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HomeMy WebLinkAbout5.0_Initiate Code Amendment to Allow Craft Brewery Amendment_PA2017-181F''�WPOR' CITY OF NEWPORT BEACH o PLANNING COMMISSION STAFF REPORT u i October 5, 2017 c��aoQN�P Agenda Item No. 5 SUBJECT: Initiate Code Amendment to Allow Craft Brewery Amendment (PA2017-181) SITE LOCATION: Industrial Zoned Property APPLICANT: City of Newport Beach OWNER: Several (39 Properties Total) PLANNER: James Campbell, Principal Planner 949-644-3210, jcampbell@newportbeachca.gov PROJECT SUMMARY Initiation of Potential Zoning Code Amendment to allow breweries with tasting rooms subject to discretionary review on a case-by-case basis in the Industrial (IG) zone. The Planning Commission may initiate a Zoning Code amendment pursuant to Section 20.66.020 of the Municipal Code. Once initiated, the amendment will be prepared with subsequent public hearings before the Planning Commission and City Council. RECOMMENDATION Initiate an amendment to the Zoning Code to allow breweries with tasting rooms subject to discretionary review. DISCUSSION The craft beer industry has expanded quite a bit in the last decade. A local brewer has approached staff seeking a potential location in the West Newport -Mesa industrial area near Costa Mesa. While a brewery is an allowed use in the IG zone under the land use definition "food processing," the Zoning Code does not allow on-site consumption of alcohol (aka tasting rooms). Staff research supports the point that tasting rooms are an important component of the business model. The amendment, if initiated, would provide appropriate operational limitations including the size of the brewery and tasting room, hours of operation, provision of food service, and parking. The amendment would require discretionary review through a minor or conditional use permit unless it is determined that operational limits alone could avoid potential detrimental conditions. Initial conversations with the Newport Beach Police Department suggest that law enforcement issues and nuisances can be properly addressed with operational regulations and/or a minor or conditional use permit. 1 Craft Brewery Amendment Planning Commission, October 5, 2017 Page 2 rigure is coning map tiu ims in aarK Costa Mesa I I I s Carden Hall 1-1 Costa Mesa ure z: Air rnoto pu iots ounmea in —2 9 Newpw! O o� mo o���•��"'°�'•rc:ui'wa.�°..nwp�>�".".�+"e"":r :,w. �� Lzn orne sr.v ad'd off^ FM ptagM.VaweOMFb FKK wv.Wk.mLLmn �i Sa � ure z: Air rnoto pu iots ounmea in —2 9 Craft Brewery Amendment Planning Commission, October 5, 2017 Page 3 Should the Planning Commission initiate the amendment, staff will reach out to property owners in the affected area, prepare a draft of the amendment, and schedule future public hearings before the Planning Commission and City Council. Initiation of the process does not have any binding effect on future decisions. The amendment may ultimately change based upon additional analysis, public outreach, or direction from the Planning Commission and City Council. Alternatives The Commission can decline initiation at this time or request City Council consideration. Environmental Review The Planning Commission's initiation of a zoning amendment is exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 15262 (Feasibility and Planning Studies) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. This meeting will not take final action on the amendment, and the initiation of the amendment does not have any legally binding effect upon future consideration of the amendment itself. The City will conduct an environmental review prior to the consideration and potential approval of the amendment. Public Notice The Municipal Code does not require notice for the initiation of amendments. Staff mailed a courtesy notice to all property owners of all IG zoned lots. Additionally, this item appeared on the agenda for this meeting, which was posted at City Hall and on the City website. Should the Planning Commission initiate the amendment, public notice will be provided for subsequent public hearings before the Planning Commission and City Council as required by the Municipal Code. Prepared by: Submitted by: W co� C��dy Jawks Campbell, Principal Plariner Br n a WisnesI6, ICP, Deputy Director ATTACHMENT PC -1 Letter from Justin Miller of Gunwhale Ales 3 Attachment PC 1 Letter from Justin Miller of Gunwhale Ales 4 Gunwhale Ales 2960 Randolph Ave, Costa Mesa 92626 949.903.4237 info@gunwhaleales.com http://www.gunwhaleales.com SEPTEMBER 20, 2017 City of Newport Beach 100 Civic Center Drive, Newport Beach To whom it may concern: This letter is to act as a proposal to open a craft brewery in Newport Beach. Please see below for the details of our plan. PROJECT DESCRIPTION Supply House, LLC (dba "Gunwhale Ales") will be operating a production craft brewery of approximately 4000 sq it, including an ancillary retail space to permit the sale of beer brewed by us for both on-site and off-site consumption. Gunwhale Ales proposes the manufacturing of small batch artisanal ales subject to federal approval through the TTB as well as through the State Alcoholic Beverage Control (ABC) License Type 23 (Small Beer