Friday, August 24, 2012

BEST PLACE - Pabst Blue Ribbon Beer

Best Place (at historic Pabst brewery) is the name chosen by businessman Jim Haertel for his historic tavern, gift shop and "tour" business at 901 W. Juneau Avenue - Milwaukee, WI.  Tours are conducted Friday to Sunday at 1:00 - 2:00 and 3:00 PM.  If you are lucky (like I was when I chose the 3:00 time slot) you will be personally guided by "the man" himself!  No, not King Gambrinus, but someone with much more passion, a much deeper voice, and ten-times the panache' - (more on that surprise as you read this blog.)  Eight bucks a piece (two-dollar discount for military members) will score you the full (one-hour) tour and a 16 oz. plastic Pabst cup, bartender-filled with your choice of Pabst or Schlitz.  There are "other" beverages available, but those will cost you a few bucks.  If you are even more fortunate; a basket of small twisted pretzels will also be sitting at the place you choose to sit.  Squeeze in...make friends with others, and relax.

The tour "begins" in the old hall that was only used (back in the day) for very special events like Pabst's 100th anniversary in 1944.  The wood work and mostly everything in the hall is vintage and/or restored.  As far as the "rest" of the building sections go, it has come the farthest in the restoration process.  The presentation is lower-tech according to today's standards but does include a video projection device attached to a laptop computer.  The sound is patched into a "D.J.-style" amplifier and is manually set in motion, as well as advanced through the various vignettes that have been chosen to tell the story of Pabst Brewing.  You drink your "free" beer while the folksy, question-answer, audience participation style "tour" unfolds.  You sit at old wooden hall-style tables, in actual original, creaky, monogrammed, wooden chairs that were "found" on site - listening and looking at the beautiful red, white and blue hand painted mural that rings the upper walls of the hall.

The tour progresses to the other old building located on the west end of the courtyard that is under re-construction.  Tarps, old plaster, peeling paint and the dank smell of really "old" remind you that you are stepping into history; and please do watch your step.  I couldn't help but be amazed that Best Place actually allowed mere "tourists" to walk through the construction zone without a signed liability waiver.  We are a litigious lot aren't we?  I hope and pray that some idiot-bastard doesn't walk through the mess (beer cup in hand), trip, fall, and sue the owners.  I "worry" about that  because it was all to refreshing to not have to be so closely legislated and banned from the full experience.  I'm sure that it will end the first time someone cries "lawyer!"  The tour guide will explain that the building is being renovated and that Best Place will even accept your volunteer "help" if you are of a mind to ask what can be done.  One even gets the opportunity to "pose" behind Captain Pabst's actual desk for a photo (if you bring your own camera) before walking through another door and back into the "old starting place of past tours."

Kings: Devereaux and Gambrinus
One more small stop in the outer "garden" entrance for a peek at the Cast-aluminum King (and I'm not talking about Elvis) and then you are "excused" to wander about the gift shop, encouraged to buy another beverage, and/or sit in the courtyard, or you may take your leave.  It's an overall nice experience.  However, the "story" of how Best Place came to be in the First Place; is actually the most interesting part of the Pabst tour...at least it was to me.  So much so that I took the time to do a bunch of research to come up with the extensive text that follows.  Read on if you have the time and want to find out more.





Pabst Blue Ribbon Beer – A story within a story, within yet another story:

The Pabst Brewing Company got its start in Milwaukee after Jacob Best Sr. relocated his German brewery. Two of Best's four sons, Jacob Jr. and Charles, had traveled to Milwaukee in 1842 to establish a vinegar factory. Charles Best returned to Mettenheim, Germany, and brought the rest of the family to Milwaukee early in 1844. Son Phillip Best became the sole proprietor in 1859 and established the Phillip Best Brewing Co. Five years later; he became partners with Capt. Frederick Pabst, who had married Phillip's daughter.

November 11, 1870, The Melms brewery was purchased by Best and Company. At the time, Melms brewery was the largest brewery in Milwaukee. Even though Melms brewery sales were slipping, the brewery was still operational. After the purchase by Frederick Pabst, the Melms brewery became the South Side Brewery and the original Phillip Best brewery on the hill was known as the Empire Brewery. (In 1886, operations at South Side Brewery were discontinued). In 1872 the output was 100,000 barrels and Captain Pabst was President of the Company. Best and Company became the second largest brewery in the United States.  By 1874, the brewery was the nation's largest. It became Pabst Brewing Co. in 1889 with Pabst at the helm.
 
