Issue link: http://winesandvines.uberflip.com/i/66152
AgfastDriplok_Sept07 8/9/07 11:56 AM E CONOMICS Trees are becoming a big issue, too. In general, you need a permit to cut conifers in California. Oaks have a lot of neighbor interest, as the Kendall-Jackson organiza- tion learned when it cut many visible trees in Santa Barbara County. Most trees are fair game in Mendocino County, but in Or- egon you need a permit to cut any trees— although securing a permit is possible. Permits: a valuable nuisance Mario Zepponi, president of Zepponi & Co., continued by zeroing in on permits. A "former" lawyer who worked at large wineries, Zepponi now advises companies about winery and vineyard acquisitions. Most winery and vineyard owners probably consider permits a nuisance, even a major problem, but Zepponi pointed out that they form the foundation for extracting value from real property as- sets. Permits to plant vines and build and operate wineries can be very valuable, as could the potential for home sites and property division. "It's essential to clean up permits be- fore completing a transaction," Zepponi stressed. "Buyers seek to quantify and limit risk exposure in real property transactions involving open-ended permitting issues." He noted three common hurdles to operating a vineyard: erosion control ordinances, endangered species restrictions and objections by neighbors. The big- gest issues in permitting a winery include property zoning, water and wastewater, getting permits for different functions and amendments or modifications to usage. And endangered species can stop development. Any vineyard over 5% slope requires a permit in Napa County, for example, while any over 30% requires both a per- mit and an environmental impact report, which can cost $100,000 and take a year to complete. Sonoma distinguishes between erodible soil and permeable soil, allowing up to 15% slope for the latter and only 10% for erodible hillsides. Neighbors, however, are what Zepponi called a "wild card." "They can raise all sorts of issues including water, wastewa- ter, traffic and nuisance value. Nuisance is often the issue they claim." Winery permits can be quite valuable. Napa requires a minimum of 10 acres for a winery permit (though certain historic wineries can be on smaller parcels). Win- ery permits are considered a discretionary process; an environmental study may be demanded, followed by public notice and an appeals process. Uses allowed at a winery are also var- ied. Old wineries enjoy many privileges not available to newer ones. The possible uses are production, tasting room (by ap- pointment only for new wineries in Napa, for example), retail sales and events. Napa loosened its restrictions on events slightly last year, but it still prohibits many uses that remain popular in other wine re- gions, including restaurants, inns and wed- dings. Even so, the value of an existing win- ery permit in Napa ranges from $500,000 to $3 million. In Sonoma, it's $500,000 to $1.5 million, and on the Central Coast, $250,000 to $1 million, Zepponi said. No deli or weddings Prices rise for a permit with a public tast- ing room, retail sales and food and events. "No one will ever get a permit like V. Sat- tui (40,000 cases, founded in St. Helena in 1975) with its deli and weddings again," Zepponi pointed out. Likewise, Napa prohibits new hilltop buildings both by erosion control require- ments and a "viewshed" ordinance that bans any building visible on ridges from major roads. "You can buy an existing winery for less than developing one." —Mario Zepponi, Zepponi & Co. This is reflected in the value of a legal home site: $200,000 to $250,000 on a mountaintop, $150,000 to $175,000 on the valley floor. Trophy properties are higher, of course. What if you have land without proper permits? Zepponi said that it's often possible to obtain them, sometimes by upgrading property to code. Fighting can be dangerous, however: One stub- born Sonoma winery owner was forced to tear down buildings constructed without permits. Not many people are interested in building a winery at this time, Zepponi concluded. "You can buy an existing winery for less than developing one at present." WINERY PRODUCTION HOSPITALITY ESTATES Won't deteriorate in hot or cold weather or in harsh chemical environments. DRIPLOK™ Irrigation Dripline Holder •DripLok™ won't stretch out of shape. •Its built-in 'saddle' prohibits cutting into drip tubing. •Withstands mechanical harvesting stress. •Competitively priced. •Conveniently packaged. •Will last up to 5 years in the field. •Available in 2 sizes. For your nearest dealer, contact: Toll-Free: 877.552-4828 909.451.2299 • Fax: 909.593-8309 D E S I G N P L A N N I N G M A N A G E M E N T S T R A T A A R C H I T E C T U R E A P www.STRATAap.com S T R A T E G I C D E S I G N S T U D I O A R C H I T E C T U R E B R A N D D E V E L O P M E N T B R A N D D E V E L O P M E N T www.strataap.com S O N O M A, C A L I F O R N I A 7 0 7. 9 3 5. 7 9 4 4 Wines & Vines sePTeMBeR 2011 39