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‘Difficult Decision’

JBC Permanently Closes Amid Lawsuits, Virus

The Jamestown Brewing Company is pictured dark Sunday morning at its West Third Street location in downtown Jamestown. Beset by delays, lawsuits and COVID-19, the downtown brewery and restaurant will not reopen its doors. P-J photo by Eric Tichy

The Jamestown Brewing Company, beset by a series of setbacks during construction, numerous lawsuits and a worldwide pandemic, has permanently closed its downtown doors less than a year after welcoming its first customer.

Owner Jon McLellan II said the “difficult decision” to shutter the brewery and restaurant was made not long after he learned an application for federal Paycheck Protection Program funding had been denied. PPP disbursements, by design, allows small businesses and nonprofits to retain employees and weather the economic storm brought on by COVID-19. Those that meet employee-retention criteria do not have to pay back the money.

In Chautauqua County, at least 22 businesses and organizations have received between $1-5 million in PPP loans, with even more receiving less than $1 million.

McLellan said JBC was approved for an Economic Injury Disaster Loan in May, but only for about $98,000, and not nearly enough to get the young, cash-strapped brewery and restaurant back up and running.

“It was nowhere near what we needed to get,” McLellan told The Post-Journal on Friday. “We needed to get the PPP loan but that was denied.”

Jon McLellan I and Jon McLellan II are pictured inside the Jamestown Brewing Company shortly before it opened in July 2019. P-J file photo by Eric Tichy

“I don’t see us reopening at this point,” McLellan continued. “It was a terribly difficult decision. We had gone through quite a few things, and we were hopeful to see things through.”

McLellan noted that he and his father, Jon McLellan I, have been brewing beer themselves for about 17 years. It was a hobby that turned into a goal of transforming the former W.T. Grant building at 115-121 W. Third St. in Jamestown into a sprawling, multi-story brewery and restaurant that could also host guests within a third-floor banquet hall.

The McLellans detailed plans to manufacture a 20-barrel brewing system capable of producing darks, pilsners and sours.

GPatti Development officially acquired the property from the Gebbie Foundation, and exterior and interior renovation work started on the building.

The restoration project had an estimated cost of about $4 million, which included purchasing the property. The cost of creating the brewery and restaurant was estimated at about $1.1 million.

And support for a downtown brewery appeared to be ample. According to reports at the time, the project received $830,000 through the state Downtown Revitalization Initiative. The renovation project also received a $475,000 state Main Street grant, around $200,000 from city officials in Community Development Block Grant funding for facade enhancements and Americans With Disabilities Act improvements, a $180,000 Jamestown Local Development Corporation loan, $100,000 from the Chautauqua County Industrial Development Agency and $50,000 from the Greater Jamestown Zone Capital Corporation.

By March 2018, Jon McLellan II said he hoped the brewery would cut ribbon before the nearby National Comedy Center opened its doors that August. The Comedy Center indeed opened on time to much fanfare to coincide with the annual Lucille Ball Comedy Festival. Actor Dan Aykroyd even personally delivered his former motorcycle to the center to be preserved, drawing a huge crowd downtown.

The brewery, however, remained closed and behind schedule due to a series of construction delays. A summer opening was pushed to the fall.

The McLellans eventually filed a lawsuit against GPatti after claiming to lose about $1 million as the result of construction delays. The developer filed a counterclaim, with both eventually claiming the other had breached contracts.

With litigation making its way through Supreme Court in Erie County, JBC officially opened it doors in July 2019, about a year behind schedule. However, problems persisted; without a liquor license on hand, the brewery and restaurant was forced to rely on the latter, and only two months later, JBC had to temporarily close until the license was receive by the end of September.

On Friday, McLellan expressed frustration in getting the brewery to the point that it could turn a profit.

“Not being known locally, and not knowing who you were dealing with, it’s trying to building something amazing, only to be met with opposition at every turn,” he said.

Despite grand plans to produce a series of beers that would be distributed, McLellan said in the end they only brewed 12 times before closing.

GPatti filed a lawsuit in February of this year seeking to evict the tenants after the developer claimed he had received a fraction of the tens of thousands of dollars in rent owed. The McLellans, in a response, said they were current with all lenders, vendors and employees, contrary to claims in the suit.

Nonetheless, Erie County State Supreme Court Justice Timothy Walker gave an oral decision from the bench in March awarding GPatti possession of JBC back to the developer. The eviction order and warrant was being drafted when the coronavirus made its way to the United State, closing businesses, schools and the courts.

JBC closed it doors March 20 due to the pandemic. It reopened for curbside beer pickup in late April, but closed again May 17. “We had to stop that effort because the cost to sell curbside exceeded the revenue we were receiving,” McLellan said in an affidavit connected to the eviction proceedings.

Despite the suits, McLellan said it was COVID-19 and its timing that became too much to overcome in the end.

“We had a great plan in place to move forward with the best chance to be successful despite the opposition we had the entire time,” he said. “Then COVID happened, and that was highly unfortunate for us with the timing. … Rest assured we had a plan, with maybe a partner, that could have changed things.”

McLellan thanked those who supported JBC and the “great people” who assisted along the way, including all the employees.

“Hopefully learn from this accident and move on,” he said. “I don’t really regret anything, so to speak. There were a lot of great people.”

Asked if brewing remains in his future, McLellan said, “I love the idea of brewing, it’s a fun aspect, but who knows what happens in the future. They might make things easier, or maybe harder, for breweries in the future.”

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