Brewery Draconum, a family-owned brewpub that has served Old Town Newhall for nearly ten years, will permanently close its only location after September 28. The owners cited insurmountable challenges from the current economic climate, including rising costs for labor, rent, utilities, and supplies. This closure marks another blow to the Santa Clarita community, which recently lost another long-standing establishment.
The family-owned business stated they had tried their best to adapt to increasing expenses but could no longer make the numbers work. Independent restaurants and breweries across California are reportedly grappling with similar financial pressures. Industry leaders have pointed to the state's high minimum wage and labor standards as significant factors, which can disproportionately affect labor-intensive businesses like breweries.
Additional costs such as commercial rents in Southern California, utility bills, state licensing fees, compliance requirements, and insurance premiums further strain independent operators. Brewery Draconum was a single-location, family-owned business with no other branches or franchises to absorb losses. Its closure means the business will cease operations entirely.
The broader tax environment in California has also been noted as a challenge for businesses. According to the Tax Foundation's State Tax Competitiveness Index, California ranks among the bottom three states, alongside New Jersey and New York. These rankings are attributed to complex income-tax structures, high marginal corporate tax rates, and substantial payroll taxes.
While Brewery Draconum did not directly blame specific politicians or state policies in its announcement, its description of escalating costs and an insurmountable economic climate aligns with the challenging operating environment faced by small businesses in California. The timing of the closure is particularly difficult for Old Town Newhall. Just weeks before Brewery Draconum's announcement, the nearby Newhall Refinery, a restaurant and bar that had been a community fixture for 13 years, was destroyed in an early morning fire on August 24. Several adjacent businesses were also affected by the blaze, leaving Old Town Newhall with the loss of two significant businesses within a little over a month.