Penn Brewery restaurant closes while investors negotiate for ownership


Penn Brewery Restaurant closed indefinitely on August 18 while its owner and groups of investors work on a deal to — hopefully — save the restaurant and the building it occupies.

Mark Fatla, executive director of the Northside Leadership Conference, which is working on a deal to purchase the brewery building from the current owners, E&O Partners, said that the restaurant closed because he suspected it was losing money.

Currently, Birchmere Capital owns a majority share and operates the company, but Fatla said several investment groups are interested in purchasing the business.

Primary among them is Tom Pastorius, the brewery’s founder, who sold the business to Birchmere in 2003, but retains a minority stake. His investment group hopes to buy back the business and resume on-site brewing operations.

Birchmere moved brewing operations to the Lion Brewery in Wilkes-Barre, Pa. earlier this year. Jack Isherwood, Birchmere’s president, told the Post-Gazette and the Pittsburgh Business Times that brewing would continue.

The Urban Redevelopment Authority recently approved Pastorius’s group for a $300,000 loan, contingent on E&O selling the building, which has fallen into a state of severe disrepair, said URA spokesperson Megan Stearman.

“Any building owner has a choice,” Fatla said. “Reinvest in your building or take out the cash.” E&O did not reinvest in the building, he said.

The Northside Leadership Conference had been negotiating a deal with E&O, but E&O changed the terms on July 24 and the conference had to restructure its offer, Fatla said.

Originally, the conference offered E&O a large number of tax credits and a small amount of cash, but E&O suddenly demanded more cash.

Fatla said that the conference’s offer remains the same, but they are now offering more cash and fewer tax credits.

“We’re not in this to own a building,” he said. The conference’s goals are to save a neighborhood and regional landmark and to save an “anchor building” at the entrance to East Deutschtown and Troy Hill.

Three other investment groups are currently negotiating with Birchmere, and some of them are willing to work with E&O, but Fatla declined to speak about specifics, and Birchmere did not respond to multiple attempts at contact.

The URA already owns a 20 percent share in the building, but has no voting rights, Stearman said. “We want to see this deal move forward … in order to get the building into hands that would be a good steward of the building. We’re hopeful that we can come to some terms that are agreeable for everyone.”

Right now, with the situation the way it is, Fatla said he believes the best way to save the business and the building is for the conference to purchase the building and for Pastorius’s group to purchase the business.

“There are other options and we’re willing to explore them,” he said.

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