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Henry and Vanessa Cornell are owners of Cornell Vineyards located in Sonoma County, one mile over the Napa County line near Spring Mountain.

Law Enforcement
State cracking down on combination beer/liquor licenses in Napa County

A recent crackdown on California’s Type 75 brewpub-restaurant licenses by the Department of Alcoholic Beverage Control (ABC) resulted in seven Napa Valley restaurants temporarily losing their right to sell spirits, limiting their liquor menu options to beer and wine.

ABC wanted to be sure that the restaurants were living up to the requirements of their special license that allowed them to sell spirits if they brewed a minimum amount of beer.

The ABC put five local restaurants on probation for three years with the continued right to sell spirits: Morimoto Napa, Acacia House, Forge Pizza, Blue Note Napa and The Runway by Patrick. ABC said investigations were pending against Golden Harvest and Goose and Gander in St. Helena.

On Nov. 15, an employee at Golden Harvest in St. Helena who asked not to be named said the restaurant had opted to forfeit its Type 75 license and sell only beer and wine in the future. “It was just too much of a pain in the ass and we didn’t make any money off of it anyways. So we’re just getting rid of it,” the employee said.

Allen Mochwart, manager of Forge Pizza, said Thursday that his restaurant brews and sells 10 barrels a month at its south Napa location. The restaurant was put on probation for want of documentation of its beer production and sales, he said.

Forge took a financial hit during the week that ABC suspended spirit sales, but this ability has been restored, Mochwart said.

“I think we just got kind of caught in the whole thing,” Mochwart said. “Some of these other restaurants apparently are not making beer or not making an effort to make beer. However, that was not the case with us.”

For some, the crackdown has prompted a deeper embrace of their brewing identity. An ABC inspection of The Runway by Patrick at the Napa County Airport brought a suspension for the restaurant’s license during the early weeks of October. Before the suspension, the restaurant brewed only the “Runway pale ale,” said manager Kim Wilkinson, and not enough to satisfy their license.

“After working with them, we quickly became compliant,” Wilkinson said. “And we will remain compliant from here on out.”

More than that, the restaurant is doubling down on its brews, adding to the pale ale a blonde, a stout and a pending fourth beer. “The suspension has made me realize that we need to really start producing the house brews,” Wilkinson said.

Calls seeking comment from the other four restaurants investigated by the ABC were not returned Thursday afternoon.

Why restaurants sell alcohol

According to restaurant statistics, the average full-service restaurant serving alcohol makes about a 6 percent profit margin. As much as 50 percent (or more) of the profit can come from alcohol sales.

For a restaurant to sell alcohol it must first obtain a special license to do so. The most comprehensive license (Type 47) allows a food-service operation to sell wine and spirits.

“We’re in the business to service our customers and offer them what they want, and many like to enjoy a cocktail at some point during their dining experience,” said Michael Dunsford, co-owner of Calistoga Inn Restaurant and Brewery.

“A Type 75 liquor license allowed restaurants who brewed their own beer to also sell spirits,” he said. “But what has happened over the years was that some restaurants saw it as a way to get around getting what is often a much more expensive and limited permit (a Type 47) to sell all types of liquor — beer, wine and spirits.”

Another reason to include spirits is because alcohols such as gin, whiskey and vodka can often provide higher profit margins when compared to wine and beer. The challenge is that there are only a limited number of Type 47 licenses available through the state each year and the ones that sell on the open market often go for $400,000 or more within the Napa Valley.

The Type 75 loophole that just closed

Restaurants not able to obtain a Type 47 have had another option. A Type 75 license allowed the sale of distilled spirits so long as they brewed at least 100 barrels of beer onsite. The license was created more than 20 years ago to help encourage and support what, at the time, was a nascent craft-beer-brewing industry.

The license was intended for legitimate small brewers, but it quickly became a way for fledgling restaurants to gain the ability to pay roughly $14,000 for the license, brew a little beer on the side (some of which could be donated to charity or theoretically just poured down the drain) and meet the letter of the law although perhaps not its intent.

The loophole was closed in September when new language was added to the law. The major changes include an increase from 100 barrels to 200 barrels of beer made onsite each year, a requirement to sell said beer on the premises and keep accurate records of production and sales, and the stipulation that any of the beer donated to charity does not count toward the yearly volume calculation.

