|Mar 12, 2014|
The Winery Glut
"Are we at capacity?... Is there justification to continue building wineries in this valley?"
-- County Supervisor Mark Luce, 2015
At the Oct 7th Planning Commission meeting Dir. Morrison presented his latest number crunching
on grape harvest, actual wine production and permitted production capacity in the county. The 2014 grape crop was enough for 21 mil gallons of pure Napa wine. As in his previous presentations, only about 18 mil gallons of capacity is currently required to be Napa grapes. Legally he feels that the county is required to allow that additional 3 mil gallons to be permitted in new wineries or winery expansions. The reality is that all Napa grapes are being processed and there is a portion of the Napa grape crop, probably much more than 3 mil gallons, that is now being processed by Napa wineries not required to do so. And the reality is that most of those wineries are unlikely to give up their Napa grape sources. The question is still why keep permitting new and unnecessary wineries and additional capacity, as long as there is already an existing demand for the whole of the Napa crop? The Farm Bureau's Norma Tofanelli dissects some of these numbers here
At the Aug 11th BOS meeting, Planning Director David Morrison gave the board a presentation on code enforcement and compliance issues (item 9B on the agenda
) which included a summary of the tentative provisions of proposal Z
unanimously approved at the APAC July 27th meeting. As part of his powerpoint presentation to the Board he included some grape crush statistics based on information received from the TTB which illuminated changes in Napa grape crushing over the years. Three graphs stood out: the number of Napa grapes crushed outside of Napa county has gone from 11% to 26% of the total harvest since 1991. Napa grapes have gone from 67% to 31% of the total grapes crushed in the county since 1991. There is an increase of 27% in Napa grown grapes and an increase of 124% in total grapes crushed since 1991. What is to be made of these numbers? Only that the amount of non-Napa wine being produced in the county is expanding (principally around the airport) while the amount of Napa wine remains somewhat fixed, based on the slow growth of new Napa vineyards.
Planning Director Morrison produced his own numbers (page 32)
at the Mar 10th 2015 joint Bos/Pc meeting. His conclusion: 28 mil gallons of wine are produced from napa grapes. Only 18 mil gallons of capacity has been added since 1990 that is required to use napa grapes. There are 118 mil gallons of capacity in the county not required to be from Napa grapes, but 10 mil gallons of which is now being used to process Napa grapes. His implicit and uncomfortable conclusion: Pre-WDO wineries have the right to shift all their pre-WDO production to central valley grapes. And the county has the obligation to approve another 192 more 50,000 gal wineries.
At the joint meeting of the BOS and the Planning Commission on May 20th 2014, the above question was asked by Supervisor Luce to the planning director. It was a monumental question, as much at the heart of the new winery debate as tourism. The planning department has given itself until October to come up with the answer.
While the county may take months, I'm willing to take a stab at it now, because like many other NIMBY's across the county I am facing the brunt of bad planning decisions right now. Projects currently proposed may be cast in concrete by the time October comes around - I can't afford to wait. I preface this by saying that I have no expertise to bring to this analysis and having just begun to look at these issues since finding our about my winery in March, have no insight into the complexity of the issues involved. I will anticipate being labeled a fool (or worse) by people who do have expertise in the area.
As it turns out, Supervisor Luce's question was posed to the planning department in 2012 leading to this staff report
presented during this planning commission hearing
The actual question was:
“1. What are the policy implications if the County has approved enough wineries subject to the 75% rule that the wineries (at maximum production) could use up all of the fruit that is grown in Napa County?"
The 75% rule was created in the WDO of 1990 and requires all capacity created after 1990, new wineries and expansion of existing wineries, to use a minimum of 75% Napa grown grapes.
Based on the staff report graph
, the total county permitted capacity of 118,600,000 gals/yr in 2012 would seem to be about 4 times the amount needed to process, according the crop report of 2012
, the 29,000,000 gals worth of 75-25% napa wine produced that year. But much of that capacity is exempt from the 75% rule: 26 million g/y of pre 1990 AP/AW capacity is exempt, as are wineries outside of the AP/AW zone (the Bronco winery at the airport is permitted 43,000,000 g/y, one third of all permitted capacity in Napa county).
