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Update: After this story published, state officials contacted the city to inform them a state law had recently taken effect that closes the loophole allowing tasting rooms to open near residential areas without much review. That renders the city’s planned regulation moot.
The trend of craft beer tasting rooms popping up around town could be slowing down soon.
San Diego is trying to change its development code to make those spots get an additional permit that would allow the community to weigh in.
Getting that permit could take around six months, according to the city’s director of development services, though that timeline will vary based on how the community reacts to each request.
Right now, full-scale breweries can get a permit to sell alcohol at a second location without going through the same review process required for their initial permit. That means they can sidestep community feedback that often leads to certain restrictions on things like hours of operation.
For a second location like a tasting room, breweries get a duplicate permit issued almost right away, though they do have to post a notice on the window for a month.
Breweries like Modern Times Beer, Stone Brewing Co., Twisted Manzanita Ales, Belching Beaver and others have taken advantage of the state alcohol law to open standalone tasting stores in popular commercial areas, while their main production facilities and original tasting rooms are tucked into hidden-away industrial parks.
It lets the breweries reach more people, and there’s considerable financial incentive to selling your product directly to consumers, cutting out distributors and bars or liquor stores and pocketing the proceeds. But the additional licenses are technically considered extensions of the initial license that allows them to brew in the first place, meaning any problems at the second locations could imperil their entire business.
But the city’s trying to put an end to that arrangement.
The city’s going through a regular update of its land development code, and wants to add a provision that these types of tasting rooms would need an additional permit before opening, even if they can technically get their liquor license right away.
“The idea here is to provide a public review that otherwise wouldn’t be provided for this type of use,” said Bob Vacchi, director of development services. “I’d hesitate to call it a loophole, but we write regulations and try to anticipate the overall effect, and sometimes there’s an unintended consequence. Here, that is that places could set up by residential areas, by right, with no review.”
He said the proposed change, which could come before the City Council by April, wasn’t motivated by issues with a particular location, or specific concerns voiced by residents. It was just a matter discovered by city staff when it worked on an amendment to the downtown development regulations to help the craft beer industry.
It also clarifies that a brewery’s accessory tasting room — the ones at the main brewing location — can open without any additional review in industrial areas.
The rule change, while potentially troublesome to some breweries, won’t shut the door on new tasting rooms.
Jacob McKean, owner of Modern Times, said it was nice that the lack of review got the locations opened a month earlier, but the real motivation was the potential profit margins of having an additional store selling your own product at retail prices.
But even with six months of potential review to secure the new required permit, plenty of brewers will still be interested in cashing in on that opportunity.
Meanwhile, the city has agreed in part to subsidize expansions for Ballast Point Brewing Company and AleSmith Brewing Company and has otherwise pledged to support the growing industry.
But Vacchi said the changes to tasting rooms don’t factor into that conversation.
“It’s just a matter of adding consistency and having a public review, and bringing these locations in line with everything we do,” he said.