The Napa County Planning Commission heard debate over the county’s 23-year-old Winery Definition Ordinance on Wednesday, and as expected it featured disagreement from some long-time Napa Valley vintners and winemakers.
But the debate did not garner any interest from the commissioners or county staff to pursue significant changes to the ordinance, or how to enforce its signature 75-percent rule — the stipulation that wine made in Napa must be made with 75 percent Napa grapes.
As County Planning Director Hillary Gitelman put it, the ordinance has worked well enough to this point that staff did not see a need to “open the hood and tinker with the ordinance.”
Wednesday’s debate was preceded by six months of discussions among wine industry groups about the ordinance’s continuing viability, and if the county produced enough grapes to supply future winery expansions.
The discussions were triggered last year when two wineries, Reata and Raymond Vineyards, sought large production expansions.
Gitelman recommended that the commission use common sense before approving major expansions. She said commissioners should condition their approval to make the applicants prove that they’re complying with the 75-percent rule before they can expand.
The county is also adding compliance with the rule to its annual random audit of Napa County wineries, so that some wineries will have to prove they’re complying and show how every year.
The commissioners agreed with Gitelman, and said they would exercise caution in examining how winery owners would prove their compliance with the 75-percent rule before approving any new winery or expansion.
“As we move forward we are going to have to take a good, hard look at our behavior,” Commissioner Mike Basayne said.
Much of the debate centered on how the county should enforce the ordinance when grandfathered wineries — those existing before 1990, whose production up that point is exempt from the WDO — seek expansions.
Wine industry groups disagreed over whether those grandfathered wineries could apply their current permit Napa grapes to an expansion.
Andy Beckstoffer of Beckstoffer Vineyards called for stricter enforcement. He feared that grandfathered wineries could expand production with their current Napa grapes, thus complying with the 75-percent rule, but then use out-of-county grapes for their pre-1990 production.
He said 132,000 tons of Napa grapes were crushed in 1990, which could hypothetically be put toward expansions, and out-of-county grapes could be brought in to backfill.
“It’s my belief that the internal policy of the staff is inconsistent with the WDO,” Beckstoffer said. “Is this the kind of county we want?”
Gitelman said that this enforcement was not the product of a secretive ruling from county staff and counsel. Instead, she said it was based on an interpretation of the ordinance’s language.
“What we’re talking about is a plain reading of the ordinance,” Gitelman said.
Moreover, Gitelman said it would be impossible to make grandfathered wineries divulge their past sourcing records without substantial changes to the ordinance.
“The county really has no regulatory oversight or control,” Gitelman said. “We don’t have that information. We look at this prospectively. To do anything different — it’s not something we’re enabled to do.”
Volker Eisele of the Napa County Farm Bureau offered a similar worst-case scenario as Beckstoffer did — a grandfathered production that’s wholly sourced from grapes in Lodi, Bakersfield or other wine regions. He said he always took pride in helping author the ordinance, but lately “that pride has turned into embarrassment.”
Eisele said he supported Gitelman’s recommendations, but believes the growth trends in Napa Valley wine production will make this issue become larger.
“You make this problem worse,” Eisele said of the commission continuing to approve new wineries and expansions. “You increase the pressure.”
Randy Skidmore, an attorney for Coombs & Dunlap, said the ordinance does not address the so-called “source-shifting” issue, and advocated that the commission and the county use this an opportunity to find a solution to it by revising the ordinance.
“Nothing in the WDO speaks to source-shifting,” Skidmore told the commissioners. “Source-shifting can have a dramatic and divisive impact on our community.
He warned that this issue could follow the path of the erosion-control debate of the late 1990s, which spilled out after a lawsuit was filed. He said lawsuits over the WDO issue are a possibility.
“It is a slippery slope, I would submit, to address this by way of interpretation,” Skidmore said. “This is an opportunity for the county to address it, rather than facing another unfortunate episode in court.”
Richard Mendelson, an attorney with Dickenson Peatman & Fogerty, said the Planning Commission and the Board of Supervisors addressed the issue of source-shifting before the ordinance was adopted.
At Wednesday’s meeting, he cited a transcript of a conversation between a planning commissioner at the time and an environmental consultant with the county, showing that the issue was debated and resolved prior to the ordinance’s adoption.
“I feel like I’m kind of listening to revisionist history,” Mendelson said. “This question has been asked and answered. It’s always been enforced this way.”
Alex Ryan, CEO and president of Duckhorn Wine Company, said he treasured his company’s grandfathered winery rights, and took care not to abuse them.
“By no means has any abuse taken place,” Ryan said. “Don’t criminalize an applicant for requesting permit options. If it ain’t broke, don’t fix it.”
David Graves, a former county planning commissioner and vintner, said the county’s review process is more than adequate to ensure compliance with the Winery Definition Ordinance.
“We have a robust, accountable process,” Graves said. “I caution you to avoid unintended consequences.”
Commission Chairman Terry Scott concluded the hearing by saying that while the ordinance isn’t perfect, it’s made the wine industry “better off than we were 23 years ago.
“The WDO has served us well,” Scott said. “It was not perfect. It was not designed by perfect people. So far, I think we’re doing very well.”