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Brian O'Neill
A barroom brawl over Iron City's $1 million tab
Sunday, August 02, 2009

This is that rare case of a beer leaving without paying its tab.

The Pittsburgh Water and Sewer Authority board voted unanimously Friday morning to tell Iron City Brewing to cough up the million bucks it owes on its water bill -- or else.

The resolution was a chock-a-block with the customary "whereas-es," but the long and short of it is that authority honchos are "authorized and directed to pursue any and all legal means to collect payment from Iron City."

This isn't going to be pretty, what with water customers potentially facing yet another rate increase in 2010. Authority Executive Director Michael Kenney indiscreetly said in June that the brewer owed only $600,000, not $1 million. Asked Friday if that was a mistake, Mr. Kenney answered, "In light of today, probably it was. Because it's an ongoing legal situation."

He downplayed the significance of the debt, saying it represented less than 1 percent of the authority's $140 million operation. But a million bucks is still a million bucks. And there was never any board action to reduce that debt. And there's a $2 million hole in the authority's budget, largely because a crash in interest rates has slashed the expected income from reserve accounts.

It's crucial to fix any leaks, and the Iron City bill is a gusher.

The brewer stuck a cork in its 140-year-old plant in Lawrenceville last month and is now brewing at the old Rolling Rock plant in Latrobe. Iron City President Tim Hickman has said the company owes only $450,000.

The guys at Iron City will be running over the figures like secretaries splitting a lunch tab. Mr. Hickman said Friday he didn't have a chance to review the resolution, but believes his company has honored its deal with the authority.

City Councilman Patrick Dowd, who joined the authority board last December, doesn't buy that. Mr. Dowd has spearheaded the effort to get Iron City to pay $1 million. The authority agreed to waive debt a couple of years ago as the brewer emerged from bankruptcy, but that was contingent on the brewer modernizing and sticking around, not moving the jobs 45 miles east.

"Clearly they did not meet the letter of the agreement, nor the intent," Mr. Dowd said.

What this might do to the brewer's new marketing campaign -- "One City. One Nation. One Beer" -- one can only guess. The hope is to market the beer to the great Pittsburgh diaspora, all those former residents and their progeny who now haunt Steelers bars from sea to shining sea.

Bill Toland, who writes the entertaining and quirky "Diaspora Report" for the Portfolio page, wrote last month, "If Iron City survives, the Pittsburgh Diaspora will play a key role."

Given the unpaid water bill, the slogans for any Steeler-Nationwide campaign will take some imagination. Off the top of one foamy head, here's a suggestion:

"We abandoned Pittsburgh. You fled, too. Let's talk about it over an Arn."

I told Mr. Hickman that Iron City was never my favorite beer, but I'd occasionally buy a bottle just to keep a job in Lawrenceville. I won't do that just to keep a handful of people in the corporate headquarters.

"We're still in the region," he said, pointing out that the beer is now being brewed in the same town that hosts the Steelers training camp. "We're still a Pittsburgh product."

"Iron City is one of the last remaining regional breweries and the economic times finally caught up with us," hence the move to a more modern plant.

Our modern world is hypersensitive about image. We're all about marketing, all about hype, from the photo-op of the "beer summit" at the White House to whatever the next Taco Bell ad might be. But this one city/one beer thing looks mighty shaky as Pittsburgh Water and Sewer gets its beer muscles on in a fight for a million.

"Whether they owe it immediately is another question," Mr. Dowd said, "but they owe the money."

Brian O'Neill can be reached at boneill@post-gazette.com or 412-263-1947. More articles by this author
First published on August 2, 2009 at 12:00 am