NEW YORK (AP) — To see how a small business can transform a neighborhood, just follow the
barrels.About30 years ago, beer lovers wanting to create their own drinks startedtaking over abandoned
old buildings in rundown city districts, refittedthem with tanks, kettles and casks, and started
churning out beer. Thebyproduct was a boom in craft beer drinkers: Barrels shipped have morethan doubled
in the past decade, according to trade publication BeerMarketer’s Insights. Craft beer now makes up
nearly 7 percent of theslow-growing U.S. beer market.But beer drinkers weren’t the onlybeneficiaries.
The arrival of a craft brewery was also often one of thefirst signs that a neighborhood was changing.
From New England to theWest Coast, new businesses bubbled up around breweries, drawing youngpeople and
creating a vibrant community where families could plant rootsand small businesses could thrive.It
happened in Cleveland. Oncean industrial powerhouse, the Rust Belt city has been losing residentssince
the 1950s. Manufacturing jobs disappeared. The city nearly wentbankrupt in 1978.Marred by abandoned
buildings and boarded-upstores after several hard decades, the downtown Ohio City neighborhood,just west
of the Cuyahoga River, which divides Cleveland, was "perceivedas dangerous and blighted" into
the 1980s, says Eric Wobser. He worksfor Ohio City Inc., a nonprofit that promotes residential and
commercialdevelopment while trying to preserve the neighborhood’s olderbuildings.Enter Great Lakes
Brewing, which opened in 1988. Overthe years, it’s built a brewery and a brewpub from structures that
oncehoused a feed store, a saloon and a livery stable."We resurrectedall of them," says Pat
Conway, who founded Great Lakes with hisbrother, Daniel. "We’ve beautified the neighborhood,
provided a stunningrestoration."Other breweries and businesses — a pasta maker, abike shop, a
tortilla factory, as well as restaurants and bars —followed. Newcomers are flocking to the neighborhood,
even thoughCleveland’s overall population is still declining. The city repaved thequiet street next to
the brewery, Market Ave., with cobblestones, andpoured millions into renovating the West Side Market,
whose origins dateback to the 19th century. Today, more than 100 vendors sell produce,meat, cheese and
other foods there.What’s going on in Clevelandis happening across the country. Trendy small businesses
like breweriesand younger residents have been returning to downtown neighborhoods inmany cities across
the U.S. The biggest cities are growing faster thanthe suburbs around them, according to Census
data.Another benefitof the brewery boom: Manufacturers like brewers typically pay workersmore than
service businesses like restaurants or shops do. That’s goodfor local economies.But for some, the
bubbles are bursting. In Brooklyn, N.Y., breweries are feeling the heat from rising real estate
costs.WhenBrooklyn Brewery opened in the Williamsburg section of the borough in1996, its neighbors were
mostly deserted warehouses and factories.Today, Brooklyn Brewery is surrounded by modern apartment
buildings,trendy bars, shops and restaurants. There’s still some graffiti, butthat hasn’t deterred the
influx of new residents willing to spend a lotof money to live there. In the past decade, home values in
the Brewery’sneighborhood have more than doubled — up 145 percent, according to realestate appraiser
Miller Samuel.Rising prices might forceBrooklyn Brewery to exit the trendy scene it jump-started. It has
twobuildings in Williamsburg, the brewery and a building across the streetwhere it stores and ages its
beer. Leases are up in 2025, and BrooklynBrewery’s co-founder and president, Steve Hindy, is already
worried thatthe company will get kicked out of its warehouse. Once an iron foundry,the building, built
in 1896, has been bought by developers who Hindysays won’t renew the lease. He suspects that they want
to convert thespace into apartments.The landlord, Solomon Jacobs, says he doesn’t yet know what’s going
to happen with the lease.But Hindy is already scouting other, cheaper neighborhoods in Brooklyn."We
sowed the seeds of our own demise here," Hindy says.Gentrificationis pressuring at least one other
nearby brewer. Kelly Taylor, who ownsKelso, is looking for new space in Brooklyn or the Bronx because
hethinks his landlord won’t renew the lease in 2017. In Kelso’sneighborhood, the Clinton Hill section of
Brooklyn, home prices havealmost doubled over the past 10 years, according to Miller Samuel
data."He’ll tear down and build something more lucrative," Taylor says speculatively of his
landlord.However,the building’s manager, Fred Sanders, says the lease was just renewedlast year for five
more years, and he hasn’t had any conversations withKelso about the future.Even if the brewery owners
don’t haveconfirmation that they’ll be forced to move, history shows they havereason to be concerned.
Winifred Curran, a geography professor at DePaulUniversity in Chicago, studies how gentrification
changes cities. Shewrote her graduate-school dissertation on how gentrification inBrooklyn’s
Williamsburg neighborhood affected small manufacturers. Smallbusinesses struggled to stay put while
developers converted factoriesand warehouses into lucrative lofts and swarms of wealthy new
residentsdrove up prices, she says. She warns that the appeal of revitalizedneighborhoods can decimate
small businesses, both old and new."Youcan try to use the establishment of manufacturing businesses
to be thewedge that allows gentrification to happen, but then you need to protectthose businesses,"
Curran says. Otherwise "the market creates thisdemand for industrial space and then kills the goose
that laid thegolden egg."Outside of New York, costs are lower, and manybrewery owners in other
cities say they haven’t felt similar pressuresfrom developers. But New York flashes a warning sign for
what can happenwhen neighborhoods become popular.One brewery, in Boston, isrelatively protected. Harpoon
Brewery opened on the South Bostonwaterfront in 1986, when it was surrounded by auto body shops and
littleelse. Now the brewery draws more than 85,000 people a year from toursand tastings. These days, the
city is focused on redeveloping the area.New apartment and office buildings, restaurants and a
convention centersit nearby. Harpoon recently negotiated a 50-year lease with the city.The rent will
rise over time, but generally, long leases provideprotection from spikes that can happen when an area
becomes so popularthat property values skyrocket.On the country’s other coast, thetech boom has made one
brewpub’s growth plans more complicated. The 21stAmendment brewery, in San Francisco, is two blocks from
the Giants’baseball stadium, which opened in 2000 and, along with the bustlingtechnology sector,
transformed the city’s SoMa neighborhood fromabandoned warehouses to hot spot. Now the company wants to
build an80,000-square-foot brewery — but that’s not possible in SoMa."Themanufacturing element of
the business has been priced out," says 21stAmendment’s founder, Nico Freccia. The company has
opened offices in theEast Bay, and he’s scouting space there for the brewery, hoping to"help anchor
the revitalization" of an Oakland neighborhood.Similardreams are fueling a new beer company in New
York. Bronx Brewery issetting up shop in the Mott Haven section, next to a lumberyard, amanufacturer and
the plant that prints the New York Post."Wereally want to be in the Bronx, be a part of a south
Bronx communitythat’s growing like crazy," says Chris Gallant, co-founder of thebrewery, which will
have a space for visitors."We hope to get as manypeople there as possible — it’ll definitely serve
as marketing," hesays.About 29 percent of Bronx residents live in poverty,compared with 15 percent
for all of New York state, according to Censusdata."I think that entire area is going to increase
in value,"Gallant says. "That’s great for the south Bronx. But it could put us in atough spot
10 years from now."Copyright 2013 The Associated Press.