County moves forward with new winery regulations

Revised rules for small gatherings, outdoor amplified music

A series of workshops aimed at bolstering agritourism, enhancing the viability of wineries and clarifying existing laws that regulate the wine industry – a heated process that’s left several local vintners feeling like they’ve “been had” under the “pretense of (the county) helping us” – is wrapping up after 12 months and more than a dozen meetings. 

On Aug. 21, the Santa Clara County Board of Supervisors voted 4-1 to accept the Planning Department’s policy recommendations regarding additional changes to county winery regulations. Supervisor Dave Cortese cast the opposing vote.

“Many of the area wineries are family-owned businesses that are trying to adapt to these tough economic times,” said Cortese. “They need even greater flexibility than the changes recommended by staff.”

While Board President George Shirakawa insists that the recommended policy changes will relax “some of the burdensome regulations on area wineries,” Executive Director Jennifer Scheer with the Santa Clara County Farm Bureau notes the new guidelines still “fall short of the changes sought by the Wineries Working Group.”

Known as the WWG, the Wineries Working Group includes local winery owners and other stakeholders such as the Santa Clara County Farm Bureau, staff from the County Department of Planning and Development, Division of Agriculture, Department of Environmental Health, the Fire Marshall and the Gilroy Welcome Center. The WWG participated in a series of monthly meetings initiated by District 1 Supervisor Mike Wasserman in September 2011 to address county policies that regulate the 22 Santa Clara County wineries.

“We’ve been pushing for as much allowed ‘by right’ (not constituting a permit) as possible because the permitting process is so onerous,” said Scheer. “We didn’t get as much as we hoped.”

To this, Wasserman responded that meeting the concerns and desires of all stakeholders is a “balancing act” that must also take into account the public’s expectations for health and safety standards. 

“Though not everyone got everything they wanted, every single change is better than the status quo,” he said. “There are winery people who wanted more, members of the public who wanted more, members of public who wanted less, and winery people who think it’s just fine. But all of them agree that it’s better than what we had.”

Some of the key changes implemented during the Aug. 21 meeting include:

Small gathering allowance: The Board of Supervisors voted to allow up to 50 people “by right” (without having to obtain a permit) for small gatherings. Gatherings with 51 to 100 people on lots five acres or larger, however, are subject to additional requirements and reviews related to access, parking, Department of Environmental Health and Fire Marshall Office criteria. Winery owners, on the other hand, say gathering allowances should be size-proportionate to winery acreage. The WWG proposed sliding scale figures of 100 guests for wineries less than 5 acres; 200 guests for wineries between 5 and 20 acres; and 300 guests for wineries larger than 20 acres (allowed “by right” without a permit).

Outdoor amplified music: The Board of Supervisors will now require wineries to have permit in order to have outdoor amplified sound associated with winery activities, with an exception for limited background music. This will now require a discretionary review to determine if outdoor amplified music requires a special permit ($2,133) or use permit ($14,732) depending on scale and frequency of events, according to the county. The review process will require an evaluation of site acoustic characteristics, review of facility design and operation “for conformance with noise ordinance” and the notification of neighbors. The WWG wants to abide by the existing county decibel limitations that are already in place.

Industry/marketing events (such as Passport Weekend): The Board of Supervisors voted to allow up to 12 medium events (exceeding the “small event” threshold, which caps off at 50 people) annually via special permit ($2,133). The WWG asked for industry/marketing events to be allowed without limitation on attendance size or frequency.

The next steps are for Planning Department staff to prepare a draft ordinance that incorporates the Board of Supervisor’s policy direction, in addition to preparing environmental documentation as required by the California Environmental Quality Act. Additional public hearings before the Planning Commission and Board of Supervisors will be scheduled after the revised draft ordinance has been prepared.

Differing viewpoints

Dhruv Khanna, owner of Kirigin Cellars on Watsonville Road in Gilroy, calls the newly recommended small gathering allowance – something winery owners were not aware of until the Aug. 21 meeting – an “oppressive,” “communist-type regulation” that “singularly attacks the smaller wineries who are leading the recovery of our industry’s recovery.” County personnel who actually show up to do a “headcount witch-hunting for the 51st individual are going to be universally booed,” he wrote via email.

Khanna called the meetings with the county a process gone “badly wrong…all under the pretense of helping us.”

“Many of us wineries feel we’ve been ‘had,’” he wrote. “And it is not a good feeling.”

“Simultaneously,” he continued, “the county has made permit-getting a process that can only fairly be described as hellish and punitive – financially, time-wise, energy-draining-wise. Every winery and every farmer in the county knows this.”

Tom Kruse, a veteran vintner of 41 years who owns Gilroy’s Thomas Kruse Winery, fears the regulation changes will “give the county a brand-new shot at everyone to bring us all up to new codes and more strictly enforced codes.”

Kruse feels Wasserman “turned on us” to side with “anti-business” people from the Planning Department in order to “appease a few disgruntled members of the public.”

“That is like attacking a fly with a Howitzer,” he said.

