How Many Wineries Are Enough?

Napa officials hold large meeting to discuss future of development in county

by Paul Franson
Alternative text
Bulk wine production in Napa County has soared because of new winemaking facilities that are not required to use 75% county grapes because they are located in the city of Napa or the commercial/industrial area in southern Napa County.
Napa, California—More than 400 people crowded a local school auditorium March 10 for an unprecedented joint meeting of the Napa County Board of Supervisors and county Planning Commission to discuss new development in the county, particularly wineries.

 They included representatives of local wine and hospitality groups, leaders in the wine and hotel businesses and individual citizens who came prepared to talk, many with signs.

In fact, after two hours of presentations by county staff and discussion among the panelists, more than 75 people had signed up to give their opinions — in 3 minutes or less. Much of the interest — and concern — eemed to focus on three winery-oriented proposals as well as development in the mountaintop community of Angwin.

The controversial projects included:

• A large visitor center proposed for Davies Winery in St. Helena, now a wine production facility occupying a car dealership next to schools (and ironically out of the supervisors’ control as it’s within in city limits).

• A proposed winery atop Yount Hills that would likely become a prime visitor destination as the first major winery on the right side of the road after Highway 29 shrinks to a two-lane country road from a freeway.

• Conversion of 350 acres from 2,300 acres of hillside forested land and chaparral at Craig and Kathryn Hall’s Walt Ranch primarily on the far side of the Vaca Range from Napa Valley.

All seem to mostly comply with existing rules.

A look at the facts
Among the facts presented by country planning director David Morrison:

The county contains 467 wineries according to the county’s definition (excluding tasting rooms, multiple locations for some wineries and virtual wineries (brands). The number of bonded wineries peaked in 2011. According to the Wines Vines Analytics database there are 1,084 wineries in Napa County. 

• 170 wineries are in the Agricultural Preserve (mostly the valley floor north of the city of Napa). They produce 48 million gallons per year and host 4.6 million visitors per years, 423,000 for marketing events as opposed to visiting the tasting room.

• 266 wineries lie in the Agricultural Watershed (the mountainous areas outside of the core valley). They produce 21 million gallons and host 2.6 million visitors, 340,000 for marketing events.

• 14 wineries operate in the airport industrial area south of Napa, which doesn’t have the restrictions of the rest of the county, and produce 48 million gallons per year, but only welcome 86,000 visitors, 28,000 for marketing events.

• A few wineries are inside cities, but they are mostly small.

As for concentration, 68% of the wineries produce less than 50,000 gallons per year (20,000 cases) and only 6% more than 500,000 gallons. 65% of wineries are permitted 100 tasting room visitors or fewer per week. 24% of wineries are permitted between 100 and 500 tasting room visitors per week. 11% of wineries are permitted over 500 tasting room visitors per week.

Over the past seven years, Napa County has approved an average of 18 winery use permits per year, eight of which were new wineries. An average of three variances to rules, such as highway setback limits, per year have been approved.

Only two of the 11 largest local employers are wine or tourism related, and 74% of employees in Napa County do not work in the wine or tourism industries.

New wineries in the rural areas are required to use 75% Napa County grapes, but 100 million gallons of the 127 million gallon permitted production is not subject to the rule by being in the airport area or cities, or grandfathered in.

Regarding conversion of forests to vineyards, oak woodland makes up 32% of Napa County’s land cover. Chaparral is the second largest category at 22%. There are 50% more oak woodlands than agriculture (13%) and development.

As of March 2015, there were 41 pending use permits for new wineries and modifications in the unincorporated area. They include 21 new wineries, 3.58 million gallons of production capacity, and more than 800,000 new visitors.

Vineyard property
As of March 2015, there were 20 pending vineyard permits for the unincorporated area, including 608 new net acres of planting. Most of the proposals (18) are for less than 30 acres. The Walt Ranch accounts for 356 acres.

The county also counted the parcels of 10 acres or more that do not have a winery. This is the minimum size for a winery property. The county found 4,523 parcels on which new wineries could potentially be located. A total of 1,687 are already planted in vineyards.

The county estimated that 88,828 acres of new vineyards could potentially be planted in Napa County.

