Monday, February 28, 2011

NPR: What A Coin Toss Has To Do With The Housing Market (Recovery)

A link to the story is here

You can listen to the story here

by David Kestenbaum

It's been almost five years since the housing bubble popped. And, with a glut of homes still on the market, housing prices could fall further. Why is it taking so long for the housing market to sort itself out?

The answer may have something to do with a coin toss.

I recently visited Eric Johnson, a professor at Columbia's Business School. He offered me a sweet bet on the flip of a coin. If the coin came up heads, I would win $6. If it came up tails, I would lose $1.

I told him I'd take the bet.

But then he changed the terms — if the coin came up heads, I would win $6. If it came up tails, I would lose $4. That bet I didn't like.

Of course, this is irrational. The bet is still very much in my favor. If I took the bet 1,000 times, I'd almost certainly make a nice profit.

Still, Johnson said a lot of people are like me: They won't take that bet. So I went out on the street to test this out on random people.

I introduced myself to Frank Blake, a guy who makes his living as a stuntman, jumping through windows and crashing cars. I offered him the bet — told him I'd pay him $15 if he won, and he'd only have to pay me $10 if he lost.

No deal.

"The $15 makes no difference in terms of gaining it," he told me. "But losing the $10 in my pocket does."

Lots of other people turned down the bet, too.

As it turns out, our brains feel losses and gains unevenly: Losing feels worse than winning feels good.

So now — as promised — back to housing.

In a down market, people really don't want to sell, because selling feels like losing.

Chris Mayer, professor of real estate at Columbia Business School, found evidence for this fear of losses when he studied the Boston condominium bubble in the '80s.

He would compare two basically identical condos. The owners of both had paid off their mortgages. But one had bought at the peak of the market. That person, he found, would stubbornly ask for a higher price, and keep his condo on the market longer than the other person, who had bought at a lower price. (Here's the study.)

"The overall magnitude of this effect is very big," Mayer told me. "This is an important factor in how housing markets operate."

There are certainly other reasons the housing market is taking so long to sort out. Some people are stuck financially with their mortgages, for example.

But this psychological quirk is also slowing the healing process. It makes people reluctant to lower the asking price on their homes, which in turn contributes to the glut of houses on the market.

"It's sort of like having a Band-Aid, where you know you would be better off if you just pulled it off at once," Johnson said. "But instead what you do is you tend to pull it off very slowly, if at all."

It's unclear why our brains are wired this way — why we overemphasize losses. Johnson says it could go back millions of years, to when a losing bet was way more serious.

Millions of years ago, we were avoiding animals that wanted to eat us. Today, we're selling houses.

But some part of our brains may be still be thinking about leopards in the trees.

Thursday, February 24, 2011

Columbus Dispatch: Foreclosures driving home sales in Ohio

Foreclosures driving home sales in Ohio

Thursday, February 24, 2011 02:49 AM


More evidence emerged today that Ohio's housing market is actually two markets: one made up of conventional homes and one consisting of foreclosed properties.

Figures released by the foreclosure-listing service RealtyTrac show a tremendous price gap between foreclosed sales and conventional sales in the state.

During the fourth quarter of 2010, foreclosed homes in Ohio sold on average for $79,611, which is 43percent less than the $138,740 fetched by homes that had not been foreclosed on.

Only Kentucky showed a higher gap between foreclosed- and conventional-home prices.

Overall, foreclosures accounted for 21 percent of Ohio home sales during the period, according to RealtyTrac.

Distressed sales, which include foreclosures and "short sales," account for about 37percent of all sales, according to the National Association of Realtors.

Even though there's a big gap between foreclosed prices and conventional prices, foreclosures can affect the price of other sales because such sales are used to set the value of other properties.

"With more than one in three sales distressed, that really starts to impact appraisals," said Rick Benjamin, president of the Columbus Board of Realtors.

While foreclosures are far more common in poorer parts of town, they can be found throughout central Ohio.

"We also see bank-owned properties in Tartan Fields, in Muirfield, in Upper Arlington, in New Albany and in Bexley," Benjamin said. "They're everywhere, and they'll be with us for a while."

The figures appeared a day after Ohio Association of Realtor figures were released showing that Ohio's home prices and sales are stabilizing.

In central Ohio, 1,034 homes were sold in January, down 3.3percent from January 2010. Homes sold on average for $145,600, off 0.3 percent from a year ago. Statewide, home sales rose 0.4 percent while average sales prices dropped 4.8 percent to $115,439.