Only 36 million g/y (the increase in production in the AP/AW zone since 1990 on the chart) is mandated to use napa grapes. That is still much more than the 29 million gallons of 75-25 blend capable of being produced from the 2012 crop. Enough new capacity has been permitted since 1990 to process all napa grapes and then some. But adding to that capacity is that many new wineries use 100% napa grapes and also that much of the 26 million g/y being produced before 1990 was from Napa grapes and it is unlikely that all or even most of that processing has shifted to non-napa grapes. Unfortunately the complexities of tracking pre-WDO wineries ability to shift Napa grapes in and out of their old facilitates makes an estimate of that capacity difficult.
The staff conclusion, perhaps understandable given the conflicting goals of the industry “stakeholders” participating in the review, was that the status quo need not be challenged at this point.
But the staff did produce a statistic of interest in the report: reviewing the Commission hearing agendas (as I did for my winery tourism page
) they concluded that 5-7 million gals/yr of capacity subject to the 75% rule were added between 2007 and 2012. (The exact number is difficult to determine because of the source-shifting abilities of pre-WDO wineries.)
But based on the County's crop reports
, between 2006 and 2015 the acreage producing Napa grapes has hardly changed. In that same period almost 6 million gallons
of new winemaking capacity have been approved in the county,
So while capacity has dramatically increased, no doubt based on the presumed profitability of winery-tourism, the acres of grapes added, whether because of the drought, a turndown in the economy, more concern about water availability, more neighborhood activism, or the previous development of all the easy watershed land, the rate of new vineyard production has leveled off.
The answer to Supervisor Luce's question? It is clear that the permitted capacity within county wineries has exceeded that necessary to process Napa grapes. Given the new-capacity-to-new-vine ratio over the last several years that will remain true for years to come. Whether this reality is hidden or convoluted because a faction wants to maximize the processing of more profitable non-Napa grapes, or because development profiteers want to promote the construction of more tourism facilities, doesn’t change that reality. Adding new capacity (and new land grabbing winery facilities) results in a shift of production (and tourist dollars) from one winery to another resulting in loss of land and resources with great benefit to development interests but little benefit or some actual loss to the agricultural viability of the County.
My policy implication: Stop building new wineries and expanding old ones. If the capacity is there, then rather than approving new wineries and expansions that use up vineyard land being built solely to attract tourists that will further strain the land and water resources of the county (and the peace-of-mind of residents like me), the County should begin to look at the incentives that will encourage wineries with unused or non-Napa capacities to fill that capacity with the fruit of new Napa vineyards.
Another approach would be for the County to begin auctioning new capacity based on the new acreage coming into production each year. Or perhaps the developers of new vineyards would have the option to sell the new capacity their vines would allow. This approach means that a market would be created in new production capacity which, for those believing in market based solutions, might be a good thing. Developers would have an incentive to turn unused or brownfield properties into vineyards.
It does also mean that more pressure would be felt to increase the creation of new acreage, which in turn raises the question of availability of water to supply the new wines and the effect of more water extraction on the aquifer as a whole in an age of global warming. That, of course, is another story
The Wine Institute statistics page
Map and Tables of use permits approved or still in planning dept since 2010
Planning Dept's 7/1/15 statistical analysis of permitted visitation and capacity
District 4 Historical Grape Crush Data
County Winery Database chart
Winery Audit Results 2013
Winery Audit Results 2012
Winery Audit Results 2011
Staff Report on Capacity 2013
PC Hearing on Capacity
Winery Capactiy Chart 2012
County Crop Reports
Economic Impact of Wine and Grapes 2012
My own capacity tables for projects approved since 2010
Our View: Winery ordinance powder keg needs defusing
Grape source rules divide wine industry
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County proposes winery fast-track
|Bill Hocker - Jul 19, 2017 3:14PM Share
NVR 7/8/17: Napa County eyes streamlining approval process for smaller wineries
Proposed Limited Winery Ordinance
Dir. Morrison's request for comments.
