Fort George Brewery is on track to brew by the end of the year at Astoria Warehousing after soil conditions proved better than expected.

The brewery purchased Astoria Warehousing, a sprawling campus of warehouses on the riverfront formerly used for labeling cans, to house an expanded brewery, cooler, canning and distribution.

The state Department of Environmental Quality required that Fort George research and clean up underground petroleum contamination found around the warehouses, likely from a former gas station and car wash. To kick-start the development, the state awarded Fort George a $1 million grant for the cleanup.

Chris Nemlowill, the co-owner of Fort George, said the contaminated area under the warehouses ended up being more isolated than originally thought.

“At this point, any other environmental cleanup costs over the next two years, we’ll pay for those out of our pocket,” Nemlowill said. “We’re feeling extremely fortunate that things were better than anticipated. That’s not usually what happens with an environmental cleanup.”

Astoria is the intermediary that accepts grant dispersals and passes them on to Blue Jumpsuit LLC, Fort George’s property holding company for the warehouses. On Monday, the City Council approved accepting the final $600,000 of the grant.

The cleanup grant from the state cleared the way for Fort George to secure a $12 million low-interest loan from Craft3, which secured financing from the competitive federal New Market Tax Credit program. The loan provided the money to buy the warehouses and a 60-barrel brewhouse from Portland brewery Bridgeport Brewing after it closed. The new brewery will increase Fort George’s production capacity for its most popular beers.

Local governments also backed Fort George becoming the first to take advantage of the Clatsop Enterprise Zone, saving the company an estimated $617,000 in property taxes over the next decade on new equipment. In exchange, Fort George promised to invest at least $12.5 million and create at least 35 full-time jobs earning at least 130% of Clatsop County’s annual average wage. Fort George still pays property taxes on the land and buildings.

The redevelopment of Astoria Warehousing had been held up by a glut of building permits as Astoria is swamped with construction activity despite the coronavirus pandemic and only recently added a new community development director. But the good news on the environmental cleanup has put Fort George back on track with its goal of brewing and canning beer in the warehouses by the end of the year, Nemlowill said.

The need for an expansion has never been more acute. Fort George is selling more beer than ever, Nemlowill said, albeit in cans, which don’t make the same profit margins as draft lines at bars and restaurants limited by the pandemic.

“We’ve pivoted to putting like 99% of our beers in cans, and fortunately we were able to do that,” he said. “We cannot make enough beer right now.”