In 1879, a Boyle ice machine was purchased for the Empire Brewery and was installed by 1880. Before the installation of the ice machine, Phillip Brewing Company suffered its first loss after a fire destroyed the malthouse, grain elevators and office building on December 21, 1879. Between 1879 and 1893, Phillip Best Brewing Company operated two breweries and opened 40 beer offices around the country. On February 5, 1881, Phillip Best Brewing Company purchased the bottling business back from Stamm and Meyer and continued the bottling department under their own name. After the brewery's marquee beer, called Best Select, won critical acclaim, Mr. Pabst had blue ribbons tied by hand around the bottle necks from 1882 until 1916. By 1892, this special packaging idea became so popular that the company was purchasing 300,000 yards of silk ribbons, which workers tied by hand around each bottle. He renamed the beer Blue Ribbon several years later in 1895.

Immediately after Captain Frederick Pabst’s death on January 1, 1904, his two sons, Gustav and Fred, Jr., began to make extensive improvements in the Milwaukee brewery. Captain Pabst’s second son, Fred, worked in the brewery until 1905 to operate Pabst Farms in Oconomowoc, Wisconsin. With Gustav Pabst as President, installation of a new malting house and a fermentation building was started. Newer equipment for bottling came into place. Pabst also experimented with the steel keg, but could not figure out to prevent the metal from spoiling the beer taste. Finally, Pabst scrapped the project and went back to wooden kegs. On March 1, 1916, Pabst introduced its first non-alcohol Pablo to the public, and on December 4, 1920 The Pabst Corporation was organized which operated the non-alcohol operations and the Pabst Reality Corporation. The Pabst Brewing Company was finally dissolved on December 24, 1920, due to Prohibition.  On December 31, 1923, Pabst Corporation acquired the business of the Sheboygan Beverage Company to continue the soft drink and Pablo operations.

With no hope of Repeal, Gustav Pabst resigned as President on December 23, 1921. Fred Pabst returned to the brewery as President to try saving the family company. In December 1923, Fred sold his cheese division of Pabst Farms with assets chiefly in the form of bulk cheese inventory, to the Pabst Corporation. The cheese was produced at the Pabst Farms, but the brewery used their cellars to age cheese. The salesmen, trained in selling beer, found it difficult to readjust to sell the new product. With the help of advertising and strong campaigns, the cheese business thrived during Prohibition. Starting with 33 employees in 1925, the brewery employed 176 by 1927. Cheese was sold in three forms, Pabst wonder process cheese, Pabst-ett and pasteurized package cheese. Pabst-ett was the most successful. By 1930, over 8 million pounds of Pabst-ett had been sold. Kraft Foods sued Pabst claiming Pabst had infringed on a Kraft patent for process cheese. Kraft won the case in 1927. The two companies entered into a licensing agreement in which Pabst-ett, a product similar to Velveeta, continued to be produced in Wisconsin, but was sold through Kraft.  The cheese operation was disbanded with the end of Prohibition in 1933. Kraft bought out the Pabst cheese operations, and Pabst started to get back in to the beer business.

With optimistic foresight, the Pabst Corporation bought the Puritan Malt Extract Company in Chicago on January 2, 1930. Two years later, Premier Malt Products Company voted to merge with the Pabst Corporation, and the name of Premier Malt Products Company was changed to Premier-Pabst Corporation. Fred Pabst, now in his sixties, wanted his brewery to excel after Repeal. Harris Perlstein, then President of Premier Malt Products Company became the President of the new combined Company. A year after Prohibition was repealed in 1933; Pabst's sales broke the 1-million-barrel mark. It tripled sales by 1946 and nearly quadrupled them again by 1968 after buying Blatz Brewing Co. In Milwaukee and elsewhere, Pabst was king. "Every bar we went to, everything was Pabst," said Beverly Leonardelli, 70, of Milwaukee. Her former husband, who worked for Pabst for 32 years, would bring home a turkey and case of beer from his employer every Christmas.
 
Pabst's sales had reached 15.6 million barrels by 1978 before they began to decline. Management however then made a fatal misstep by depending only on cash to finance  modernization and new facilities. This decision led to skyrocketing production costs while rivals  enjoyed cost reductions due to the installation of state of the art equipment.   Pabst built only one new modern and efficient brewery during 1960-70s. Now a weakened giant, Pabst began to battle hostile takeovers from several investor groups.  After years of stock turmoil, the board finally reached the decision to sell the brewery to California millionaire (philanthropist) Paul Kalmanovitz in 1985 for $63 million.   He bought other declining breweries, including Pearl and Falstaff, which were losing market share to growing giants Anheuser-Busch and Miller Brewing. Kalmanovitz cut out all advertising and terminated most of the management. His business strategy was to run a lean ship. With almost no advertising budget, he was able to cut prices. He also removed quality control. There was no consistency from one batch to another. Beer drinkers turned away from Pabst Blue Ribbon label.

