CITY COUNCIL: Review Planning Commission's Wine Tasting Policy

Meeting Date: 7 February 2012
Prepared by: Sean Conroy, Ping & Bldg Services Manager

City Council
Agenda Item Summary

Name: Review of the Planning Commission's Wine Tasting Policy.

Description: The Planning Commission adopted a Wine Tasting Policy on 23 June 2011 to assist in its review of applications for wine tasting. This item is scheduled to provide the Council with an opportunity to review the policy and provide direction as necessary.

Overall Cost:
City Funds: N/A
Grant Funds: N/ A

Staff Recommendation: Review the policy and provide necessary direction.

Important Considerations: The City has recognized an increase in requests for wine tasting activities in the commercial districts in recent years. The Planning Commission has approved 13 use permits to allow for wine tasting since 2003 and staff receives frequent inquiries regarding potential new establishments. On 10 November 2010, the Planning Commission appointed a subcommittee to evaluate the City's requirements on processing requests to offer wine tasting and whether new requirements should be considered. On 23 June 2011, the Commission adopted a Wine Tasting Policy.
Decision Record: The Planning Commission adopted a Wine Tasting Policy on 23 June 2011.

Attachments:
• Staff Report dated 7 February 2012
• Wine Tasting Policy

Reviewed by:


Jason Stilwell City Administrator Date

CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR MCCLOUD AND MEMBERS OF THE CITY COUNCIL
FROM: SEAN CONROY, PLNG & BLDG SERVICES MANAGER
THROUGH: JASON STILWELL, CITY ADMINISTRATOR
DATE: 7 FEBRUARY 2012
SUBJECT: CONSIDERATION OF A REVIEW OF THE PLANNING COMMISSION’S WINE TASTING POLICY

BACKGROUND & PROJECT DESCRIPTION

The City has recognized an increase in requests for wine tasting activities in the commercial districts in recent years. The Planning Commission has approved 13 use permits to allow for wine tasting as an ancillary use since 2003 and staff receives frequent inquiries regarding potential new establishments. On 10 November 2010, the Planning Commission appointed a subcommittee to evaluate the City’s requirements on processing requests to offer wine tasting and whether new requirements should be considered.

The subcommittee met with several interested parties, including the Monterey County Wine Growers Association, and developed recommendations for the Planning Commission. The Planning Commission adopted the attached policy on 23 June 2011. The policy is meant to provide guidance to applicants prior to submitting an application for wine tasting and to provide a framework for the Commission’s review of new applications. The policy is non-binding.

EVALUATION

Regulatory Framework: There are three primary polices from the General Plan that should guide the Council’s review of the wine tasting issue. These include:

P1-5: “Maintain a mix of commercial uses that are compatible with the character of Carmel as a residential village.”

O1-5: “Protect and enhance the balanced mix of uses in the central business area, particularly along Ocean Avenue to ensure a high quality, pedestrian oriented commercial environment providing a wide variety of goods and services to local residents.”

P1-22 “Establish methods that will result in limiting or reducing the number of certain uses including but not limited to drinking places, art galleries, gift shops, T-shirt shops, and jewelry stores in the Central Commercial Land Use District. Fast food operations are prohibited.” (emphasis added) Carmel Municipal Code (CMC) Section 17.14 allows for drinking places (bars) as a conditional use in the Central Commercial and Service Commercial Districts. CMC Section 17.56.020 establishes a cap of no more than three drinking places in the City.

CMC Section 17.14.040 allows the Planning Commission to approve ancillary uses in excess of 10% of the floor area of a space if the uses are consistent with a general theme.

Since the City is at its cap for drinking places, wine tasting must be an ancillary use in order to be allowed. Typically wine tasting is ancillary to the retail sales of wine. However, some ancillary wine tasting uses have been approved that are associated with other uses (art, home furnishings, etc.)

The primary purposes for the Wine Tasting Policy include: 1) To ensure that wine tasting establishments contribute to the mix of commercial uses in the downtown, 2) To ensure that wine tasting operations do not operate like a bar, and 3) To avoid proliferation of non-resident serving businesses. The criteria identified in the Policy are designed to provide structure and consistency for the Commission and applicants. Since the Policy is not an ordinance and is non-binding, it also allows for flexibility if the Commission is presented with an application that falls outside of the adopted criteria.

Below is a summary of the criteria outlined in the Policy followed by a brief response from staff.

• The primary purpose of wine tasting should be to encourage patrons to purchase wine for consumption off-site. Establishments should not operate as a wine bar where the primary purpose would be for patrons to drink wine.
• The wine tasting service and seating area should generally be limited to no more than 30% of the floor area of the retail space.
• Tasting should involve wine only, no other alcoholic beverages should be
permitted to be tasted or purchased.
• The maximum serving size should be 2 ounces per serving. Customers should not be permitted to drink bottles of purchased wine in the store and no wine tasting should take place on public property.
• Light snacks may be allowed, however, appetizers and/or meals should not be permitted.