While sales and prices aren't rising substantially, local and state officials say the figures illustrate that they have at least stopped their downward spiral.

"Certainly the fact that our level of sales were slightly higher than those of last January is outstanding news and provides optimism for our prospects in 2011," said Meg Hudson, president of the Ohio Association of Realtors.

Nationwide, sales increased 2.7 percent from last January, the first time in seven months that sales activity was higher than a year earlier.

The median price dropped to the lowest level in almost nine years, and the share of sales represented by foreclosures and other distressed properties climbed to a 12-month high.

"It is really a foreclosure-driven market," said Ethan Harris, head of developed markets at Bank of America Lynch Global Research in New York. "I don't think it is a sign of the market returning to health."

Information from Bloomberg News was included in this story.

Tuesday, February 22, 2011

Columbus Dispatch: Olde Towne East's new place to eat...Angry Baker

On Restaurants

Mad about sandwiches? Stop in at Angry Baker

Olde Towne East's new place to eat also has desserts, vegan dishes

Tuesday, February 22, 2011 02:50 AM


Olde Towne East is now just a little bit sweeter.

The Angry Baker bakery and cafe opened its doors at 891 Oak St. on Jan. 28, becoming part of the growing restaurant scene on the Near East Side.

"I live in Olde Towne East. There is a real need for a lot of things here, like small restaurants and places for people to go," said Angry Baker owner Vicki Hink. "I really love the area and all the people that live here. Everyone has a strong sense of community and has been super-supportive."

The need, as well as a desire to strike out on her own, is why she decided to open the Angry Baker. The tiny, 900-square-foot spot seats only 14, but it has it where it counts.

Breakfast offerings include smoked salmon, red onion relish, cream cheese and arugula on a croissant for $6.25; an egg sandwich with Ludlow cheese on a bacon, Swiss and chive scone for $5.25; a French toast sandwich with ham, Swiss and Ohio maple syrup for $4.75; and cinnamon-apple vegan pancakes for $4.25.

Lunch fare consists of a handful of sandwiches, such as the Snobby Joes vegan sloppy joe made with lentils for $6.50, and a white cheddar grilled-cheese sandwich with bacon, pear and arugula for $7.25.

Then, of course, there are the sweets. Options range from the simple, such as $1 peanut butter cookies, to the deluxe, such as Dr Pepper cake filled with blackberries and chocolate ganache for $4.50 a slice. Brioche caramel cinnamon rolls are $3.75 each, and kolache is $2.75.

A slice of salted caramel apple pie is $3.75, and vegan muffins and cookies go for $1.75 to $3.

Hink uses local ingredients whenever possible, including meat from Bowers & Sons in Pataskala and the Columbus Packing Co., and cheese from the Blue Jacket Dairy in Bellefontaine and L.W. Randles in Warsaw. The eggs come from Hillandale Farms in Croton, and the milk is from the Reiter Dairy in Springfield. The oats, flour, bran, honey and maple syrup come from Stutzman Farms in Millersburg.

Although the Angry Baker has been open for only a few weeks, "We already have regulars," Hink said. "The first couple of days, we even sold out of a lot of things.

"I do the majority of baking myself, but I've had to hire a couple more people just so we can keep up with the amount we need."

Hink, who went to culinary school at Columbus State Community College, worked at several local haunts before deciding to strike out on her own, notably Hyde Park, Z Cucina and Bakery Gingham.

Hink said "the Angry Baker" was a nickname given her by a former co-worker and good friend. "Certain jobs you like, and some you don't. That job in particular, not so much."

She insists she is nothing akin to the Seinfeld show's "soup Nazi." "Do I get a little angry sometimes? Who doesn't?" she said. "But I'm mostly pretty nice."

Her dining spot's neighborhood, Olde Towne East, is on the way up. Yellow Brick Pizza opened across the street at 892 Oak St. early last year. Portico at Voda Emporium, a coffee shop and lunch spot serving bagels and sandwiches, just opened at 79 Parsons Ave.

"We believe Olde Towne is making a huge gain in popularity. Many young people are moving in and new businesses are opening," said Ted Dyrdek , co-owner of Portico at Voda Emporium. "We now have four places to eat within two blocks: Black Creek Bistro, Yellow Brick Pizza, the Angry Baker and Portico. All are different, but all are quality food establishments."