In 1988 after Kalmanovitz passed away, Lutz Issleib took over as Chairman and President of Pabst.  Under his leadership Pabst began a steady, though limited, rise back to the marketplace by buying famed but defunct beer brands and contracting brewing them. Times got tougher anyway.  Rising employee legacy costs forced the brewers hand to do something they had promised would never happen; they cut employee benefits.  "Shame on Pabst!"--condemning the 152-year-old brewer's move to cut benefits for more than 800 retired workers. "What they did was a slap in my face. After putting 42 years into that place, I thought that someone put a knife into my back," said Roman Makarewicz, 74, his voice shaking in anger. "I will never drink another drop of Pabst as long as I live." Pabst announced it needed to cut health and death benefits for more than 770 union retirees and 43 nonunion retirees. The move would immediately save Pabst $3.5 million and it was hoped at that time that it would help keep the Milwaukee plant running; saving some jobs.  "From information we've received from inside the plant, not much longer," said Jay Kopplin, then president of Brewery Workers Local 9. "Pabst certainly has not been acting like a company who's interested in making a long-term commitment to its workers or to its Milwaukee facility."

Pabst Retirement Heist Story
Fast forward to 1996. The brewer laid off 70% of its Milwaukee workforce by early 1996 and later that year, in December, announced that it would shift the remaining production to Stroh Brewing Co.'s La Crosse plant. Pabst had already contracted with Stroh to handle two-thirds of its production in La Crosse. Pabst closed its Milwaukee brewery and moved its corporate headquarters to San Antonio, Texas. A deal was done five years later with (then) Miller Brewing (Now MillerCoors LLC, a joint venture of SAB Miller and Molson Coors Brewing) to produce most of the Pabst beer products and in 2001 no beer was actually made at any Pabst-owned plant.  It is now manufactured at a total of six different MillerCoors plants across the US. (Ironically, a few of which were actually Pabst breweries at one time).

The sale of Pabst is the direct result of a deadline imposed by the Internal Revenue Service. Federal tax laws don't allow charitable foundations to own for-profit companies. The IRS initially gave the foundation until 2005 to sell Pabst, or lose its tax-exempt status. That deadline was extended to 2010 when a buyer couldn't be found, according to a 2008 report by the Chicago Tribune.  On May 26, 2010, the sale of the Pabst brand to C. Dean Metropoulos was finalized and publicly announced. Metropoulos is a Detroit-born food industry investor, notable for his acquisitions of the Vlasic and Bumble-Bee brands, adds multiple beer brands to his portfolio for a mere $250M.  Metropoulos’ sons, Evan, 31 years old, and Daren, 28, are now playing key roles in running the company.  Pabst moved its corporate headquarters from Woodbridge, Illinois to Los Angeles, California on May 14, 2011.  Pabst Blue Ribbon America has a licensing agreement and joint venture arrangement with China Pabst Blue Ribbon. It is produced, marketed and distributed by CBR Brewing Company, which jointly owns the company along with Guangdong Blue Ribbon Group under a sub-licensing agreement with the Pabst Brewing Company. CBR is a British Virgin Islands owned company but it is based in Hong Kong.

That was Pabst, “the beer’s” story – this now, is Pabst the “physical landmark’s story:”

The former Pabst brewery property was a dark, abandoned place for years after the plant abruptly closed in December of 1996. Then Jim Haertel (pronounced “hurtle”) took the initial big risk in 2001, which started the process of revitalizing the forgotten 20-acre parcel in Milwaukee’s northwest-downtown area.  Most of the buildings have remained vacant since the brewery closed in 1996, creating a void of activity north of downtown. But until last year, it was impossible for the complex to be sold because the estate of former Pabst owner Paul Kalmanovitz and his wife, Lydia, was tied up in legal battles. The reclusive Kalmanovitz, died two years later. He left his entire estate to his wife, who died in 1996. The company began marketing the massive property in November 2000 after the estate was finally settled, clearing the way for the sale of the Pabst plant.Haertel, a former Marquette University graduate and former president of J.C. Haertle Real Estate & Financial Consulting, Wauwatosa who has a self-proclaimed passion for beer and historic buildings, approached the entity that owned Pabst Brewing Co. about purchasing the former Pabst headquarters building at the brewery complex (full story below). Haertel was told they would not sell just one building. He would have to instead, purchase the entire complex.

