Plans are brewing for more than a quarter of the space in the 200,000-square-foot former Crown Cork & Seal building on Dell Avenue.
A unanimous decision from Port of Walla Walla commissioners Wednesday makes way for what could be the new headquarters and production space of Mainstem Malt.
The business founded by Phil Neumann works with family farms throughout the region to grow premium, Salmon-Safe-certified, dry-farmed malting grains for the craft beverage industry.
Its movement with the Port sets the stage to transition from a supply-chain model to a full-fledged craft malt hub — the original vision and hope when Neumann began more than three years ago.
“We’re rooting for you to make it work,” Port Commissioner Ron Dunning said after the vote. “It’s exactly what, as a commission, we want to see in agriculture.”
The project has an ambitious start before it would become operational though.
About a year’s worth of planning and negotiations led the Port to Wednesday’s discussion, which alone ran more than an hour of the economic development agency’s 9 a.m. meeting.
Much work is needed inside the 1950s-era building, where Artifex Wine Company has operated a custom crush facility about a decade now in one portion of the massive former cannery building.
The first part of the agreement with the Port, which will likely be signed next week after minor tweaks, would start Dec. 1. Between then and May 31, Mainstem Malt would have an option period in which it would need to provide documentation verifying available funds of $750,000 for its part of improvements and equipment.
Receipt of that documentation would trigger a separate six-month period in which both Mainstem and the Port would be responsible for their own respective improvements, including an estimated $500,000 on the Port’s part. During that period, Mainstem Malt would pay just the state leasehold tax while improvements take place.
Neumann said the hope would be to exercise that first option in December and get equipment — at least the first major piece — into the building in March while work continues around the facility.
If all moves forward, the original lease would be for 11,200 square feet of manufacturing area and 12,000 square feet of warehousing. The first expansion option would add 11,200 more square feet of manufacturing area. A second expansion could add another 21,600 square feet.
The initial term is five years, with five options at five-year increments for a total of 30 years.
The Port acknowledged lease rates initially are low for the first five years to provide business growth and market penetration. In the sixth year and after, annual increases reflect fair market value.
The total monthly lease the first five years with 12.84 percent state leasehold tax would range from $2,474.08 to $4,453.34 in the fifth year. In the sixth year it would jump to $10,813.06 per month.
Port Executive Director Pat Reay told commissioners the project meets a number of the agency’s goals in that it partners with a startup business with growth opportunity, improves underused space, contributes to the value-added agriculture economy, and has potential employment growth of at least eight jobs to start.
“This is the type of project we’ve been working on,” he said.