HAMPTON -- The town is stepping in to ensure Smuttynose Brewery Co. is awarded a federal grant it received from the U.S. Department of Commerce to aid the company in its efforts to build a new brewery on Towle Farm Road.

Selectmen voted unanimously on March 26 to guarantee to the U.S. Department of Commerce that the project for which the grant was earmarked will be completed despite bids coming in much higher than expected.

Smuttynose was awarded a $250,970 federal grant in 2010 to be used to pay for sewer line extensions for its facility under construction on Towle Farm Road.

The grant was a 50/50 grant, meaning Smuttynose had to come up with the additional $250,975 for the project.

At the time, the project was estimated to be $500,000, but all the bids for the project came in much higher at just over $600,000.

Town Attorney Mark Gearreald said the U.S. Department of Commerce cannot commit any more funds to the project.

Before awarding the grant, Gearreald said, the agency wants assurances from the town of Hampton, which sponsored the grant application on behalf of Smuttynose, that the difference in the contract would be paid and the project would be completed.

Gearreald said the guarantee will not cost the town a dime as Smuttynose will pay all the additional cost.

Gearreald said Smuttynose has agreed to place the entire $604,000 in escrow with Hampton so that the bills can be paid as they come in from the contractor.

"This is still conceived as a win-win situation for the town," Geaffeald said.

The town initially agreed to sponsor the grant because it would allow the Smuttynose project to go forward bringing a number of jobs and commerce to Hampton.

Town Manager Fred Welch said Smuttynose's sewage needs are such that it needs to tie into the town's sewer system.

Welch previously said the improvements would benefit Smuttynose and the town. The installation of sewer extensions will close a looped system along Towle Farm Road.

"It will be a benefit to the town because it will tie systems together," he said. "Right now, you have dead-end systems."

Smuttynose is currently located in a 25,000-square-foot facility at 225 Heritage Ave. in Portsmouth.

The Hampton lot, soon to be the new home of a 42,000-square-foot brewery, is a 14-acre site formerly owned by Gregory and Jennifer Sancoff at 105 Towle Farm Road.

Smuttynose owner Peter Egelston decided to move the brewery to Hampton to expand its operations, after previous bids to relocate the brewery to sites in both Portsmouth and Newmarket did not work out.