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Deschutes says it will continue to run its tasting room in Roanoke but it won’t be able to break ground for a new brewery in the city in 2021.

Deschutes Brewery is not prepared to build a brewery in Roanoke anytime soon, the company told Roanoke officials in a letter.

And the brewer’s CEO indicated they may not expand at all if business doesn’t improve.

“At present, we are not on track to complete design plans and drawings for the proposed brewery by August 31, 2020, nor are we on track to commence construction of a brewery on the property by June 30, 2021,” Deschutes President and CEO Michael LaLonde said in a letter to Roanoke City Manager Bob Cowell.

In the letter and in a statement to the media, LaLonde cited a challenging craft beer market that has given the brewer pause.

“We hope the market stabilizes in the near future and allows us to continue work on our national expansion,” LaLonde said in the letter. “If we build a brewery on the east coast, it will be in Roanoke.”

The letter was sent to meet a contractual obligation associated with the Oregon-based company’s purchase last year of the site it picked for a new brewery in the city.

The contract includes the deadlines for submitting a design and beginning construction that LaLonde referenced. If Deschutes fails to meet any of those deadlines, the city has the option to buy back the land for the same $3.2 million the brewer paid for it.

“Obviously we’re disappointed,” Cowell said Tuesday afternoon, but added that the city understands Deschutes has to make decisions based on business realities.

“There is still a bit of hope thrown into that mix in that they haven’t completely closed the door,” he said. “At least we have that glimmer, which softens the disappointment a little bit.”

Cowell said the city isn’t concerned about Deschutes holding onto the 49-acre site — a rare piece of open land zoned for industrial use in the city. The goal is still to have Deschutes making beer there, and if another company wanted the site in the future, there’s always a chance to strike a bargain, he said.

Deschutes announced in 2016 to great fanfare it had chosen Roanoke for construction of a $95 million facility that would initially employ 108 people. But the company said it wouldn’t break ground on construction until 2019.

Last year, after a weakening in the national craft beer market, Deschutes said it was re-evaluating the size and timing of the project, ultimately saying in November that it would not start work in 2019.

The company waived $4.2 million in state and local incentives in order to build on its own timeline, but bought the site for the brewery outright as a show of good faith. It can re-apply for incentives.

In the meantime, Deschutes has become a corporate citizen, opening a brewpub downtown, sponsoring cyclocross events here, and hosting outdoor “street pubs” in 2016, 2017 and 2018 to raise money for local charities, although Cowell said he understands Deschutes has discontinued the street pubs nationally.

The company said it would continue to operate the Roanoke tasting room.

“We are disappointed that we are not able to meet our original timeline, but we remain a contributing member of the Roanoke community,” LaLonde said in his statement.

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Matt Chittum covers Roanoke City. A Roanoke native, he’s been at the Roanoke Times for more than two decades, having overcome an inauspicious start with a part-time clerical job.

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