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Sonoma’s city council imposes moratorium on new tasting rooms

“What this does is push the pause button, it stops the world where we are right now,” said Sonoma City Manager Cathy Capriola.

She was referring to an urgency ordinance imposing a moratorium on wine tasting facilities in the Plaza Retail Overlay District, a measure that on Monday, Dec. 4, was finally approved by the City Council following a two-month delay.

The City held a study session on tasting rooms on Sept. 18, which included public input and presentations from the Sonoma Valley Visitors Bureau among others. It was that study session the resulted in the call for a moratorium, to allow staff time to evaluate the complex issue.

The urgency ordinance – a measure that becomes effective immediately, without the usual 30-day wait, but which required a 4/5 “supermajority” vote from the City Council – passed 4-0, with Councilmember Gary Edwards recusing himself due to the fact that he owns property within 500 feet of the Plaza area affected by the moratorium.

The moratorium, as passed, calls for a nine-month suspension of new tasting rooms and wine bars allowed in the Plaza Retail Overlay District. When the moratorium expires next September, the Council is expected to consider four aspects of the issue:

Whether or not a Conditional Use Permit would be required for new tasting rooms – it is not at present;

Favoring local sourcing of Sonoma Valley-grown wines;

Requiring a retail component in a tasting room, which would impose sales tax on any transactions;

Evaluating policies related to controlling the concentration of wine-related business in the Plaza Retail District.

The moratorium does not apply to the five wine-related businesses already in the process of applying for permits.

Sonoma Planning Director David Goodison said that no additional businesses had applied for permits in the intervening two months, possibly due to the stress that the fire emergency put on the business climate.

“The only reason to adopt a moratorium in the first place is as a stop-gap measure, to allow yourself the opportunity to develop more permanent regulations that address the issues that underlie the reasons you created the moratorium,” said Goodison.

The staff report for the Dec. 4 meeting included sales tax information which showed that the city’s total sales tax, which includes tasting fees and on-site retail sales among other sources, generated $2.7 million between April 2016 and March 2017. One point of interest involves sales tax – and whether it is applied to wine club memberships, which might depend on whether the first club allotment is picked up at the tasting room or shipped to the club member; and whether or not that club member lives out-of-state, which would mean they are not subject to California sales tax.

The moratorium on new tasting rooms follows public concern over the significant growth in such businesses, which have increased from 13 to 23 in the past five years in the Plaza Retail Overlay District, which includes the Plaza and roughly a half-block in each direction (excluding State Parks property). There are 33 wine-tasting businesses altogether in the wider downtown area.

With Edwards recused, the remaining four council members gave personal reasons for their vote.

“I feel like the Sonoma Valley wine industry, which is the only wine industry I care about, is already hurting,” said Councilmember Rachel Hundley. “I don’t want to do anything that will essentially kick them while they’re down.” But she decided to approve the measure with special concern over the question of the local-sourcing aspect of new Sonoma tasting rooms.

Councilmember David Cook took a different approach to the local sourcing issue.

“It gets convoluted,” he said, noting that many Valley wineries often get their grapes from non-Valley vineyards (and non-Valley wineries sometimes use Valley grapes).

Harrington’s own support was motivated in part by the opportunity to require conditional use permits for the businesses.

“Right now we don’t have a way of being notified of a new wine-tasting bar. No use permit, nothing like that,” she said. “I think we need to fix that.”

Mayor Madolyn Agrimonti recalled a “very humble” young man recently appealing to the Council to allow a tasting room since his small winery had no other visitor services.

“But I think it’s grown far beyond that humble request in the beginning,” she said, expressing interest in working out the sales tax questions that to this point are unresolved.

Goodison promised that the city staff over the next few months would “expeditiously” review the options on controlling tasting rooms in Sonoma. “It will be an accelerated process,” he said. “We don’t want this to drag on.”

Contact Christian at christian.kallen@sonomanews.com.