Investing In Downtown LA, One Beer At A Time

Many urban developers are saying that America’s next great city will be downtown L.A.

For years downtown LA has been a war zone of homeless encampments.

It also had the reputation of being the busiest drug market in the world.

It was gritty and crime ridden and many compared it to New York City in the 1970’s.

I actually used to work in downtown when I first moved to LA.

My 18th floor story office overlooked the gridlock where the 10 and 210 intersect.

I was a new transplant from San Francisco and foolishly rode my bike from the Gold Line train stop daily.

I loved the freedom of my bike culture and the ability to whiz through traffic and jump on the train and read a book.

That experiment ended after my bike was stolen.

I started to drive like everyone else after that, and turned a blind eye when passing through.

Graffiti is Art

LA’s Arts DistrictDowntown Los Angeles is both a warehouse wasteland and a creative hub for young professionals and artists alike.

Factories are being reused with new construction and art galleries and coffee shops are opening in their place.

In the mid-’70s, a handful of artists saw an opportunity in the empty buildings and began colonizing the area.

They illegally converted former industrial and commercial spaces into working studios and paid as little as a three cents a square foot.

This surge of artistic activity paved the way for businesses like The Atomic Cafe and legendary punk rock venue, Al’s Bar, which fostered bands like Sonic Youth and Red Hot Chili Peppers.

The City of Los Angeles eventually passed its “Artist in Residence” or “AIR” ordinance, which allowed residential use of formerly industrial and commercially zoned buildings.

The community now struggles to create a balance between  gentrification and preserving the character of the Arts District.

Angel City Brewery The first thing out of my mouth when I Mapquested the location was, “it’s in the middle of hell”.

I got invited to come check out Angel City Brewery and talk with Alan Newman, president of Alchemy & Science — the craft-brew incubation project of the Boston Beer Company.

I texted my team to stay in the car with the video equipment until we could get back up.

What I found upon arrival was nothing less than shocking.

A Metro station near Little Tokyo that was clean and crisp with sleek design.

Brand new condos and coffee shops and wine bars and art…everywhere.

Sculptures, architecture, even the graffiti on the sidewalk was elevated.

Somebody has done some cleaning.

From Vermont to LAI had previously written about working for Alan at 7th Generation.

7th Gen embraced a lattice business model of collaboration and I wrote about how that had affected my outlook on Corporate America.

The first thing Alan did was apologize for sending me out into the world with such an utopian philosophy.

It’s Ok, I was only 22, I thought recycling made a difference and was sure Al Gore was going to be president.

When I accused Alan of trying to make downtown LA touchy, feely like Burlington, Vermont, he fiercely denied the comparison.

Alan Newman, president of Alchemy & Science

Alan: Look, Magic Hat was a moment in time.

Angel City is also a moment in time.

The concept remains the same when you are creating a brand is to build a following of customers who appreciate what you are doing.

Music for Magic Hat

Alan: At Magic Hat we were fans of music, so music became the dominant theme.

It was something we were passionate about and we really brought that music community in to appreciate our beers.

Magic Hat was a big supporter of live music and was constantly touring around the country sponsoring Jazz Festivals and other events.

NA: And Angel City?

Alan: The goal here is to be part of the arts district and be part of the renaissance of downtown LA.

In the 5 years since we’ve been here I’ve just watched downtown LA turn into this spectacular place to work and to live and the arts district has just blossomed.

Back in the heyday of Magic Hat we were always on the list of places you must visit. The entire city of Burlington was really proud of Magic Hat.

And here in LA, although much more difficult given the size of Los Angeles, my goal is the same.

I would love for Angel City to be a place in LA that everybody is proud to have in it’s community.

We are a still a few years away yet but we have come a long way.

Investing in Downtown LA

NA: From what I can see is that everything is growing up around Angel City. There is a brand new Metro station and condos across the street.

Did you anticipate the recovery of Downtown LA?