Manufacturer). We will be occupying a 4000 sq Ft industrial building. The applicants are Justin Miller, JT Wallace, and Robert Fitzgerald, representing Supply House, LLC as managing members. APPLICATION SUMMARY Gunwhale Ales currently is a licensed craft brewery in Costa Mesa, specializing in the making and selling of outstanding "farmhouse" style ales. Our beer strikes a balance between the raw, wild spirit of European farmhouse brewing, and the pioneering hop forward styles of California. We have an obsession with yeast driven Saisons, hop forward IPAs, and other rustic, wild and sour beers. Gunwhale beers reflect the culinary and cultural heritage of the West Coast. This gives our beers uncommon qualities that are both surprisingly delicate and nuanced, yet refined and robust in their simplicity. We call them "Coastal Ales'. Gunwhale Ales, still in its first year of business, has already been named Top S breweries in Orange County, by both the OC Register as well as the OC Weekly. We are a premium but approachable brand, and we aim to make a world class product to be distributed bearing the City of Newport Beach on our packaging. Our traction has led us to a quick expansion of our production, and we look forward to operating as what would be Newport Beach's first production brewery. 5 We will be brewing 15 Barrel batches of artisan beer, using a state of the art brewhouse. We then inoculate with yeast and bacteria to induce fermentation in stainless steel and wood vessels. After one to two weeks, the wort becomes beer without further intervention. We will also produce the wort (a beer intermediate) for our Costa Mesa location, which will be transported in a stainless steel tank to that facility. After fermentation, we will package and store the beer, as well as engage in the production of any aging, blending, and conditioning required. These processes can require little time at all to multiple years of aging, depending on the style. We repeat this process, and the beer will be inspected weekly to ensure quality and to decide when the product is ready for service. When the beer is properly aged, we may blend and package into bottles or kegs, and store them until pending sale. Brewing, fermentation, barrel tending, blending, packaging, and distribution will occur during normal business hours. The finished and packaged beer will be sold in the tasting room, for both on-site and off-site consumption. It will also be sold through self -distribution to licensed retailers in the area. Gunwhale Ales include a variety of styles, with flavors ranging from rustic to dry to roasty to funky and sour. The experience of visiting breweries, enjoying product, talking with brewers, and taking home packaged beer has proven to be a popular model for "beer geeks" and regular customers alike. These customers tend to become advocates for brands they like, sharing enthusiasm with their friends. Due to premium pricing ($5-8 per 12oz pour and $10-20 per 750ml bottle), our customers are not the typical bar drinker. Unfortunately, craft brewers receive less than half of the retail value of their beer when they use traditional methods of distribution. Therefore, a retail experience of the brand and the resulting sales contribute crucial revenue with a high profit margin which are necessary for a brewery's survival. For these reasons, the ability to sell beer directly to customers for on-site consumption is integral to the success and growth of Gunwhale Ales. This of course is akin to similar beverage manufacturers such as coffee and wine, who also offer a tasting experience. W ff Gunwhale Ales will be managed by its three co-founders, Justin Miller, JT Wallace, and Robert Fitzgerald, all avid beer - loving entrepreneurs who live very nearby in Newport Heights neighborhood. Besides the success of Gunwhale's first location, the management brings a strong mix of experience in the food/ beverage industry, with manufacturing, design, and marketing skills to ensure overall success of the venture. Brewing operations and management of the tasting room will be directed by Justin Miller, experienced Executive Chef of Costa Mesa's Pizzeria Ortica (with award- winning chef David Myers). The facility, equipment, and maintenance will be overlooked by Director of Production JT Wallace, a veteran in construction and manufacturing. Robert Fitzgerald, a Certified Cicerone OO (beer sommelier) and artist / designer is Director of Sales & Marketing, manages the brand and its distribution. We have contracted with Hauck Architecture and CLTVT, top beer industry architects and consultants, for the buildout of a facility. Gunwhale Ales sees beer in a larger context. We have a goal of building our brand, but we really hope to foster a community and a culture. We mean this in the same way that food, music, art, and design are created, by the artisan Page 2 Id and shared with the masses. We see a lack of local breweries and venues to experience the resurgence of craft beer, but furthermore, a lack of brands that speak to the both the farming history of Orange County, to the coastal lifestyle, and to complex but approachable beer styles. Gunwhale Ales will be anchored by the