Local Procedures for Implementing CEQA
(CEQA sm. winery def. see appendix B, #10)
Comments are due by August 4th, 2016 4:00pm and should be sent to
What can one say? Vineyard properties are currently being given use permits for new building projects at the rate of one a month (and increases to existing wineries at two per month) even with Planning Commission review. Apparently that is still not fast enough to keep up with developer's desire to profit from an expanding tourism economy and booming real estate prices. The County wants to streamline the process, providing an easier avenue for speculators to increase resale value with "winery-ready" properties. Not one more gallon of Napa wine will be added to the county's "wine industry", just more luxury estates and tourism venues. This is not about affordable small "family" wineries. It's about expediting a real estate strategy targeting wealthy investors.
And the requests for expansions to these fast-track use-permits can still be expected to continue to clog up the PC pipeline for some time to come.
One can see the problem from the County's standpoint: The amount of pushback from residents who will be negatively impacted by all of the proposed development is beginning to bog down a process whose purpose is to allow public participation. The solution proposed is to reduce the visibility and amount of public input in the process.
The Planning Commission is a public event. Its meetings are predictable and previewed on the county's website and in the Register. Its proceedings are broadcast and a video archive is retained. The county claims that the public will have a similar opportunity to vet projects being presented to the Zoning Administrator. But notification will only go to residents within 1000' of the project. No previews in a public calendar. And likely no mention in the Register. It will then be up to a neighbor to make the project known to a wider audience, a daunting tsk for some. Once the hearing is done, no record beyond brief meeting minutes will be available for review. But the collective changes that these projects bring, with increased tourism throughout the remote areas of the county and the expansion of taxpayer-funded infrastructure to accommodate an ever increasing number of tourists and employees, will affect the county as a whole, not just the immediate neighbors.
As a recent article on Visit Napa Valley
highlights, county and municipal governments seem to see a growth economy as the prime objective of governance. As we have seen in all meetings throughout the last few years, the county is unwilling to seriously consider the increasing cumulative impacts of "growth" that have led to so much resident opposition. In this proposal, conceding to the demands of the development industries, they wish to make the opposition more difficult. The County's continued promotion of building projects and the resulting impacts on traffic, affordable housing, community character, infrastructure and service demands, the physical landscape and resource sustainability, run counter to the County's stated image of itself in the first paragraph of its Vision Statement in the General Plan:
"While other Bay Area counties have experienced unprecedented development and urban infrastructure expansion over the last four decades, Napa County’s citizens have conscientiously preserved the agricultural lands and rural character that we treasure."
Many county residents, seeing the urbanization taking place before their eyes, no longer feel that vision is being supported by their government, and they must again, conscientiously, make their voices heard. In a public forum.
The question the County should be addressing is not how the approval of building projects can be streamlined to increase the pace of urban development, but how to scale back the amount of development being proposed, as previous Napa County governments have done with the ag preserve and zoning ordinances, to insure that Napa remains a rural, agricultural place to be treasured in the future. Fast-tracking building projects is not the answer.
NVR 10/2/15: Planners look at fast-tracking small wineries
Note the difference between the 2015 and the current proposal: the requirement that grapes must come from the property has been eliminated. Wineries can be approved under the new proposal on properties having no vineyard potential (like The Caves
); a lease on grapes (currently leased by someone else, no doubt) suffices. There is no mention of use-permit revocation in the ordinance, so presumably the lease may be sold as soon as the winery is approved.
Love the small wineries?
|George Caloyannidis - Jul 18, 2017 7:51PM Share
If a municipality wanted to preserve the ambiance of a single-family neighborhood, it wouldn't rezone it to residential high-rise. Over a short period of time, homeowners would sell to developers at a profit and the area would experience a fundamental transformation.
In Napa County, whenever a small winery pleads hardship, officials accommodate it with higher use permit limits of production and visitations. They say: "We all love small wineries. We must do everything to support them." Who can possibly argue with that?
But there is a problem. Even when wineries have been operating in gross violation of their use permits, their plea for survival becomes their passport to riches. Just like that, even without proof of hardship, the value of the winery is often doubled and tripled and sold within weeks.
Further proof of how this policy incentivizes small wineries to disappear from the supposedly intended idyllic landscape into big investor portfolios, is the current rampant winery consolidation activity, all fueled by the county's policies marketed by its disingenuous rhetoric as compared to its actions.