“Increasing the minimum annual production requirement from 100 to 200 barrels will help to ensure that those who have a Type 75 license are indeed committed to producing a quality beer product — the 100 barrel threshold was too low to achieve this,” said Tom McCormick, executive director of California Craft Brewers Association.

“Some Type 75 licenses were making beer as easily, cheaply and quickly as possible just to meet the minimum production requirement, knowing that they could sell 100 barrels of even a poor-quality beer. This led to license abuse, where the Type 75 was often being used as an inexpensive alternative to a Type 47 license.”

The impact

According to the ABC’s website, within the Napa Valley there are 29 restaurants that have Type 75 licenses, with only a few having the word “brewpub” or brewery on their street signs. Some of these dining establishments are making and selling beer onsite, and although they will need to increase production, that should not represent an insurmountable challenge.

However, those restaurants that have not been following the intent of the law will find it costly, time-intensive and a possible blow to their short-term bottom line as well as their brand image.

“California’s craft-beer industry is a national leader, and brewpubs are an important part of that,” said ABC Director Jacob Appelsmith. “This statewide investigation makes it clear that the ABC is committed to protecting the integrity of the craft-beer industry and expects licensees to be compliant with the law in order to sustain a fair and healthy marketplace. The department prefers increased compliance through education but will use enforcement tools to ensure compliance.”

According to the ABC, there are approximately 150 Type 75 brewpub-licensed premises in California, and a recent investigation found that nearly a third of those locations were not operating legitimately.

Some math

One barrel of beer fills 248 pint glasses. If the 29 restaurants that currently hold a Type 75 license in the Napa Valley each make 200 barrels of beer a year, that would total 1,438,400 pints of beer they will need to sell.

The Napa Valley had about 3.5 million visitors in 2016, and one-third of those stayed overnight, according to Visit Napa Valley data. According to a Gallup poll, 63 percent of the U.S. population drinks alcohol. Of those, roughly 40 percent say they prefer beer. Sixty-three percent of 3.5 million equals 2,205,000 who drink, with 882,000 saying they prefer beer. Thus, every single one of these beer-liking visitors would need to drink nearly two pints from one of these 29 restaurants to deplete their inventory.

Of course, there are plenty of locals who enjoy beer, too. The population of the valley’s city and towns is at just over 140,000. Using similar math as above, and making the assumption that residents go out to eat and drink once a week, we come up with 1,834,560 potential pints consumed per year by locals. But these 29 restaurants are only a fraction of the total outlets/restaurants/wineries that serve beer.

Add that to the beer that is already hitting the streets with an influx of new breweries in the valley (Stone Brewing, St. Clair Brown, Mad Fritz, Lincoln Street Brewers, for example) and that makes for a lot of beer and might spell trouble for some of these restaurants that find inventories hard to push through at a fast enough rate to maintain quality. Unlike wine, most beers do not improve with time.

A frothy future

The authors of these changes to the law intended to close a widely abused loophole. For consumers who enjoy beer this, along with a recent increase of local-craft breweries will lead to increased choices, improved quality and lower prices. For example, The Acacia House, which has a Type 75 license, had its license suspended for nearly two weeks until the case was adjudicated. For now, customers there can now enjoy $3 pints of beer and $9 burgers during happy hour, apparently in an effort to both move inventory and showcase their brews.

These changes might cause restaurants that never intended to become beer producers and used Type 75 as a means to sell spirits to fold up shop.

“It will cost me $60,000 a year to make that much beer, and I’d never be able to sell it,” said one such restaurant owner, who asked that his name not be used.

And, yet, without the ability to sell distilled alcohol this same person tells me that they’d be unable to stay afloat.

“We may see a few places go under, but I hope not,” Dunsford said. “My hope is that this change to the law results in both more compliance and better-quality beer.”

Public Safety
Sight of devastation in Paradise rekindles memories of 2017 in Napa firefighters

Napa City Fire Captain Ty Becerra’s gut told him the Camp Fire would be bad when he arrived at a staging area on the Butte College campus, home to a respected firefighter academy that he trained at 22 years ago.

Becerra was one of about 20 Napa Valley firefighters who headed to the scene of Butte County’s Camp Fire hours after it began at 6:30 a.m. Thursday. They arrived later that day in off-road vehicles and a pickup truck, soon joined by an army of more than 5,500 firefighters from around the state and as far away as Texas.

