Statesboro City Council on Tuesday unanimously approved a reimbursement grant of $272,821 in Tax Allocation District funds for private infrastructure improvements within the Hop Atomica Statesboro brewery, restaurant and micro-distillery planned for an existing building at 6 Walnut St., an almost $2.3 million total project.

The source of the grant funding is the growth increment from property taxes within the South Main Tax Allocation District. The South Main TAD was established in December 2014 for an area that extends to other streets on both sides of the South Main Street, or "Blue Mile," downtown corridor. As with other TADs, city tax from property values that existed within the district at the time of its creation have continued to go into the city's general fund budget. But tax revenue resulting from new development and increased values after that date are held in a special fund for redevelopment projects in the district.

For this project, the applicants were Walnut & Vine LLC and its owners, brothers Smith Mathews and Pratt Mathews, who through the LLC have purchased the building at 6 Walnut St., on the corner of South Walnut and West Vine streets from Don Lanier, owner of United Appliance & Furniture, which used it as a warehouse. To be clear, United Appliance remains in business in its showroom building, 103 S. Walnut, across West Vine.

But the 7,600-square-foot building now set to become Hop Atomica, 6 Walnut St., is the one just north of Vine Street, on the corner diagonally opposite the now defunct, historic Vandy's Bar-B-Q. Sometime before 6 Walnut became part of the furniture and appliance business, the building was a John Deere farm equipment dealership, which also included more garage-like 35 W. Vine St. building behind it, also transferred last fall from Lanier to Walnut & Vine & Boro Beverages LLC. Bulloch County's online tax records still tag these as the "Old JD Place."

The Mathews brothers, originally from Statesboro, are the founders and owners of Hop Atomica in Savannah.

"We're a wood-fired, you know, pizza place, brewery and distillery," Smith Mathews told Statesboro City Council while displaying a slide of the Savannah place's products. "So everything's scratch-made, in-house, we don't order anything out. Even our ranch. Once we get open you need to come try that ranch, I'm telling you."

That would, of course, be ranch dressing. In addition to pizzas, wings, sandwiches and salads are featured on the Savannah menu. Then there's craft beer brewed on site, and "craft spirits," including bourbon, rum, vodka, gin and agave spirits distilled on site.

TAD funding process

A recommendation from the appointed TAD Advisory Committee is required before City Council can award TAD funding for a project. The committee members, after hearing the request Feb. 24, voted 3-1 to recommend the project, so the application then went to the elected City Council on Tuesday morning, March 3.

The Hop Atomica Statesboro project will bring "extensive renovation of a historic downtown building, revitalizing an undeveloped block of downtown," Mathews asserted with another slide in the presentation. In so doing, the developers "will create jobs, contribute to economic growth and support downtown development," it stated.

Another slide gave a cost breakdown, with little photo illustrations, of the things expected to be paid for with the $272,821 requested TAD funding.

These cost elements are $5,000 for modern exterior lighting, $13,561 for a stucco and masonry upgrade, $7,500 for designed handrails and fencing, $29,000 for "modern canopy awnings," $14,225 for a roof upgrade "visible from street" $47,398 for "modern" exterior doors and windows, $27,000 for an exterior paint upgrade, $33,130 for sidewalk and exterior demolition and improvement, $21,375 for exterior sitework improvements and $2,700 for right of way acquisition.

A city-planned and publicly funded streetscaping project will end almost at this corner, Mathews noted.

"So what we want to do is take those streetscaping improvements and turn that corner on Vine Street and go down there and integrate it all the way down," he said.

'Cost challenges'

But Mathews also said that the developers have "faced significant unforeseen cost challenges."  One major challenge was that the building appraisal came in $350,000 less than expected, reducing what the owners could finance and prompting them to cut back on some details of their plans. Additionally, securing a loan from a government-backed program has taken months longer than  expected, during which interest rates increased, and banks required additional environmental testing at the site, which he attributed to the presence of drycleaning businesses nearby.

Also, many structural problems were found with the building's foundation and roof structure, he said. This was illustrated with a photo of wooden roof beams pieced together with a gap alarmingly near the edge of their support post.

Other financing

Other financing sources for the project include a TAD-required "contributed equity" share, in this case simply a cash investment by the owners, of $226,001, or 10% of the original projected cost, and a little over $1 million each from a private bank loan and the State Small Business Credit Initiative, or SSBCI loan, federally funded through the state.

That leaves the $272,821 TAD to cover a little over 12% of the currently projected cost. The money is to be paid out on a reimbursement basis for expense reports. It's not a loan, but the city officially expects to recover its investment through the taxable value of the business.

At the previous meeting on Feb. 17, the council has approved a resolution deeding a 3-foot-wide strip of city right of way along West Vine Street to Walnut & Vine LLC for $2,700. This allows the business owners to install a ramp and stairs along that side of the building.

Previous actions

This is the then-anonymous project that city staffers and Downtown Statesboro Development Authority executive director Allen Muldrew were alluding to late last summer when they asked City Council to approve an amendment to the Alcoholic Beverages Ordinance to allow and regulate "local distilleries."

Before council approved a first reading of that amendment on Sept. 2, 2025, Muldrew referred to the would-be investors as "a couple of guys who live in our community — they're from here — who see where Statesboro's going downtown" and added that it was not their first project. The council adopted the amendment Sept.  16.

Actually, Smith Mathews lives in Savannah, but Pratt Mathews has returned to Statesboro as his home. Earlier generations of their family led the Statesboro Telephone Company through much of the 20th century. 

Interviewed after Tuesday morning's meeting, Muldrew said the project is an important one for continuing downtown redevelopment.

"We believe that it's going to add to some of the momentum that we already have going on downtown," he said. "These are experienced restaurateurs. This is their second place. They're from here, and they are building it to a high standard for our downtown."

Tuesday's council vote to approve the TAD funding agreement was 5-0, on a motion from District 1 Councilmember Tangie Johnson seconded by District 4 Councilmember John Riggs.

Mayor Jonathan McCollar asked Matthews when the business will open.

"We're shooting for about six months," he said. "We've already broken ground, and so we're hoping for August or September. But before the end of the year, ideally.