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The Kettlehouse Brewing Co. can grow, but its owner fears the Missoula City Council devalued one of its assets.

On Monday, the council said yes to a permit that allows the Kettlehouse to use a beer and wine license at its Myrtle Street taproom. It also imposed an early closing time to assuage neighbors who raised concerns about noise and traffic, but Kettlehouse owner Tim O’Leary described the 10 p.m. limit as a “bad precedent” on a local business.

“I hear time and again how much people love the Hip Strip,” O’Leary said. “They can walk to get a slice of pizza, a fresh pint of beer, locally made pastries, ice cream. They’re all locally owned businesses operated by your neighbors.”

O’Leary requested the permit because he wants to grow the wholesale side of his business, but state law places limits on the production of breweries. So he will separate the taproom side of his business from the production business; the taproom will run as a tavern with a beer and wine license instead of as a microbrewery.

The Kettlehouse had no plans to stay open until 2 a.m., but O’Leary told the council the 10 p.m. shutdown reduces the resale value of his license and that of others that may be coming on the market.

“We’ll consent to these restricted hours that are unfairly and shortsightedly imposed by this body,” O’Leary said. “The restriction will place this license holder at a competitive disadvantage with the other members of the tavern industry in Missoula, Mont.”

At the meeting, Councilman Mike O’Herron made an unsuccessful bid to eliminate the early closing. He said he appreciates the concern of a couple who live across the street, but he didn’t want to see one business unfairly targeted.

“I think as an order of principle, it’s important to have a fair playing field for the taverns in town,” O’Herron said.

Councilwoman Caitlin Copple agreed, saying for any single neighbor that’s complaining about living next door, there’s three or four Missoulians who would love to live in that vibrant part of town.

“Anything we can do to encourage our homegrown entrepreneurs to keep doing the good work that they’re doing is a good thing,” Copple said.

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Councilors O’Herron, Copple, Jason Wiener, Adam Hertz and Dick Haines voted for the failed amendment.

Councilman Bob Jaffe, though, argued a “conditional use permit” is, by definition, to be granted with necessary conditions. The regulation explicitly notes factors the council should consider include the surrounding area, noise and traffic.

By its nature, the taproom is busy at closing time, and it also faces a neighborhood, he said. So the council placed appropriate conditions.

“It’s not the same as the other restaurants and bars along the Hip Strip,” Jaffe said. “This one has its entry door facing a residential neighborhood.”

In other business, the council also approved a $98,900 contract to remodel the city’s new Development Services Office. Councilman Wiener said the new arrangement is intended to provide better access for customers.

Reporter Keila Szpaller can be reached at @KeilaSzpaller, 523-5262, keila.szpaller@missoulian.com or on MissoulaRedTape.com.

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Reach Keila Szpaller at @keilaszpaller, at keila.szpaller@missoulian.com or at (406) 523-5262.

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