Response: These criteria are designed to avoid the appearance of a bar. Allowing other alcoholic beverages, larger tastings and/or allowing for appetizers and/or meals would promote a more bar-like atmosphere in which the primary purpose would not be to purchase wine for off-site consumption.

• In order to encourage diversity and maintain a balanced mix of uses, one retail location offering wine tasting should not be located directly adjacent to another retail location offering wine tasting (not including restaurants). Generally, not more than five establishments offering tasting should be permitted along any one block.

Response: This criterion is designed to discourage too many wine tasting uses being located along one street. The Commission concluded that having some wine tasting operations in close proximity to one another would be beneficial, but determined that generally more than five along a street would begin to impact the balanced mix of uses the General Plan encourages.

• Night time hours should be limited to no later than 10:00 p.m.

Response: To avoid a bar-like atmosphere the Commission determined that hours should not extend beyond 10:00 p.m.

• Wines from local Monterey County wineries are strongly encouraged.
Response: This criterion is intended to promote and encourage the display of local Monterey County wines for the benefit of the local economy and to promote unique wine tasting operations. When Associated with other Uses (Art Gallery, Clothing Store, etc.)

• All the standards listed above.

• Limited to retail spaces of 2,000 square feet or larger.

Response: The purpose of these criteria is to limit the number of possible locations where wine tasting could be added as an ancillary use when associated with uses other than retail wine shops. This would assist in avoiding the proliferation of wine tasting in the downtown.

Water & Licensing: Other factors that will limit the number of wine tasting operations in the City are water and licensing. Federal law requires that anyone wishing to conduct wine operations and/or produce or blend wine must first establish premises, obtain a bond and receive permission from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
California liquor law allows up to two tasting rooms associated with a winery. Typically, wineries will have an on-site winery and are allowed one additional off-site gallery that is licensed with the Department of Alcoholic Beverage Control (ABC). This license is referred to as the duplicate 02 license.

The Monterey Peninsula Water Management District (MPWMD) recognizes wine tasting operations associated with an 02 license as a group I water use. All other wine tasting operations are considered a group III use, which requires significantly more water. Therefore, if a shop owner wanted to purchase a variety of wines at wholesale and then offer them in a tasting room setting, MPWMD would classify the business as a group III use.

Water restrictions and licensing requirements should limit the total number of wine tasting operations in the City for the following reasons:

• Most commercial sites in the downtown are occupied by group I uses and lack the necessary water credits to open a wine tasting operation unless they associated with an 02 license (off-site tasting room).
• There are only approximately 35 bonded wineries in Monterey County. It is safe to assume that not all 35 will want to locate their one off-site tasting room to Carmel.

RECOMMENDATION

The Council has the following options:

1) Take no action and allow the Commission to continue to operate under the criteria of the Wine Tasting Policy.
2) Send the Policy back to the Commission with a request for revisions.
3) Continue this item with a request for additional information.

Wine Tasting Policy
(Adopted 6/23/2011)

Purpose

To establish guidelines for the review and approval of wine tasting facilities in the Central Commercial and Service Commercials Districts in the downtown.

Policy

The General Plan encourages a balanced mix of uses that serve the needs of both local and nonlocal populations. The Planning Commission recognizes the demand for establishing wine tasting facilities but also recognizes that their proliferation could impact the balanced mix of uses that the General Plan encourages. The following standards are recommended and should be considered by the Planning Commission in its review of wine tasting permits:

When Associated with Retail Wine Shops and off-site Wine Tasting Rooms:

• The primary purpose of wine tasting should be to encourage patrons to purchase wine for consumption off-site. Establishments should not operate as a wine bar where the primary purpose would be for patrons to drink wine.
• In order to avoid the appearance of a bar, the wine tasting service and seating area should generally be limited to no more than 30% of the floor area of the retail space.
• Tasting should only involve traditional wine based products such as still wines, sparkling wines or Port, no other alcoholic beverages should be permitted to be tasted or purchased.
• Tasting should involve wine only, no other alcoholic beverages should be permitted to be tasted or purchased.
• The maximum serving size should be 2 ounces per serving. Customers should not be permitted to drink bottles of purchased wine in the store and no wine tasting should take place on public property.
• Light snacks may be allowed, however, appetizers and/or meals should not be permitted.
• In order to encourage diversity and maintain a balanced mix of uses, one retail location offering wine tasting should not be located directly adjacent to another retail location offering wine tasting (not including restaurants). Generally, not more than five establishments offering tasting should be permitted along any one block*.
• Night time hours should be limited to no later than 10:00 p.m.
• Wines originating from Monterey County Vineyards and Wineries and locating their offsite tasting rooms in Carmel are desired and strongly encouraged.

When Associated with other Uses (Art Gallery, Clothing Store, etc.)

• All the standards listed above.
• Limited to retail spaces of 2,000 square feet or larger.
*For the purposes of this policy a block would include all commercial spaces on both sides of a street located between the next two cross streets. For example, no more than five wine tasting establishments should be permitted along San Carlos Street between Ocean and Seventh avenues.