tasting room that is a place that not just offers better beer product, but an environment that strives to incubate meaningful interaction and ideas. The tasting room will be a crucial sales tool, allowing access to the full experience of the brand. From our experience with our current location, it also acts very much as a "third place" for local residents, workers, and visitors. Instead of adding to the noise, we will promote collaboration, constructive discourse, and transparency, with hopes to bring along the community on our beer making adventure. We hope we can do our part in affecting the culture around food and beverage, in raising the bar for sustainable and premium quality and in responsible consumption. This is a culture that celebrates independence and encourages community, and we hope to make the community of Newport Beach our primary facility and home. 2IT63 r1111.11 Our project would ideally be located at a property with the zone designation IG (General Industrial District) and has a general plan land use designation of light manufacturing with ancillary retail use. The area surrounding this property consists of light industrial and manufacturing uses as well as a few office and commercial uses. The site contains an existing 4000 sq ft steel industrial building with surface parking. We propose to use the 4000 sq ft stand alone building as a site for a production craft brewery. Breweries are already permitted for use in the Industrial zoned district. In conjunction with the manufacturing of artisan beer, we propose a floor plan that includes 480 sq. ft tasting room area indoors and outdoor patio space of 1550 sq ft. This tasting area will include cold storage and a tasting bar and seating. The tasting area will be considered ancillary to the primary use of manufacturing, but will be crucial to expose customers to a new brand and to create demand for a product (local craft beer) that is underserved in Newport Beach and in Orange County in general. The outdoor patio space will be a renovation to the exterior of the building (for which we will seek all necessary planning and construction permits). The patio space will be a partially covered, and will have seating for tasting. It will have its own gated entrance, cold storage and service area. It will also be fenced in, and will have access (ADA included of course. The design and renovations of our project will be similar to other quality renovations in this zone due to recent market changes in the area and will meet all requirements put forth by the General Plan. Both outdoor spaces will be partially covered patio space, enclosed in adherence to all ABC regulations. The ABC License Type 23 allows for both onsite consumption (tasting) and off -premise consumption (packaged beer to go). No food service is to be provided by the brewery, however, we request the ability to program food trucks or delivery of food for on-site consumption from nearby businesses. We also would like to arrange food pairings or private beer/culinary experiences with local commercial kitchens, catering companies, and nearby restaurants. We see this as a unique and elevated neighborhood experience for Newport Beach's craft beer aficionados, as well as a draw to those who would travel further for the unique type of beer that Gunwhale produces. We believe this use will complement the strategy in the General Plan by revitalizing the area through creative industrial uses that serve the community without exceeding the development capacity of the General Plan. The light manufacturing at our brewery will meet the objective of jobs generation and economic development while also contributing to improve urban form and community character. Even as the retail component is ancillary, the proposed Page 3 7 use is compatible with other existing food/beverage/retail concepts, especially targeting artists, designers, craftspeople, and young professionals that currently live and work in the Newport Beach area. We believe Gunwhale Ales will compliment other nearby concepts to prevent people from leaving the area for cultural, retail and entertainment purposes. We also believe the City of Newport Beach (which is at virtual full development) can begin to compete in the craft beer boom that other cities are enjoying through the synergy of similar entrepreneurial ventures. We believe Gunwhale Ales will distinguish and contribute to Newport Beach's livability, vitality, and image by improving the retail options in order to serve the neighborhood, but it also brings well -paying manufacturing jobs, provides a gathering place around the idea of artisanal food and beverage. The brewery will contribute important tax revenue to the City of Newport Beach, and we will be better able to serve the many business to business partnerships with Newport Beach retail establishments that already carry our product, and who will be even more proud to carry the highest quality and locally made products. Gunwhale's management prides itself on local ties, and we can assure the City that our business activity which is also social, will be in balance with the community it serves and neighbors and considers its impact on natural resources