Starting a Brewpub, 7 Hills Brewing

I love craft beer and love might just be an understatement. It is exciting for me to visit a new city. To find out what local beer they have to offer. Being able to attend the brewery to see everyone else enjoying themselves to eat their food and of course drink beer.

That is part of the fun when going on vacation and road trips. Dubuque, Iowa has been a growing city for quite a while but always lacked something. A place an area where food and tasty beverages are a part of the town. Most cities have an area where you can just walk around. Visit several different restaurants and get some great local food may be a craft cocktail or just enjoy a pint of local beer. Well, Dubuque was missing that.

Luckily Keith of Seven Hills Brewery had an idea to start a beer pub and fill the void of what he wanted in his town Dubuque. Find out what it takes to create a brewery and a restaurant right now.

Guests

Keith Gutierrez Owner 7 Hills Brewing Co

Keith Gutierrez

I am.

The Idea

The idea I would say kind of conceptualize when I was waiting tables at a restaurant pay for grad school in Chicago. I was next to a winery. They were busy as can be and we were really slow. I bargained I was full with her or their patrons I always go over there after work or before and you know they are brewing wine on a mass scale micro-winery.

So they had high steel that’s similar brewpub, and you know kind of reward my passion. How cool that would be to actually do a winery, and we’re in one. In hindsight, I can’t imagine a headache as a verb is more than enough at the moment. But yeah the actual long-term dream would be distillery winery brewery. But after you know I just kind of thought be a cool idea. Didn’t really give it much thought.

That was something I was gonna pursue. Graduate, as I said, got my degree moved out here and practiced and now had a comfortable living my wife’s master’s nursing you know where we’re sitting right the middle class only thing that was lacking in this town was a place for adults to go. A lot of younger bars and we both always travel out of town Cedar Rapids Chicago Minneapolis Madison go to brewpubs kind of what we still do and thought and there we don’t have one in our own town that that kind of scale and thought now would be cool.

And then when our friends were starting to talk about the idea for a chef and a general manager they got me excited and kind of RioCan that no fire, and that’s all the timing that opportunity. You know what they’re trying to do. While I was doing I kind of just grabbed the side connected and then I had to give birth to that formula.

Experience

I gave home-brewing a whirl. It wasn’t. It was my thing I was more of a hobbyist but you know I have a medical background in science, and I’ve always just naturally really got chemistry. DEIDRE CLARKE inv. When I first got her trying to convince me of a chemistry major. The reason I bring that up is that she’s still there and now they are introducing like a beer class.

So far I kind of reconnected with her. She loves beard and realizes I load bearing college. And here we are. No, I’m kind of more or less wanted Kickstarter launched the idea because I’ve always kind of felt like a natural leader in individual sports. I was still captain of the team’s president of a lot of clubs so I never really thought I’d ever been in business.

Never had the desire I’ve always kind of want to stay away from it.But you can get only around hers or herself so long, and the calling was there, and I refuse the calling wanted of my life and suffered from the experience, so I knew in this game I had better answer it.

So here we are, and we’re having fun. It’s exhausting, but it’s it’s there’s no better thing than owning yourself as an individual.

And everybody from every employ and house kind of has that same mentality, and I think that’s why the experience we offer is top notch.

Wife on board of dream

It was during. She had surgery on her back. And we have a Madison kind of weird scares that a cancerous tumor on her spine. So we went to a specialist, and it was like during that week she’s healing. I was on the phone talking to you know that idea was kind of sprouted and she was like really you want to open up a barrier right now and where I’m probably pregnant with our cat is back surgery we have to have a 1-year-old a 3-year-old and I was like well if it if we can get through this without killing ourselves you know and each other I go.

The rest should be easy. You know it’s like let’s maximize my you know my stress to the max. You know she definitely she and I love it because she’s always skeptical. And I wanted to be the question my sanity at times I’m not delusional, but I think she knew she tried to like her father that she trusted that you know I would give it my all and I don’t. I’m a very hard worker, and I’m passionate, and I’m a man of my word. I tell you I’m going to do it. I’m going to do it.

Getting Financed

That’s funny because it kind of brings me back to a story I didn’t need. I called him masseurs bless a blessing but he was in Rome, and I couldn’t wait until he got back. I’m pretty impatient. Most people know me. So I basically called him the said hey I’m going to marry your daughter. I hope you say yes or No.

I’m going to marry your daughter, so I think that’s kind of also my no against the spirit. But I knew you know we got married, and I knew Gary for not that long about a year, and I was in therapy, and he actually experiences a traumatic injury on a snowmobile, and as a result of that, he had. Lost some gross motor skills and so I did a lot of rehab with him and grew a stable relationship with them.

