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Napa's Stone Brewing abruptly closes: 40 staffers laid off

Downtown Napa brewpub and restaurant Stone Brewing closed abruptly on Thursday morning and laid off 40 staff members, according to a company statement.

“We’re incredibly disappointed to leave Napa,” said the statement from the brewing company. “We poured so much passion into the renovation of the beautiful 1877 Borreo Building.”

However, according to Stone Brewing, landlords “West Pueblo Partners forced Stone to close.”

Not so, said Kevin Teague, a spokesperson for West Pueblo Partners. “(Stone) chose to close by not paying rent.”

West Pueblo Partners, which consists of Teague, Michael L. Holcomb, Michael C. Holcomb and John Nichols, owns the Borreo Building. It is located at Third Street and Soscol Avenue.

Stone Brewing and West Pueblo Partners have spent most of 2021 in a legal dispute over unpaid rent.

The COVID-19 pandemic battered the brewery business, said the beer company. Sales dropped dramatically.

Stone said Napa landlord West Pueblo Partners refused to work with them on a rent deferral.

“Stone sent partial rent payments for the months the COVID shut down orders restricted its Napa operations, and full rent for the months after the orders were lifted, however, West Pueblo Partners refused the payments and insisted on terminating our lease.”

West Pueblo Partners saw it differently.

The partners said Stone refused to pay rent even as it continued to operate its restaurant and brewery.

“Stone Brewing, one of the top 10 largest craft brewing companies, chose to stop making its rent payments even though it had the money to pay rent. Stone Brewing has not paid rent for a year now," said Teague on Thursday. "During that time, Stone also launched a large expansion of its business.”

As of March, Stone reportedly owed West Pueblo Partners $211,273 in back rent.

Earlier this year, West Pueblo Partners started the process to evict its tenant.

Stone Brewing Company next filed a lawsuit in Napa Superior Court alleging breach of contract and other causes.

According to J. Noah Hagey, an attorney for Stone Brewing, the Napa Stone lease includes a provision that protects the tenant from events outside their control such as the COVID-19 pandemic.

“Stone has struggled to operate and maintain the brewery during the pandemic,” said Hagey.

West Pueblo Partners disagreed.

“Stone’s excuse is that COVID somehow impedes its ability to pay rent,” said Teague. Stone’s claims “lack merit,” said Teague.

On Oct. 15, Napa Superior Court judge Hon. Victoria Wood, Dept. ruled in favor West Pueblo Partners.

The lease was clear, the court wrote. Stone Brewing was not “delayed, interrupted or prevented from paying rent.”

“Stone simply made a financial decision not to,” pay rent, Wood wrote.

Even with this setback, Stone isn’t giving up, said the company.

“We intend to vigorously appeal the trial court’s ruling, because it is wrong,” said the Stone Brewing statement.

“It makes us incredibly sad that Stone Brewing chose to spend money on litigation rather than on making rent payments and supporting its Napa workforce,” said Teague.

On Thursday, Stone Brewing said it will be offering “the opportunity for some team members to relocate to Southern California and will do all we can to support those we leave behind in Napa, including providing severance and benefits coverage.”

Stone Brewing opened in Napa in May 2018 after an extensive renovation of the Borreo Building.

Take a look at Napa's Stone Brewing Co., located inside Napa's historic Borreo Building. It's one of Napa's oldest commercial structures.

You can reach reporter Jennifer Huffman at 256-2218 or jhuffman@napanews.com

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Business Editor

Jennifer Huffman is the business editor and a general assignment reporter for the Napa Valley Register. I cover a wide variety of topics for the newspaper. I've been with the Register since 2005.

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