In 1995, Napa County bottled 13% of total grape production and exported the rest. It now bottles 243% of total grape production, including many grapes imported from other counties. Since 1997, grape production has increased 6% but the total amount bottled has increased 245%.

Source of drivers on the roads
Contrary to popular opinion, wineries don’t generate most of the traffic in Napa County. They create only 17% (including workers).

In addition, a travel behavior study showed that

• 9% of daily trips are pass-through from and to other counties

• 21% of total daily trips into Napa County were “visitor” trips

• 55% of daily trips were internal to Napa County

Other trips were made by commuters into and outside the county.

Visitor impact
Napa County receives 2.5 million tourists a year, less than AT&T Stadium in San Francisco. They visit an average of three wineries per day. Overnight visitors stay an average of three days, which affects the total number of visitors to wineries.

A study of visitors showed that Napa Valley receives 13,400 visitors on an average day. They collectively spend an average of $3.82 million per day. There are 5,400 lodging rooms in Napa County and about 700 being built or financed, but illegal tourist rentals are rampant.

The annual visitor spending per Napa Valley resident is $10,027, offsetting taxes collected per household of $1,053. In 2012, tourism supported 10,500 jobs paying $300 million, and generated tax revenues of $51.7 million. They generated $39 million in transient occupancy (hotel) taxes, which provide a significant part of local government revenue (50% in Yountville and Calistoga, 20% in Napa).

Community feedback 
The majority of the speakers supported increasing attention to growth.
Representatives of the wine industry endorsed the goal of the meeting and offered to assist county officials. 

Together, the Napa Valley Grapegrowers, the Winegrowers of Napa County (a lobbying group) and the Napa Valley Vintners encouraged the county to enforce existing regulations and follow through on its General Plan policies. Some recent surveys of wineries found widespread violations of visitor and production rules, for example.

A joint statement from the three groups read: “We believe that unrealistic winery applications, shored up by the excessive use of variances, should be denied.

“We do not favor or encourage a moratorium. Strict oversight of existing procedures, paired with fewer creative solutions to non-conforming parcels, will go a long way toward diminishing community and industry concerns.

“We further request continued attention be paid to the enforcement of food and wine pairing accessory use at wineries.”

The groups noted that there has been discussion of establishing guidelines or using a “conceptual matrix” when balancing parcel size or acreage with production and visitation and offered to help the Planning Department establish these guidelines with an eye to sensible and sustainable development.

Likewise, the Farm Bureau requested winery guidelines related to production level and location. It also echoed many individual speakers who suggested larger minimum parcels for wineries (now only 10 acres; yet the minimum parcel split for housing in the Agricultural Preserve is 40 acres, in the watershed or hillsides, 160 acres), better analysis of grape supply vs. production and a preference for estate wineries and those using 100% Napa County grapes.

Vintner Michael Mondavi, among others, pointed out the need for wineries to be able to welcome visitors due to the difficulty of small and new wineries obtaining effective distribution.

One speaker, Diane Shepp of Protect Rural Napa, suggested a moratorium on variances, a source of many issues, and also more compliance staff — especially over extravagant wine and food pairing — and effective penalties.

Chris Malan, an active local environmentalist of Living Rivers Council called for a ban on vineyard conversion of oak forests or timber permit among other requests.

Many speakers and officials noted that affordable housing was a big part of the issue, and encouraged efforts to consider all factors, not just wineries.

At the close of the summit, supervisors and commissioners moved to approve these recommendations by the staff:

• Direct staff to establish an ad hoc committee to review the Winery Definition Ordinance. It will include four wine industry representatives among 13 other stakeholders. This committee will review minimum parcel size in the Agricultural Preserve, whether an estate requirement for grape sourcing should be enacted, and the loss of vineyard land for winery development, variances, and marketing and visitation activities at wineries.

• Form a Board of Supervisors committee to plan a forum with the cities to address regional land use issues

• Direct staff to revise the circulation element of the General Plan

• Direct staff to complete the Climate Action Plan

Additionally, county staff was instructed to refer the conservation regulations to the Watershed Information Center and Conservancy for review.

Perhaps the best summary of the issue was by supervisor Keith Caldwell: “There’s not a huge issue with the creation of new wineries up to now, but perhaps we should look at how many more do we need? And how many acres of vineyard should be removed to build wineries?”

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