"I'm pretty optimistic," Hink said. "I know the area and how much this was needed here, and I'm confident it will do well. And although it's always scary to go out on your own and open a place, it isn't too scary not to try."

The Angry Baker is open 7 a.m. to 6 p.m. Tuesday through Friday, 9a.m. to 5 p.m. Saturday and 10a.m. to 5 p.m. Sunday.

Angry Baker owner Victoria Hink, center, with employees Paul Fogarty and Samantha Mittelstaedt, says she already has regular customers.

Jeff Hinckley | DISPATCH photo
Angry Baker owner Victoria Hink, center, with employees Paul Fogarty and Samantha Mittelstaedt, says she already has regular customers.

A customer leaves the Angry Baker in the Olde Towne East neighborhood, where dining options are on the rise.
Jeff Hinckley | DISPATCH
A customer leaves the Angry Baker in the Olde Towne East neighborhood, where dining options are on the rise.
The Angry Baker's scones include bacon Swiss chive, and vegan chocolate chip.
The Angry Baker's scones include bacon Swiss chive, and vegan chocolate chip.

Friday, February 18, 2011

Business First: Ibiza slapped with foreclosure lawsuit by county seeking unpaid property taxes

The financial fallout of the scrapped Ibiza condominium tower has deepened with the filing of a foreclosure for unpaid property taxes and several more lawsuits from would-be buyers over the past few months.

Even so, the property’s lender still hopes a revised project can succeed on the Short North site.

Franklin County Treasurer Ed Leonard’s office filed foreclosure lawsuits Feb. 8 against Apex Realty Enterprises LLC for more than three years of unpaid taxes on the site at 830 N. High St. and a neighboring property at 26 E. Hubbard Ave.

If you are a subscriber, read more here

Sunday, February 13, 2011

NPR: Buyers Face Gamble With Rising Mortgage Rates

The post is here

Listen to the today here

February 13, 2011

February is when potential home sellers start painting walls beige and cleaning out closets, preparing for the spring homebuying season. But sellers got some unnerving news last week: The interest rate on a 30-year mortgage jumped up to a level not seen since last April.

In November, the average rate slipped to a 40-year low of 4.17 percent. Today, it's just over 5 percent, and concerns are growing that rates will keep rising — enough to scare away potential buyers. It's at least enough to make those buyers rethink the advantages of homeownership.

Why Rates Rose

The housing industry had hoped interest rates would stay very low for a very long time — at least until the market bounced back. Unfortunately, home prices and sales are still depressed, but now mortgage rates are going up.

The key reason is inflation. In recent months, prices have been rising for all sorts of commodities, from steel to wheat to gold. Whenever prices go up, long-term interest rates — like those on 30-year mortgages — rise along with them.

So far, at least, the rate hikes have not been steep enough to discourage most potential buyers, and 5 percent is still low by historical standards. Mortgage experts generally say you won't start to seriously undermine the housing market until rates get closer to 6 percent.

Time To Buy A House?

One encouraging thought for people who are trying to sell their homes right now: Rising rates can actually give a short-term boost to real estate sales by pushing potential buyers off the fence. People who have been taking their time making a decision now have motivation to make a commitment before rates move higher

Yet rushing to buy a house and lock in today's interest rates is still a gamble — given that home prices may still fall further. If buyers act now, they can spare themselves a 6 or 7 percent mortgage rate. Then again, if they live in a city where home prices may drop an additional 10 percent, it might be better to hold off for the lower price.

This much is certain: Today's combination of low rates and low prices is making homeownership more affordable than it has been in more than a generation, in terms of the ratio of home prices to annual household income.

During the housing bubble between 2002 and 2007, homebuying became very unaffordable. That's why so many people resorted to bad borrowing ideas like interest-only mortgages. They needed to use lending tricks to buy homes.

Today, buyers don't need tricky loans to become owners — they can find plenty of affordable houses and good mortgage deals. But what they do need is good credit. In the aftermath of the financial crisis, lenders are still keeping their standards high. To get a good loan, a buyer needs a credit score above 740.

The Joys Of Not Buying

Renters may want to consider their advantages. Financial planners point out that while buying is affordable, rents are way down too, so it can make financial sense to keep renting. Renting allows for more mobility, too. If a good job opportunity opens up in another location, it can be easier to move if you aren't tied down by a home.