and open spaces. The proposed hours of operation for the small beer manufacturer (Type 23) are from 5:00 am to 12:00 am daily. We propose the hours of operation for the retail indoor/outdoor tasting room as: Monday through Friday 4:00 pm to 12:00 am and Saturday and Sunday 11:00 am to 12:00 am. The proposed hours of operation are compatible with what has been approved at many brewery and winery tasting rooms around the County. The proposed site will comply with access and parking needs, as stated by the City Code. There will be low parking demand during the day since the facility will be used mostly for brewing and will be operated by a few employees (3 production employees early in the day and 2-3 sales staff in the evening). We plan to employ security during later hours in the tasting room if ever necessary. Thank you for your consideration. Justin Miller JT Wallace Robert Fitzgerald Gunwhale Ales Co -Founders Page 4 N Planning Commission - October 5, 2017 Item No. 5a Additional Materials Presented at Meeting Initiate Code Amendment to Allow Creaft Brewery Amendment (PA2017-181) Planning Commission - October 5, 2017 Item No. 5a Additional Materials Presented at Meeting inmate -oae,vmenamem to vdiow ureart a NO The craft brewing industry has expanded incredibly in the last few years CALIFORNIA 2.2 Breweries per Capita* (RANKS 23RD) •per 100.000 21• Adults NUMBER OF BREWERIES PER YEAR Boo B00 aoo 200 2011 2012 2013 2014 2015 2016 Source: the Brewers Association, a 5ol(c)(6) not-for-profit trade association. Community Development Department October 5, 207.7 N 7-181) 7,345262.73 Million Economic Impact Impact per Capita ECONOMIC IMPACT (RANKS IST) (RANKS 27TH) MCI 392959221 3.7 Barrels of Craft Beer Gallons per 21, Adult PRODUCTION Produced per Year )RANKS 15tH) (RANKS 2ND) NUMBER OF BREWERIES PER YEAR Boo B00 aoo 200 2011 2012 2013 2014 2015 2016 Source: the Brewers Association, a 5ol(c)(6) not-for-profit trade association. Community Development Department October 5, 207.7 N 7-181) Planning Commission - October 5, 2017 Item No. 5a Additional Materials Presented at Meeting inmate _oae ,vmenamem to miiow ureart Woreweries 'A • Many communities have embraced the industry without significant issues: San Diego, Los Angeles, Anaheim, Costa Mesa, San Clemente... • Newport Beach Zoning prohibits on-site consumption of alcoholic beverages at retail establishments • City allows beer manufacturing in the industrial zone (allowed use) • City allows brewing at restaurants (i.e. NB Brewing Company) • Modern breweries are manufacturing and retail establishments • Gunwhale Ales, operating in Costa Mesa, seeks a second location Community Development Department October 5, 207.7 3 7-181) Planning Commission - October 5, 2017 Item No. 5a Additional Materials Presented at Meeting Initiate Code Amendment to Allow Creaft Brewery Amendment (PA2017-181) Woreweries 'A • Question, should the City amend the Zoning Code to allow on-site consumption of alcohol at retail establishments? • Breweries typically locate in industrial areas (lower cost) • Breweries typically have tasting rooms (important revenue source) • Brewpubs operate slightly differently (more like restaurants) • Breweries produce beer from raw ingredients (cooking & fermentation) • Breweries condition the product, bottle and can it, they fill kegs • Most beer is sold wholesale to restaurants, bars and retail stores Community Development Department October 5, 2017 4 Planning Commission - October 5, 2017 Item No. 5a Additional Materials Presented at Meeting inmate _oae ,vmenamem to miiow ureart woreweries 'A What typically happens in tasting or "tap" rooms • Beer "tasting" and consumption • Retail sales of beer for off-site consumption • Some have food (kitchen or periodic food trucks) and some have snacks only • Many have games (board games, jenga, corn hole, etc.) • Many have video monitors • Some have live entertainment • Most operate with limited hours, some do not Community Development Department October 5, 207.7 7-181) Planning Commission - October 5, 2017 Item No. 5a Additional Materials Presented at Meeting inmate -oae,vmenamem to miiow ureart a 10 Amendment Scope • Create land use definitions and development standards • Industrial zone only • Limit the size of the tasting room • Limit hours of operation — no late hours • Require responsible alcohol sales training • Address parking (shared parking is common) • Require discretionary review— MUP or CUP What about wine tasting? 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Felt dwnow in nseM GIS N.aor mcc]O+a wNoeaPMSJn E.m Xr<p�grvxprpe�NPPm Community Development Department October 5, 2017 w Ifi TIT IT OM05 FAR 7 7-181) a 10 Process Planning Commission - October 5, 2017 Item No. 5a Additional Materials Presented at Meeting Initiate Code Amendment to Allow Creaft Brewery Amendment (PA2017-181) • If initiated, the amendment becomes a work priority • Initiation does not bind future decisions • Staff would prepare draft code language • Future public hearings: Planning Commission & City Council • 4-6 months to complete Planning Commission could seek City Council input at this stage Community Development Department October 5, 2017 8