Alan: Actually they are putting in the Metro Center a few blocks from here.

There will be a day when having mass transit at our doors will be a great resource for our customers.

Union Station is a few blocks away from Angel City and the region’s primary transit hub which include Metro bus and rail lines, Metrolink commuter rail, Amtrak long-distance rail, and specialty shuttles.

The Union Station Master Plan will transform Los Angeles Union Station into a world-class transportation facility.

There will be an outside ampitheater for outdoor events and parks and billions of dollars in upgrades and expansions to accommodate an estimated 100 thousand people a day.

Arts District RevitalizationNA: Now you have 2 breweries that are both in arts districts. Angel City and Concrete Brewery in Miami. Was that done purposely?

Alan: People assume I love the arts districts, and I do, but all the urban centers have zoned manufacturing out of the cities.

So these art districts are the only places where you can find people and manufacturing zoning.

NPR referred to the district in Miami as the “worlds largest outside museum”.

The culture of Miami and Los Angeles are vastly different but fundamentally the same.

The Public House

NA: There are no televisions here. Do people expect that?

Alan: We supply games for people to play and everyone said Alan, you can’t run a bar without televisions.

I said, I am not running a bar, I am running a brewery and living in the arts district.

The Beer Hall has comedy nights and music.

Angel City Brewery also has a farmers market on Thursdays in their parking lot, Bingo, Yoga and an iPhone film contest.

Embracing the Heritage of Los Angeles

NA: Tell me about your Heritage Festival.

Alan: One of the things I love about this brewery is the diversity.

I grew up in New York and I really missed the diversity while living in Burlington, Vermont.Here we have Little Tokyo across the street.

Olvera Street is nearby (“the birthplace of Los Angeles,” and Mexican Marketplace), we have Korea Town and China Town.

And if you come here on any night of the week, who you will find drinking craft beer is a real mash up of cultures.

You will see Asian-Americans, you will see Mexican-Americans.

The common wisdom in craft beer (the industry) is that these people don’t drink craft beer.

My contention always was that they don’t drink craft beer because they don’t have a neighborhood brewery to understand what goes into craft beer and explore different flavors.

If you give people in a community a place to come, it doesn’t matter what their heritage is so Heritage Day for us celebrates that mash up.

We have everything from Taiko Drums to Mariachi Bands and entertainment all day long and give back to the community by celebrating.

NA: What’s your favorite beer right now?Alan: I’m a bit of a beer whore and I’ll drink everything.

I’ll drink wine and spirits and have no problems switching back and forth.

Ony 7% of beer drinkers drink beer when they go out.

So the lines between all these beverages are blurred.

 

Move over IPA’s, Here Comes Sour Beer

NA: What’s the next big thing in the industry?

Alan: Millennials are moving to the downtrodden areas where they can afford to live and repopulating those urban areas.

They are transforming a place that didn’t exist 10 years ago.

As they move in a coffee shop will open, and then a restaurant will open and then a bar.

I think millennials are looking for what’s new, what’s different.

What can we try that’s never been done before.

I mean that hard soda thing came out of nowhere.

Since I have gotten into beer the next big thing is going to be sour beers and I have been hearing this for 20 years now.

We are just now starting to see sour beers gain popularity after hearing about it for years and they tend to be less alcohol.

NA: Do you gear your marketing towards millennials?

Alan: We don’t sit around and talk about how to get more millennial business?

They are not loyal and like to switch around.

We make an effort to sell to people who love beer.

We have re-thought the more rigid forms of what beer should be.

When I started it was either English, Belgian or German style beers and you stuck with that style.

In today’s world it really doesn’t work that way.

All the styles get mixed together and millennials are just more adventurous to try new beers.

NA: What’s Next?

Alan: We have so much room to develop our products.

We spent 4 years getting the breweries up and running and now we are making making sure our beers are world class and consistent and we are serving our communities the best way possible.