When It's Easier to Just Open a Restaurant - Voice of San Diego

Beer

When It's Easier to Just Open a Restaurant

Told it would need to acquire a conditional-use permit to open a small tasting room, Ballast Point decided to open a restaurant instead.

This spring, Ballast Point announced it was opening a small tasting room in Little Italy.

The plan was to install a scaled-down brewing system that would allow for experimental pilot batches of one-off beers, and serve them in a neighborhood-friendly tasting room that would also fill growlers of the brewery’s regular line-up.

But a month later, the brewery said it was hiring a new executive chef, marking a left turn toward a full-service restaurant.

“Plans did change,” said Jack White, Ballast Point CEO and founder. “Our initial idea was to do a smaller, three- to five-barrel system, to focus on specialty beers and the creative side of operation, staying true to our roots of small-batch beers and having fun with basically an accelerated version of home-brewing. And of course we wanted to do a tasting bar.”

So how did a small tasting room evolve into a full-scale restaurant?

In short, the land use regulations forced Ballast Point’s hand.

“Due to city permitting issues, we weren’t able to serve just beer or any alcohol without also serving made-to-order food, unless we went through a conditional-use permit process,” White said.

A conditional-use permit is basically just what it sounds like: It lets a business use the property in a way other than what it’s zoned for, with certain conditions — a made-to-order exception.

Some local planning professionals see such permits as a way to incentivize breweries to locate in dense urban areas.

But since granting a conditional-use permit means granting an exception, the surrounding community is invited into the process to voice concerns.

The uncertainty of inviting in outside involvement scared off Ballast Point. Both the timeline and the end result would be unpredictable if it pursued the conditional-use permit.

Ultimately, the Planning Commission is the decider on these types of permits, except in the downtown area, where Civic San Diego, a nonprofit entity given permitting authority by the city, makes the final call. But businesses are encouraged to go before local planning groups, to hold a discussion that informs the final decision.

“We had never gone through it, but we hear it takes a lot longer, there’s a lot more restrictions, and people who weigh in on the details could stifle creativity and the idea for the concept,” White said. “We figured if we’re going to do a restaurant someday, we might as well do it now.”

Within the downtown neighborhoods controlled by Civic San Diego, a tasting room that would allow for off-site sales — like growler fills and bottles for sale — requires a conditional-use permit, but a restaurant doesn’t.

So a company can basically achieve its initial goal as far as the beer-side of the operation is concerned, so long as it adds a restaurant to go along with it.

“Besides the fee that comes with it, a conditional-use permit is a three- to nine-month process, if not longer,” said Scott Cairns, vice president at Smith Consulting, which advised Ballast Point to avoid the special permit. “They could be open and operating successfully long before a permit was even approved.”

Ballast Point’s decision-making calculus wouldn’t hold true for every brewery.

The company’s long-term vision eventually called for a restaurant anyway, so it just accelerated that move. It’s unlikely that missing out on nine months of sales and paying a permit fee would justify hiring a kitchen and wait staff, building out a professional-level kitchen, finding vendors to fill out a menu and all the rest that comes with opening a restaurant, for a company that never wanted one in the first place.

A rendering of Ballast Point's Little Italy restaurant.
A rendering of Ballast Point’s Little Italy restaurant.

And Ballast Point, with its original location in Linda Vista, its production facility in Scripps Ranch and a new beer garden inside Petco Park, can certainly handle paying the difference up front, which might not be an option for every brewery.

But Cairns said conditional-use permits are unpredictable enough to be avoided if possible.

“We’ve done conditional permits for things we thought would be a no-brainer that became a nightmare,” he said. “It opens everything up to more scrutiny. And it becomes an emotional issue. That’s what scares everyone — that it’ll go into emotions instead of logic. Community planning groups, and subgroups of that, like neighborhood groups, they can become very emotional. Everybody has a button.”

One of the city’s new planning commissioners, Anthony Wagner, will take to the citywide commission his experience as part of those local groups. He’s president of the Allied Gardens Community Council and chairman of the Navajo Community Planners.

He believes conditional-use permits should be a welcomed tool as breweries continue to grow.

“We welcome you, we just want to have a right to discuss how you’ll operate as a good neighbor,” he said. “Additional operating conditions could make them a good neighbor, and allow them to be profitable.”

Wagner suggested a means of putting together conditional-use permits for the industry.

“If you had a local control ordinance that said, we welcome you in these mixed-use areas, to expand the eclectic tastes of a neighborhood, but you have these operating conditions,” he said. “We wouldn’t say whether you can paint your walls blue, but it would define the relationship between a consumer that goes into your establishment, and the effect on public health in the community. And then the community would have the right to control nuisance activity in and around a problematic outlet.”

Correction: This post has been corrected to reflect that Civic San Diego had final authority on conditional use permits in the downtown area.

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