Basically, don’t at all my free time just to help him. He would come. He’d come down once a week. My brother and I kind of stepped up and started running the family business he was already part of it. So you know we just got to know very raw very intimate when you are working with somebody from the ground up. So metaphorically is kind of like I helped Bulgaria back up and returned Gary. You know I’m not an unintentionally help build up.

You know this. Called the love child. You know this is our fourth child my wife, and I said because it’s still in infancy and it’s one of the hardest times the first year raising anything. So I agree that a very successful business very well respected. It was one of the last small dairy businesses on the side of the butter side of a lot of small families was bought out.

So, in the end, they end up selling the two separate Creameries is sold to the land of lakes and grassland and that big corporate had been kind of toying with buying out Gheriah for years by offering next to nothing.

So that is kind of a goal that isn’t so good out here so when they came to the table Jason my Romar said they give us an offer we can’t refuse. And he kind of saw lay down the tunnel with how the market was going, and he got out of a great time, and at that point, I know Uncle Sam wants to tax hard in the IDF.

On the other side of my friends was you know a verbal conversation for more than a year and me and my wife kind of thought they’re not going to do it because it’s enormous they wanted to go big. They don’t want to start small. Ever was Hershberger not small?

Like Homer the actual school for so long story short they just I just saw two opportunities kind of happened once I just don’t pass things off as coincidence so I just think my relationship with Gary and know him trusting me on the right side of things and giving and guidance and always be honest with him about what I think he should do in regards to outcomes and seeing the people he should be.

Trust me I guess I have no business experience. I said if you say no I totally get it. I said that’s a significant investment and his response was you know I was given a chance at your age when I had no experience is like who am I to say no to that you know. And I said I’m glad you’re I’m so happy that happened then.

Finding the Perfect Location

You know Main Street look the area brewery in town in the past is we thought hey how cool it would be to go back into an old brewery. Yeah. Really restore yeah restore that redeveloped that there was no opportunity.

Bricktown was the very that I worked out on third main the rent was really high off the bat. We would have two of our glycol ions in the boiler and all that mechanical side of the brewing system. It just didn’t make sense. So we knew like it was kind of like the Pearl Jam.

There like let’s be that garage band that gets big. So what butterflies we found this big square garage that was you know it had a big garage door and I was like well it’s okay if we can get a fermenters, so we don’t tear down half the building because that was our bit concerned everything that’s developed on Main Street.

It’s you know it’s already finished. We wanted to start the rush. So it was a no-brainer that we wanted to go into a brick and mortar you know historical building finding it was really hard. I prefer to be the owner of the building the tax credits that we’ve applied for most neighborhood is owned by Onder anyway.

You with they intend to do their build-out for anybody who goes in which is why I said it was difficult but we found a landlord who was willing to let us you know is building and. It’s been very good to us, and we’ve been very good to him we have a great relationship, and we’re pleased that we found that with the little guy who saw a little guy in a sea of the guys.

Overcoming City Council

You know we kind of compare to me. We do like kind of you see the analysis of regional logic what’s going on. Galina Potosí Iowa City Des Moines and that we know we had an excellent an excellent audience market you know to be very thirsty if you look at you know the alcohol standards Gallagher’s German Yeah you know.

So you know we have a very rich history brewing in Iowa from the early 1990s. We always a fortune that we kind of started as the craft brewery place and then disappeared. And one of our ideas the business philosophy is to restore that a rich tradition of brewing back into our city. Because when you look around and see you know Dubuque, Iowa is probably on the top 10 towns but went on the craft beer were not even Manowar. And that’s kind of frustrating when the core is more significant than us.

Yeah, it really is. And you know going through the politics I kind of are saying why. Because like I told our city did not embrace us from the start and it was because they were very heavily influenced by individual business owners and developers who we tried to work with that first realize the personnel is unmatched.

We said we are. We appreciate your craft. We respectfully decline because we can’t afford you. And they basically do not like that in this neighborhood.

Millwork District area you know and there’s a lot of that right ole boy mentality Aaron to you as a calm me and an example Usborne anyone. I’m kind of I never fit in anywhere so you would say like I’m the god of the millennials or the baby of the other Gen Xs.

You know I can’t see hear that you know we’re trying to the young the youth are trying to be very progressive yet like the good old boys club is still holding on to these ancient 90’s ancient traditions, and we’re trying to break those.

And that’s what Coreper mean we are a zealot. Exactly. No, we’re not. We were manipulating what we have. Involved, so you know we know people want to drink here, so we’re gonna make the right sides good times and good food.

