As the owners of the NBA’s Chicago Bulls and NHL’s Chicago Blackhawks ready a $7 billion real estate development around their United Center arena, one of the nation’s few Black-owned craft beer companies is drawing up a new brewery and taproom nearby.
Funkytown Brewery has a contract to buy a vacant, two-story industrial building at 1931 W. Lake St., with plans to convert the site into the company’s first stand-alone facility for brewing, distributing and selling beer, CEO and co-founder Rich Bloomfield told CoStar News.
The local brewery’s vision for the property, including an outdoor beer garden, comes amid changes for both the U.S. craft beer industry that's consolidating after years of explosive growth, and the neighborhood around the basketball and hockey arena.
The Lake Street building is just north of the arena whose owners — the Wirtz family, which owns the Blackhawks, and the Reinsdorfs, owners of the Bulls — in July unveiled plans for a sprawling mixed-use redevelopment of a sea of surface parking lots and other land that they own on the city’s Near West Side.
The development will include a music hall, thousands of apartments, hotel rooms, retail space, restaurants and other amenities. It is named the 1901 Project, a reference to the arena’s address at 1901 W. Madison St.
“We want the foot traffic and the visibility in what is going to be one of the most exciting areas in Chicago over the next several years,” Bloomfield said. “We know there’s development coming. Even if there wasn’t, we can capitalize on the foot traffic that lets out after games. The announcement of the 1901 Project just makes it sweeter.”
Funkytown appears to be joining that planned wave of development.
The company's beverages have been served at the United Center since early 2022, not long after the company poured its first beers. Funkytown was founded by Bloomfield, Zack Day and Greg Williams, who grew up as friends just west of Chicago in Oak Park, Illinois.
Their business is now based within the Pilot Project Brewing incubator and taproom in the Logan Square neighborhood.
Funkytown plans to continue some operations there, while opening a larger space of its own at 1931 W. Lake where it can bring together the making, selling, storage and distribution of beer. The company projects annual revenue to increase from $500,000 now to $5 million and eventually much higher with the new facility, Bloomfield said. He said Funkytown wants to open the new space by the fall.
To fund the expansion, Funkytown is bringing in outside investors for the first time. The company is talking with high-net-worth investors and others to raise $5 million for an all-cash purchase of the Lake Street building, new equipment and other costs, Bloomfield said. Funkytown has a contract to buy the building for $2.85 million, Bloomfield said.
The building, near the new Damen Avenue train station on the Chicago Transit Authority's elevated Green Line, is owned by an affiliate of Pennsylvania-based industrial products company Avalotis, according to CoStar data and Cook County property records. The company did not respond to a request for comment. One of the brokers representing Avalotis in the sale declined to comment.
Industry in flux
Funkytown is looking to expand during a time of major changes to the beer industry in and outside of Chicago.
As of mid-2024, there were 9,736 small and independent breweries in the country, according to the Colorado-based Brewers Association. In the first half of last year, there were 335 openings and 399 closings, statistics that reflect industry consolidation after years of increased competition.
Changes in Chicago in recent years have included Goose Island closing its original brewpub on Clybourn Avenue to move within the Salt Shed concert venue along the Chicago River; Metropolitan Brewing’s closure of its popular Avondale space along the river; and Lagunitas Brewing’s shutdown of a massive brewing facility in North Lawndale.
Most recently, Revolution Brewing closed its original brewpub in Logan Square to consolidate operations in its production brewery and taproom in Avondale.
Recent arrivals in Chicago include just the second U.S. brewery of Ireland’s Guinness, along the northern edge of the Fulton Market district.
Amid the local and national shakeout, many brands have focused on unique spaces and experiences — such as those in or around sports arenas and music venues — to stand out from the crowd.
“What’s happening in the beer industry is not all doom and gloom, but the industry is rightsizing,” Bloomfield said. “It’s a tough time, but I think it’s a time for breweries to double down on who they are and reinvent themselves. Breweries are trying to focus more on the experience and the community they create, which they can control more than they can control things like distribution.”
Selling directly from a taproom increases the profit margin well above the approximately 40% on a keg delivered to a bar or restaurant, he said.
“When you’re selling $7 or $8 pints, that’s a 900% profit margin, and the taproom is marketing the brand every day,” Bloomfield said.
Unique identity
Even without its own facility, Funkytown already stands out in one way. It is one of the relatively few breweries nationally with Black ownership. Less than 1% of craft breweries are Black-owned, according to the National Black Brewers Association.
When Funkytown’s owners returned to Chicago after going to college together at Grambling State University in Louisiana, they noticed a segment of the city’s population was largely unaware of the city’s fast-expanding craft beer scene.
“Goose Island, Half Acre and Revolution were growing, and that’s what we gravitated to," Bloomfield said. "But when we went to a party, we were the only Black dudes bringing craft beer."
They have focused on reaching new customers, in part by creating beers that will appeal both to beer fanatics and newcomers, such as Funkytown’s flagship Hip-Hops and R&Brew pale ale or its Woo-Wap-Da-Bam amber ale. Funkytown has stayed clear of hops-heavy brews such as India pale ales.
“We’re reaching out to those diverse groups,” Bloomfield said. “It’s why we don’t draft IPAs. It’s just too intense for someone who hasn’t built up that palate.”
For the record
The seller of 1931 W. Lake St. is represented by CTK Chicago Partners brokers Howard Caplan and Nick Saraceno.