Waukee's Kinship Brewing had ambitious plans, but less than 3 years later faces foreclosure

Opened to fanfare on New Year's Day 2021 with a sprawling, custom-built facility in Waukee, Kinship Brewing is now under foreclosure and facing an uncertain future, though its owner maintains it will survive.

The brewery, at 255 N.W. Sunrise Drive, and the limited liability company that owns the property, Sunrise Drive Acquisitions, owe Lincoln Savings Bank almost $6 million, according to the foreclosure action.

Lincoln filed the foreclosure Oct. 26, saying that Sunrise defaulted on loans of $3.5 million and $2.4 million and that Kinship has failed to keep up payments on an operating loan with a $44,898 balance. The combined debt adds up to more than $5.9 million, with interest continuing to accrue, the foreclosure says.

Also named as defendants in the foreclosure are Kinship's owners, husband-and-wife Zach Dobeck and Catherine Carlson; investor Michael Kentfield, a co-owner in the group that established The Foundry beer and food hall in West Des Moines; and Sprout Property Co., another associated limited liability company.

In addition, the suit names several other entities that have potential claims against Sunrise and Kinship, including Dallas County's development agency, and asks the court to designate Lincoln's claims as the primary ones.

The foreclosure suit indicates Kinship and Sunrise have been on the financial rocks since at least February, when they defaulted on the loans. The suit says the defendants in April entered into a forbearance agreement ― a measure aimed at giving them a chance to get caught up on payments over time and avoid foreclosure ― but defaulted on that too.

Owner says value of property far exceeds assessment

The suit asks that a judge appoint a receiver for the property and issue a "special execution" for its sale to satisfy the debt. It says Dobeck and Carlson pledged their Urbandale home as collateral, but that the bank doesn't intend to foreclose on that property.

Court records do not indicate that a hearing has been set on the case.

Despite the foreclosure, Kinship remains open, with somewhat attenuated hours, producing and serving beer. But a high-end restaurant that had operated on the premises since January, Barbarian, has closed and, according to its chef-owner, Jacob Demars, has no plans to reopen.

Employee wages among bills going unpaid at Kinship

Dobeck in an interview with the Des Moines Register declined to address how or whether Kinship is paying its bills, including employees' pay, but said the ownership group intends to keep the business going. He would not elaborate on how that might be possible, and Lincoln Savings Bank declined a request for comment.

In a message to employees obtained by the Register, Dobeck wrote, "Your delay in pay is not because I am purposefully withholding, it is because the resources need to be replenished."

The message, which was sent to employees via the brewery's scheduling system on Oct. 27, said the issue started when a cash "infusion that we were expecting did not come, as planned."

The Register does not know how many employees have gone without pay. Dobeck wrote in the message that he is working on alternative ways to take care of back pay.

A second message sent on Nov. 3 claimed that employees would begin being paid in batches starting with tips the following week.

The Dallas County Property Appraiser's Office lists a value of about $2.4 million for the 12,180-square-foot brewery, a 657-square-foot detached building and the nearly 6-acre lot on the northwest side of Waukee. But Dobeck said that value is outdated and a private appraiser says it's worth $5.3 million.

Kinship opened with ambitious plans, drew big crowds

As Waukee's first and so far only craft brewery, Kinship was the talk of the town when it announced plans in 2020 to open in the fast-growing city. The lot it occupies is near the intersection of Northwest 10th Street and Hickman Road, and the brewery sits just off the popular Raccoon River recreational trail, a short distance from the trail's southeast terminus, and has a paved connection and bike parking.

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Even the usually dry language of the appraiser's description of the property communicates the ambitious scale of the high-ceilinged, industrial-chic building: "There is a large glass vestibule at the entry and roughly 25% of the building is used as a tasting room with a walk up bar. Tap room floors are polished concrete and the walls are painted drywall with large murals. The exterior of building is finished with Shou Sugi Ban wood siding and the roof is rubber membrane. There is a large outdoor beer garden with 2 gas fireplaces (and a) kitchen for food preparation. There is also a large fenced in dog park on the property."

Kinship opened on Jan. 1, 2021, and drew capacity crowds. It donated over $50,000 to local charities in its first year, and Dobeck said it served around 1,200 barrels of beer ― double his expectations. It specializes in lagers and was soon canning its beers for sale at retail outlets around the Des Moines metro. Its draft beers often have been on tap at bars around the region serving craft beer.

In an interview shortly before Kinship's opening, Dobeck said he had wanted to own a brewery since he was a college student at the University of Georgia, where he graduated in 2008. A software developer, he began home brewing with his brother and got a job at a small branding agency in Atlanta that he said helped inspire him to build stories around his brews.

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"That was pretty close to falling in love with craft beer, falling in love with branding and saying, 'Hey, maybe I should learn how to make it,'" he said.

His wife was from Iowa, and whenever they'd visit, he said, he "would look through the prism of eventually living here."

In 2018, they made the move and began planning for the brewery. Dobeck said his dream was to build the business into a kind of community, hence the name, Kinship.

The brewery has frequently hosted events in that spirit: movie nights, charity benefits, drag brunches, ugly sweater specials and musical performances.

More: Intricate plates from chef Jacob Demars come to Barbarian, opening in Waukee in January

In November 2021 the company announced Demars would be joining and working temporarily out of a food truck to bring an "edge" to classic bar food.

In January this year, Demars opened his 32-seat restaurant at Kinship, focusing on new American modern cuisine. It was open only Sundays, but Demars had plans to expand to five days a week.

After Barbarian closed this fall, Kinship brought in food trucks and announced on Facebook that it planned to reopen the kitchen, subleasing it to the operators.

"The challenge that we were seeing is that running a brewery and running a food operation, or also technically running a restaurant, were two different disciplines, two different entities, so to speak," Dobeck told the Register.

Former employee says Dobeck 'just got way over his head'

Megan Murphy was sous chef at the Barbarian. As an hourly employee, she was supposed to be paid on Oct. 27. Dobeck told her the day before that there would be no hours for people until he, "figured things out." As of Nov. 19, she says she has not received that paycheck.

Murphy was told she could look for another job and return when things were back in order,

"He seemed like a really good guy," she said. "I don't think he did any of this on purpose, but he just got way over his head."

Dobeck says he's committed to Waukee: 'There is a path forward'

Dobeck said he believes in Waukee and wants to continue being a part of the community. He said the company has no plans to close or sell the business.

"We've got to learn about what makes us successful and what's going to make us successful in the long run," he said. "It's more about growing into the community. We as a brewery, both from a distribution and a destination … have really come on our own. So we're just navigating some challenges.

"It hasn't been an easy few months honestly, but at the same time there is a path forward," he said. "I've had to make some really hard decisions, and I'm working on mitigating some of those decisions."

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Kinship isn't alone among breweries in experiencing tough times. Buffeted by forces including the COVID-19 pandemic, inflation, labor shortages and a general decline in craft beer sales, even one of the most famous craft breweries has closed in recent months: San Francisco's Anchor Steam, reputed to be the nation's oldest.

In the Des Moines metro, two have closed permanently in the past year: 1717 Brewing in the East Village and Mistress Brewing in Ankeny. Another, Fox Brewing in West Des Moines, has been closed since June, pending a rebranding by a new owner.

Noelle Alviz-Gransee is a breaking news reporter at the Des Moines Register. Follow her on Twitter@NoelleHannika or email her at NAlvizGransee@registermedia.com.

This article originally appeared on Des Moines Register: Waukee's Kinship Brewing is in foreclosure; owner says it will survive