Bitter Loss

Burntstone Brewhouse Suffers One Last Blow and Closes Its Doors

originally published October 17, 2001

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Since opening in 1998 at 140 East Washington Street, the upscale restaurant and bar has been the only tavern in town where a patron can enjoy hand-crafted beer in the building where it was brewed. In its three years in operation, the Burntstone offered a full lunch and dinner menu, maintained a full bar and served several styles of original seasonal ales and lagers brewed on premises by the tavern's own brewmaster, Matt Buley, a longtime brewing enthusiast who has logged in 108 batches brewed so far at the brewery.

"Even though we may or not be running it, we're hoping that an investor will step in and find a way to keep it going," says co-owner Lou Villalba. "That would be much better than selling the business and watching it get ripped apart. That would rip me apart."

Burntstone owners Lou Villalba and Scott Schaffer relocated to Athens from Lawrence, Kansas in 1997 and opened the brewpub in October, 1998, just as Athens' only other brew pub, the Athens Brewing Company, was winding down its operations on West Washington Street (where the Wild Wing Café currently operates).

Although the American Northeast and Northwest enjoyed something of a craft brewing renaissance in the '70s and '80s, it took the Southeast much longer to catch up. There were only a few dozen micro and pub brewers back in 1980 (by the mid-'90s there were hundreds of brewpubs scattered across Georgia and the South). Homebrewing wasn't legal in Georgia until 1992. The operation of "brewpubs" wasn't legalized until 1994, the same year that Athens microbiologist and brewmaster Brian Nummer opened the Athens Brewing Company.

In addition to the fancy beers, wines and liquors on the menu, the Burntstone regularly featured five or six homemade clean-tasting ales and lagers on tap. The bar featured a brassy atmosphere highlighted by the impressive copper vessels sitting in the brewing area in the front window. Local singer-songwriters and folk and jazz bands played occasionally. The Burntstone Brewhouse has also been a major supporter of Athens' annual Classic City Brew-Fest, which benefits the non-profit AIDS Coalition of NE Georgia.

Although the Burntstone successfully carved a niche for itself in the crowded downtown restaurant scene (the owners say it showed a profit after only a year), the pub suffered a series of financial blows that finally debilitated the business. According to Buley and Villalba, there were troubles from the start with the contractor who renovated the space from the Atomic Music Hall club. Then a large air conditioning unit went dead and had to be replaced in the summer months of 1999. In 2000, the owners discovered an infestation of termites and immense structural damage. They had to remove the floor and rebuild the entire brewery and the front facade of the building in January, 2001.

"Then we had a fantastic head chef this year who really organized the kitchen and menu who suddenly went bad... " Buley says. "Basically, the organization fell apart for a while because the guy who organized things was suddenly gone."

Despite the structural and employee problems, the Burntstone continued on, although genuinely discouraged.

"I was actually having my doubts going into this fourth year, since the county passed those decisions on the alcohol and liquor licenses, which were raised 50 percent," says Villalba.

Earlier this year, the Athens-Clarke County Commission voted to raise the Class C-D alcohol sales license from a $2900 fee to a $4350 fee per year. An additional three-percent sales tax was added to all mixed-drink sales as well. Burntstone also has the distinction of being the only tavern in Athens required to play an additional "brewpub" license of $500 per year.

"Margins do add up in this business," says Villalba. "Those numbers are absolutely crucial. It's not about the dollars and the cents: it's about the cents. I have a business in Miami where the alcohol license is considered an asset that can be sold as an asset. Here, it's not considered a financial asset. I think people who are not in business have a very wrong picture of what running a service industry business is like."

burntstone.jpg (l to r) Lou Villalba and Matt Buley. Photo by Ballard Lesemann

Despite the mounting financial trouble in recent months, the Burntstone was determined to press ahead into 2002 and beyond. Then, what Buley calls "the fatal blow" hit the brew pub: a recent theft and embezzlement scheme from a new employee. The scam was massive enough to force the closure of the operation.

According to the proprietors, an employee hired in early August stole thousands of dollars from the business over his brief tenure. They say he cleverly covered his trail of misdirected checks, deposits, cash payments and bookkeeping manipulations for nearly two months.

"He deposited checks into our bank account to cover other phony deposits and forged signatures of other employees and deposited those," says Villalba. "We were paying bills that had already been paid, or so we thought."

After the Burntstone discovered the discrepancies and became suspicious, the owners notified the police department. To confirm their suspicions, Buley even "staked out" the brewery on Sunday, September 23 and witnessed the suspect letting himself into the building at 4 a.m. and grabbing an amount of money out of the cash drawer.

"It was on a Friday [September 21] when we first walked to the police station and told them what was going on," says Villalba. "I understand they have their procedures and limitations, but as far as bringing this person to justice, nothing has been done [as of Tuesday, October 2]. Not a warrant has been issued even though we have theft by taking, money laundering, embezzlement and forgery."

"We're working with an investigator, but it's going really slow," says Buley. "I know for a fact that it's over $7,000. And that's a fatal blow. There are only two financial investigators in Athens-Clarke County, and they both move at the speed of molasses."

While the Burntstone Brewpub managers tally up the financial damages and contemplate their future in the industry, others wonder if events like this signify the coming end of what enthusiasts refer to as the "American Beer Renaissance."

"Craft brewing is definitely on the downward swing, unfortunately," says Owen Ogletree, organizer of the annual Classic City Brew-Fest and former owner of the local homebrew shop Brewtopia. "It was very trendy, especially in Georgia around '95 and '96 when the laws were changing. People were excited about trying it, but many of them came to realize that it required a great amount of work and time, and you had to be very clean and know what you were doing. We had customers the first year who were brewing every week. By the time we closed, they were brewing once a year. I think the Normaltown Brew Shop [on Prince Avenue] is doing okay. They say they're not making much money, but they're doing it because they love it. To have a good source of supplies and as a good service to Athens - I'm really glad they're there."

As for Burntstone, Villalba says, "I would like to keep the good memories of this place intact. That's what this last month is all about. Friends and loyal customers have been gathering here. I always tell people that Matt Buley is one of the biggest assets of the place. If you ask me what I'd like, I'd say I'd like to see someone to take over and harvest a lot of what we've already cultivated."

"I'm hopeful that something might happen," adds Buley. "I'm filing for unemployment this week, but I hope I can still brew beer in the brewery somehow."