Taps for brewery breakup

To hear the two rival brewmeisters talking, no one's crying into their beer about the breakup of the Yards Brewing Co., the popular local craft brewery.

Tom Kehoe Jr., one of the original partners - he started brewing beer in his dorm room for his frat pals - will get the name and the recipes, but former business partners will get the Kensington brewery and all the tanks.

They are ready to brew a new set of beers as the Philadelphia Brewing Co. "We've sold the name Yards, but not the heart and soul of the operation," said Bill Barton, who will run the company with his wife, Nancy, and their friend Jim McBride.

Barton wonders how Kehoe will be able to get production up and running before his lease expires in their building at the end of the year.

Kehoe thinks that Philadelphia Brewing Co. may try to copy Yards recipes, but he is not worried. Brewers, he said, try to copy the taste of good beers all the time - but without the name and the brand strength, they will not fill many mugs.

Yards' brew crew works for Kehoe, but Barton said some would jump ship once he gets Philadelphia Brewing Co. up and running.

So, while it is not quite a barroom brawl, it has at least been a courtroom tiff.

In June, McBride filed two suits against Yards and Kehoe in Philadelphia's Court of Common Pleas. In one, he sought repayment of $30,000 in personal loans. In the other, he asked to be compensated for the use of brewing tanks.

The two sides said they figured out how to divide the business after an 11-hour marathon bargaining session Thursday.

Maybe the brawl will be in the marketplace if the two rivals start competing for taps in the taverns.

"I believe there is enough room in the marketplace for both breweries," said Sam Calagione, who owns Dogfish Head Craft Brewery in Milton, Del. "I have a lot of respect for them. They are both capable of running strong breweries."

Yards sold just under $2 million in beer last year and had recently begun to turn a profit.

So what caused the breakup? Depends on whom you ask.

"There was a difference in our opinions of work ethic," said Bill Barton, formerly in the auto-auction business. He, his wife and McBride joined Yards in 1999, after Kehoe's original partner and co-founder, Jon Bovit, bowed out.

Barton said he and his wife were out selling the beer, persuading bars to set up Yards taps. Kehoe would show up late and leave early. "He was on a free ride," Barton said.

Kehoe laughed at that. "We're still cordial," he said.

Kehoe said Bill and Nancy Barton were more committed to their Kensington building than they were to the brew.

When Yards, which fermented its first beers in 1994 in a 900-square-foot brewery in Manayunk, outgrew its second location in Roxborough, it moved to Kensington in 1999. The firm set up at the Weisbrod & Hess brewery, which last produced beer in 1939.

Now restored, the building at Hagert and Martha Streets houses the brewery plus an eclectic mix of businesses.

But, said Kehoe, it is too small and too awkwardly configured for a growing beer firm.

"We're maxed out there," Kehoe said.

He said that Yards did not have the capacity to produce much more than its 10,000 barrels a year at that building. As is, manufacturers have to saw the legs off the tanks to fit them in the building, he said.

Yards beers had become so popular locally that Yards had to pull out of its business in Maryland and Virginia just to have enough product to satisfy local drinkers, he said.

"Bill and Nancy love this building, and they love the neighborhood," he said. "I want to expand."

Barton said he and his wife were busy preparing for production, aiming to start in October, if Kehoe moves out by then. Names and label designs will be announced then, he said. For now, he is on vacation. The couple officially resigned from Yards in mid-July.

Bill Barton first got to know Kehoe in 1995, when he went to Manayunk to buy Yards beer. It was the Bartons' attorney, Linda Carpenter, who suggested that they invest in Yards, which was struggling at the time.

Carpenter and Kehoe later married. "My attorney married my partner," Barton said. That had its own complications. Now, she is running for judge on the Court of Common Pleas.