After months of talks, and years of initial contemplation, Haertel signed the deal on (interestingly) Sept. 11, 2001, to purchase the brewery property. As the World Trade Center towers were hideously destroyed by terrorists in New York, and the future of America was suddenly uncertain; Haertel decided to move forward anyway with his grand plan. Going all-in; Haertel had cashed in his (and his wife Karen’s) 401(k) of a mere $ 50,000 (down payment on eleven million), and searched for investors. He needed partners and massive investment money to complete the purchase and take on a redevelopment of the brewery complex. At the end of years of financial gamesmanship and lawsuits; Haertel ultimately retained/obtained the former Pabst headquarters, gift shop and visitor's center building. Additionally, he has plans to add a unique Beer-Bed & Breakfast component.

Dead-Ended but not Defeated:

"We are elated to have achieved this major milestone and look forward to closing this transaction. The goal of our redevelopment effort is to have the property become a place where people live, work and shop, as well as, a tourist destination for thousands of visitors each year. The historic buildings within this development and innovative new uses for them will be the focus of this revitalization project," said Jim. Paul Bertling, long-time friend and fellow Marquette graduate, (then Chief Operating Officer for BrewCity) added, "We envision a city within the City of Milwaukee. People living, working, shopping and enjoying other diversions all within a few block radius." Bertling is the Vice President and Partner in the advertising and marketing firm Creative/Suit and Tighe that will help promote BrewCity. “It's all good! The city reclaims a very important part of its history as the once proud brewery plant rejuvenates from what has been a vacant, deteriorating property since it closed in December of 1996." 

Their joint vision for the property was summarized in a private placement document under the heading, "Highest and Best Uses of the Real Estate":


  • Rejuvenate space for residential uses such as lofts, condominiums, apartments & dormitories.
  • Restore space for traditional office uses and for innovative virtual and hoteling office uses.
  • Renovate space for retail uses as licensed, ethnic inspired BrewPubs, restaurants & shops.
  • Refurbish space for traditional hotel rooms and unique Brew, Bed & Breakfast rooms.
  • House the Museum of Beer & Brewing with areas for collectors to display or sell items.
  • Create a jewel for the New Urbanism movement resembling the "Streets of Old Milwaukee."

Their credibility was enhanced by the inclusion of letters of intent from a non-profit Museum of Beer & Brewing and from Randy Sprecher of Sprecher Brewing of Milwaukee.  Karl Strauss, a Master Brewer and Certified Management Consultant in the brewing industry, is a Board Member of the Museum of Beer & Brewing and was employed by Pabst Brewing Company for 44 years, with more than half of those years spent as corporate Vice President for Production at the Milwaukee Plant. Strauss states in a letter of support, "The property is no longer viable as an economical macro brewing facility. But many of these beautiful, strong, brick and concrete buildings have a lot of character that should be thoughtfully renovated and revitalized for future generations. There are a few spots where new Brew-Pubs and Micro-Breweries could continue Milwaukee's tradition as one of the Beer Capitals of the World." Strauss adds, "I cannot think of a better location for the Museum of Beer & Brewing than the Pabst Brewing Company Historic District. I am happy to endorse your plans for this unique development."  Many of the buildings are rich in architectural detail, including the former Pabst gift shop, Blue Ribbon Hall, and the former corporate office building, which were built between 1885 and 1937. The old brewing house, at 41,300 square feet, and bottling house, at 255,300 square feet, provide open areas that would be ideal for restaurants and shops, Haertle said.  Randy Sprecher established Sprecher Brewing Co. Inc. in 1985 in Milwaukee. They are dedicated brewers producing fine European and traditional style beers and popular gourmet sodas. Sprecher also was once employed at the Pabst Milwaukee Plant. In a letter to Haertel he states, "We would operate a brew pub and quality restaurant operation at that site (Pabst)." This would have been in addition to their nearby Glendale brewing facility and was, of course, predicated on working out a formal agreement.  It never happened. Haertel’s enormous dream-endeavor called the BrewCity project eventually stalled in 2006 when aldermen rejected a tax incremental financing (TIF) request. The brewery complex eventually was sold to Zilber Ltd., which is transforming the brewery into a mixed-use urban neighborhood.  Jim was ultimately given the buildings by Wispark upon their sale of the complex to Zilber and his Brewery Project LLC, and just recently in December settled a lawsuit with Wispark. Terms of the settlement weren’t released.

