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Winery regulations a balancing act for Santa Clara County (VIDEO)

By Jessica Parks | 2 Mar 2012

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For years, Santa Clara Valley vineyards have sat in relative obscurity, with longtime residents and visitors driving right by, never knowing what they’re passing.   The region is home to some of the state’s oldest wineries and numerous award-winning vintages that have beat out Napa, Sonoma, and Paso Robles in some national competitions.

The valley’s soil, weather and demography are ideal for growing wine grapes.  But the high cost of land and restrictive zoning ordinances, winery owners say, have made it difficult to maintain and expand their businesses.  The county is now trying to change that.

A coalition of local vintners, farming and tourism representatives spent five months in spirited debate with planning staff to draft looser regulations on commercial gatherings like weddings and corporate picnics, promotional events like tasting tours, amplified music, signage and other issues.  County planners submitted that proposal, along with their own more conservative recommendations, to the Planning Commission on Thursday.

The dueling proposals stood in contrast to the last working group meeting, after which staff and industry representatives said they had reached a broad consensus.

The issue is not whether to loosen the regulations, but rather, how much.  Winery owners have long complained that county rules are vague, expensive and onerous, creating major headaches out of minor repairs and small events.  They say they want the freedom to conduct standard winery operations, like tastings or fixing a leaky roof, without having to apply for a permit.  The county also wants to clarify its regulations and promote agri-tourism — but not if the new rules would create problems for neighbors or trigger an environmental impact study, planning staff said.

The working group doesn’t think its proposals would rise to that level.  All sides want to avoid an intensive impact study, which would lengthen the process by about a year and cost the county $60,000 to $100,000, said Planning Director Nash Gonzalez.

A major point of contention is what constitutes a “small gathering.”  Currently, all events require a permit, which can cost anywhere from hundreds to thousands of dollars and require costly engineering reviews and facility modifications.  The working group proposed a tiered permit-free guest limit based on lot size — wineries under five acres could have up to 100 guests, wineries under 20 acres could have 200 guests, and those over 20 acres could have 300 guests.

Planning staff said those limits could be fine for most facilities, but might create parking, traffic, sewage and noise concerns for wineries that are surrounded by smaller homes.  They instead recommended a single 50-guest allowance.

Dan Martin, owner of Martin Ranch Winery in Gilroy, told the commission that would not work for his business.  “We’re only open one weekend a month to the general public, so we have no control over how many people show up,” he said.  “I believe 50 is a number that we really couldn’t make a profit at.”

Kirigin Cellars owner Dhruv Khanna also said the staff recommendation was too strict.  “If 51 seniors arrive in a bus or two to have a brown bag lunch,” he wrote in letter to the commission, “the winery would be deemed to have broken the law.”

There was also significant debate about noise.  The working group said wineries should continue to follow existing noise ordinances, arguing that they have been doing so for decades with minimal complaint.  Planning staff urged a “more cautious approach” of limiting amplified music, saying noise is “a major quality of life issue” in rural areas.

A few local residents told the commission of noise concerns, but they also said that most of the wineries had been good neighbors and rectified any problems.  One resident suggested allowing amplified music indoors, and another suggested that wineries use decibel monitors to control their noise levels.  All said they would prefer self-regulation, better enforcement and neighborly cooperation rather than stricter regulations.

James Reilly, the county’s lead planner on the winery changes, said that although very few wineries receive noise or traffic complaints, “there are one or two that do cause problems for neighbors,” and the regulations need to address that. The trouble areas are mostly up toward the mountains, where noise carries farther away from the vineyard, and traffic and parking can clog narrow streets.

The working group met nine times from August to December and debated these issues at length.  Reilly said the process was longer and more complex than staff had anticipated.

Jennifer Williams, executive director of the county Farm Bureau, addresses the Planning Commission.

The county staff’s role, he said, was to observe the meetings and advise members on which changes would be feasible.  “We would tell them: ‘Here’s the backlash you might expect if you make this recommendation.’ We weren’t there as advocates.”

Still, many working-group members were surprised at the discrepancies between their proposal and the county staff’s proposal, and wrote to the commission to urge further study.

The staff report dropped existing references to on-site tasting areas and sales of related products like olive oil, flowers and nuts.  It also removed any mention of roadside signs pointing drivers to nearby wineries.  Reilly said those uses would be assumed to be allowed even if the code doesn’t explicitly name them.  The working group disagrees.

Wineries can be a hybrid of agriculture, tourism, food distribution and entertainment, which makes them difficult to regulate.  Many of the county’s existing codes don’t jibe with those varied uses.

At Kirigin Cellars, for example, an 11-acre plot in the middle of the property is too flat to plant vines.  So Khanna turned it into a grass field where people can play soccer, watch dog shows, practice archery — and in the process, discover Kirigin wines.  The county did not view that as an agricultural use, so Khanna had to apply for a special permit that spiraled into an expensive, five-year back-and-forth with the planning office.

Khanna acknowledged that it is not uncommon for business owners to cycle through lawyers, traffic experts, engineers and consultants for years to get their permits.  But the process would have been easier, he said, if the county treated wineries like the hybrids they are.

The working group’s proposal would not give him carte blanche to make changes at Kirigin Cellars, but it would allow marketing events like tasting tours, and noncommercial gatherings like fundraisers without a permit.  Planning staff recommended a cap on those types of events.

Jennifer Williams, executive director of the county Farm Bureau and a member of the working group, objected to the proposed cap.  Tours, festivals, weddings and conferences help diversify wineries’ revenue and can ease losses during drought years.  They also expose new customers to the winery.

In a place like Santa Clara County, where the quality of wine is high but visibility is extremely low, getting new people in the door is key to staying in business, she said.

The Planning Commission is arranging to visit some of the wineries and directed staff to report back on some of the issues raised at the meeting. The next hearing will be April 5.

[Updated, March 14: A previous version of this video wrongly stated that Sycamore Creek had to install a 10,000-gallon water storage tank.  The tank stores 100,000 gallons of water.]

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