Unsettled Debts, Unfilled Promises Taint Iron City

Article excerpt

Iron City Brewing Co. is leaving Pittsburgh to brew beer in Latrobe with unsettled debts to local governments and the water authority, as well as broken promises to workers.

When Iron City Brewing President Timothy Hickman announced the move to City Brewing Co.'s plant in Latrobe in July, he said Iron City would honor financial commitments it made when his ownership group bought the brewery out of bankruptcy in September 2007.

The largest debt is to the Pittsburgh Water & Sewer Authority, which said Friday it is owed $600,000 because Iron City Brewing is shutting down its 148-year-old Lawrenceville brewery after less than two years of operations, said Michael Kenney, the authority's executive director.

Iron City Brewing owes a total of about $161,000 to Allegheny County and the Pittsburgh Urban Redevelopment Authority, officials said yesterday.

The $600,000 bill is part of a $1 million claim on unpaid water and sewer bills, which the water authority agreed to write off if the brewery continued making beer through September 2010, Kenney said.

"We don't feel it lives up to the agreement," Kenney said.

The authority is considering its legal options and will notify Iron City Brewing that it believes the company has defaulted on the agreement, Kenney said.

Although the authority says the brewery owes $600,000, the agreement says the brewery's debt would be reduced to $450,000 if Iron City operated for 18 months. By continuing brewing and bottling beer into July, it appears Iron City will have operated at the plant for 22 months.

The brewery paid the authority $460,000 under the settlement and is current on water and sewer bills, Kenney said. It invested some money in the plant to repair its boilers and kegging line, but did not spend an estimated $4 million in new equipment, he said.

A dispute over $2.6 million in unpaid water and sewer bills pushed then-Pittsburgh Brewing Co. to seek bankruptcy protection in December 2005.

Under threats that the brewery could not emerge from bankruptcy with a $2.6 million water and sewage bill, the authority agreed to forgive about $2 million, in return for the promise that Iron City Brewing operate for three years and invest in the aging plant.

Hickman, who was at the City Brewing plant in Latrobe yesterday, could not be reached for comment. …