Washoe Wine Pioneers Say Business License Is Only Half the Battle

If you can get them to sit still, Washoe County’s wine producers will share their excitement at winning the legal right to open wineries with on-site tasting rooms. They’re building a business sector that, until two years ago, was forbidden by law in the state’s major population centers. Their vision is to make a place for Nevada the booming domestic wine market.

In 2015, the state legislature lifted a prohibition on commercial wineries in Washoe and Clark counties. Soon, there were urban wineries on the drawing board in the neighborhoods where where craft distillers and brewers had a head start operating legally.

The uphill climb was creating an ordinance for Washoe’s unincorporated areas, where residential zoning restrictions would prevent vineyards from becoming destinations for tastings and special events.

Urban or rural, legal doesn’t mean simple. The vintners have hoops to jump at every level of government. First stop is a federal agency called the Alcohol and Tobacco Tax and Trade Bureau, which wants site plans, expected case production, and other details that may not yet be known. Next, the state issues a liquor license, after gathering the data it will use to tax them. For county and city business licenses, the applicant must invite planners, safety inspectors, and water officials to examine the nuts and bolts of the operation.

For wine commerce to achieve its regional potential, there’s more lawmaking to be done. Some say the permitting path needs to be smoothed, and there are more state-level restrictions that need to be lifted. (See Wine Coalition 2017 legislative agenda on the GBN home page.)

Jason Schultz hopes to transform his vineyard from an expensive hobby to a profitable business. Schultz was lured to winemaking after some tasting trips to wineries in California’s mountain counties. As his interest deepened, those trips became an occasion to chat up winery owners about tending the vines.

After state law changed, his trips became became legislative fact-finding missions, as he helped long-time members of northern Nevada’s winemaking community pull together a regulatory proposal for Washoe County. Although Nevada’s rural counties had regulations already on the books for the state’s four legal wineries, the group saw value in the combined experience of hundreds of California wine producers who knew what worked.

“Nevada leaders and regulators have much to understand about how a successful wine industry operates,” Schultz said.

Conceding that Washoe shouldn’t try to be Napa or Sonnoma, they looked for guidance in Placer, El Dorado, Amador, Calaveras and Nevada Counties.

Schultz says Washoe resisted wholesale adoption of those schemes, so the next task was molding them into something that works here. Washoe wanted special use permits, which require a set of documents so demanding that there’s an expensive consulting sector to help complete them.

Schultz and the wine group set about educating county planners and commissioners on winery economics. They had to differentiate the hobbyists, who weren’t likely to turn professional, from the those with potential to push Nevada into the the industry’s mainstream. The former would be inhibited by regulation. The latter needed conditions that foster financial success.

Senior planner Chad Giesinger understood they wanted unprecedented commercial activity in the unincorporated areas, where the zoning is both agricultural and residential.

“To really provide a growth opportunity for the nascent industry in nothern Nevada, they’d need to locate beyond… the urban core,” Giesinger said. But the county code that permitted “liquor manufacturing” was confined to commercial or industrial zoning.

The most lucrative setting for wine entrepreneurs brings tasting room traffic to the vineyard. A full-fledged rural winery will host weddings, food and wine pairings, and other special events. They’re likely on tracts with considerable space between the commercial facility and nearby residents. Nonetheless, such activity was forbidden in residential zones.

“You’re really conducting a commercial bar on your residential property,” Giesinger said. In the end, he crafted a layered permitting system, with options for a spectrum of activity.

It was the economic development promise that secured County Commission approval. Schultz says the commissioners got it when the group started discussing large-scale wine production.

“We’re starting to talk about 10, 20, 30 tons of grapes that you’re shipping in,” Schultz said. “We’re talking about having tanks that are five, six hundred gallons. We’re talking about putting out thousands of cases of wine. When you put that all together it’s more than a lot of people were thinking.”

“There really are some true opportunities for growing a new industry in here Nevada,” said Commissioner Marsha Berkbigler, who has been conversing with industry advocates since voting to support the ordinance last fall.

Schultz says the next step is figuring out how to streamline the process, given specific challenges on individual winery properties. Water supply, for instance, is a prominent concern in commercial licensing because water has multiple implications, for fire safety and for public health. Proximity to water – or the absence of a ready water supply – introduces start-up cost variables that could lock a small producer out of the business.

Legal doesn’t mean simple.

“The to-do list will be ever evolving as we fight for change and discover new requirements, given individual circumstances” Schultz said. He’s ready for the next round.

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1 Comment

  1. JES on January 26, 2017 at 9:21 pm

    Well done SS