Like a good whiskey, a good distillery needs room to breathe. That’s the problem facing Daric Schlesselman and Sarah Ludington, the co-founders of Van Brunt Stillhouse in Red Hook, Brooklyn. After more than five years in this once tumbledown waterfront neighborhood, their business is growing and they need more space to make more whiskey.
The revival of Red Hook’s fortunes, where old warehouses and flophouses are now multi-million dollar harbor-front condos and private townhouses, has doubled commercial rents, Schlesselman said in an interview.
“When I started considering opening a business in Brooklyn, you could look around and find buildings that were available, and now there’s not as much stock on the market and the cost of what there is is astronomically high,” said Schlesselman, who left a job writing for Jon Stewart’s “The Daily Show,” to start the still in 2012.
The distillery’s got 4-and-a-half years left on a $14 a foot lease, but Schlesselman hopes to double production next year, then double it again over the next several years, and for that he needs more space.
The problem is that New York City’s real estate boom has asking rents in the western part of Brooklyn hovering around $24 to $26 per square foot annually. At Van Brunt’s current sales volume that’s about $10 a bottle just for real estate. And at $50 a bottle retail, Van Brunt needs to lower its price to sell more whiskey. “There’s just no way for me to push my prices down if I’ve got to pay that kind of rent,” said Schlesselman.
He says he’s looked in Industry City, but prices there are close to $50 a foot. At the Brooklyn Army Terminal, the 12-foot ceilings are too low for the larger fermenting vats Schlesselman wants to expand production.
The 6,000-square foot distillery includes the still room itself, about 40 feet on a side, a bottling area, a tasting room, and barrel and grain storage. The new still would produce double today’s output of about 30 gallons per 5-day run, and allow him to increase his staff from the current eight full-time employees.
Schlesselman says he wants to stay in the city, and preferably in western Brooklyn, a short commute from his home. Moving an hour or two north of the city would cut his costs dramatically — he’s been offered a barn in Orange country for a dollar a foot — but much of his brand’s value is that it’s distilled and aged in New York City.
“Either I find someone who believes in manufacturing and owns a building and is willing to rent to me, which is highly unlikely, or I get a warehouse outside this area and I am trucking my barrels, or I move my production outside the city and this becomes just a tasting room until my lease is up,” said Schlesselman.
“There’s value to being the hometown product in a marketplace like New York City,” he said. “The idea of being the local guy in Putnam County bears a little less fruit.”