Update:

KALAMAZOO, MI --

Arcadia Brewing Co.'s planned expansion on Kalamazoo's riverfront and the city's courting of owner Tim Suprise has been a year in the making, said Kalamazoo's head of economic development.

Jerome Kisscorni said Arcadia had sent out a letter of interest in expanding to several Southwest Michigan communities, including Kalamazoo. The city offered several incentives to convince Suprise to expand Arcadia Ales at 701 E. Michigan Ave., "to show that we were serious that we'd want them to locate in Kalamazoo."

"In attracting them, we were very aggressive," Kisscorni said. "Once we had talked to them, and Tim was committed, he really liked the riverfront. We really put the pressure on assistance from Southwest Michigan First and inittally from the Ds (downtown organizations). We all went together."

ENMAR LLC, on behalf of Suprise, on Thursday will ask the city's Brownfield Redevelopment Authority to consider a purchase and redevelopment agreement for the BRA-owned property. ENMAR plans to buy the 2.6-acre parcel near the Kalamazoo River on downtown's east end for $5,000 to redevelop and lease it to Arcadia Ales.

Plans include a $5.4 million investment to redevelop the site for mixed uses, including a 30,000 square-foot facility with a 4,500-square-foot brewpub, a 1,500-square-foot office area, a 24,000-square-foot beer production area and a parking lot with 75 or more spaces.

Suprise, who founded Arcadia Brewing in downtown Battle Creek in 1996, did not respond to a phone call and emails seeking comment Tuesday.

Kisscorni said the city is prepared to sell the parcel valued at $88,000 for a heavily-discounted $5,000. The city also has promised to secure a $200,000 low-interest loan and provide $120,000 in tax increment incentives.

In addition, the BRA invested $120,000 in environmental assessments and removal of debris and foundation at the East Michigan Avenue property, an investment that can be reimbursed through the project's future tax capture. The BRA expects to receive captured tax revenues associated with the project for five years following the full payment or reimbursement for eligible costs into the "Local Site Remediation Fund," according to the agreement.

The company also has applied for state incentives, and if the BRA approves the agreement Thursday, the Michigan Economic Development Corporation's approval is the last hurdle for Arcadia.

"The one piece that is missing to make this thing go is the state incentives," Kisscorni said.

A similar agreement for the property

. At that time, a city memo included with the agenda did not name Arcadia.

ENMAR expects to break ground this year and predicts Arcadia would start operating on the Kalamazoo property in winter 2013. The expansion would create 42 full-time equivalent positions within three years of its completion date and 30 full-time equivalent positions in the first two years. Treystar Holdings, LLC would develop the property.

Kisscorni said city officials wanted Arcadia to locate in River's Edge as the city spends money to redevelop that area.

"It's another piece to what we're trying to do to the city," he said. "Now we're seeing that redevelopment. It's taken literally millions of dollars to clean up the riverfront."

Some people expressed doubts years ago as the city attempted to redevelop brownfields on the riverfront, he said. He called Arcadia a "signature" business coming to that area. With the People's Food Co-op and MacKenzie's in River's Edge, it is creating a synergy, Kisscorni said.

"We realized what we needed to take were these challenged sites and put them back into production, generating taxes," Kisscorni said. "Now we're seeing the fruit of 10 years of work, to see the riverfront take off."

Kalamazoo Mayor Bobby Hopewell applauded Suprise's willingness to invest in a brownfield project and in an area of town that is an "opportunity of up-and-coming success."

"This truly is a transformative project that I think will continue to help transform our interest in highlighting our river and that great neighborhood," Hopewell said.

Hopewell added he would be interested to see how Arcadia plans to use its real estate on the river.

Larry Bell, owner of Bell's Brewery, which has its original location less than a half-mile from Arcadia's proposed Kalamazoo location, questioned whether Arcadia would manufacture less than 30,000 barrels of beer combined in both its Kalamazoo and Battle Creek facilities per year, as required under Michigan law to have a "Micro Brewer" license from the Michigan Liquor Control Commission.

Of Arcadia's proposed Kalamazoo production facility, Bell said, "that's bigger than what we did downtown and we produced a lot of beer in our old space."

Kisscorni said Arcadia is likely producing well below that 30,000 barrel limit.

"That's one of the reasons that (Suprise) was looking," Kisscorni said. "He's got a capacity issue. He can't produce enough to satisfy, so he can increase his capacity. He may be five years out or so before he hits that 30,000 barrel mark."

Arcadia can increase its beer-making capacity because it has gained a reputation and a following for its product, Kisscorni said.

Arcadia's plans come on the heels of a June 4 announcement that Boatyard Brewing Co. had found its home at a 2,700-square-foot space at 432 E. Paterson St. in Kalamazoo. The space, owned by Trident Realty, of Kalamazoo, is eight blocks north of Bell's Eccentric Cafe.

Kalamazoo already has a reputation for being a top medium-sized city to have a microbrew, Hopewell said.

"I think this will just enhance that standing," Hopewell said. "I'm supportive of most things that bring uniqueness of opportunity in Kalamazoo, uniqueness of place, uniqueness of quality of life that adds to it."

Emily Monacelli is a government and taxes reporter for the Kalamazoo Gazette. Contact her at emonacel@mlive.com. Follow her on Twitter.