subscribe: Posts | Comments      Facebook      Email Steve

Crunch time for Napa’s Winery Definition Ordinance

19 comments

I blogged on this a few months ago, and now, Napa’s proposed new Winery Definition Ordinance (WDO) is coming up for a vote this Tuesday by the county Board of Supervisors, so it’s time to revisit the topic.

“Why bring in Las Vegas to Napa?” one person wrote in to the Napa Valley Register, expressing fears of “wedding chapels” fueled by “corporate greed” attracting hoards of outsiders with attendant problems of traffic, litter and crime.

On the other side is this comment to the Register: “I am in favor of Weddings, Funerals, Bar Mitzfah’s, anything that will bring in a buck or two for the winery’s [sic].”

The issue is whether or not to amend Napa’s original (1990) WDO to allow wineries to host a greater range of for-profit social and cultural events that had, until now, been prohibited. In a petition circulating on the Internet in favor of the changes, the author urges the Board of Supervisors to pass the new amendment, “[g]iven the current unprecedented economic climate, the worst in a generation if not a lifetime,” which is threatening the economic livelihood of an unknown number of Napa Valley wineries.

As the St. Helena Star pointed out last Fall, “Back in 1989, after much wrangling, it was eventually decided that restricting commercial activity within wineries in the unincorporated, agricultural areas of Napa County would protect the rural nature of the county and its historic agricultural preserve.” That decision resulted in sharp new restrictions on tourist activity: tours and tastings for new wineries were to be offered by appointment only. Non-agricultural uses like weddings were prohibited. In this way, WDO supporters hoped to prevent “putting the valley on a fast track toward Disneyland.”

That was then, when the economy was pretty good and the extraordinary boom on the 1990s was just over the horizon. Fast forward to today. The St. Helena Star didn’t come out with a specific editorial opinion, but pointed out the stark nature of the debate: Napa faces “either wine Disneyland or failed wineries replaced by houses.” A horrible, Sophian choice.

Not being a resident of Napa Valley, my opinion perhaps doesn’t matter. But I can’t see the harm in allowing wineries a little more leeway. Napa already has a lot of touristy stuff — the Wine Train, bumper to bumper traffic on Highway 29 especially during summer, busloads of visitors brought up from San Francisco, the Petrified Forest, Calistoga’s mudbaths. The more popular tasting rooms are completely mobbed in High Season. And think about those 100 cents on the dollar, full-retail prices tourists are dropping on wine they buy direct from the winery. You never hear locals complaining about the millions that visitors leave behind to pay for roads, schools, cops and firefighters.

The proposed new amendment is neither draconian nor dictatorial. No winery would be forced to do anything it doesn’t want to. And the trial period for the amendment is two years; in 2012, the Board will revisit it to determine if it works as intended. It’s hard to see how a few more weddings and birthday parties would have any impact at all on Napa’s agricultural preserve. It will take increased diligence on the part of winery owners to police and clean up after their events, but that’s the least you’d expect from somebody doing business in Napa Valley. I hope the Board passes the amendment. It could spell the difference between survival and failure for some wineries up there.

  1. There’s no way the Ag Preserve should be further eroded just so vintners can try to maintain their lifestyle of excess. They’ve been hit by the economic downturn like everyone else, but don’t want to change with the times. Their answer is to look for new revenue streams instead of altering their business plan.

    The best that Napa has to offer is top notch. But too many average yet overpriced wines are simple, overripe and overoaked. And the vintners care more about having a Wino Disney than great wine. Wine is about agriculture, though. The lifestyle element is important to many individuals who believe you can buy culture through a heavy, expensive bottle, though, so that’s not going away. But it certainly doesn’t need to be expanded further.

  2. Greg, are you saying that wineries that want to expand their tourist activities make bad wine? I don’t think it’s that simple. Granted there are some poor wines from Napa Valley but I don’t think that has anything to do with events. I think expanding the wineries’ ability to make some extra money is a good idea. If it doesn’t work out, then the Supes can cancel it in 2012.

  3. What I find so distasteful are the negative comments from Napa Valley vintners who, because of the location or size of their winery or other constraining reasons, lash out at their peers who, as you write, need to augment their income in these rough economic times. The critics cloak themselves in the self righteousness of protecting the ag preserve when they personally have nothing to loose by not allowing this modest change. In actuality they and the region have nothing to lose by allowing the experiment. It comes down to “If I can’t do it, neither can you”

  4. I don’t want anybody telling me what I can do and cannot do in my business, and I am sure that winery owners are the same way. But this debate is not about some kind of libertarian freedom. It is about how many cars can fit on Hwy 29 in the middle of summer. It is about whether wineries should be able to sell even more of their wine at full retail and thus leave none for the rest of the world. It is, in short, about profit at the expense of the golden goose–which is a mix of conditions in the Napa Valley, the further commercialization of the wine experience away from things artesinal to things having nothing to do with anything related to wine.

