TO: Board of Supervisors
FROM: Brian D. Bordona - Director of Planning, Building and Environmental Services
REPORT BY: Michael Parker, Planning Manager
SUBJECT: Micro-Winery Ordinance Update
RECOMMENDATION
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Receive a status report of the Micro-Winery Ordinance and provide direction regarding the May 5, 2025 sunset date. (No Fiscal Impact)
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BACKGROUND
On April 5, 2022, the Board of Supervisors (BOS) adopted the Micro-Winery Ordinance (MWO) which is scheduled to sunset on May 5, 2025, unless otherwise extended by the BOS. The MWO established a new sub-category of winery with the following characteristics:
A. Ferments on-site at least 201 gallons of wine annually and has a production capacity of no more than 5,000 gallons of wine;
B. At least 75 percent of the grapes used in fermentation on-site are grown on the same property as the micro-winery or contiguous parcels under the same ownership. For the purpose of this section, "the same property as the micro-winery" means any parcel or parcels identified as included within the Use Permit application;
C. Has a maximum of 5,000 square feet of total enclosed space including storage, processing facilities, tasting areas, and caves;
D. No more than twenty Average Daily Trips (ADT) (ten daily round trips) are generated by tasting room visitors, all winery employees including seasonal employees, and deliveries to and/or from the winery;
E. No marketing events are conducted on site;
F. Tours and tastings and retail sales for wineries in the Agricultural Preserve and for the Agricultural Watershed, may be conducted on-site but are limited to between the hours of 9:00 a.m. and 6:00 p.m.;
G. No subsequent application for an increase in the production of wine or tasting room visitation shall be considered within two years after the approval of the original micro-winery use permit.
Micro-wineries shall only be permitted within the Agricultural Preserve (AP) and Agricultural Watershed (AW) zones.
In terms of the impetus for the MWO, the County regularly expressed its concern for the sustainability and long term survival of small, family-owned wineries and/or farms. This concern is reflected in multiple documents, including the County Strategic Plan, the General Plan, the Agricultural Protection Advisory Committee, the Local Guidelines for Implementing the California Environmental Quality Act (CEQA), the PBES Process Improvement Study and related ongoing efforts to streamline permit processing.
In addition, many families who own vineyards and either sell grapes to other producers or produce wine offsite expressed a desire to host on-site tastings. The MWO enabled them to sell their wine directly to consumers (DTC), providing a significant business advantage to their small business operations.
Furthermore, small, family-owned wineries face increasing challenges in meeting the complex Federal, State, and County regulations required to establish a winery. The costs associated with compliance, particularly those linked to stricter state standards, disproportionately impact these businesses. They often lack the resources to absorb the additional costs, which can be especially difficult when establishing and operating a small facility. Unfortunately, regulatory requirements-especially at the state level-continue to increase, further burdening these small, family-owned agricultural businesses.
At the state level, counties serve as agents of the state and are obligated to enforce state laws and mandates. Winery facilities are subject to various state regulations, such as public water systems, septic systems, well permitting standards, fire safety (including road improvements for safe ingress/egress), and building/fire codes. While counties must enforce these regulations, they do not have the authority to amend or exempt them.
Benefits of the MWO
The primary benefit of the MWO lies in the streamlined approval process. Micro-Winery applications are considered and approved by the Zoning Administrator rather than the Planning Commission. To date, two micro-winery applications have been approved, with four additional applications in progress.
The two approved applications took on average 172 days to submit a completed application. Once the applications were deemed complete, staff processed them within an average of 76 days, including writing the environmental analysis and staff report (and related legal review), filing it with the State Clearinghouse for public review, and scheduling a public hearing with the Zoning Administrator. The total average County cost was approximately $14,995 each, compared to an average cost of $22,723 for a new winery use permit.
On August 22, 2024, county staff participated in a micro-winery workshop hosted by Save the Family Farms. A key takeaway was the significant difficulty small family-owned operations face due to the infrastructure upgrade costs mandated by the state. These expenses, combined with the county's regulatory limits on production and visitation, make it challenging for small producers to make their projects financially viable.
MWO Sunset Clause
The MWO, passed by the Board in April 2022, contains a sunset clause in Section 2.A.5, which states: “No application for a new micro-winery use permit or modification of an existing micro-winery use permit, whether minor or major, shall be considered three years after May 5, 2022 (the effective date of this Ordinance), unless the provisions in this code pertaining to micro-wineries are extended, re-adopted, or amended by the Board of Supervisors.”
Should the Board choose to lift the sunset date, they could also direct staff to collaborate with stakeholders and the Planning Commission to amend the ordinance in ways that further streamlines the process or add value to micro-winery entitlements, helping to make projects more financially feasible. Potential amendments for consideration (that are within the Board's regulatory authority) and that are supported by staff include, but are not limited to:
• Removing the sunset date and extending the ordinance indefinitely;
• Increasing the annual production limit from 5,000 gallons to 10,000 gallons;
• Raising the Average Daily Trips (ADT) from twenty (ten daily round trips) to forty (twenty daily round trips) for visitors, employees (including seasonal), and deliveries to and/or from the winery;
• Revising the approval process to include a Notice of Intent to Approve by the Zoning Administrator with a Public Hearing only upon request from interested parties (similar to other existing application considered by the ZA); and
• Clarifying that vineyards on the same property or contiguous parcels under the same ownership must be established and producing grapes when a micro-winery application is submitted.
Decision-making Options:
Option 1: (Staff Recommendation): Direct staff to return to the Board with a recommended ordinance update, incorporating input from stakeholders and the Planning Commission, to remove the sunset date and introduce amendments aimed at improving the ordinance.
Option 2: If the Board would like to extend the ordinance (e.g. for another three years to May 5, 2028) without introducing other substantive amendments, direct staff to bring a recommended ordinance update extending the sunset date to the Board for review and final adoption.
Option 3: Take no action and allow the Micro-Winery Ordinance to expire on May 5, 2025.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
No |
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Is it Mandatory or Discretionary? |
Mandatory |
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Is the general fund affected? |
No |
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Consequences if not approved: |
The Mico-Winery Ordinance would expire on May 5, 2025 |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.