Becerra said he looked in the sky and saw a smoke plume as dark as “midnight” hovering close to the ground over Paradise instead of sticking straight up. The town was being devastated by what has become the deadliest fire in California history.

“People’s lives were changing in that instant,” Becerra said. “Just the amount of destruction that was taking place right when we were pulling in.”

More than 8,700 homes and 260 businesses have been destroyed by the Camp Fire as of Thursday morning, according to Cal Fire.

Firefighters have been working 24-hour shifts every other day, except for the first couple of days when they battled flames during strong, erratic winds for about 48 hours straight and took naps when they could, Becerra said.

They sleep in a mobile trailer that holds 40 or 50 beds stacked three high, Becerra said. They’re given four- to five-pound lunches filled with high-calorie snacks to last throughout the day.

Napa Fire Captain Mike Dombrowski, who’s been fighting fires for nearly 30 years, has been in Paradise since Friday morning. Firefighters are there to do a job, but being confronted by so much destruction weighs on them after a while, he said.

“I’ve never seen devastation like this,” he said. “I mean, you go for blocks and blocks and blocks and you will not see one house or business standing.”

On Wednesday, Dombrowski was stationed at a supply distribution center for residents displaced by the fires. He got off of his shift at 7 a.m. and would return to fight the fire the next morning.

Until then, Dombrowski handed out gift cards on behalf of the Napa firefighters’ union. It’s in situations like this that he’s heard from residents who were caught off-guard by the fast-moving fire and lucky to leave their neighborhoods alive.

The gift cards can bring tears to the eyes of people who lost everything, but it pains Dombrowski that he couldn’t have helped more.

“We had our fire last year,” he said. “I think it’s kind of our responsibility to pay it forward and do whatever we can to help and support the people who are going through it this year.”

Matt Gonsalves, a Napa firefighter and paramedic, struggles to articulate how he feels about serving on the Camp Fire site.

He’s excited and proud to be able to help the community. One woman who lost her home hugged him for what felt like a full minute, he said.

He was somber when he first realized the scope of the Camp Fire. It was pitch black when they arrived at 4 p.m. on Thursday. It brought back memories of the fires that rattled Napa and other parts of the North Bay and beyond a year ago.

Cal Fire has repeatedly called California’s devastating wildfires and year-round fire seasons “a new normal.”

“I don’t like that this is the new normal,” said Gonsalves. “It seems like every fire I’ve been on in the past two years has set a record of some sort … it’s just terrible.”

Napa council on board with makeover plan for old Cinedome neighborhood

A vision for a downtown Napa neighborhood that once was host to the Cinedome movie theater now has the support of city leaders.

The City Council on Tuesday night voted in favor of a master plan to redevelop 5.4 acres near Main and Pearl streets, near where the Cinedome was torn down in 2015. Under the plan, eight parcels controlled by the city, Napa Sanitation District and the owner of the theater site would be laid out for homes, shops and a multistory garage for more than 300 vehicles.

Up to 45 townhomes could occupy a Napa Sanitation District-owned block on the north side of Pearl Street. To the south, a multistory building would include street-level retail and restaurant space, with some combination of offices or more housing upstairs. Other city-owned lands south of the theater site would become open space or a public plaza leading visitors to the Oxbow Commons, the downtown park that doubles as a wintertime flood-relief channel for the Napa River.

Planning officials emphasized the Cinedome-area plan is a broad-stroke vision statement, and does not itself rezone any parcels or mandate land uses.

The document leaves open the question of where to place a parking structure, which Napa hopes will meet future visitor demand and estimates will cost at least $12 million. While city officials favor a Napa-owned site behind the Kyser-Lui building, which houses Cole’s Chop House and Torc restaurants, SyWest Development – which owns the land where the Cinedome once stood – has lobbied for a location farther east on Pearl Street, closer to four-lane Soscol Avenue.

What site Napa ultimately chooses for its garage also could dictate its design, which it would have to adapt to a parcel’s size. Because a conventional drive-in structure requires a larger footprint, a garage built using only city-owned land – without acquiring land from SyWest – is more likely to be mechanized to save space, according to city senior planner Michael Walker.

Council members grappled with what kind of garage to pursue, with Scott Sedgley cautioning that a mechanized parking structure would be harder to convert into a building than a conventional garage should ride-sharing and driverless cars reduce parking demand in future decades. Peter Mott, meanwhile, wondered whether any parking without drive-in access would be up to the challenge of festivals, concerts and large-scale gatherings, at the nearby Oxbow Commons or elsewhere.