The "big" deal that wasn’t:

A Hofbrauhaus restaurant was originally planned for Haertel's building, but that fell through when he and Cincinnati Restaurant Group did not reach a deal. A group of fellow investors (who own around 40% of Brew City Redevelopment Group), later sued majority owners Jim Haertel, Brew City president; his wife, Karen, and his mother, Janyce. The minority owners, led by Dan Glaser, say ending negotiations with Hofbrauhaus hurt Brew City, and that Haertel made that decision without board approval. The minority owners, led by Dan Glaser, were unhappy that Jim Haertel rejected the offer to open a Hofbrauhaus at the building, which includes the former Blue Ribbon Hall. That offer was made by Cincinnati Restaurant Group Inc., which operates a Hofbrauhaus in Newport, Ky., under license from the famous beer hall of the same name in Munich, Germany.  Jim Haertel says the Hofbrauhaus offer would have been too risky, requiring Brew City to invest $6 million into the venture.  The Glaser group asked Milwaukee County Circuit Judge Thomas Cooper to issue an order restraining the Haertel group's actions. The Glaser group's attorney, Manuel Galang, said those actions were hurting the investors.  Milwaukee County Circuit Judge Thomas Cooper said that while there may be a valid dispute among investors in the Wauwatosa company that had been negotiating to open a Hofbrauhaus Brewery and Restaurant on the site of the former Pabst Brewery in Milwaukee, there is no cause for an injunction. “I’m not sure I have the authority to step in the middle of a corporate cat fight,” he said in court.

The lawsuit brought by Daniel Glaser, an investor in the BrewCity Redevelopment Group LLC, against James Haertel, the lead investor, will continue. They are seeking a change in the board of directors and dissolution of the corporate assets.  Glaser has been joined by more than a dozen other investors. They accused Haertel of “financial mismanagement.” Glaser claimed in his lawsuit that Haertel had forced a change in the board of directors on Oct. 30, which gave the Haertel family a majority of the board, and brought about the change in direction. He also said the original plan for the beer hall was why he invested.  Developer Gary Gorman, president of Gorman & Co. Inc. in Oregon, said he was considering bringing a Hofbrauhaus to the ground floor of a hotel he is developing on the 21-acre site. As stated earlier, most of the rest of the property is owned by the estate of Joseph Zilber. A number of proposals for the site are still being considered. The Haertel family's attorney, Terry Johnson, said Haertel’s actions weren't hurting the investors. He also said the Haertel family's 60% ownership of Brew City gave them the power to vote Karen Haertel on to the board. Haertel said he was ultimately concerned about the risk of investing millions of dollars into creating a Hofbrauhaus, and whether that investment would ever pay off.


Instead, Haertel opened his own gift shop and bar in the building, in 2009 and has rented out the Blue Ribbon Hall in the building for private events. He also provides tours of the building, even though a majority of it is in disrepair and is under intermittent construction.  Haertel wants to continue operating the Little Tavern on the Hill, (which opened in May 2009) a gift shop, and the event venue at the building, which is now called Best Place at the Historic Pabst Brewery. Suzanne Ehlke, director of sales and marketing for the gift shop, said, "We also have 20 percent devoted to new items to round out our selection.  T-shirts and hats, but for the holidays, we have beer-themed ornaments, fancy steins and gift cards, too." "We acquired a lot of stuff; we are keeping one of everything and selling what's left.  We hope to brew beer someday with the same attitude, brew it, enjoy a few and sell what's left," Haertel said. Since then, Haertel said, revenue has been growing.


Haertel also said his tavern and restored Blue Ribbon Hall, which hosts catered events, already have the authenticity that the Hofbrauhaus uses as a selling point. So, will the Hofbrauhaus group again look at the former brew house/mill house? Gorman mentioned that his hotel plans include putting a restaurant and tavern in the area where the defunct brewing kettles are still intact.

1999 - Dreaming the Grand Idea – Settling for What Became:

"Originally I was pursuing the idea of opening a brew pub and beer museum in the Gipfel Union Brewery," Haertel said. The building, surrounded by chain link fence on 4th and Juneau Avenue with the Bradley Center serving as a backdrop, is one of the oldest surviving buildings in Milwaukee and the oldest former Brewery building still standing. He stood outside it and contemplated in the spring 1999.

