I was the president of the Napa Valley Vintners and its spokesman during the negotiations and public hearings in the months preceding the adoption in early 1990 of the Winery Definition Ordinance, known as the WDO.
Like the Agricultural Preserve established 22 years before it, the WDO seeks to preserve our agricultural land. While recognizing that wineries are an integral part of a successful and sustainable local wine industry, the WDO ensures that winery activities serve the county’s goal of maintaining agriculture as the highest and best use of our land.
For the first time in our valley’s history, the WDO specified for wineries located in the agricultural zoning districts of our county the uses (and the only uses) in which they can engage, including wine production, marketing, tours and tastings, limited food service and retail sales.
One important requirement of the WDO is the 75 percent grape source rule.
That rule requires wineries established after the adoption of the WDO to use at least 75 percent Napa County grapes in the wines they produce.
This ties the wineries’ use of agricultural land directly to the fruit grown on that land. Napa County broke new ground in adopting this land-use law.
Wineries that were established before the WDO, often referred to as legacy wineries, were not subjected to the 75 percent rule as a matter of fairness.
They could and did make their wines from grapes grown anywhere, inside or outside Napa County.
The county could have classified the pre-WDO wineries as legal nonconformities, but that status (or “stigma”) would have called into question the legitimacy of their operations and made them subject, at worst, to an abatement of their nonconformity or, at best, to reduced financial or marketing viability.
A critical trade-off in obtaining the support of the WDO by the legacy wineries was that they constitute legal conforming uses.
The 75 percent rule addresses what happens when these pre-WDO wineries expand their operations. If a pre-WDO winery expands its production level inside the existing winery facility with no incursion onto agricultural lands, the 75 percent rule does not apply.
This preserves the nexus between the grape source rule and the preservation of agricultural land. I recall that at one point in the WDO deliberations, it was proposed that existing wineries be able to expand their footprint by 20 percent without being subject to the 75 percent rule, but County Counsel correctly observed that this would undermine the justification of the rule.
Restraints of trade like this (the requirement to buy local grapes) are frowned upon by the U.S. Constitution, so the 20 percent expansion right was rejected.
Instead, if a winery expands its footprint after 1990, that portion of the winery’s production increase that is the result of the physical expansion is subject to the 75 percent rule. This again affirms the nexus between the grape source rule and the preservation of agricultural land.
The county does not examine the winery’s grape sourcing for the pre-existing production level. It can be 100 percent Napa Valley or zero percent Napa Valley; it can change from vintage to vintage. It is the winery’s lawful entitlement. This is how the rule reads.
This is how the county has applied it for 23 years.
Andy Beckstoffer, who has recently argued against the county’s consistent and correct application of the 75 percent rule to pre-WDO wineries, addressed the issue properly and directly at a public hearing in 1989:
“(H)ow (do) you want to treat the existing wineries who really built this industry and developed it for us over the past 20, 40 years, whether you want to put on them the stigma, if you will, and the uncertainty of a legal nonconforming status. We’ve said there’s no abatement; we’ve said, you know where they can expand, where they can develop or not develop. There are technical arguments, and I appreciate those arguments, but from my point of view, it really comes down to how you’re going to treat these people who have built this industry, whether you’re going to put the stigma on them and put the uncertainty on them or not.”
Dan Jonas, then chairman of the county Planning Commission, said in his recent editorial (Aug. 24) that the final Environmental Impact Report for the WDO did not contemplate what he calls “shifting of existing production” when a pre-WDO winery expands its footprint and production level, with the increased production subject to the 75 percent rule and the existing entitlement remaining exempt from any grape sourcing requirement.
The environmental report makes it clear that this very fact was taken into account.
Jonas himself made sure that the environmental report consultants were aware of his concern, and they responded to his comment (Comment 591 in the environmental report):
Comment: Commenter (Jonas) points out that 75 percent rule applies only to new wineries and expansion of wineries beyond the Winery Development Area. The result of this is that an existing winery can apply their current production capacity ... to out-of-county grapes.
Response: Our projections were based on this same understanding.
No one is claiming that the WDO is perfect, but we can say with certainty that the grape sourcing rule was fully considered, is clearly written, has been consistently applied by the county and has served the county well. To suggest that it be reinterpreted or changed is unnecessary, unfair and a breach of faith as to the legacy wineries.
Johnson is a past president of the Napa Valley Vintners.