    Not so long ago, I attended the wedding of one of my very closest friends. He and I have just finished a new book about CA wine to be published next fall. When his son and intended got married, they did so at the very lovely Fogarty Winery set in the San Francisco Peninsula hills with a view of vineyards and the Bay. What a great setting. But here is the kicker. These two young professionals (he is a lawyer, she is a Ph. D-owning consultant to the newest firms in the pharmaceutical industry) do not drink wine or anything else. OK, I have no problem with that, and I have no problem with them wanting to get married in a gorgeous setting, which they and their parents could clearly afford.

    But, here is what I don’t get. Why would it benefit the wine industry to become part of the entertainment industry. There is a downside here, and it is called the ugly smell of excess. I think the limitations on tasting rooms are counter-productive, and they should be changed. Wine appreciation should be encouraged. But weddings, barn dances, anniversary parties and the like will get in the way when they get carried to excess. How many wineries will shut down on weekends–as Fogarty does for the weddings it hosts? How much extra traffic will be generated by folks who have zero interest in wine?

    If Napa needs more to make itself profitable, a question that has not been addressed in the petition except in the most offhand way (see the promotion that Napa does tellling us how it is the overwhelming center of wine tourism already), then for goodness sake, do it with barrel tasting weekends, passport weekends, tasting rooms for all.

    There is an old saying, “The business of business is business”. In the case of the Napa Valley, and frankly everyone else in the wine business, I would prefer that saying to be interpreted as “The business of the wine business is wine”. Find ways to promote your wine, rather than promoting the very special setting that allows you to be in the wine business.

  5. Bill Smart says:

    I think it’s kinda funny that wineries are looking to “augment” their incomes by adding events like weddings and birthday parties. For those of us that have been tasked with planning and executing a successful event at a winery, when was the last time you thought to yourself, “gee, if only we could host more events at our winery – then we’ll make lots of extra money.”

  6. It’s already a tourist pit and the locals aren’t giving back the revenues they get now — those strike me as remarkably weak arguments for weakening the WDO. Hell, I have a six-lane freeway a mile from my house and I use it to get places. That doesn’t mean I’d want it turned into a 12-lane freeway. These are not all-or-nothing propositions. It’s a matter of where to draw the lines. Because someone is comfortable with where the line is now and doesn’t want it moved, well, that should hardly invite the suggestion that they are irrational, silly, myopic, hypocritical — honestly, I’m not sure what you’re implying with your argument.

    That said, I’m now a former resident of Napa Valley, so my opinion, like yours, doesn’t really matter. And whatever valley residents decide is in their self-interest ought to be respected.

  7. In support of the proposed amendment to “temporarily” re-define “marketing terms” within the WDO, I would like to clarify for readers a very important point. The proposal as written, does NOT grant additional event permits. It is NOT welcoming increased visitorship. As the proposal is written, Wineries will be granted “within their CURRENT Use Permits” the ability to host events for profit; social, cultural, or corporate. The wineries are already granted a certain number of event permits, that currently can only be used for what is considered “wine marketing” exclusive of cultural or social events. Many wineries are NOT hosting any marketing events in this economic climate. And some newer wineries, post 1990, are happy to market their wine, vineyard property, and hospitality to any social, cultural, or corporate group to get their brand on the market. The WDO like the Constitution needs to be amended on occasion!

  8. Here in Oregon we are facing similar issues and we are watching the discussion in Napa with great interest. As the owner of a small winery I am constantly looking for ways to bring more customers to our tasting room. However, agricultural land is a precious and fragile thing. Even the land that produces the worlds greatest wines is under constant threat of re-development for residential and commercial use. Once that land is lost, it never returns.
    A question often heard in Oregon is “If wineries are allowed to host weddings, etc, why not other farms and rural property owners?” I think wineries need to accept limitations on their activities if they hope to preserve the agricultural land base for future generations of winemakers (and wine drinkers).

  9. Steve, I’m not necessarily saying that bad wine is being made by the wineries that want to expand economic activity. I have no idea which those are, though I’d bet they’re the wineries with pristine grounds and large chateau-like tasting rooms. But it probably is a reflection of priorities when the hospitality business is considered more important than the wine business.

  10. Greg, I think if I was lucky enough to have a winery in Napa Valley I’d probably want to host some hospitality stuff, especially in this market when everybody is hurting.

  11. Andrew Healy says:

    Greg. You’re so far from the truth with your statement it’s not even funny. The amendment doesn’t call for more events it calls for more flexibility in running the events that wineries want to run. And when you look at the fine print of the WDO you’ll discover that vintners are prohibited from running “events for profit”. Now imagine how far you’d get with that in your altered business plan. The Napa Valley is dying in front of our eyes and change will come.

