fairgrounds expects to sell 2,000 to 3,000 kegs of beer from the brewery each year during the fair, horse races and other events. Beer produced in excess of the fairgrounds’ needs could be sold to outside bars, restaurants or supermarkets.

The tasting room would feature beers made by local brewers, in addition to the product produced on-site, said director Russ Penniman.