“It’s one thing to have a mechanical garage at a hotel with a valet,” he said. “If everyone gets out of some music event at the same time and 80 people all go out to their cars, I don’t see how that works.”

The Cinedome strategy favors housing construction on Napa Sanitation District-owned land north of Pearl Street, coupled with retail space and possibly office or residential development on the former theater property.

But while the master plan does not encourage adding a hotel to the neighborhood, one property owner asked Napa leaders not to rule one out in case the resulting revenue is needed for the whole project to be built – despite hotels’ unpopularity with critics blaming them for worsening traffic congestion and housing shortages.

“I’m not against housing, but we have a lot of housing (zoned) property that’s not being developed,” said Rebecca Lee, owner of the Kyser-Lui building. “Some people don’t understand the economics of having tourists coming to town and leaving their money in the community to be used for infrastructure. Once people understand the economics, hotels work, as long as there’s not a glut of them.”

Building only housing in the Cinedome neighborhood, she cautioned, risks turning many of the new dwellings into unlicensed lodgings rented to tourists through Airbnb-like services, with no room-tax money flowing back to the city.

Councilmember Jim Krider advised Napans that the master plan remains flexible in its land uses as well as its siting. “A hotel is not out of the realm of possibility, even if it’s not recommended in this report,” he said before the vote.

The Napa council’s acceptance of the Cinedome plan marked the final vote for both Mott and Krider. Mott is leaving after three terms and 12 years following his loss in the Nov. 6 election, and Krider – a council member from 2005 to 2012 before his appointment last year to replace the retired Juliana Inman – chose not to appear on this year’s ballot.

Social Services
Napa officials looking to ramp up homeless outreach as winter shelter opens

More than 175 homeless Napa County residents have been placed in permanent housing since July 2017, but local service providers are hoping to see that number climb with Thursday’s opening of Napa’s 50-bed winter shelter.

The winter shelter at the Napa Valley Expo on Third Street will take clients at 5 p.m. and 7 p.m., and they can stay until 7:30 a.m., said Emma Moyer, who manages housing programs for Abode Services, a Bay Area homelessness and housing services provider contracted by the county and city of Napa. Clients are then encouraged to head down to the South Napa Shelter, where breakfast is offered.

The schedule is no different than years past, but Moyer is hoping things will be different now that the homeless outreach team is better staffed.

“In the past, it’s really been just a room that people can sleep in,” she said. “We’re really hoping that with our outreach efforts … we’re going to be able to engage with folks in a way that we haven’t been able to in the past.”

There were 322 homeless residents of Napa County identified in a 2018 count, said Nui Bezaire, who coordinates homeless programs for the county, at a Wednesday night community meeting attended by a handful of residents. Twenty-three of the homeless locals contacted identified as veterans.

Most of Napa Valley’s homeless population is concentrated in the city of Napa because that’s where the most services are, said Brandon Gardner, who works in homeless outreach for Napa police. Another chunk of that population is in American Canyon, while a handful of people are scattered Upvalley.

The number of homeless individuals in Napa has gradually increased over the past seven years, but it’s still not as high as the Bay Area overall, said Mitch Wippern, a lead official with the county Health and Human Services Agency.

“We would much rather work with these folks, support them, house them, rather than have to deal with them in law enforcement capacities,” said Napa Police Lt. Brian Campagna, who led the presentation.

The city’s housing division is trying to allocate housing to homeless clients who receive funding from the federal Department of Housing and Urban Development. City and county officials are working with more than 30 Napa landlords to house homeless clients, Campagna said.

Eleven such new vouchers have been recently granted to locals. Another five were granted assistance via the department’s veterans assistance program.

Four low-income units in the Stoddard West Apartments and Napa Courtyard Apartments will be available next summer, and American Canyon’s low-income senior housing project Valley View will begin allowing residents to move in next month.

About 85 percent of clients who are in Napa’s housing programs have remained housed for at least six months, Bezaire said.

Officials are trying to reduce environmental impacts that homeless encampments may create by providing trash pickup and toilets, if necessary, he said. Half of shelter users have been homeless long-term, he said.

Abode Services encourages people who are experiencing homelessness or know someone who is to call 707-271-7818 for help.