So yeah that was another part of the obstacles was getting back to you know in hindsight would be nice to have a community council that was more accepting especially right now. I had said the city council when people are trying to you know stall us I said let us come down here I go.

Just by the nature of our business model being a brewpub whether we make it or not we’re going to bring in that first year of us and this area kind of hit a plateau and you know I’m not Nostradamus but I can predict that and once we did that two months later both of these buildings were honest cop out because I knew a couple the owners they were like OK brewpubs going here boom we’re going to put a hotel here.

The other guy was like I want to reality if I hold on that couple years that property values are going to skyrocket, so he’s thinking from an investment, and then the guy by the hotel bought the other building, and they’re going to do small business bill retail build-outs.

So we’re just a catalyst to help push. You know this is this reaction forward. And I think now I’ve heard more businesses are coming down here because it’s the vibrant cool thing to be around. I’ve had moments of moments of truth where you know I guess one of the developers tell me on the phone I got named names but the one that basically I can see pull strings in the council with most of the money said to me if I didn’t buy his building and if I ice I put a bid in another one.

And by that, I’m going to lose the cool factor and fail, and my stomach drops and I know this guy, and they told me they got to know him because you probably wouldn’t sign it. And I was like you know where I grew up nobody says that’s respecting the hard working person. And I was my my my parents raised me pretty passive, and I’ve always kind of had trouble with that. So it was my own. That I grow a spine and you know I to defend myself.

And I did. I just I think I might turn my eyes. You know I saw red, and I lit up on the phone. Even the realtor the time goes. And you must be crazy to say that guys I know that. Who says this to anybody that’s disrespectful in my neighborhood where I grew up.

They drag you in the back the aliens Macki around. It’s just you know it’s like verbally spitting and somebody say so that and then when I went to the council to amend the Pudi because we wanted just essentially make sure that the definitions of the distribution part of what a brewpub wasn’t or city didn’t perfectly match with the state’s definition and by dealing with that individual I knew that if anybody came to try to stop shop to just be a thorn it would be.

So I was doing my diligence, and because of that, they made this. He made this entire story and had no fear mongering. And we got it was very prejudicial. I got to the point where I was contemplating you know with litigation. And then the city I think told him is he needs to settle down and stop.

So I heard we kind of broke some ties. It was never my intention. But at the same time if these are symbolic things I’m happy it’s you know it’s Namal. It’s you know it’s corporate cronyism so you.

Oh exactly. I mean my business plan was back three months. That’s money that’s you know getting eaten up. And then on top of that, it’s just we’re doing something so good for the community. One of the first things this lady said the council the secretaries are even from here. What the fuck does that matter?

You know I don’t have a name. The last name that you see on a street sign here bringing money into this area know how to annoy not a nuisance. I want to be like how to million out a pet file. You don’t like you don’t know these things you can’t make these judgments you have to give me you know give me the opportunity.

And if I screw up, then you become after me. The judicial system the checks and balances.

The endpoint when someone is so what’s the real it was it was a circus. So they never say anything like that the council meeting. What’s the real reason that you’re concerned to the individual giving me our time noise and smells and of course you know I can’t hold back from a smart ass.

He’s basically telling you guys you don’t know how to do your job because there’s noise and smells you know ordinances already in these beauties. So that’s really that’s that’s a lie. And I said how you measure that. How do you measure how do you analyze from a quantitative that you know noise smells like come on subjective.

You know what I know. My thing was common sense there are you guys can allow a sushi place to enter tomorrow and Iran you know Rossie for boys it’s smelly fish we’re making liquid bread it smells pretty good you know.

Yeah I mean yeah it’s you. It was anybody who had sensibility and reason and rationality. You can see right through this whole thing but a lot of people kind of have the wool pulled over their vision so, and I’m sure I’m considered a rabble-rouser. But you know I don’t I’ll I’ll be even worse tomorrow if they try to do that.

Somebody else says to try and be successful and take this huge risk. You know in  Cedar Falls, Waterloo SingleSpeed opened up another familiar cool place. Very similar business model. There are times three and that size.

They renovated an old building put in three times the amount we did they the city gave them the old building for a dollar. And they helped them along the way. I’m so jealous and a little better. But yeah you know what in hindsight you know once I can kind of step back from detaching my emotions and look at it more rationally like I guess this is what they say.

You know those overcome the hardest you know will have the most appreciation. So, in the end, I just want to help anybody that’s trying to start going down this route. I was like Hey don’t I meet a library. I’ll just pick my brain.