Due to the growing stringencies on noise ordinance regulations, owner Tim Slater of Sarah’s Vineyard in Gilroy said he canceled his once regular Friday night concerts and, as a result, had to lay off one of his staff members.

“There’s already a noise ordinance,” he said. “Why did they need to make an extra special one just for wineries? And what about all the other businesses in the county? Do they have an extra special noise ordinance for the airport?”

Wasserman says he has received complaints from “dozens of residents regarding amplified music and traffic congestion” related to winery events. 

One group of about 12 households identifying themselves as neighbors to the Jason-Stephens Winery, located at 11775 Watsonville Road, signed a petition this month to the county that states, “we are against any further concerts, loud noise and flocks of hundreds of people destroying our environment.”

Resident Howard Bell, 77, who lives on Old Creek Road about 400 yards away from Jason-Stephens, signed the petition – but said he personally doesn’t want the winery to stop having concerts altogether. He claims some events have lasted late into the night, however, as the crowd sometimes “hangs along for hours” after the music stops.

“I can deal with Friday and Saturday, as long as they’re done by 11 p.m.,” he said.

Bell also wants the winery install additional parking to accommodate larger crowds. Concertgoers cause roadway congestion when they park along Watsonville Road, he said.

Underlining his support for “free enterprise,” Bell added that he wants to see the winery succeed. 

“There’s some nights that I sit out there and listen to the music,” he said. “But I’d like to see a limit to it.”

Because of changes related to the small gathering ordinance, amplified sound rules and limitation on the number of industry/marketing events a winery may hold annually without obtaining additional permits, Jason Goelz, co-owner of Jason-Stephens Winery, recently announced that the winery’s popular Friday Night Live Music Series – now in its fourth year – will end permanently on Sept. 28.

“They are restricting us from doing business essentially,” wrote Goelz. “We have had thousands of customers enjoy our music series over the years, many coming to the events on a regular basis. With very few problems and a much more relaxing environment than the bar/club sense, this is a loss for the community.”

Goelz, who does not have a use permit, points out that some wineries have spent more than $250,000 to make it through the process, while others just “gave up.”

“I would just like to add that my four or five closest neighbors love my music, and never complain about the sound levels as we adhere to noise ordinances,” said Goelz. “This includes the neighbors directly across the street and directly behind the winery.”

Throughout the entire process, Supervisor Wasserman has pointed out that current rules technically require winery owners to have a costly “use permit” ($14,732) to host any sort of commercial, industry or marketing event, be it a small, medium or large gathering. While the changes may not be everything the wineries want, “some people would say the fact no one group got everything they wanted probably means it’s fair,” wrote Wasserman via email. “For the last 21 months, I have had the responsibility to protect all the residents in my district including the delicate balance of property rights.”

While the minimum application fee for a use permit currently begins at $14,732, “in reality, it’s quite a bit more than that,” Scheer noted back in April, citing examples of required noise, traffic and sometimes biological surveys. “A ball park figure is $100,000, and it can easily cost more.”

She said the county is in “cost recovery mode,” meaning permit applicants get charged for any extra work associated with the application process.

Wasserman emphasizes that special permits are good for up to five years. Use permits last even longer, he said.

He maintains that each of the recommendations that were passed help to clarify existing requirements, and/or made them less onerous or costly than the current rules.

“At the end of the day, these changes (less government involvement, less permits, less cost) are clearly better than what we had,” wrote Wasserman. “And that is many people’s definition of progress.”

As far as some of the regulation changes go, not all winemakers agree. 

“Events at wineries are how wineries have weathered the economic conditions over the past four or so years,” said Goelz. “The winery business is already one of the toughest financial businesses to begin with, now things just got more difficult.”

Other changes:

–The ordinance would specify that private noncommercial and fundraising events benefiting nonprofit organizations of any size could be held at wineries in the unincorporated areas.

–The ordinance also will address onsite and way-finding signage.

–After meeting with the WWG, the Department of Environmental health also developed a new “food sampler” permit category for limited food service. This permit is cheaper and does not require a commercial kitchen. It will allow wineries to legally serve sliced fruits, cheeses and dry or salt-cured, ready-to-eat meats that are served without heating or further preparation.

Background (Taken directly from a county press release)

Since 2010, the Planning Department has been holding regular meetings with representatives of the Division of Agriculture and UC Cooperative Extension to discuss agricultural land use-issues. The participants of these meetings identified agritourism as being valuable to agricultural sustainability and began looking at ways for the County to better support agritourism. The group participants determined that the current winery regulations fall short of providing desired clarity about allowed winery activities. To address that, the Planning Office began a comprehensive review of winery regulations with a focus on ways to better support wineries and to accommodate a greater range of winery marketing activities. In February 2012, the Planning Commission held a workshop following by three public hearings. The Commissioners focused much of their attention on the subjects of special events and outdoor amplified music. The Planning Office believes that an ordinance that incorporates these recommendations will enhance the viability of wineries and promote agritourism in Santa Clara County.

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