"Then, I gazed up the hill and saw that huge Pabst sign staring back at me. I realized that massive Pabst Brewery complex was empty, the Park East Freeway was coming down, and all the land around that area was ripe for new development. I knew I had to go check it out." Haertel recalls driving up Juneau Avenue, spotting the old corporate headquarters of Pabst -- several beautiful brick and stone structures at 901-917 W. Juneau Ave. -- and thinking would make an even better brew pub and beer museum than the Gipfel building. Haertel struggled to inquire about the buildings.

Phone call after phone call and letter after letter led nowhere; only contacting the webmaster that handled Pabst's Web site bore fruit and Haertel finally found someone in charge: the then-VP of Pabst Brewing Company, Bernie Orsi. "Initially, we were told the buildings were not for sale. But we took the approach that everything is for sale at the right price," Haertel said.  Pabst was owned by S&P, a California-based charitable trust whose managers preferred holding and maintaining the Pabst property in Milwaukee versus selling it. S&P informed Haertel that the corporate headquarters building was not for sale by itself; Orsi bluntly told Haertel, "You have to buy the whole thing or nothing at all!" The entire Pabst property would have to be purchased as a single entity -- all seven city blocks -- sending the potential price tag into the eight-figure range.

While digesting this, a larger vision began to emerge: Haertel and others suddenly pictured a massive mixed-use development for the 27-building complex. Retail shops, brew pubs, restaurants, museums, entertainment venues, apartments and loft condominiums, even some office space ... all elements of classic urban development suddenly burst into his imagination and became a seemingly attainable goal.  Emphasizing the historic nature of these buildings, most built in the late 1800s, horse-drawn carriages, trolleys and more would create a theme that would take one back to the "Streets of Old Milwaukee." Given that this was the former Pabst Brewery, number one in the nation for many years, any redevelopment would have to embrace beer. The vision matched the passion ... real estate, history and beer.

Certainly a defining moment was Orsi's all-or-nothing demand. Rather than being deterred, Haertel found himself saying, "Well then, send me the information on everything!" That's when Paul Bertling entered the picture. As VP and partner of the ad agency Creative Suit & Tighe, Bertling (1989-2005) handled marketing for various projects for longtime buddy Haertel over the years, usually preferring to stick to the marketing side of things. This time it was different. When Haertel described his admittedly far-fetched scheme, the sheer scope and ambition of the idea gave Bertling the desire not to simply assist with this plan, but rather to join as a full partner in the project, about to be incorporated as the Pabst Brewery Redevelopment Group (PBR Group). They soon re-christened the company the Brew City Redevelopment Group (BCR Group) to honor a request from Pabst. With architects, builders, brokers, advisors and their own visions, architectural renderings and conceptual presentations started developing as the two ventured out to find outside investors who could actually make this proposed redevelopment a reality.

A vision requires imagination; turning it into reality requires blood, sweat, tears ... and money. Lots of it. Since hitting the Powerball jackpot seemed unlikely, Haertel and Bertling began the search for investors, literally from the moment Brew City Redevelopment Group began on New Year's Day 2001. The plan grew cohesive enough where by June 1, the two rented out a room in the Pabst Mansion and invited around 30 potential investors to see their vision for what would become PabstCity, but which they had dubbed, "Brew City Brewery District -- A City Within The City."  Six investors resulted from that presentation. Most were angel investors, friends and relatives of Haertel and Bertling whose faith and trust in the two sealed the deal as much as the idea itself. Jim's mom and uncle, Paul's in-laws, and other close cohorts allowed them to put together an offer that they brought to S&P out in California the following July.

A handshake deal resulted from the trip; though not written in stone (or on a contract, which works even better in real estate deals), an offer of $11 million for the entire Pabst property was worked out. Haertel and Bertling had to then come up with the money, starting with a hefty deposit. In this case, S&P originally wanted a $500,000, non-refundable deposit simply to begin moving the deal towards a close. Haertel and Bertling began by negotiating the figure downward, eventually reducing the initial deposit to $50,000 which would cover the first nine months of the deal, at which time an additional $500,000 would be due. This would give Brew City three months to come up with the balance (over $10 million) due at closing.  "It took a long time to get them to agree to those terms," Bertling said, "And then there was the matter of risking the $50,000." Haertel bit the bullet and liquidated much of his 401(k), paying the taxes and 10 percent penalty. This funded the dream in 1999, 2000 and 2001. Haertel and Bertling, with the ongoing assistance of Attorney David Keating, raised $100,000 from that Pabst Mansion presentation, by painstakingly putting together a Private Offering document. Haertel and Bertling emphasized tremendous gratitude to their "Angel" investors.

