The Catskill Watershed Corporation (CWC) has approved a low-interest loan to Todd Pascarella of Fleischmanns and Brian Mulder of Roxbury to buy a building in Arkville where they plan to establish a craft distillery. The $280,000 loan will also provide working capital and funds to purchase equipment, supporting a business plan that capitalizes on the current popularity of small-batch, locally produced beverages, attractive to the region’s visitors.
Alan Rosa, Executive Director of the CWC, commented, “We’re happy to support these two local entrepreneurs who will use regional ingredients to make quality products. This is a project that can create jobs, increase tourism, and raise the visibility of all things crafted in the Catskills.”
Named for a community that was flooded in the creation of the Pepacton Reservoir, Union Grove Distillery will produce spirits such as vodka, rye whiskey, and bourbon. Its operations will be open for tours, sales, and tastings, attracting visitors to Delaware County. The building is located at the corner of Route 28 and County Road 38 in the village of Arkville.
Pascarella, who currently serves as the mayor of Fleischmanns, said the time is right for this kind of business. “The laws in New York State have loosened up since about a decade ago, to help promote and revive agriculture. Farm distillery licenses have been made affordable and attainable. One of the caveats is that you have to document and use 75 percent of your grains and other materials by drawing from New York State sources.”
Mulder and Pascarella are experienced entrepreneurs, since they’ve been working together for several years as the firm Energy Experts, performing energy audits and installing spray foam and blown cellulose insulation. They’ve taken courses in distilling, and Pascarella has been experimenting with home-brewing of beer, which is legal, unlike home-distilling. “I have a degree in environmental science,” he added. “I’ve always understood chemistry and biology, and my partner has a great business sense. We’re both doers.”
The CWC is funded by New York City to run programs that help maintain the water quality of local reservoirs that supply drinking water to the city. To compensate for attendant restrictions on upstate industry, the CWC provides loans for businesses that stimulate the economy without impairing water quality.
To apply for the loan, Pascarella and Mulder had to write a detailed business plan. “It took several tries,” said Pascarella. “We had to prove to the CWC and to ourselves that we have a clear vision for how it’s going to work out for us financially, how we’ll cope with the beginning period where we’re spending more money than we’re taking in.” Assistance in the form of templates and guidance came from the Small Business Development Center in Kingston. “Most of the work was done by us between 11 p.m. and 2 a.m.,” said Pascarella, “crunching numbers, researching, talking to others in industry.”
Using local products
They consulted with the owners of new distilleries in the region, such as Tuthilltown Spirits in Gardiner and Coppersea Distilling near Highland. “It’s overwhelming how helpful and welcoming they’ve been. We want to be a part of that industry and community,” enthused Pascarella. “We don’t see it as a competitive thing. There’s so much interest in craft sprits and locally, wholesomely produced products. We’re looking to help propel each other forward.”
Once the purchase of the building is completed, renovations will begin to create manufacturing and barrel aging space, storage, an office, a tasting room, and a gift shop. Pascarella hopes to be able to open in late spring and be in full swing for the summer season. “We’ll have to continue to do insulation work for a while to feed our families,” he observed, “and then we’ll transition to this work full-time, and in a couple of years we’ll be hiring on several people.”
They’ll start with vodka, since it doesn’t require aging and can be sold soon after it’s produced. Flavored vodkas will be available, such as maple, flavored with locally produced maple syrup. Other products will take a year or more to age and will be phased in gradually, including rye, bourbon, and specialized formulations.
“Thirty years ago, people realized not everybody likes just drinking Budweiser and Bud Lite,” noted Pascarella. “They discovered that there’s an infinite palette available for producing drinks and liquor, from crafted beers to distilled spirits. The room for creativity is wide open. People are turning away from mass-produced to local, unique products they saw coming out of the still.”
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