SONOMA COUNTY WINERY USE PERMITS, EVENT RESTICTIONS AND DTC

BOOZE RULES GUEST BLOG

There have been hundreds of articles and reports in recent months detailing winery marketing event restrictions in Napa, Sonoma and throughout California.  Local authorities from Santa Barbara to Napa to Sonoma have been grappling with the winery and hospitality business need to market their wines to visiting customers against the desire of local residents (many of them new to the wine country) to experience a quiet agricultural countryside. This conflict is not going away and is reflected in applications for new wineries being protested and in applications for use and event permits for existing wineries being denied.  The DTC model is essential to the survival of the small to medium size winery, and entertaining visitors is essential to the DTC model. We and our colleagues at Carle, Mackie, Power & Ross, LLP, (a law firm on the ground in Sonoma County) are tracking Sonoma developments as they occur so that our winery clients and friends can input in the process. Kim Corcoran, an experienced wine business and litigation attorney at CMPR, attends the County Board of Supervisors meetings on these issues.  This is her report.


Latest Developments on Winery Use Permits and Visitor Restrictions

Kim Corcoran, Attorney

Sonoma County wineries have been under attack in the last few years by groups in opposition to winery events, new wineries, and even the direct-to-consumer business model itself.  The vast majority of Sonoma County wineries are good neighbors and work to ensure that their impacts on nearby residents are lessened.  Most of the neighbors understand that they are living on land zoned for agriculture (which includes wineries), but opposition groups are advocating for more residential-oriented rights on ag land.  The wineries have pushed back, stating that without a high value crop such as wine, the land is worth more for housing tracts than it is for agriculture.  To help bring the parties to some resolution, the Board of Supervisors convened a Winery Working Group panel.  After many months of meetings, however the animosity seemed to grow stronger.  The issues were placed back in the hands of the Board of Supervisors.  

Meeting 10/11/16, Sonoma County Board of Supervisors

The Sonoma County Board of Supervisors agreed this week to move forward with zoning code amendments to facilitate clarity for the wine business in the County.  The Board adopted a limited resolution asking County staff to develop specific code amendments as well as standards and siting criteria for areas of local concentration to be adopted either as guidelines or code amendments.

Perhaps the most remarkable thing about this week’s action is that it was on the Board’s “consent” calendar.  This means that there was none of the public comment (read “rancor and discord”) that has attended other public hearings on this subject.  Of course, it takes a lot of work on everyone’s part to get an “easy” result - hats off to all for getting to this point.

Indeed, it is a sign of the times that direction from the Board simply to craft some code amendments is seen as a major milestone.  Opposition groups have pushed hard for an immediate moratorium on any new winery use permits and for an immediate determination of (and prohibitions within) “areas of over-concentration.”  Leaving aside the redundancy of their term, anyone with knowledge of the areas in issue knows that it will not be easy to define areas of the County that may fall into such a category.  Moreover, opposition groups appear to seek County regulation for the express purpose of interfering with the direct-to-consumer marketing model that has made Sonoma County wineries vibrant and prosperous. 

Each of the Supervisors expressed their appreciation for a more deliberative process, one Supervisor referring to the process as “deliberative by design.”  Another Supervisor, with nods of approval from others, reminded the audience that direct-to-consumer sales is an old business model from the time before grapes were even a major crop.  Such a sales model can greatly assist in keeping much of the County’s current land in agriculture. 

The winery supporters have been advocating for the adoption of clear definitions and this week the Supervisors instructed County staff to develop such definitions.   Under the current ordinances, the County is asked to regulate winery “special events” when there is no definition for the term.  The wineries are seeking definitions for “events” and “activities.”  An activity is a normal business activity within the winery’s usual, site-specific capacity (such as a special tasting, a distributor meeting or a winemaker lunch) that would not be counted as a “special event.”  Under the wineries’ proposed set of definitions, new wineries would be limited in the number and scope of special events, but not activities. 

Several of the Supervisors discussed the need for additional enforcement mechanisms with one of them specifically complimenting the wine industry for their proposals in this regard.  The wineries have proposed outside funding for a position that would be available on nights and weekends to assist neighbors and wineries alike, and to coordinate larger winery events with other neighborhood pressures such as marathons and bicycle races. 

While we will need to wait for County’s staff’s recommendation on each of the issues before we’ll know what’s in front of us, the meeting this week was a step forward in that process. 

Please do not hesitate to contact Kim Corcoran at kcorcoran@cmprlaw.com or (707) 526-4200 if you have questions or concerns regarding this article.