I got you to know we kind of see it as a youth. We’re not cutthroat. Survival of the fittest. You kill and can’t compete we want to cooperate. I was like happy with yourself. Cooperate with others. We all win.

Moving Forward

We’re actually coming up on our anniversary date August 21st. We sign maybe it is one year one month. We sign the lease. July 1st of 2017. We would have got we haven’t finished construction before that. The problem was we use historic tax credits and maybe. I’ll take all falter. I’m not a patient man.

So you get to a certain point and then you have to wait for them. There are different steps along the way of this tax credits 1.0 when 520 so you have to get approval as you keep you know the answer to be the architecture, OK the materials locate the plants.

It’s not as simple as like new commercial you have everything going you get the financing, and then it’s I mean this hotel probably be a year, and it’s four times the size of what we did. So and I’m jealous. But you know our building is definitely you really have a story building it’s restoring an old spirit to its.

You walk in her place, and you just feel like a different vibe that they don’t get when you walk into a commercial area. Well and that’s another rescue take is that the tax credits as you know you can you still have to be approved at the end.

Know you submit it and it’s still like Madurese how people get it, but you’re still like oh my gosh I put in extra money to meet their standards.

You could save a lot more going to commercial and then you still it’s a gamble. OK investing Abbasid is it gonna pay off. No, we got the approval. We’re waiting for the return or at last stage of it. So the architectural standards were all approved.

Now they’re just kind of doing a concert of the occasion with a match of our accounting. So basically you know to make sure that we spend the money on stuff we said. I have nothing to worry about there.

You know because I’m not I never try to hide anything. I’ll tell it right to people right away I pay eight thousand dollars for a freakin door that’s not even operable. Because these companies that make this critical stuff know that all this stuff behind it so they jack up the price.

And so it is it is frustrating because I am a fiscally conservative side of me that that kind of irks me but you know I mean I’m also getting money back.

So when you ask for something you’ve got to give something it says I would design the entire tax code definitely but you know I’m not on the board, so I’ll just shut up.

The Cost of Opening

Yes, three of $300,000 of that I got from a bank. The rest I got from my private investor. Yeah, that’s love he loves. And you know what Gary is he’s a stand-up guy there are not many people like him. I mean he’s he stands 6 foot seven.

So yeah I mean I I’m a little guy like at what we look like twins Joe Pesch are Danny Devito and Arnold, but Gary builds a business from the ground up to become enormous. And I guess he didn’t blink twice. He’s just a very kind right person who just as he’s helped his community. I mean he’s probably given everybody a job with the talent first opened.

Russell is on her Wisconsin. You know that in the dairy world. When we were looking at our tanks the dairy. There are people who have ever had dairy tanks are now fabricating tanks you know, and I mention his name, and I mean the conversation when 360 Oh I was just an average person kind oh my gosh she’s sick of her tour, and we love Gary and I you know I see that everywhere we go with my wife.

And it’s excellent because you know I’m sure he probably like any business guy apparently upset the powers to be. Gary’s most modest humble guys always. He’s got the most excellent, but more he’s still like stay low stay on the radar.

You know he’s like I’ve seen way too many people get on their high horse. All right. Back off. So you know I very much try to model my business ethos and ethics of what he has done.

When he raised a great daughter. So I think I think his wife what a fantastic support system.

Reflecting Back

You know it didn’t felt truly mine. You know I don’t really kind of I have that that philosophy you know I just don’t see things as separate which most people don’t get because so like what. So you know I always said this is awesome you know.

But on paper financially it is beautiful. You know on that side of things that really never felt like that until recently only because haven’t been able to breathe the last two months because we’ve been busy enough that I’m like OK now it’s like I mean now we can catch up on these deficiencies. But you know when I won we are winning awards in town, and I have to go up and get them.

It was I still feel weird about my wife’s like her exact result you need to be better about receiving compliments because she’s like you only to be Commager when you’re not because you know I guess I’m like I don’t care about the compliments or the comments I just want honesty common sense to be a part of everybody’s life again.

So in that sense. But you know Esther it’s just part of me. So she’s you know there wasn’t until we get these awards that it’s like wow this is really like this is it’s authenticated you know in the most important thing isn’t that the money or the prizes it’s people in the community saying we love your place.

I think that’s why my wife and I always makes us smile. It’s like we’re sharing this with them and we want their feedback and you know it’s not like you know what can you do for them. What can they do for you?

It’s a give and, and we just love being a part of something that’s like a spiritual force way more significant than merely me as an individual.

Biggest Changes

The two of the core members are no longer with us. Yes and the first laughs didn’t. I learned a lot about being a leader, and a boss that didn’t go over well, of course, the loss of a best friend from it and that one was because of money. It was management.

