A month after Smithfield’s Town Council voted to deny Red Point Taphouse an exemption from hooking to town water, the brewery’s landlords returned with a counterproposal.

They’ll agree to connect and cover the remaining cost if the town foots the now $32,000 estimate for extending a water line across South Church Street to a meter at the edge of Red Point’s property line.

The council voted 4-3 on April 1 against granting Red Point’s request for a special use permit that would have waived the unmet water connection condition of the 1929 former gas station-turned-brewery’s 2020 rezoning.

Red Point’s former co-owners, Tim Ryan, Derek Joyner and Nick Hess, say they reluctantly agreed as a condition of rezoning to within two years pave the parking lot and connect to town water, not knowing at the time that it would cost over $30,000 to have town contractors extend the required 2-inch water connection from the opposite side of the road to where the business is located. A prior Town Council had agreed to waive the paving requirement in October.

Red Point is currently served by a private well owned by Bill and Phyllis Phelps that predates the town’s annexation of the area. It makes a monthly payment to the couple in lieu of paying a town water bill.

Ryan, Joyner and Hess sold the business to Ben and Elen Osmanson in January, but the trio retains ownership of the building.

The town code stipulates that “where a public water supply is available in the town it shall be unlawful to connect a residential or commercial structure to a private well.” After seven months of disputing the town’s contention that the code, by virtue of the rezoning and extensive renovations Red Point undertook, now applies to their formerly grandfathered well connection, Joyner took a more conciliatory tone at the council’s May 19 Water and Sewer Committee meeting.

“We as a small business want to be in compliance. We’re not trying to be difficult about this,” Joyner said. “In the face of the ongoing bridge closure that was not expected at the time of us starting this business, it would be really hard for us to do this right now.”

Ryan, who did not attend the May 19 meeting, had in past appearances at Town Council meetings said the brewery’s profits were hurt by the ongoing rehabilitation of the Cypress Creek Bridge. Since January of last year, the Virginia Department of Transportation has restricted the two-lane bridge connecting downtown Smithfield with the east end of town to a single westbound lane with eastbound traffic diverted via Main and Grace streets to the Route 10 Bypass. The work is scheduled to be completed this fall.

Joyner said if the town covered the cost of bringing the water line across South Church Street, Red Point would foot the cost of extending the connection underneath Red Point’s parking lot to the back of the building.

“Our parking lot is old South Church Street from decades and decades and decades ago,” Joyner said. “We still have quite a task ourselves as small-business owners to get that through the parking lot through the back of the building to connect to the existing main line. … We still have a fairly decent financial obligation.”

Ryan told the Times that Red Point would have to pay $10,000 to $15,000 for the meter and subsequent plumbing work, which is “more than all of the profit we made last year,” if the town agrees to foot the cost of bringing water to the meter hookup. 

Ryan said, and Stallings confirmed at the meeting, that the town does not profit off water sales, The revenues collected are intended to cover the town’s operating costs. According to an audit of the town’s 2023-24 finances, water fund operating expenses exceeded revenues by just under $170,000.

 

Council raises ‘precedent’ concerns

Joyner’s request for financial assistance drew mixed reactions from the council members.

Councilman Steve Bowman, who was among the four to vote against waiving the water requirement in April, said he wanted “assurance” that if the town took on the $32,000 cost that Red Point would uphold its end of the agreement and complete the connection. Joyner said he and his co-landlords had received quotes from contractors and could complete the connection from the edge of the parking lot to the building within 30 to 60 days, depending on weather.

Councilwoman Valerie Butler, who also voted against the water waiver, said a discussion on cost-sharing was “overdue” and should have preceded Red Point’s waiver application.

She said she was concerned such a cost-sharing agreement would “set a precedent.”

Councilwoman Mary Ellen Bebermeyer, who in April voted in favor of Red Point’s requested waiver, called for revisiting the prior vote.

“I don’t think it sets any precedent because there aren’t any other wells in town,” she said. “This business was already on a well. If it was new construction, that’s completely different. Obviously, new construction has to connect to town water, but because this is an existing business that has water, didn’t need our water, it’s the epitome of a special use permit. … This is a small business that we as a government are making them jump through these hoops for our convenience, not for theirs. … They don’t need the water, so we’re all spending a lot of money for something that no one needs.”

Butler asked Bebermeyer how she would feel if, as a small-business owner, she was in compliance and had to pay for town water and sewer, but “right up the street from you there’s a business that’s not doing that.”

Town Manager Michael Stallings said revisiting the special use permit vote isn’t an option because “at this point in time there isn’t an SUP on the table.”

“What we’re talking about is their request for financial assistance to make the connection,” Stallings said.

Vice Mayor Bill Harris, who had also voted in opposition in April to the waiver, said he too is “concerned about precedent” and would be more agreeable to “some sort of loan” from the town, rather than taxpayers outright footing the cost.

“If we were to vote right now, I would not vote to approve the $32,000 of taxpayer money to make that connection, but I’m certainly in support of small business and if we could work out something that is amenable to all, that commits you folks to doing what you said you would do earlier, I would certainly consider voting yes to that,” Harris said.

Stallings said legally the town can’t make a loan to a private entity, but could foot the cost of the water line extension and be reimbursed over time.

Such an agreement wouldn’t be without precedent. In 2018, when the Smithfield Recreation Association, which runs baseball and softball programs for children ages 5-16, backed out of plans to sell the SRA-owned Beale Park to pay its $300,000 share of the town’s cost of developing the newer Luter Sports Complex, the town and SRA entered a repayment agreement requiring the association to make $30,000 annual payments through 2028. The town renegotiated the agreement in March to forgive half of the remaining $120,000 debt.

The council members also discussed whether a larger-than-2-inch water connection would be needed to potentially offer town water not only to Red Point but a handful of residences also connected to the communal well.

The council expects to further discuss the matter, and potentially vote, at its June 3 meeting.

Editor’s note: This story was updated at 3:48 p.m. on May 21 with additional comments by Tim Ryan and how Bill Harris had voted on Red Point’s April waiver request.