  12. Of course, if Charley O put out Touring and Tasting mag he might be taking a different tack. Hospitality and wine are completely intertwined, whether in Wine Country or in town. Tourism is hugely important to California.

    Fortunately, Messers Atgen and Healy inject some reality into this exchange. I’ve lived in Napa Valley for 15 years. I don’t benefit directly from the events. But I do benefit from the quality of life that events help support–places like the Napa Valley Opera House and Lincoln Theater. Napa ain’t Livermore (though I’m very fond of Livermore particularly of a winery called Steven Kent) Nor is it Disneyland for adults or Carmel inland.

    Our congestion “problem” is almost nonexistent, particularly when you consider the availability of Silverado Trail (everyone here is so damned spoiled). And, as pointed out, the proposal is so modest. People we are in the Great Recession. Bill Harlan, a sterling individual, is not representative of the vintner community here. And neither is Volker Eisele nor Peter McCrea.

  13. Make that Charlie (sorry to miss you at ZAP)

  14. Michael Haley says:

    Part of the problem here is that business is way off, so if no new structures are built, and we can get some of the business back that we have lost into existing structures, why not? It is not about some vintners, it is about everyone’s jobs in the valley.

    The whole valley is locked down in regulation at the service of the wine business, and if the wine business is not producing is it ok for the government to continue to restrict business? When we have 11% unemployment? Are we just going to throw everyone under the bus that doesn’t own a winery that is on one of the main thoroughfares and has the walk in tasting room business? Because everyone else is going under, and we have got to get more business up here.

  15. Steve,

    Thank you for your comments – it has certainly generated some heated comments. As someone who was there at the beginning of the WDO and will be speaking tomorrow maybe I can give your readers an insider’s view of the issues. Trying to avoid the Magnum Opus, this is the shorthand version of a very complicated issue.

    First, the WDO was originally championed by the various farm groups to protect the value of their grapes – pure protectionism, not altruism. The vintners (I was on the board at the beginning of this) were hesitant about the main limitation which was requiring at least 75% of Napa Valley grapes be used by new wineries. The problem was how to enforce new wineries to use 75% Napa grapes while not forcing those older and larger wineries into a business plan that was retroactive and totally illegal. How do you tell Sutter Home that they now have to use 75% Napa grapes for the White Zinfandel? My view was that I would prefer to have Sutter Home Winery (a better neighbor cannot be found) be located in Napa Valley than driven out of our county. The Supes created a two tier system, those wineries in existence before the County required a Use Permit for a winery would be exempt from the WDO (a simplified version of the WDO). All wineries that came into existence after early 1974 and required a Use Permit and would, with the WDO, be required to use at least 75% Napa Valley grapes. This is undoubtedly illegal (unequal treatment under the law), but we all thought (and think) it is a good compromise (and is the 800 lb. gorilla in the room).

    The second main area of concern was tchotchkes, tee-shirts, etc. that could be sold at wineries. Wineries are a necessary incursion on ag land and most of us realized that a winery needs to sell its product, thus being open to the public in order to sell its product. Every effort to was made to allow a legitimate winery to produce and sell its product, but without allowing a faux winery to capitalize and exploit its location and have a Vera Wang corner or maybe the Waterford crystal and flatware section. Tchotchkes etc. had to be imprinted with the winery name or logo to qualify as bona fide “winery related” products allowable for sale at a winery. Prohibitions on weddings, corporate, social and cultural events were not part of the original idea and came into prohibition at a later date.

    Why should BV, Robert Mondavi, Trefethen and others be able to be open to the public whenever they want and I am forced to tell a potential customer of mine that they have to make an appointment? Maybe I like the “appointment only” arrangement, but shouldn’t that be my choice? Why can I legally have a marketing event where women can be informally dressed or a marketing event where women can be formally attired, yet if I have a marketing event where a women is dressed in white I’ve broken the law? Shouldn’t I decide how I want to use the few marketing events that I’m allowed under my Use Permit? Why should the County dictate to me how to market my wines? No other county in America restricts their wineries to the extent that Napa County does. And the corollary to that is that a U.C. Davis study revealed that mountain grape growers are the most regulated farmers in America – thus the world.

    I have been riling against the WDO yoke for years and reject the argument that the WDO should be changed because of this terrible economic environment. It should be changed because it is a poorly crafted ordinance and an embarrassment to the Napa Valley. No other County in America burdens its wineries this way. The WDO should be changed because it is the right thing to do; we need to allow wineries to market with 21st century ideas and not be hamstring by 20th century falsehoods. If the opponents truly believe that changing the WDO will destroy the Ag Preserve then let those wineries not in the Ag Preserve (maybe half of all Napa wineries) try the two year experiment.