One final factor to keep in mind: The political winds are shifting. As they look for ways to balance the budget, it's possible lawmakers could phase out some mortgage deductions. Last week, President Obama proposed winding down the government's role in mortgage financing.

These changes potentially could reduce the availability of 30-year fixed mortgages and make home ownership less attractive, which would make selling a house harder in coming decades.

Lastly, the rising mortgage rates probably spell the end to the refinancing boom, too. Owners with a high mortgage rate who didn't get around to refinancing are probably smacking themselves in the head now.

Those who did refinance their mortgages last year cut their interest payments by 22 percent on average. Now that rates are rising, lenders are reporting sharp drops in the number of applications.

Friday, February 11, 2011

Columbus Dispatch: Columbus no longer planning for streetcars, light rail

A century ago....we had street cars in Columbus.

Friday, February 11, 2011 02:51 AM


Despite a lingering presence in regional planning documents, officials say the idea of streetcars for Columbus and light rail for central Ohio has been shelved.

The Mid-Ohio Regional Planning Commission gave its OK yesterday to use more than $225million in federal money for roadwork, buses, bike trails, sidewalks and other projects designed to ease traffic congestion and improve air quality.

Don't expect action soon, however, on another item on the list:

Although MORPC continues to list Mayor Michael B. Coleman's 2006 streetcar proposal among the region's priorities - on paper, it's in line for $20million from the agency starting in 2015 - even Coleman has let the idea go.

"The streetcar plan is not something the mayor is pursuing in any way," spokesman Dan Williamson said.

And its successor, a light-rail line from Downtown to Polaris that was turned down for federal stimulus money in 2009, is finished as well.

Central Ohio Transit Authority spokesman Marty Stutz said COTA is no longer pursuing a light-rail plan.

MORPC Transportation Director Bob Lawler said the planning agency has kept streetcars in its long-range plan as a placeholder should the idea be revived.

Its continued inclusion doesn't cost anything, he said, and it hasn't kept money from other projects.

Streetcars originally appeared in MORPC's 2007 plan as a priority for 2011. They're now in this year's plan as a 2015 recipient of the federal money that MORPC passes on to central Ohio governments and public agencies.

The federal money is used for projects in one of three categories: improving roads; easing pollution or congestion; or enhancing the regional transportation system.

"We're trying to hold open the opportunity if they were to pursue (rail)," Lawler said.

More likely to move forward, however, are the 46 other federal-funding requests that MORPC approved yesterday for fiscal 2012 for Columbus, the Ohio Department of Transportation, Franklin and Delaware counties, suburbs, townships, COTA and the Columbus Regional Airport Authority.

Columbus is slated to receive $34.6million in fiscal 2012 and 2013 to widen Alum Creek Drive between Frebis Avenue and Williams Road. That's the biggest amount of money earmarked for any project.

Approval by MORPC doesn't officially put any project on the construction calendar. Cities often must kick in some of their own money - the Alum Creek project will cost Columbus $8.6million - and control the timing.

COTA is another big recipient in the MORPC plan, in line for $2.5 million annually to help pay for new buses.

Columbus Dispatch: Development panel OKs racetrack at Cooper Stadium

City Council is next step for vote on rezoning

Friday, February 11, 2011 02:51 AM


Even though it acknowledges concerns about the noise, the Columbus Development Commission unanimously endorsed a plan last night to convert the Cooper Stadium site into a racetrack and auto-research center.

The next stop for developer Arshot Investment Corp. is the Columbus City Council, which probably will hold a final vote on the rezoning in March. Then it's on to the city's Board of Zoning Adjustment for a special permit.

Between now and then, there will be a lot of lobbying of City Council members by proponents and opponents of the plan. Arshot wants to convert the empty baseball stadium west of Downtown into a sports and entertainment hub near some of the city's poorest neighborhoods.

"I deeply believe this area of Columbus is ripe for rebirth," the Development Commission's chairman, Mike Fitzpatrick, told more than 100 people at the city's Carolyn Avenue complex after the commission's 5-0 vote.

Developer William J. Schottenstein, who did not attend last night's meeting, is promising neighbors that sound walls will minimize track noise, that he'll pay fines if they don't, and that he'll hire area residents to work at the complex.

"It's a $30 (million) to $40million gamble he's taking here," Fitzpatrick said.

A parade of people for and against the track made their cases during the hour that the commission gave them.