With real money now ready to be put on the line -- and lost forever if the deal did not materialize -- the two waited anxiously for a formal acceptance. Turned out the property was listed for sale to attract higher offers. Brew City gave a "final offer" and requested an August 31 deadline. As the deadline passed the increasingly frustrated pair, trying to move their dream forward but also trying to protect their investors, sent what was essentially a "never mind, the deadline has passed" letter to S&P. That prompted a phone call that resulted in a new, revised agreement that extended the deadline by 10 days.  On the 11th day, the accepted offer landed in the fax tray. All that was needed was Haertel's signature to validate the deal and move the entire project forward and make the dream reality. Ready to sign and celebrate in Keating's office, the TV in the corner suddenly started broadcasting images of hijacked planes crashing into the World Trade Center, the Pentagon and in a rural Pennsylvania field. It was the morning of September 11, 2001. Suddenly, there was no mood to celebrate. The shock and dismay of those attacks also gave rise to uncertainty about the future. What would happen to the country? The economy? Nobody had a reliable crystal ball that day, or knew what to expect in the coming months and years. In the blink of an eye, the wisdom of entering into the deal at all became a concern on an entirely different level. After a lot of contemplating -- quickly, with the expiration date of the deal still that day -- the two decided to put some faith in the future, sign the agreement and move forward.

Signing the $11 million real estate deal for the Pabst complex gave Haertel and Bertling nine months to gather up another $500,000. Of course, the $10 million-plus balance still needed to then be raised. The BCR guys knew one thing (or so they thought): they would best raise the money via a "divide and conquer approach," dividing up and selling different pieces of the property to raise the $11 million while still retaining control over the development's vision and, of course, the corporate offices on Juneau, which they still wanted for their brewpub and museum of beer and brewing. The time had come to find major players: investors who had lots of cash and capital, with the clout and resources to generate the development for the multi-use array of stores, restaurants, entertainment venues, residences, and offices envisioned for the Pabst Brewery complex.  The two created additional presentation materials, a Web site (www.brewcity.net), and began courting "building buyers". Haertel would spend every Sunday afternoon offering free tours of the property to drum up interest (scheduling each one in the fall season to begin 30 minutes after the Packers games to allow people time to get there). Lots of potential partners stepped up; and time after time, deals fell apart. From late 2001 throughout much of 2002, hopes sprang up; obstacles tore them down. Perseverance finally helped, along with good old-fashioned networking. The divide and conquer approach was scrapped in favor of the "find a white knight" approach. Brew City needed to attract some big development partners; and soon. They had about two months to come up with $500,000.

Eventually, three qualified investment groups emerged. One was Wispark, the real estate subsidiary of We Energies. Another was a Chicago-based investment group; the third came about from a source they didn't expect. C.G. Schmidt Construction, Grubb & Ellis (The Boerke Co.) and Uihlein-Wilson Architects, their builder, broker and architect partners, introduced them to then-Milwaukee Bucks coach George Karl. Karl was looking for a site for his non-profit "Friends of Hoop" organization. Haertel and Bertling were only too happy to describe their vision for PabstCity to Karl, who liked the idea and asked if they had the necessary investors. The two replied they didn't, but it wasn't exactly a secret that he made a pretty good living as the Bucks coach and might have money to spare.

While Karl wasn't prepared to part with millions of dollars, he did hook them up with John Ferchill, a Cleveland-based developer who once tried buying the Cleveland Cavaliers during Karl's coaching days there. Ferchill's company, The Ferchill Group, had experience in redeveloping projects similar to the Pabst complex and proved to be enthused about the plan. As negotiations, deals and plans went back and forth across meeting tables, phone lines, e-mails, and numerous tours of every inch of the mammoth facility, a small matter of $500,000 was needed to keep the deal moving toward its scheduled closing, turning the heat on Haertel, Bertling and all the others involved like a pressure cooker. Eventually, the Chicago-based investors faded out, leaving Wispark and The Ferchill Group as the primary developer for what will become PabstCity.