    My overarching desire/dream/goal is to keep the Napa Valley wine industry economically viable because it is the last and best firewall against the urbanization of our farmlands. Those of you who don’t live and operate here don’t understand the anti-competitive forces that exist here and I wish you wouldn’t be so quick to criticize that which you don’t really understand. No other wine growing county in America has hamstrung its industry as the Napa County Supervisors have – show me another county that has passed a WDO that is as restrictive as our WDO. No other county has passed a Conservation Ordinance that is as restrictive to mountain viticulture as Napa County has. Right or wrong, purity or perfection, compromises must be made and this change to the WDO is very minor and well within the margins of our General Plan.

    If you want more detail see my letters to the Napa Register, September 27, 2009 – http://www.napavalleyregister.com/news/opinion/mailbag/article_10784990-a06f-5dad-bd03-4d37f07da7d0.html – and to the St. Helena Star December 17,2009 – http://www.sthelenastar.com/articles/2009/12/17/opinion/commentary/doc4b298b763a5a6360724122.txt.

    Stu Smith
    Smith-Madrone

  16. Dying? I think we all agree that things are not as rosy as they used to be. But, dying?

    It would be helpful to get some proof of that kind of claim.

  17. “Not as rosy?” It’s shocking to see the denial of the severity of what’s happening to the Napa wine industry. Go buy a banker a beer or two and have a discussion about balance sheets of Napa wineries. No, you’re not seeing mass meltdowns yet as wineries scrap around for any cash, dump current inventory through discounters, sell 2008/2009 bulk, etc. But wait until we get through a very dismal 2010 with 2011/2012 likely not all that much better (and possibly worse). Layer in global competition from extremely high-quality and more competitively-priced regions who are hurting even worse than Napa yet have much lower land/operating costs and therefore can discount more and last longer.

    While you may be tempted to believe that you’ve seen it all before and things will be bouncing back soon, you probably haven’t and they probably won’t. Lack of demand for expensive wines drives wineries to lower prices and quality, and increase production. This drives grape prices lower, which in turns drives farming intensity down, yields way up and quality way down (Remember Merlot in the mid-90s?). So now you’ve got a growing association between Napa and thin, green Cabs loaded up with oak chips and selling for $12. Watch land prices and tourism shrivel, and the Napa brand lose its sheen. Who wins then? Certainly not grape growers whose personal wealth always comes back to that retail bottle price.

    Let ‘em have a few weddings and sell a bit more wine from the tasting room. And if somehow the economic sky doesn’t fall, then go back several years from now and then tighten down the screws.

  18. Morton Leslie says:

    There is a reason Napa Valley wines sell at such a premium. It hasn’t come in spite of the WDO, but because of it. Yes, the ordinance is restrictive. Yes, it drives some of the business elsewhere. Yes it makes the Napa Valley different than Sonoma. But there are different customers, and in the market of luxury wine there are traits in the way people do business that are indicators of the integrity of their business practices. Do you need to appeal to every customer? Just because someone wants a wedding away from their asphalt jungle does that mean they will buy fine wine. Bringing yourself down to the base level, doing everything because it bring you a buck is the American way of strip malls and fast food. Sometimes the smartest thing is to be different, and rise above the fray and show some integrity.

  19. Andrew, it sounds like you are much closer to the problems in Napa than I. But dying sounds like hyperbole. Even correcting for inflation, Napa wine was significantly cheaper in the past. How did they do it??? Michael says overcropping and thin weedy wines. Good luck with that plan as plenty of other regions without the same overhead of ultra-rich vintners requiring a decadent lifestyle can do that cheaper.

    Maybe there needs to be a correction. People who bought land and wineries during the bubble are going to get burned, but how could they not realize this was a risky investment? Those who tarted up average Napa fruit to sell for $100 per bottle are in trouble, too. Again, bad investment.

    I honestly do not see why Napa is entitled to continue as it has. Maybe Napa could learn to make good wine for under $40 like every other quality-conscious region. Get out of the bubble and learn to be competitive now that obscene profits from unsound financial instruments aren’t being funneled into the valley via status seekers and point chasers. This is a wake up call! Put your profits back into the wine instead of gaudy tasting rooms, flashy cars, expensive events and so on. I bet if you go out to Santa Cruz or the Sierra Foothills not every vintners drives a Mercedes and started out as a millionaire.

    All I’m saying is Napa should go back to the basics. Maybe now that everyone has gotten accustomed to a life of luxury, that’s not possible. Well, hedonic adaptation is a b—-, I suppose.

Leave a Reply

*

Recent Comments

Recent Posts

Categories

Archives