Sonoma looks at limits on new wine tasting rooms

Sonoma, a city defined by wine and a birthplace of the California wine industry, is looking at putting the cork back into the bottle - at least when it comes to ever proliferating tasting rooms.

With an eye toward achieving more retail balance around the historic plaza, the Sonoma City Council is leaning toward imposing a moratorium on new tasting rooms until it can determine what, if any, measures are needed to better regulate them.

The move to get a better handle on tasting rooms and possibly limit their spread follows a burst in the number of new tasting facilities encircling the showcase plaza - growing from 13 five years ago to 23 today. Their proliferation has contributed to escalating rents for commercial spaces, making it difficult for other retailers to locate there, according to city planners. And it has raised concerns that the city is relying too much on tourism and wine tasting.

The debate over tasting rooms also has sharpened in other favorite Wine Country destinations such as Healdsburg, which has 34 tasting rooms, similar to the 32 or 33 Sonoma has citywide. The Healdsburg City Council recently agreed to codify a limit of one tasting room per block face - what until now was only an informal guideline.

“The let-the-market-decide, laissez faire attitude I think has been proven to not work. We need some directive on what would really be appropriate, especially for the plaza,” Sonoma resident Georgia Kelly told the council Monday in a study session dedicated to the topic. “We have mostly a mono crop. We want to support local agriculture, but also more than just grapes.”

A majority of the council agreed that new wine tasting rooms probably should be required to obtain a use permit from the Planning Commission. Currently, city officials say they typically don’t hear about a new wine tasting room until the owner comes in to get a business license.

Mayor Rachel Hundley said she wants to explore all options, including requiring a use permit, better dispersal of tasting rooms and potentially requiring that wine poured or sold be sourced from a certain percentage of Sonoma County grapes. She was joined by council members David Cook and Amy Harrington in agreeing that a temporary moratorium on new tasting rooms is desirable.

“A moratorium is important because the whole point is to stop a rush from coming in the door if everyone wants to save their place,” Hundley said, adding that it can be crafted in a way that doesn’t hurt people who are already in the process of establishing a tasting room.

The moratorium, which could be implemented at the Oct. 2 council meeting when the issue returns, might last six to eight months, according to Cook, who said it would “push the pause button.”

Wine industry advocates cautioned the council against being too heavy-handed with tasting rooms, which employ and serve many local residents, are mostly family-owned, and play a big role in selling wine directly to the consumer at a time when distribution channels have dried up.

“It’s an extremely competitive landscape,” said Maureen Cottingham, executive director for the Sonoma Valley Vintners and Growers Alliance. “The vast majority of wineries can’t get distribution.”

Councilman Gary Edwards said he has no interest in a moratorium and people should be able to do what they want with their property. The free market should determine the balance of businesses, he said, noting that at one time, in the late 1800s, there were 24 bars on the Sonoma Plaza and a couple of brothels.

“It was the Wild West,” he said. “The market does take care of itself. It always does in Sonoma.”

But Planning Director David Goodison noted there have been previous efforts to manage types of businesses around the plaza. In 2005, concerns over the large number of real estate offices prompted the City Council to subject ground floor offices to use permit review. In 2012, the City Council placed limitations on the location of chain stores, whether retail, restaurants or personal services.

During the recession and its aftermath, wine tasting rooms tended to displace office uses or fill long vacant commercial spaces. Now, city planners say wine tasting facilities are filling spaces that have traditionally been retail. Instead of being located in smaller shops, they are occupying larger and more prominent spots directly adjoining the plaza.

City officials said part of the reason commercial rents on the plaza have increased in recent years is the ability of tasting rooms to pay more than other retail uses.

In 2012, a survey found that of the 138 ground floor businesses around the plaza, 13 were wine tasting, or 9 percent. Currently the 23 wine tasting rooms around the plaza represent approximately 17 percent of the ground-floor businesses.

The number of wine bars - three - has remained the same. Those typically are defined as not associated with a particular winery and offering tastes or sales from multiple wineries.

Citywide, wine tasting facilities accounted for $134,000 in annual sales tax revenue compared to a total $773,000 in revenue for the downtown. Total sales tax revenues in the city are $2.7 million.

Police officials say tasting rooms are not typically associated with drunken driving violations or other calls for service, especially because most close early in the evening. But some speakers at Monday’s meeting decried drunken behavior that they’ve seen, or said the number of wine tasting rooms sends a message that the town supports a lot of drinking.

“I’m not teetotaler, but there’s a lot more wanton drunkenness around town,” said resident Chris Petlock.

You can reach Staff Writer Clark Mason at 707-521-5214 or clark.mason@pressdemocrat.com.