The North Side's historic Penn Brewery, which has been closed since August and hasn't brewed any beer since the end of last year, is coming back to life.

Tom Pastorius, who founded the craft brewery in 1986 and in 2003 sold all but a minority interest to local private equity firm Birchmere Capital, on Friday finalized a deal for himself and a small group of investors to buy back the business.

Mr. Pastorius said yesterday the plan is to start brewing within two weeks and reopen the restaurant "as soon as the beer is ready." Work already has begun inside.

He said the North Side Leadership Conference, which has for months been working with him to secure a deal he had said was contingent on the property having a new owner, "is having productive discussions for purchase of the property" with the owner, E&O Partners.

E&O Partners has signed a five-year lease, effective Nov. 1, that will allow the brewery and restaurant to operate, said David J. Malone, who heads DLB Management, the general partner of E&O Partners. Mr. Malone said E&O also has agreed to sell the property to the Northside Leadership Conference if that group can comply with the terms it has offered to E&O. Those terms were not disclosed.

Mr. Pastorius, of Sewickley, would not disclose the terms of the purchase. He's again president and CEO of the brewery that he proudly describes as Pennsylvania's first craft brewer. The restaurant, which opened in 1989, was the first restaurant operated under a brewery license in Pennsylvania since Prohibition.

Penn Brewery's eight brands are sold in bottles and draft in eight states, and many of the brews have won industry acclaim, including most recently gold and bronze medals (for Kaiser Pils and Oktoberfest, respectively) at the Great American Beer Festival in October 2008.

Penn Brewery, located at the base of Troy Hill in the 1848 brick Eberhardt & Ober brewery complex, has been on a downhill run for the past year. Last November, the company announced that it was going to relocate elsewhere in the city. It stopped brewing its own beer, contracting out production (for three years) with the Lion Brewery in Wilkes-Barre.

As Penn's lease was about to expire in February, the company and its landlord, E&O Partners, squabbled over issues ranging from how the rent was to be calculated to water bills to maintenance issues on the property, which is on the National Register of Historic Sites.

At the end of February, the company announced it was staying put for five years, but it never signed that lease, and it let go of most of its employees; its president and CEO Len Caric resigned. It canceled its Microbrewers Fest this summer and did not hold its Oktoberfest.

Mr. Pastorius had been working on a deal to save the business for months, enlisting the help of the North Side Leadership Conference, which was able to bring tax credits to the table as it negotiated to buy the property.

The conference also offered Penn an additional $300,000 in loans to buy equipment and make other improvements. Conference Executive Director Mark Fatla said this morning that the Northside Community Development Fund loans are still part of the deal for the business while his group continues to work on acquiring the property.

Even as the URA initially approved the loan this past August, Mr. Pastorius was adamant that there would be no deal for the business unless the property had a new owner. But yesterday he said he was confident that would be worked out as he and his group move forward.

The other investors are Linda Nyman, Sandy Cindrich and Corey Little. Mr. Pastorius said the women's husbands and Mr. Little are founders of Virtual OfficeWare, an electronic medical records company in Robinson.

"They're local, they're hard-working ... They are beer lovers." He said Ms. Nyman and Ms. Cindrich plan to work at least part-time at the brewery.

He added that they're all in their 40s. "It's like bringing in the next generation to ensure the future of the company."

Mr. Pastorius acknowledged in a release yesterday, "It's going to be a rough few months while we repair the damage done to the brands and replace the bottling equipment that was sold. We ask for the patience and support of our many loyal fans." Mr. Pastorius said the first beer they'll brew is the flagship Penn Pilsner, but they'll follow that immediately with "the full line of Penn brands." Penn will be distributing Pittsburgh-made draft beer to other accounts as soon as it is ready (and Penn buys a new keg filler), but the Lion Brewery will continue to brew the bottled beer until Penn can make enough and has the means to bottle it.

"All beers will be brewed to the original recipe and same exacting standards as prior to the close of the North Side brewery earlier this year," the release said. "There will also be some new brands coming soon that will broaden the spectrum of the brewery's styles."

He has rehired brewer Andrew Rich, bringing employment up to four, and said that more brewing staff will be added as production ramps up. "We're really excited about it," said Mr. Rich, who's already been cleaning and working on the brewing equipment.

Mr. Pastorius hopes to surpass the 12,000 barrels Penn had been brewing annually.

"Money Q&A" and "Company Town" are featured exclusively at PG+, a members-only web site of the Pittsburgh Post-Gazette. Our introduction to PG+ gives you all the details.