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very public about the process of opening a brewery, and we talked on Monday about how the city’s zoning ordinance affected him, and other issues plaguing an industry that’s earned the city a lot of national kudos in recent years.
One of the conclusions by the author of this study on the local beer industry’s economic impact is that the city’s land use policies could threaten the industry’s medium- or long-term growth. Having just gone through the painstaking process of opening a brewery, do you agree with the premise that there are some zoning and land-use related concerns facing breweries?
Kind of, but I don’t think the zoning and land use issues are specific to breweries. Basically, the city needs to decide in a holistic way how it wants to integrate manufacturing into its future. My brewery is medium-sized, so when I decided that I wanted to be located somewhere south of (Interstate 8) and west of (Interstate 15), that essentially left me with two areas to look: Barrio Logan and Sports Arena/Point Loma. I looked at virtually every available building in those areas, and only a couple were ruled out due to zoning.
A far, far greater problem was finding a well-maintained, suitable building; all of the capital in industrial real estate development has gone to faraway business parks, not centrally located urban areas. It seems like a lot of urban industrial landlords are just waiting for redevelopment to sweep through.
If I’m reading you right, you’re basically saying if there is a land use-related problem facing brewers, it isn’t really zoning-based, or if there is a zoning-related problem, the effect is relatively small. If that’s the case, what do you make of the two would-be solutions that were brought up? One is coming up with brewery-specific zoning categories, and the other is trying to achieve the same idea through conditional-use permits.
For me, zoning wasn’t my biggest challenge. It’s not like there’s a million buildings in San Diego that would make fantastic production breweries if only the zoning were more flexible. The generally poor quality and high cost of urban industrial stock was the real challenge.
Nanobreweries are a different story, though. What we’re seeing in the craft beer industry is a shift in the business model: Over-the-counter sales are now a huge part of the game plan for new breweries, mine included. So for those tiny operations that are trying to convert storefronts into miniature breweries, they may be running into more issues with zoning.
The proposed solutions both strike me as somewhat inadequate. The process of getting a conditional-use permit is lengthy, expensive and onerous, which is why everyone I know in the industry avoids them like the plague. A brewery-specific zoning category would help resolve some issues — like the one addressed recently by the City Council — but as you pointed out, the process would involve a lot of red tape.
In that case, what are some of the things you came up against during the process of opening that the city conceivably could address, if in fact it decided fostering the industry was a priority in the first place?
Some commenters on my initial story argued the whole discussion is misguided, because just look how well the industry is doing given present conditions.
The commenters raise a valid point, but what they’re missing is that there are some things that we’re thriving in spite of. The biggest challenge I’ve faced was from the San Diego Police Department. The vice squad files a protest against every single new alcohol license in the city in order to dictate restrictions on the license. I don’t believe alcohol licenses should be issued willy-nilly, but unfortunately, their approach is unproductive and results in lengthy delays.
They dream up restrictions without consulting the industry — who shares many of their goals — and the results are absurd.
For instance, I
can’t sell any single bottles less than 22 oz. They said this was to prevent me from selling my “cheapest container,” which would presumably end up in a brown paper bag on the street. But restricting the size of the bottles doesn’t accomplish that at all. I can lawfully sell 40 oz. bottles of malt liquor for $1; I just can’t put my very rare, very expensive barrel-aged high-alcohol beers in a 12 oz. bottle to sell in my tasting room. It’s inane and it doesn’t serve any purpose other than to make it harder to operate and delay the issuing of new brewery licenses.
That’s just one example among many; other breweries have had to deal with far more restrictive conditions that have threatened their ability to operate.
So if city leaders decided they wanted to take a look at issues facing local brewers, you think that would be a better starting place than tinkering with the zoning ordinance?
I think there’s a variety of smaller issues that could be addressed easily, but if the concern is about the medium- to long-range health of the local industry, then a big-picture approach is needed. Removing the petty, ill-conceived obstructions to opening would be a good start, but if the city decides it wants production breweries in the urban core, then it’ll need to help supply adequate real estate — perhaps by incentivizing the rehabilitation of industrial property for specific uses, like breweries, which is where zoning could come into play.
Disclosure: I contributed to Modern Times Beer’s Kickstarter campaign.
I’m Andrew Keatts, a reporter for Voice of San Diego. Please contact me if you’d like at email@example.com or 619.325.0529 and follow me on Twitter:
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Beer Policy, Land Use, Neighborhood Growth, News, Share