HISTORIC Scotland has awarded a £500,000 grant to a Falkirk brewing project that failed to attract Scottish Government support via its food marketing, processing and co-operation scheme earlier this year.
The organisation granted the funds to the Arran Brewery to support its plans to create a brewery, microdistillery, bottling plant and visitor centre in the former Rosebank Distillery.
But the fate of the £7 million project hinges on talks between Falkirk Council and Arran Brewery owner Gerald Michaluk over how the authority classifies the category B-listed building.
The building dates back to 1864 and is one of only three remaining lowland distilleries.
Mr Michaluk, who acquired the distillery from Scottish Canals last year, said the Historic Scotland grant means his project has moved "a big step closer" to coming to fruition.
However he warned his plans could yet be scuppered if the council forces him to adapt the building to modern building regulations.
Insisting his scheme is fully compliant with health and safety rules, Mr Michaluk said: "Right now, the thing is a distillery, so the use would be classed as that use. If it continues to be it means I can go in there and start work and put a brewery in and there is no problem.
"If the site is not, I have to spend £120,000 on planning applications to get it to become what it is now. And if I do that then there is no way that a building built in 1864 is anything like compliant with building regulations. Never in a month of Sundays. It is beyond economics to make it compliant in my mind."
Falkirk Council declined to comment directly on the Arran Brewery's plans. It said it was pursuing the regeneration of the Rosebank site with Scottish Canals and had received several proposals, including one plan for a mixed use and residential development.
The council's head of economic development and environmental services, Douglas Duff, said: "There are a number of regulatory issues to be addressed to enable the project to be delivered and we are working closely with the company and Scottish Canals to tackle these."
In spite of the impasse, Mr Michaluk said he is "confident" of securing a positive outcome from talks between his lawyers and the council.
Rosebank Distillery was mothballed by Diageo in the 1993 and sold the buildings to British Waterways (now Scottish Canals), but the spirits giant retains the rights to the Rosebank name.
It also holds stocks of Rosebank whisky and releases limited edition bottlings of the malt which are prized by collectors.
A Rosebank bottling from the 1970s is currently being sold on the Whisky Exchange website for £899.
The grant awarded to Arran was one of five from Historic Scotland worth a total of £1.68m that were announced in parliament yesterday by culture secretary Fiona Hyslop.
The organisation said urgent repairs will be made to the fabric of the building, located next to the Forth and Clyde Canal, under plans to restore it to its former glory.
As well as restoring the distillery, plans include the preservation of warehousing and the creation of a visitor centre incorporating the Scottish National Brewing and Distilling Centre.
Historic Scotland's building repair grant assists with the cost of repairs that require traditional materials and skills to conserve original features in buildings of architectural or historic interest. Mr Michaluk said the grant from means Arran has the bulk of the funding for its Rosebank plan in place. The project looks on course to meet the £7m target is in spite of being refused a £1m grant from ministers to expand its brewery on Arran and fund a bottling line at the Falkirk site.
The company is looking to raise £4m through crowdfunding and to secure bank funding.
Mr Michaluk said: "We have most of the finance in place because a lot of the suppliers of the equipment are also lending us money for the equipment. That side of it is really taken care of.
"We spend £180,000 a year in bottling... so having a bottling facility and paying for that is not a problem."
Arran will trade its beer business at Rosebank as the Forth and Clyde Brewery, while its micro-distillling operations will go under the Camelon Distillery name.
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