I often visit the northern foothills of the German Alps, dotted with small towns, forests and meadows where a dozen or so cows of small dairy farmers graze. These farmers make a living with milk, cheese, honey and schnapps. They are prohibited from increasing their grazing lands by clear-cutting their forests, a long view policy that provides them with a decent living but keeps the value of their holdings to levels not attractive enough to corporate takeovers.
Small farms are preserved in harmony with forests and crystal-clear streams. When visiting the region one is captivated by the agricultural serenity so beautifully preserved since 198 years ago, when it was memorialized in Beethoven's 6th symphony, so appropriately named: “The Pastorale.”
Meanwhile, the wine lobby myth our supervisors have bought into that wineries cannot make a living without direct sales has now mushroomed to 59 percent of total revenue and is fueling the market of runaway hotels and traffic congestion their drinking and merchandising tasting rooms generate.
Just over the Alps from Italy's Alto Adige to Sicily, from the Mediterranean to the Atlantic in Spain, from the Languedoc to the Loire in France, from Germany's Rhineland to Austria's Burgenland, the direct sales model even for the thousands of wineries producing fewer than 8,000 gallons is an aberration. Instead, one finds their wines around the globe from Los Angeles to New York, Paris and London. Such marketing takes hard work, but it is enough to provide a decent living generation after generation, not just for a decade or two and then off to the Riviera.
Making a decent living from a "small" winery in the Napa valley means Maseratis and Teslas in the garage, government-assisted denuded forests, soiled streams and clogged highways. Sadly, it is us in our state of Napathy who allow the damage. Instead of voting for the right candidates, we let them displace us with second homers and luxury commercial rents.
To top it all off, the supervisors are scheduled to hear a "limited winery" ordinance that will "streamline the process" of approving "new small and/or family-owned wineries" producing a staggering 30,000 gallons. In the process they will shut the public out the door by installing a wine Czar to dole out permits without environmental review or public hearings. The problem is that 261 of the county's 510 existing wineries - more than half of them - produce less than that, 209 of them produce fewer than 20,000 gallons and one quarter of them produce fewer than 15,000.
Traditionally, existing wineries have enjoyed more, not fewer privileges than new ones. No one in the right mind believes the county's smoke screen that new wineries will enjoy this privilege while old ones will be compelled to undergo full review. It is so patently unfair that the furry paws can no longer hide beneath grandma's dress.
Potentially, in excess of 2.5 million more visitors to existing tasting rooms could be added to the 3.5 million who visit us each year and 8,000 vineyard acres could replace forests in the process. This does not even include the un-quantified hundreds of potential new wineries - those supposedly covered by the ordinance -- waiting to join the gold rush.
Within a decade, this devious under-the-radar effort by the county will have replaced forest green with the only green it is beholden to and will have silenced the Napa Valley Pastorale once and for all.
NVR LTE version 7/18/17: Love the small wineries?
Flynnville: what is an appropriate winery?
|Bill Hocker - Apr 7, 2017 9:46PM Share
NVR 4/7/17: Napa County approves a winery on an 'eyesore' Calistoga site
NVR 4/14/17: Napa County planners approve South Whitehall Lane winery
NVR 2/15/17: Worried about size, Napa County delays proposed Calistoga winery
2/15/17 hearing agenda and documents
Napa County Planning Commissioners sent the Flynnville Winery proposal back to staff indicating that the "size and scale" of a winery of 60,000 gal/yr, 25 visitors and 15 employees/day located on Hwy 29 next to the Castello di Amorosa on a brownfield site was inappropriately large. A month and a half earlier 3 of those commissioners approved a winery of 100,000 gal/yr, 60 visitors and 19 employees/day
6 miles up a mountainous dead-end road in an area with virtually no previous tourism, on a site that a requires the removal of 10% of existing vineyards to accommodate the project. I don't disagree with their decision on Flynnville. I strenuously disagree with their decision on Mountain Peak.
Despite many proscriptions in the county's winery definition ordinance, there is no definition of appropriate capacity or visitation. County Planning Dir. Morrison attempted to reduce the arbitrariness with Proposal X
in the APAC hearings last year tying both to parcel size, an idea pooh-poohed by the wine industry members and eventually shot down by the Supervisors. Applicants are free to propose capacity and visitation based on their "business plan" which itself is never scrutinized. Staff shows the commissioners comparable existing wineries with similar capacity to assess the appropriateness of visitation. There is no metric to assess the capacity. The grapes grown on the gerrymandered Flynnville site might be enough for 2500 gallons of 75% wine each year. 60,000 gal/yr is just an arbitrary number.