Opponents said the track would hurt the quality of life for nearby residents, reduce home values, disturb visitors at the nearby Green Lawn and Mount Calvary cemeteries, and harm migrating and nesting birds.

"How can anybody expect us to sell Downtown living?" German Village real-estate agent Regina Acosta Tobin said.

But proponents said the project would breathe new life into the 47-acre site, turning a lifeless area into a job generator.

The half-mile oval track would seat 8,500 at the site of the former home of the Columbus Clippers, with sound walls up to 35 feet tall. Arshot has been emphasizing the automotive-research and technology center.

The project would create more than 300 jobs, Arshot said, and host not only races but also concerts, festivals, trade shows and sporting events.

The new Southwest Civic Association signed a good-neighbor agreement with Schottenstein yesterday before the meeting.

Races have to be finished by 10 p.m., the agreement says, although other events could go until 11:30p.m.

Money from ticket sales and fines for noise violations up to $20,000 would be placed into a community foundation for scholarships and vocational training for residents, and public improvements near the site.

"We wanted to make sure this development has a lasting, positive impact," said the new civic association president, Stefanie Coe.

Coe said Arshot would monitor noise and report violations to the Southwest Area Commission, which drew laughs from opponents.

Though the Southwest Area Commission has approved the idea, the Franklinton Area Commission voted against the plan on Tuesday night.

Coe, also a Southwest Area commissioner, said good-neighbor agreements can be better enforced through civic associations, and acknowledged the track helped spur the new group's creation.

"If we formed it for this purpose, who cares?" Coe said.

Monday, February 7, 2011

Columbus Dispatch: Central Ohio housing market still looks good for buyers, not sellers

Central Ohio housing market still looks good for buyers, not sellers

Sunday, February 6, 2011 02:58 AM


Real estate, like baseball, thrives on numbers. Hardly a day passes without a new statistic measuring some part of the housing industry.

To navigate the statistical sea and provide perspective on the often-competing figures, The Dispatch examined four key measures of the central Ohio housing industry during a full decade: home sales, building permits, foreclosures and home prices.

Although details vary, the figures paint a clear overall picture: The housing industry in central Ohio, as elsewhere in the nation, peaked in the middle of the decade and has spiraled mostly downward since.

Some observers think the spiral is far from finished, but others think the worst might be over.

What the numbers mean to consumers depends on where they stand in the market.

Buyers - especially those who don't need to sell a home - are driving the train. With mortgage rates historically low, prices down and inventory up, the real-estate mantra "There's never been a better time to buy" rings pretty true.

"The guy who has nothing to sell, is working, has a down payment and is living somewhere month to month - that is your best-positioned person out there right now," said Stephen Hutchinson, president of State Wide Appraising and Broker One Realty in Columbus.

Sellers - especially those who paid top-dollar during the boom from 2003 to 2007 - are facing a tougher road.

Prices in some areas of central Ohio have held better than others, but most sellers should expect to get less for their home today than they would have three or four years ago. The notion is especially true for sellers of condominiums or homes in the price range of $400,000 to $800,000, where inventory is high and demand is weak.

The best-positioned sellers are those with a home priced from $150,000 to $300,000 in stable, high-demand areas such as the Clintonville neighborhood, Grandview Heights, northwest Columbus and Worthington - all of which saw an increase in the average sales price last year.

"If I were a buyer, I'd look to the more-established neighborhoods - the Clintonvilles, the Worthingtons, the Arlingtons, older neighborhoods that have stood the test of time," advised Cynthia MacKenzie, an agent with Keller Williams Capital Partners in Worthington.

On the other hand, sellers who are trading up still could come out ahead. They might take less for their home, but they'll offset the loss when they buy a more-expensive property.

"If you're a move-up buyer and you sell your $200,000 home and take a 5 percent discount and buy a $400,000 home at 5 percent discount, you're ahead," noted Rick Benjamin, president of the Columbus Board of Realtors.

For buyers and sellers alike, though, the big question remains: Will prices go lower?

The short answer: No one knows.

Illustrating the challenge, two national real-estate-information services - Clear Capital and Fiserv Case Shiller - studied similar data for Columbus (including home prices and demographic and employment trends) and arrived at opposite conclusions.

Clear Capital predicts that prices will rise 2.1 percent this year in the Columbus area, making it the fifth-healthiest market in the nation. Fiserv Case Shiller, however, foresees central Ohio prices dropping 2.8 percent in 2011 (but rising 1.3 percent next year).