On and on that department side and then on the other the other department I guess I always say on the president I have three branches just like the government. So the two that were had one each their own offices the second and the second one left on good terms.

He was over. He wants to start his own brewery. I think he’s got the irony as you said you know I do beg, but I think he’s going go small because of the finance. Which is fine. And I think it’s a great experience that he’s actually answering his calling.

So why aren’t you mad Traps and I’m like No I’m? I don’t you know I put I put it he was a friend of mine. So I put his growth before my economic growth like his growth as a human. And I want him to understand all the aspects of this business because it’s not easy and I think he’s got respect for me and I respect for him, so he laughs.

We hugged it out and on good terms and you know I’ve already called him today to ask about the cost of excise taxes because you kind of handling that now our numbers now are Hudner who he trained very well. So you know we all have that meet me and him Travisono make that make this area a better viewing area.

So he’s, but he’s in Illinois, and he’s working on his business plan, and I told him I’m here to help you. Well, I’ll let you know what you shouldn’t do. I know you know what you should do. So you don’t learn to learn from my mistakes. Exactly. You know the first year to stay alive stay afloat and I guess we’ve really turned it around.

I mean we’re standing here in this event center which once we get up to 80 a code and tax credits are what’s holding us back from actually doing the construction part of it which is a whole different thing. But once we get this open that is it’ll help us on financial stuff we’re not paying rent and only doing small private amounts.

So it’s funny because I never had any desire to do this with my landlord needed renters in there because he was struggling for the money side.

Future Plans

So once again it shows you know you know with a lot of nature like I’m giving it to my lender now. And then you know I’ll get it back. Once we open that he’s been helpful and other ways. So it’s you need to find good people to work with.

So started attended so you know we plan to get this place going you know work out the kinks over here you know we would love that but nothing more than to do a production facility because we’re hitting a point where we’re at about I’d say 50 60 percent efficiency on our system. We would like to max out at a hundred which we’re we’re growing into the buyers are very busy summer for them.

An excellent job in their tails. But yeah I guess the long-term goal like 10 years or less. I just know that from the build out I’m like oh yeah remain open here and then. It’s been a year after so I’m going to overshoot than undershoot. So in a ten-year plan I’d love to do a production facility. You know I work with a lot of older just groups in Europe where there’s trailer miking running and you know I’d like to work with them on plotting out you know where we can go on the county that somebody can lead up to want a trail bike trail or something that.

So because a production facility in the winter we probably wouldn’t do anything for six months because it’s hard to get. I mean it’s hard to miss a state down here but out there I probably win new food.

I just have food trucks so I’d like to grow into a food truck perhaps in three or four or five years because then that could service that other one is good and then build production of sell-out new commercial you know because all I need is a Polish head you know. You , and if we did say we did phenomenally well I would love to work with Clark University’s Stem program to build a lab inside of it and even Laurus you know their science program because we want to share our love for beer and beer as art and science and you know merge those two or marry those two and then evolve the students because I tell you, man, I put I put up internships recently, and it’s easy to get nibbles on that because you’re a brewpub and it’s trendy and if you boys cool and environments fun.

Advice from Keith

Yeah absolutely. First thing that hits my mind is you’re going to have doubters haters cynics. There’s a lot of people you’re going to tell your ideas stupid most of them. And I want to pull you back down to where they are that I want to elevate the you know surround yourself with successful people positive thinkers you know people that think outside the box that are against the grain that aren’t worried about the status or what the job the general person is.

You know Matt is dramatizing just know it was in your heart you know, and apparently, you know we to keep you realize you have two ears and one mouth. You know you listen to people you learn so much, and you’re going to have moments where you’re just. Should I stop? Is it worth it? You know to follow it through.

You know what’s the worst that could happen you fail. So a lot of people fail. Sure. Was my guy over there. Tesla. Eli must have probably failed before he had a Lars. So you just see it through, and you’ll have no regrets that you failure fail. But if you don’t get off and try it, that will eat you alive.

Final Thoughts

What a great what a fantastic story to hear about seven hills and the journey Keith took to get it open. We all know that everyone’s mission is entirely different and that’s why we are doing this for the breaking in podcast.

We want to hear about small business owners and their obstacles and their successes to make their ideas their dreams come true. I can’t think Keith enough to sit down with me. Well, technically we stood to do this interview and talk about his journey and everything that came with opening seven hills brewery.

So during the Dubuque area stopped by for a high glass of beer and some excellent food their burgers are fantastic. They’re Cubans. Not too bad either. So thank you for listening to the breaking and podcast til next episode. Take it easy and live your life.

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