As shown in the county crop reports
, the number of acres in vines in the county have not increased much since 2006. But some 6mil gallons of capacity
have been approved in that same period. At present all new wineries and winery expansions in the county will have to poach grape sources already used to make wine elsewhere, merely shifting the location of grape processing. Winery capacity, a permanent entitlement that "goes with the land" is often justified on the basis of grape contracts that developers claim to have. Those contracts may have been owned by someone else in the previous year and can be bought by another (desperate) new winery developer before this winery is even built.
The capacity and visitation decisions are left to individual commissioners' sense of appropriateness. (They are given the discretion to deny a project as well but have done so in only one previous project - the original, over-the-top Flynnville proposal
made in 2013.) The arbitrariness of their decisions often leaves one shaking one's head in despair as tourist venues continue to proliferate in the agricultural zones.
Most new projects and expansions are in fact being proposed simply to provide additional venues for wine tourism. Unfortunately the growth of the tourism industry has much different impacts on the environment than agricultural processing. By presenting the marketing and sales of wine ( i.e. tourism) as "agriculture" in the 2008 General Plan (policy AG/LU-2 on page 13 here
), the analysis of the impacts of tourism development were conveniently avoided in the EIR leading to 2008 General Plan adoption.
A wine-tourism economy has impacts. It inflates rural land values and labor costs and urbanizes the rural environment, undermining the profitability of an agricultural product that must compete in a global market to exist. Winery tourism brings an ever increasing labor force into rural areas and an ever increasing number of tourists to be housed and fed and transported by ever more employees in the municipalities. It is a cascade of urban development impacts that we are already experiencing in traffic, loss of affordable housing, infrastructure taxes, natural resource degradation and the changing rural and small town character so important to us all.
NVR 2/19/16: Napa County Planning Commission delays winery decision amid flood concerns
The Flynnville proposal was continued just before lunch. Surprisingly, it was not to be the major time-consumer of the day. That honor fell to the tiny, 10000 gal/yr, no-visitation Whitehall Lane Winery, a proposal so modest that it was hard to imagine any controversy given the now weekly approval of multiple wineries at the planning commission. The difference? The project is surrounded by respected resident growers and winery owners who don't want another building project (particularly one done by a spec developer) in their neighborhood. Yes, many of the complaints revolved around the drainage issues of Bale Slough that flows through the site (just as the depletion of groundwater became an issue for a respected neighboring vintner on Flynnville.) But as we know, and as Comm. Scott mentioned earlier in the day, these battles must be fought on the technical, "fact-based", nitty gritty issues that can be reduced to numerical "standards" and CEQA subsections. They are not fought over the real and non-quantifiable concern that the ever proliferating building projects are destroying the rural character and way of life that residents, growers, vintners and weekenders alike all treasure. It is that visceral concern that (IMHO) brings forth the energy and money necessary for the fight. Technical problems can be negotiated with technical fixes and CEQA "mitigations". There is no mitigation for the loss of a treasured rural character and way of life.
One of the great disappointments in the ongoing proliferation of winery projects these last 3 years has been the unwillingness of growers and vintners to confront the urbanization of agricultural lands until the buildings are proposed in their own backyard. Growers and vintners ("people who don't normally come to speak to us" in Chair Gill's words) have a great deal more power in convincing county officials than other residents. By remaining quiet they are insuring that eventually their backyards will be filled with building projects, and the rural character of the county that they appreciate and that is their livelihood is sure to disappear. [The project was a continued]
The winery glut
|Bill Hocker - Dec 3, 2015 10:21AM Share
At the Nov 2nd, 2015 Planning Commission meeting, Planning Director Morrison presented a brief review of projects in the planning department pipeline. A total of 51 new or major mod winery applications are currently under review. He noted that at the normal rate of Planning Commission review getting through the 51 would take 3 years. Of course the normal processing rate has been slowed a bit in the last 2 years. As he also noted, more projects will continue to be added in that time - the pipeline has not been shut off. And, as new restrictions based on the APAC recommendations are being considered for implementation by the Board of Supervisors, a surge of applications to get in under a wire may be expected as well.