Some indicators suggest that prices might be at or near the bottom. The average sale price of a central Ohio home ($158,893) was only slightly below that of the previous year ($159,840), the smallest decline in several years.

But the 2010 housing sales were fueled with federal money, which won't be around this year.

Such figures also can be tricky because they measure only the average price of homes that sold, not the average value of all homes.

More important, they vary radically from community to community and neighborhood to neighborhood. (To find out how your community fared last year, visit the Columbus Board of Realtors' website, ; click on "housing statistics" under "news" and search "areas" statistics for December 2010.)

Perhaps the biggest drawback of such statistics: They tell you only where prices have been, not where they're headed.

When it comes to forecasts, it's impossible to overlook the elephants in real estate's living room: foreclosures and short sales (homes that sell for less than the balance on their mortgage).

Such homes typically sell for well below their normal market value. One example: A foreclosed house on San-bridge Circle, a few blocks west of downtown Worthington, sold last year for $170,000; similar area homes typically command $230,000 to $250,000.

As long as foreclosures and short-sale properties are a large part of the market, they will depress prices of conventional homes, meaning that prices must be dropped to compete - another plus for buyers but not for sellers.

How important are foreclosures in the central Ohio market? Consider: More than 13,000 properties were foreclosed upon in central Ohio last year, while about 20,000 homes were sold altogether.

Not all of the foreclosed properties ended up back on the market. Some were financially resolved, some were commercial properties and many were sold directly to investors.

Still, between 30 percent and 36 percent of all homes sold in 2010 in central Ohio were distressed properties, according to most estimates. Such properties remain heavily concentrated in Columbus' poor neighborhoods but can be found throughout central Ohio.

"Foreclosures have a 100 percent impact on prices," Hutchinson said. "Even if you have only one or two in Bexley, Worthington, Upper Arlington, they still compete against the other homes in that market. Those have got to be liquidated to get (price) increases."

Even though foreclosure filings dipped a bit last year in central Ohio after steadily rising for a decade, there's little reason to think that foreclosures are going away anytime soon. The number of Ohioans behind on their mortgage is as high as ever; and jobs, though returning, aren't arriving with any speed.

Finally, there are the homebuilders, who've largely stood on the sidelines during the housing downturn. Last year, they built about one fourth the number of homes constructed during the industry peak.

The lack of new construction has been brutal for those in the industry but good for buyers, who can find a better deal on a new home now than they could have a few years ago.

"You get a lot more home today than you did then, during the peak of the boom," said Mark Braunsdorf, owner of Compass Homes and president this year of the Central Ohio Building Industry Association.

"Plans are more efficient; and material prices, land prices and labor prices are at recent historic lows."

Braunsdorf and other homebuilders are convinced that a backlog exists in the demand for homes.

Their case: The number of homes sold and built in central Ohio has shrunk sharply during the past five years while population has continued to rise (even more than during the boom).

Those who in normal times would have bought a home are now renting or bunking with family or friends, waiting for the right time to purchase.

But landlords, who have invested millions in high-end apartment complexes in central Ohio during the past year, aren't convinced. They think some would-be homebuyers have been scared out of the market, possibly for years.

Braunsdorf noted that in normal times, before the crazy years of the boom, about 5,000 new homes a year were built and sold. For three years running, that number has shrunk to about half that.

"I do believe there's pent-up demand," Braunsdorf said. "There is some natural demand even in a potentially shrinking economy, and Columbus isn't dead. It's still growing."

Sunday, February 6, 2011

8 Places Have Open Houses Today in Italian Village

Get out before the game and take a look at these great places.

Just print this and take it with you.

Italian Village Open Houses

This great condo will be Open today from 2-4pm
More information is here:

1034 Summit

Thursday, February 3, 2011

Columbus Dispatch: A spirited endeavor

The story with more pictures is here

Two new Columbus distilleries put lightning in a local bottle

Wednesday, February 2, 2011 02:53 AM


Looking for a Christmas present for her brother, Connie Trein opted for a stylish bottle of OYO vodka made by Middle West Spirits near the Short North.

"I heard about it from friends," said Trein, 46, of the South Side.

"I was surprised to hear there was a distillery in Columbus."

In fact, Columbus has two distilleries -- both of which opened last year.

In addition to Middle West Spirits, in business since July, Watershed Distillery near Grandview Heights started selling gin and vodka in December.

