The craft beer boom is spreading to the shores of Lake Minnetonka.

The Excelsior Brewing Co., the first Lake Minnetonka brewery and the only one allowed in the small town, is more than tripling in size less than two years after opening thanks to the high demand. The $1.4 million expansion is set to open next month, with a celebration this Saturday of the demolition.

“We basically reached our capacity nine months into operation,” spokesman Ben Flattum said. “We didn’t know what we were getting into … and it’s been crazy.”

The expansion of the brewery, which opened in summer 2012 in an old 1920 Ford dealership industrial building, will increase beer production by 600 percent and add a bottling line to sell cases to Twin Cities stores for the first time.

It’s part of the growing brewery and taproom trend across the west metro area. And Excelsior could soon have company on Lake Minnetonka.

Across the lake from Excelsior, Wayzata City Manager Heidi Nelson said they’ve received some inquiries about opening a brewery in the city, though no formal proposals have been submitted yet; the city is also discussing changing its ordinance to allow taprooms.

In Excelsior, the brewery is just three blocks from the lake, near the town’s main street, at 421 3rd St. But opening a new business in a small town hasn’t come without challenges.

Last fall, some nearby residents and businesses complained to the city about noise issues increasing with the brewery’s expansion. And since then, the City Council has debated how or whether to limit the brewery’s hours and outdoor seating.

“It’s been a very contentious issue,” City Manager Kristi Luger said. “We have a split council; it’s a 3-2 vote. And that’s not typical here.”

She said the debate comes down to balancing residents’ quality of life with the realities of being a popular tourist town. While she said police haven’t received any formal complaints about the brewery, the city has received calls about drunkenness and noise.

Excelsior changed its ordinance in 2011 to allow breweries, but restricted it to only one. Now, when it comes to limiting hours and seating, Luger said there are few small cities that Excelsior can model their ordinance after because the brewery business is so new since the 2011 so-called “Surly bill” allowed them.

“It’s a very polarizing issue right now … it’s such a new industry,” she said, adding about breweries’ taprooms, which don’t serve food like restaurants: “It was supposed to be a tasting place … but it’s kind of become like a bar. And our council members are very uncomfortable with it.”

But Flattum said it’s a vocal few; most residents and businesses, he said, have been supportive of the brewery and have contributed to its success.

“We don’t sell a cheeseburger and that makes us the enemy?” he said about the city’s bars that sell hard liquor. “I’d say on Lake Minnetonka, we are the least rowdy.”

The final agreement is expected to be voted on by the City Council on April 21.

More beer all around

In the meantime, a year and a half after the three local residents opened the brewery, they’re back in construction mode.

The expansion includes relocating and remodeling their taproom in the former auto shop space and boosting the square footage from 2,700 to 8,500 square feet. Taking up the entire building will increase their brewing capacity by 600 percent, Flattum said, adding seven 40-barrel fermenters, two conditioning tanks and a bottling line to begin selling six-packs of beer to metro stores in late May.

The brewery is hosting a “wall party” Saturday to celebrate the demolition of a wall separating the current space from the expanded area and then a grand opening of the new space May 24 with an outdoor beer garden and live music all day.

If they someday outgrow that space, Flattum said they have ambitions to move their production off-site to another west metro city, but keep the taproom in Excelsior.

Luger said that’s a good thing for the town, despite the few concerns.

“The brewery has been great,” she said about it boosting tourism to Excelsior and responding to any complaints. “They’re well established. And they’re successful.”