Working together made sense given the magnitude of this project, so Wispark and The Ferchill Group decided to pool resources, creating a joint venture. They, along with BCR Group, formed Juneau Avenue Partners, with BCR retaining control of the former Pabst Corporate Office Complex and a minority ownership interest in the rest of the site. Finally, less than 10 days before the deposit's due date, a cohesive group capable of bringing the project to fruition was in place, the $500,000 payment was made, and the project survived another hurdle. With a few months and a little over $10 million to provide before the deal was scheduled to close with S&P, things still weren't final. "The last three months were a roller-coaster ride," Bertling said. Juneau Avenue Partners pooled the balance of the $11 million purchase price for the official closing of the deal, which occurred, one day early, on September 10, 2002.

Jim Haertel and his sister, Linda Gleason, of Mesa, Ariz., poked around a Pabst basement storage area. "We saw piles of boxes and papers. We were like, 'What is this?' When we started going through we saw (photographs of) Groucho Marx and Danny Kaye. And we were like, 'Oh, my gosh, these are people that have visited here and left their mark on this place,"' Gleason said. "It was such a thrill because it was history coming to life right there." Black-and-white photographs from the 1940s show Marx hoisting a beer stein at company headquarters, as well as visits from celebrities Kaye, Jimmy Durante and Donald O'Connor.  A thick, dusty guest registry contains the signatures of people from around the world, including Belgium, India, Mexico, Switzerland, Pakistan, Holland, France, Thailand, Japan and Egypt.

Pabst 100th anniversary celebration - Why so Groucho?
The Boston Red Sox visited in 1953. Dom DiMaggio and broadcaster Curt Gowdy were among those who signed the registry.  A calendar on the wall in one corporate office is still turned to December 1996, when the brewing era came to a halt at the 22-acre complex. Dusty ornaments hang on an artificial balsam Christmas tree in another office area, a reminder of happier times when Pabst managers gathered in Blue Ribbon Hall at the end of the week to swap stories and share the product they had a hand in making. That December, Pabst stopped making Blue Ribbon and its other beers at the downtown plant for the first time since Prohibition.  Pabst security guard John Mies had worked for the brewer 17 years when word came that the company's 200 or so employees should leave. "The owner just decided everybody could go," Mies said. "It was kind of sad because it was a good place to work, friendships were formed." Personal belongings were left behind. Company-issued jackets hung in the lockers of production workers, pictures were stuck on locker doors, dirty glasses and ashtrays filled with cigarette butts were left on desks. Mies and several other employees were retained by Pabst to secure the complex. "Over the years, I've watched the deterioration," he said. "It was kind of sad to see that."

The End?

The entire Pabst Brewery Complex, all 27 buildings and seven city blocks, was now officially theirs…until it wasn’t.  (See the beginning of this accounting) However, in the end, Haertel and Bertling got what they originally wanted: the Pabst corporate headquarters buildings, plus a stake in the rest of the project. Jim Haertel and Paul Bertling (now owner of The Bertling Agency) have both said they have a lot of people to thank and are sincerely grateful. They share this bit of advice; “like beer has four ingredients: barley, hops, yeast and water. Their recipe for success is passion, people, patience and persistence.”  Incidentally, the entire Pabst complex, with its 27 buildings, was placed on the National Register of Historic Places in 2001.

Imagine this; Jim Haertel is the actual person who occasionally gives the tours, plays the video clips of old (Old Milwaukee) commercials featuring Will Ferrell, other interesting Pabst ads from the ages, quizzes his audience on Pabst trivia, and politely asks his patrons to “buy another beer, so I can do more work on the buildings.”

As I have taken the time to compile this entire two-pronged blog-tale, I wonder just what “claim” Jim Haertel can actually make to anything remotely related to the Pabst empire other than he bought two old buildings (of many) in a town where its brand name once was king.  He doesn’t own the Pabst brand, he doesn’t produce its products, and he doesn’t even work for the current Pabst Brewing Co.  He does however have an incredible passion for history, a love of beer, a nice location, two antique and storied buildings, (gift shop, and a tavern/banquet hall), A super-cool, colorful, huge, cast-aluminum statue of King Gambrinus, and a dreamer's dream that still lives on…it seems to be enough for him for now…but you never know.  Good Job Jim!


Visit Jim (and Best Place) and buy a beer from him (or two)…he really needs the money.


NOTE: I did not personally "write" every word in this entire compilation.  Why should I have?  I did what anyone who wants to know anything about something does nowadays; I exhaustively surfed the Internet for content.  What I did do however was the research, and assembly of the tale; updating bits and pieces into something that chronologically makes sense, and paints the entire picture for the reader.  I hope you have enjoyed this compilation.


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