Crowd Funding a Possibility for McMenamins Elks Project

McMenamins is exploring a new way of funding projects, which, if it works, could help the Tacoma Elks Lodge project off the ground. That's if it works in Bothell first.


The McMenamins brothers announced this week that they're making a push for outside investors to generate the last $8 million of a $26 million project to renovate Anderson Middle School in Bothell. Although it's being called "crowd funding," it's no Kickstarter; according to the Puget Sound Business Journal, you'll need at least $1 million net worth, and $200,000 or more in annual income to get in on the Bothell deal.

Technically investors would be buying in on the property, rather than the business. 

While the deal offers the company’s well-heeled fans a chance to invest in a $100 million-plus operation, their influence will be limited.

Investors will invest in Anderson School Properties, a limited liability company set up to own and develop the property. Anderson School Properties in turn will lease the site to McMenamins’ Washington operating division. Investors will have little if any control over day-to-day operations.

There would be a few extra perks. According to details listed on the Anderson School investment terms, the McMenamins are advertising an 8% return on investment, plus other perks, including special pricing  on hotel stays, concert tickets, and spa visits, as well as previews of other McMenamins properties, beer, wine, spirits, and more.


The Tacoma Elks Lodge remodel project is expected to be a little cheaper overall than the Bothell school - $20 million is the figure we last saw. Of that $20 million, the McMenamins still need $6 to 7 million, which they've been having trouble lining up. In December, they announced that the Tacoma project would be delayed indefinitely, while they focus on completing the Bothell school - a project that (unlike the Elks building) came with a deadline.

According to The News Tribune the brothers are currently looking for EB-5 immigrant investor funding for the Elks project, but might consider the crowd funding scheme here too if it works in Bothell. Looking to other investors to fund a project is new for the McMenamins brothers, who have traditionally funded their projects themselves. TNT reports that this new tactic would allow the brothers to approach investors directly, rather than going through investment brokers, who have shown little interest in the project so far.

So, if you've got a spare $250,000 or more, you could get in on the Bothell project now, but we'd rather you saved it for Tacoma's Elks project... just in case.

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We almost had it, but not looking very good.  Interesting how in another part of town they are planning on investing $100 million, but this project is lagging.  Are these guys making bad financial moves and that is why investors don’t want to touch them?

April 3, 2014 at 11:20 am / Reply / Quote and reply

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We almost had it, but not looking very good.  Interesting how in another part of town they are planning on investing $100 million, but this project is lagging.  Are these guys making bad financial moves and that is why investors don’t want to touch them?

the brew pub schtick is getting a little long in the tooth.  That is the alpha and omega of why they are looking for alternative sources of funding.  I stated this ~ three years ago in the comments under News Buffoon articles written back then and it is even more true today.  Now I would also like to point out that Bass Pro did not cost the taxpaying residents in dollars and City staff time and is a viable business model that is on the uptick unlike McMenamins business that is focused almost exclusively on public subsidies.  Yes, Bass Pro has been lured with public dollars in some locations - but that is not their stock in trade.  Public dollars were used to get Bass Pro to move into and save a civic center in some community, BUT they were already committed to setting up shop there anyway and the community basically bribed them into taking what was a liability off the community’s hands.

Without public subsidies Bass Pro will make money for their investors, without public subsidies there is no way McMenamin’s, or any other brew pub can attract funding. 

McMenamins has not been economically viable without public subsidies for almost a decade.

April 3, 2014 at 4:04 pm / Reply / Quote and reply

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Let me clarify that I am not talking about small scale craft breweries/eating establishments.  I am specifically addressing large scale establishments that are entertainment/restaurant with a theme and this theme ran out of steam and has been coasting for quite some time now.  The ones that are already established can continue to generate profits, but it is not a smart bet to invest in this business model at this late stage.

April 3, 2014 at 4:12 pm / Reply / Quote and reply

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The reason people aren’t beating down their doors to invest in this is that it promises 8% ROI.  That’s low.  It has nothing to do with brewpubs being OVER.

April 3, 2014 at 4:47 pm / Reply / Quote and reply

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I did not say over, I said long in the tooth.  You obviously don’t understand market trends on Theme restaurants.  The ROI is only there during the ramp up.

April 4, 2014 at 6:17 am / Reply / Quote and reply

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Is McMenamins asking for public subsidies?  There was a parking garage deal with the City was in place when the Grace Pleasants apartment complex was linked to this but… the McMenamins brothers have said that they don’t need a parking garage or necessarily want one.  Do explain.

April 3, 2014 at 4:45 pm / Reply / Quote and reply

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Show me a McMenamin’s project that does not lead off with a campaign designed to get “the public” on board with a “public private partnership” and I will take my words back.  Who paid for the utility upgrades required if this project moves forward?  I guarantee you that if 99% of the resident, property owners, in Tacoma were interested in a project to improve their real estate they would pay for the Utility upgrades.  It does not end there either.  You certainly are naive if you thing the parking garage was the extent of the public subsidies.  The McMenamin’s have a history of getting the public to fund their business ventures.  It is what it is and to recognize it for that is not being honest.

April 4, 2014 at 6:23 am / Reply / Quote and reply

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At least there’s a good roof on the building.

April 3, 2014 at 12:02 pm / Reply / Quote and reply

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I do think that using a similar method to the Quimper Merchantile community funding, in Port Townsend, is a slam dunk.  Check out their web page for details on how they funded themselves.  With McMenamins situation, they could probably do without the board members of investors…
Essentially, the Quimper method sells stock to local people.  In return, the store has their buy-in as customers, profit sharing through the stock program, and makes the store a community pride rallying point. 
Imagine the average Pierce County resident able to buy into this?  Tacomans would come out of the woodwork to help save this building alone I’m sure…
But, I wish the McMenamin brothers luck!

April 3, 2014 at 12:08 pm / Reply / Quote and reply

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