The small operations are among only four micro-distillers in Ohio but a growing number nationally -- more than 250, or a 25 percent increase from 2009, said Bill Owens, president and founder of the American Distilling Institute in Hayward, Calif.

A micro-distiller, he said, is defined as one that makes 60,000 proof gallons (gallons with 50p ercent alcohol) or fewer a year.

By comparison, Absolut Vodka produces more than 2 million proof gallons a year.

Another comparison: At full capacity, Watershed makes about 23,400 bottles of vodka a year; and Absolut, 600,000 bottles a day.

The interest in small distillers, Owens said, is traced to the movement to buy, eat and drink local products.

Spirits are arriving last to the party, it seems, because home distilling is illegal.

"Home brewers were the springboard for craft beer," Owens said. "We don't have that with distillers."

Indeed, the "local" movement inspired the Columbus distilleries.

"I lived in Switzerland, played professional volleyball," said Greg Lehman, head distiller and co-owner of Watershed.

"The town I was in had local everything: soft drinks, cheeses, spirits."

Upon his return to the United States in 2003, he noticed that he couldn't buy only local products.

"My buddies and I were taken by the fact that there were a lot of microbrews in Columbus but no spirits."

Brady Konya and Ryan Lang, co-owners of Middle West Spirits, sought to make spirits not only in Ohio but also with as many Ohio ingredients as possible.

"We wanted to make a vodka with a distinct sense of place," Konya said. "If you're going to produce something with a distinct sense of place, it has to be sourced locally."

Middle West buys soft red winter wheat grown and milled in Fostoria, about 90 miles north of Columbus, for OYO.

For the honey- and vanilla-infused vodka that it has produced since December, the distiller uses wildflower honey from Lancaster. (The vanilla is obtained from Uganda, Konya said with a smile, because "We don't have good vanilla in Ohio.")

Watershed makes its vodka from corn but, as yet, limits its sourcing to the Midwest, not exclusively Ohio.

In creating the products and opening the businesses, both companies faced a learning curve.

Lehman joined a silent partner in 2007 to begin planning a distillery, but they needed time to acquire funding.

Without banks willing to underwrite them, they had to find private investors. Then, after leasing the space and purchasing a still in September, they had to fine-tune the recipes.

"We're by no means master distillers," Lehman said. "We learn every day. We've made every mistake you can make. There are variations in every batch."

Middle West has a similar story.

The owners presented their business plan to more than 20 banks before obtaining funding from Key Bank in Cleveland.

When they started producing the vodka with a custom-made Kothe copper still, they had an output of about 50 percent below industry standards -- so they hired a chemist for help.

"It took eight months to fine-tune the recipe," Konya said.

Early responses to the products of both companies have been positive.

The newly opened Hubbard Grille in the Short North features OYO vodka in its Hot & Filthy Martini, a $10 drink splashed with olive juice and garnished with two jalapeno-stuffed olives.

"It's quite popular," general manager Daniel Morris said. "I'm a huge fan of their product and what they do. I think that product is, flat out, one of the best-tasting to come along in a long time."

Bill Glover, chef and owner of Sage American Bistro in the Ohio State University area, considers himself a big fan of Watershed and especially its gin.

"It's one of my favorite gins I've ever tasted," he said. "It's got an amazing flavor profile."

He uses it in a drink called Vespers, which includes Watershed gin and vodka along with Lillet Blanc and a splash of tonic.

With the distillers up and running, both are looking toward the future.

Watershed is aging bourbon for 2013.

Middle West has a whiskey to release in March and plans to make eau de vie and other liqueurs. (Because aging in barrels takes months to years, many micro-distillers first produce clear spirits -- which require no aging.)

Two distillers in a single city don't necessarily compete, according to the companies.

Lehman appreciates the awareness that Middle West draws to the art of micro-distilling.

The real competition, Konya said, comes from the big distillers.

"There is plenty of room on the shelf for both of us."

If you go

  • Middle West Spirits is at 1230 Courtland Ave. Open houses are offered at 5:30 p.m. Wednesdays and by appointment. OYO vodka is sold at the distillery and at various stores. For a list, call 614-299-2460 or visit
  • Watershed Distillery is at 1145 Chesapeake Ave., Suite D. Tastings are available by appointment only. For where to buy Watershed gin and vodka, call 614-357-1936 or visit