The Boathouse Brewery came into existence following an explosion deep within the cellars beneath the courtyard, which would have been blamed on overly exuberant students had the remains of an experimental brewery not been found during the clean-up.
Archchancellor Ridcully (a former student brewer himself) was left with no choice but to discourage the practice and so reluctantly issued a decree banning all brewing activities within the boundaries of UU.
Weeks of careful examination of the Unseen University statutes and bylaws (championed by Ridcully himself) eventually lead to the discovery of a loophole. It turned out that the little-used boathouse, being constructed mainly over the river Ankh and therefore not technically within the grounds, was exempt from the decree and so the Boathouse Brewery was born. A large red line painted on the floor now formally marks the junction of river and university grounds.