An enterprise on tap - Wynkoop Brewing Co., Denver, Colorado

Nation's Business, July, 1994 by Rosalind Resnick

John Hickenlooper is a self-confessed "deal-aholic." Somebody, he says with a wry smile, should stop him before he "joint-ventures" again.

A boyish-looking 41 with unkempt bangs and wire-rim glasses, Hickenlooper is the president and guiding spirit behind the Wynkoop Brewing Company, the restaurant he started six years ago in a five-story historic warehouse in what was once a blighted area of downtown Denver. Now, partly through Hickenlooper's efforts, Denver's downtown is bouncing back, and business at the 140-employee restaurant is booming. Last year it raked in $4 million in sales.

Although he has never men a business course in his life, Hickenlooper, who grew up in suburban Philadelphia, is a natural at bringing people together to make money.

He and his partners are opening what he calls "brewpubs"--restaurants where beer is brewed on the premises--in a half-dozen other cities, swapping their management expertise and recipes in return for equity stakes.

Hickenlooper has also teamed up with Joyce Meskis, owner of the thriving Tattered Cover Book Store, to renovate 220,000 square feet of historic Denver warehouses, turning them into affordable housing and shops. Then there's the $2 million beerbottling plant he opened in Denver in May.

As an undergraduate at Wesleyan University in the 1970s, he majored in English and dreamed of becoming a writer. But, in his senior year, he fell in love with geology and went to work for an off company in Colorado. When the company laid him off in 1986, he used most of his $110,000 severance pay to start his brewpub.

Hickenlooper opened the Wynkoop Brewing Company in 1988, after two years of hustling money from everybody from his Little League coach to his aunt in Scotland. He also took on three partners and, with them, invested $400,000 in equity, borrowed $50,000 from a bank, and got a $120,000 loan from the city. "I've always been fascinated by the beer business," says Hickenlooper, who created his own Hickenlooper Lager under the tutelage of home brewers he met in college.

Hickeulooper says his concept was to create "an American version of an English pub... a place where the president of the bank would sit elbow to elbow with the teller." To make that egalitarian dream a reality, he used some of the profit he made from brewing his own beer to lower the cost of the food, enabling customers to order a complete dinner for $6 or $7.

Thanks to some favorable press--and the fact that nobody else had opened a restaurant in lower downtown Denver in two years--Wynkoop, named after one of Denver's founders, was an overnight success. '"We were a big fish in a little pond," Hickenlooper says.

But not for long. Emboldened by Wynkoop's success, 10 new restaurants staked out turf in Wynkoop's neighborhood in 1991 and 1992, three of them brewpubs. Wynkoop's sales dropped off by 10 percent.

There was also a problem with the lease. During the restaurant's first three years, Wynkoop's lease was $20,000 a year, a rock-bottom $1 a square foot. But, starting in the fourth year, the lease was set to increase to 5 percent of Wynkoop's gross sales, which were then running at about $3 million.

Hickenlooper knew he needed to shift gears. With loans from a bank, the U.S. Small Business Administration, and the Colorado Housing and Financing Authority, Hickenlooper and his partners purchased the basement and first two floors of the building and financed an expansion. They added a banquet hall on the first floor and a billiards room on the second. Hickenlooper financed the pool hall by selling pool tables to customers and friends for $2,000 a pop and leasing them back. Hickenlooper then formed a separate company to purchase and convert the top three floors into residential lofts that he sold, once again, to customers and friends, who agreed to co-sign on the building's construction loan.

Despite his continuing success, Hickenlooper says, he has no plans to franchise or go public. Rather, he says, he'd prefer to do a private placement, sell 10 to 20 percent of the business, and bring some of the restaurants together under a single corporate umbrella. He is also planning to pursue his goals of opening four to five new restaurants a year and starting a micro-brewery together with two other local brewpubs. One day, he says, he hopes to market a national brand.

And where will Hickenooper find the money to make these dreams come true?

"We'll finance it the way we always have," he says. "I'll figure out some way to get my customers to give me some money and some way to give them a reward that makes it worth their risk."