In 2017, a commercial-property broker saw promise in building a biergarten at downtown’s popular Seaport Village retail establishment. The plan was to have a half-dozen or so local breweries share space around a communal courtyard, and he solicited Mike Hess Brewing’s (MHB) eponymous founder to help get the word out and bring in potential tenants. Due to complications involving licensing and logistics, the project died, but that broker’s belief in beer at Seaport Village did not wane. He has since teamed with the San Diego Unified Port District—which now owns and operates Seaport Village—to select quality tenants to raise the property’s long-term viability as a tourist destination.
“I got a call asking if I wanted to take another run at Seaport Village, to which I replied, ‘only for the right space and only if it has outdoor seating, preferably on the water,’” says Mike Hess. “And it turns out the space is the best spot in Seaport Village. It has everything we were looking for. I looked at the space, brought down some of my key leadership team and, three weeks later, we had a deal and a lease.”
MHB was an early adopter of the satellite tasting room. The company is headquartered in North Park, but operates four off-site venues in Miramar, Ocean Beach, Imperial Beach and Northern California’s Walnut Creek communities. Hess says a relatively uncomplicated build-out should result in an opening sometime in the first half of 2020.
Coming in around 1,000 square feet, interior space is limited at the Seaport Village location, but the outdoor patio nearly doubles that figure, and it’s right on the boardwalk, affording an elevated, 180-degree view of the harbor. Indoor capacity will be limited, but the patio will be able to seat roughly 75 guests at a time. The venue will be equipped with 20-plus taps dispensing MHB beers as well as wine, cider, kombucha and, on occasion, guest beers. Like MHB’s Imperial Beach tasting room, a kitchen will be installed to serve a variety of tacos. That work area will be in full view of patrons.
“When we opened up the brewery in 2010, we never thought that we’d grow as we have,” says Hess. “In fact, we didn’t even have any designs of growing past being San Diego’s first nanobrewery. We said we will continue to grow and work our butts off as long as we are having fun and providing great jobs for great people.”
When asked if he would consider opening a sixth venue in San Diego County, Hess is measured in his response. “We’re always open to good opportunities and, with our license, we can continue to open more, but we are not in the business of building for building’s sake. There has to be a good business reason to make the commitment, both in time and money, to add on locations. Our wholesale business has also really done well this year, and we have some projects we’re working on in the distribution space that will take up some of those resources. And I’d like to wrap up Seaport Village and phase two of our Imperial Beach tasting room before taking on any more projects.”
MHB’s Imperial Beach tasting room opened in March and has experienced a regularly high-level of patronage. Phase two of that project is completion of a large outdoor beer garden. The first round of comments recently came back from plan-check reviewers, and Hess says all concerns should be addressed and plans resubmitted by the end of this week.
“The project is just awesome and I have to pinch myself when I think of how amazing the final product is going to look,” says Hess. “There isn’t anything like it in Southern California and our whole team is pumped. It is going to be an amazing addition to Imperial Beach, and it is so helpful that the locals are equally excited to have a super-fun, casual, family-friendly spot right in the heart of Seacoast Drive.”
To those who deem satellite tasting rooms a fruitless or foolish endeavor for craft breweries, Hess points to his own company’s success with the model as well as multiple studies from the Brewers Association (the national trade organization representing U.S. brewing companies) which state consumers are 70% more likely to purchase a brewing company’s products at retail and on-premise accounts after visiting one of their tasting rooms. He also says that breweries with tasting rooms grow, on average, three times faster than brands without those venues.
“We love building amazing third spaces for consumers. So, for us, Seaport Village fits well into our model, which is to build world-class locations to help build our brand,” says Hess. “We believe Seaport Village will be a great spot to be able to serve not only those locals living and visiting downtown, but all the tourists looking for an authentic San Diego brand experience.”