Pandemic Knocks Journeyman Off The Trail, But Project Still On Track: ‘We Signed The Development Agreement … And Literally, A Week Later, The World Fell Apart’
A sign that says “Worth the Wait – Journeyman Distillery” is the only sign of a project that Valparaiso officials have said would pump millions of dollars into a blighted site and turn it into a distillery, restaurant and destination.
The project, Valparaiso and Journeyman Distillery officials said, is still moving forward, albeit stalled six months because of the COVID-19 pandemic, and, at least for now, without the residential development that was announced as a companion piece in an effort to expand the city’s downtown reach southward.
“For us, going back to March, we signed the development agreement with the redevelopment commission and literally, a week later, the world fell apart,” especially in the hospitality and restaurant industry, because of the pandemic, said Bill Welter, a Valparaiso native and founder of the distillery, which also has a location in Three Oaks, Michigan.
While the agreement with the RDC has a clause that includes pandemics, which would have provided an out, Welter said everybody involved wanted to see the redevelopment of the former Anco windshield wiper factory site at Campbell and Brown streets move forward.
Everybody agreed to take six months and see what happened.
“In September, I felt comfortable enough to move forward,” Welter said, adding he has contracted Berglund Construction as the general contractor for the project; RATIO as the architect; and Project Management Advisors as the consulting firm.
“We’re about 45 days into the project now and we are in the early stages of doing all the planning, and it’s a fairly large undertaking,” Welter said, adding he would like to break ground in the spring.
Because of the large scope of the work, the architectural phase alone will take six to eight months.
“We’re thrilled. We’re excited to get started and super excited to be in Valpo,” Welter said, adding he’s tried to be patient through the pandemic.
The RDC purchased the building out of receivership in April 2017 for $175,000. The commission paid $1.2 million, much of it reimbursed through a grant from the Regional Development Authority, for cleanup, including asbestos and mercury removal, officials have said. The property includes seven buildings that total 130,000 square feet, though two of those buildings will be torn down.
Journeyman expects to close on the property Dec. 15, when it will be transferred from the RDC, and the project’s completion date is now Oct. 30, 2023, said city attorney Patrick Lyp, which is a six-month extension because of the pandemic.
During an Oct. 26 RDC meeting, board president Rob Thorgren said he was excited the project still was moving forward.
“I don’t think six months is much of an extension given all that’s happened,” he said.
The RDC announced in May 2018 that Journeyman planned a second distillery and affiliated amenities for the site, part of a plan to redevelop the area into transit-oriented development. The site also is the hub for ChicaGO Dash commuter buses into downtown Chicago and transportation to the Dunes Park station for the South Shore train line.
At the time of the announcement, officials said Flaherty and Collins of Indianapolis had been selected for a residential component of the project.
Given the scale of the Journeyman project, doing that and developing a residential project was too much to handle at once, Lyp said.
“This became a Journeyman-focused project,” Lyp said, adding the city never had a formal agreement with Flaherty and Collins, who withdrew from the project in the fall of 2019.
The city, RDC and Journeyman are “fully committed to a residential component to compliment both the TOD and Journeyman,” Lyp said, adding the plan is to likely issue a second request for proposals for residential development next year.
Journeyman has committed to a minimum investment of $8 million for the first phase of its development, which includes a distillery, brewery, restaurant, banquet/event center and barrel storage, Lyp said, adding a second phase could include a boutique hotel, movie theater and artisan/craft maker spaces.
In June 2019, the Indiana Economic Development Corp., led by Gov. Eric Holcomb, voted unanimously to grant the project $5 million in tax credits. Officials have said that the Indiana Recovery Tax Credit program, also known as “Dino” because it’s used for “dinosaurs,” large, vacant and older industrial buildings, will provide the project 25 cents in tax credits for every $1 spent on redevelopment.
Additionally, the RDC approved a grant application for funding from the Coronavirus Aid, Relief and Economic Security Act for future improvements to Campbell and Brown streets that would enhance the Journeyman project and future development in that area, Lyp said.
The grant, if the RDC receives it, would provide $1.5 million in federal funds for the road improvements, with the RDC providing another $1.5 million.
Officials are excited to see the Journeyman project move forward, particularly with Welter’s selection of an architect and other players to bring the plans to fruition.
“It certainly gives more confirmation that this will be a transformative project,” Lyp said.