The number of plutocrats and personalities in the world wishing to have a winery of their own in the Napa Valley is probably much larger than the 4500 parcels in the county available for such projects. Few of these projects will add to the wine output of the county. They will only subdivide that output into ever smaller brands, harder to sell in the wholesale chain. These vanity vintners will continue to demand tourism for retail sales and to exhibit their good-life identity, a trend encouraged by an ever expanding tourism industry wanting venues to drive demand, heedless of the impacts that tourism development is having on the rural character of the county and its agriculture based economy.
Supervisor Luce has already intimated
that it is time to consider a permanent moratorium on new wineries in the Ag Preserve. The planning department is receiving applications faster than they can process them, also a reason for a moratorium. The BOS is considering changes to the General Plan regarding wineries, another cause for a moratorium while the changes are made lest there is a surge of applications.
It is time for a moratorium on winery development.
More than a moritorium
|Bill Hocker - Mar 24, 2015 7:37AM Share
[letter to the editor
in the Napa Valley Register, March 24th, 2015]
At the March 10 joint meeting of the Napa County Board of Supervisors and its Planning Commission
, which began a months-long review of development issues facing the county, a very interesting statement was made by Supervisor Luce following Planning Director David Morrison’s statistical presentation on the county and the wine industry.
The supervisor recalled his role on the planning commission at the time the 1990 Winery Definition Ordinance (WDO) was formulated and recounted its original intent: to boost the capacity and increase the amount of Napa grapes processed in county. He compared the original intent to foster more capacity and compared it to the reverse situation now where there are several times the capacity to process grapes than there are grapes available. He stated that “The justification, frankly, for putting yet another new winery into our Ag resource area is much thinner than it has ever been in the past. And I think that we are really faced with a question of why should this be allowed to continue.”
He indicated that he didn’t have an answer to the question but, frankly, in posing the question he let his feelings be known. He had expressed the same question at the May 20, 2014, joint meeting, with the desire for more numbers from the planning director to provide guidance.
Director Morrison’s presentation here indicated that the current actual wine production in Napa County uses 2.43 times as many grapes as the total current Napa grape crop. The total permitted capacity (the theoretical amount of production currently allowed in the county) would be able to process 5.25 times the current total Napa grape crop.
At the end of his remarks, Supervisor Luce hedged a bit on the need for winery prohibition in the watersheds, but in doing so clarified his stand on their prohibition on the valley floor. (Given the overcapacity argument, I don’t quite see a distinction myself.)
One of the directions given to Director Morrison at the meeting was to set up an ad hoc committee to look at the current WDO and winery issues. The Agricultural Production Advisory Committee (APAC) is to be composed of 17 members from various county constituencies. One of its tasks is to look at what changes can be made in the current WDO to ensure the long-term sustainability of an agricultural economy that is not consumed by tourism. A series of issues were proposed to be looked at: minimum parcel size, estate grape requirement, no-vineyard-loss provision, separation of valley and watershed winery requirements, visitation limits, etc. All might be considered “tinkering” with the ordinance to control the number of new wineries, expansions and visitation going forward.
The firmest proposal to date, an increase of the minimum parcel size for a winery to 40 acres from the current 10, would mean that 2,400 new wineries might be developed in the future rather than the 4,500 currently possible.
What was not proposed was the option, raised by Supervisor Luce, to cease building and expanding wineries altogether. That option should be the first decision that APAC undertakes.
That Supervisor Luce’s proposal seems to have been unconsidered by the other supervisors and by the planning department indicates perhaps political or economic interests that I, as only a concerned citizen, am not privy to. But the supervisor is not naive about the political possibilities in the county, and his proposal is the only real suggestion made thus far to stop the development wave that continues to degrade the character and the substance of the rural, agricultural, small-town life that we all claim to cherish and is my reason to be here. That development wave will eventually bury the vines.
Supervisor Luce’s proposal is a first step to protect the vision of the Agricultural Preserve, made in 1968, for the next 50 years, and it needs a full discussion now.
Hocker lives in Napa.
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