Surly Brewing Co. says an industrial site in southeast Minneapolis now tops their list of locations for a proposed $20 million brewery, and the popular craft brewery is seeking public funds to help clean it up.

Cities across the metro lined up last fall to snag the "destination brewery," which was made possible by the so-called "Surly law," which the Legislature passed in 2011. The Brooklyn Center-based company wants their new brewery to house a restaurant, beer garden and event center.

After months of research, Surly is setting its sights on a former food processing plant near University Ave. SE in the Prospect Park neighborhood. It's just down the street from what will eventually be the Central Corridor light rail's "Westgate" station.

Surly is working with the city to apply for environmental remediation grants to clean up the area, which has had 150 years of industrial use.

A city list of companies seeking grants pegs the Surly proposal at $2.5 million for cleanup costs. The document says plans call for a 50,000-square-foot structure housing a brewery and beer hall, as well as adjacent recreation space and festival gardens "to the extent feasible." Site design also includes 40,000 square feet "mostly for expanded brewery operations." Total projected cost is $23.5 mllion.

“The site has some great attributes. But it also has some great challenges," said Surly's real estate consultant, Tom Hauschild. "And the environmental conditions and the buildability of the soil are two major ones. So if those two things can be rectified at a reasonable cost, this could be a great solution for Surly.”

The city list says that, if approved, about $1.5 million of the grant would come from the Department of Employment and Economic Development, while the Metropolitan Council and Hennepin County would provide the rest. Applicants are required to first seek approval from the local juristiction.

The focus of their attention, The "Malcolm Midway" site, located on Malcolm Ave. and 5th Street Southeast, is currently home to little more than slabs of concrete and piles of rocks. One side is adjacent to a loading bay with a lot of major truck traffic, while another features massive storage containers.

Hauschild said the benefits of the site are its central location, industrial zoning, proximity to public transit, and 8 acre size, large enough for the new brewery.

Surly still has to win the grants, which are awarded competitively. If all goes as planned, Hauschild said, "We’d love to be brewing beer there in 2014."