PROPOSED definition for Area C – Oliver

affecting  (Hester Creek, Tinhorn Creek, Burrowing Owl) presently and others later

“winery” means an establishment involved in the manufacture, packaging, storing and sales of grape and fruit-based wines, including a wine bar and food & beverage service lounge. A wine bar and food & beverage service lounge also includes the provision of alcoholic beverages produced in British Columbia.

Administrative Recommendation:

THAT the Board of Directors direct staff to draft an amendment bylaw to the Okanagan Valley Electoral Area Zoning Bylaws in order to introduce a new definition of “winery” to allow for the sale of other “made in BC” alcoholic beverages.

Background:

The operation of wineries as a permitted use within the Agricultural Land Reserve (ALR) as well as within the various agricultural zones used by the Regional District (RDOS) is a relatively recent and evolving occurrence.

In the early 1990s, RDOS Zoning Bylaws did not generally include a “winery” definition, or permit such uses within the agricultural zones, while the ALC did not consider wineries to constitute a “farm use” under the Agricultural Land Reserve Use, Subdivision and Procedure Regulation.

This began to change by the end of the decade after the Agricultural Land Commission (ALC) established a “General Order” for wineries and cideries in 1998, and the Liquor Control and Licensing Branch (LCLB) introduced a “Winery Lounge Endorsement” licence (last amended in 2000) to permit the sale of B.C. Wines and food products in wineries.

The ALC further refined its position in 2002 (BC Regulation No. 171) by permitting winery lounges, which could serve food but were limited to a floor area of not greater than 125.0 m2 (indoors as well as outdoors) and were required to maintain a minimum 2.0 hectare (ha) vineyard. Importantly, the only alcohol to be served in these “winery lounges” is wine produced from the vineyard.

The RDOS subsequently updated its Zoning Bylaws to reflect these changes by introducing a definition of “winery” and permitting these in all of the agricultural zones.

More recently, a number of wineries have approached the ALC to obtain approval to expand the range of alcoholic beverages that may be served in a “winery lounge” beyond those produced from their vineyards (i.e. beer and spirits).

In response, the ALC initiated a “Winery and Cidery Policy Review” in 2011 to determine the appropriateness of allowing wineries to sell other alcoholic beverages in a “winery lounge”.

The Commission ultimately “determined that the current regulatory regime for wineries located in the Agricultural Land Reserve is appropriate … [and] that wineries who seek to acquire a ‘food primary’ license from the Liquor Control and Licensing Branch (LCLB) in order to offer additional alcohol products for sale must continue to submit a non-farm use application to the ALC.”

As the Commission continues to view a business operating under a Food Primary License to be a “non-farm use”, the Regional District maintains the ability to regulate these uses, and it has been Administration’s position that such a business represents an “eating and drinking establishment” — as defined under the Zoning Bylaws — and that such a use is not permitted, nor appropriate within the agricultural zones.

This issue was recently considered by the Planning and Development (P&D) Committee of the Regional District Board at its meeting of January 24, 2013. The Committee resolved, amongst other things, that the “ALC and the BC Liquor Control and Licensing Branch revise their policies to allow only BC products within the ALR at all food and beverage service lounges in the ALR”.

The Board revisited this issue again at its meeting of June 6, 2013, when it resolved to “authorize” an application from Hester Creek Estate Winery seeking approval to offer an expanded range of alcoholic beverages to proceed to the ALC. The Board also resolved to advise the ALC that it supports “a ‘food and beverage service lounge’ in the ALR being granted approval to offer alcoholic sales of products grown and produced in BC under the Winery Lounge Endorsement license.”

Analysis

The original intent behind allowing food and beverage service lounges to operate within the ALR was to assist wineries in the marketing of farm products produced on-site. It is also recognised that winery lounges support agriculture in that they encourage visitation, sales, and ultimately agricultural production and that food service helps develop links to local products and farmers, which further supports agriculture.

Administration remains concerned, however, that approval to act upon a Food Primary Licence potentially diminishes this link between the agricultural operation and the retail outlet by allowing a restaurant to exist as an independent commercial entity.

Administration also shares many of the concerns that have previously been expressed by the ALC on this subject, including:

. the erosion of the agricultural land base due to larger structures and expanded parking; . impacts of more people, traffic, noise and trespass on adjacent farm operations (i.e. neighbour complaints); . complaints and conflicts with other types of agriculture that may not fit with the “winery aesthetic”; and . pressure for other, non-farm related amenities (i.e. meeting facilities, hotels, spas, etc…).

Conversely, it is recognized that the ALC appears to be shifting its position on this matter, having recently approved the request from Tinhorn Creek Vineyards to offer an expanded range of alcoholic beverages at its Miradoro restaurant.

Administration is also cognizant of the recent pronouncements by the Board on this matter, specifically the statement that “approval to offer alcoholic sales of products grown and produced in BC” is supported.

In response, and to ensure the Zoning Bylaws are reflective of the Board’s position on this matter and that applicant’s such as Tinhorn Creek, Hester Creek and Burrowing Owl are not subsequently required to seek rezoning approval from the RDOS should they obtain ALC approval, Administration is proposing a textual change to the definition of “winery”. Specifically, that the following text be added (see underline):

“winery” means an establishment involved in the manufacture, packaging, storing and sales of grape and fruit-based wines, including a wine bar and food & beverage service lounge. A wine bar and food & beverage service lounge also includes the provision of alcoholic beverages produced in British Columbia.

This change would allow Administration to more favourably assess ALC “non-farm use” applications seeking approval to offer other made in BC alcoholic beverages as part of a “winery lounge”.

The Board is asked to be aware, however, that LCLB does not currently issue a license that would limit sales to only BC produced alcoholic beverages at wineries, that the ALC has limited resources (i.e. staff) to enforce any condition limiting sales to BC products only (a condition that was imposed on Tinhorn Creek), and that Administration considers enforcement of such a provision by the RDOS would be very difficult.

More preferable language would be to simply reference operations licensed by the LCLB (be it through a “Winery Endorsement Lounge” or “Food Primary Licence”), as is done in Penticton and Summerland. There is a concern, however, that doing so would not be reflective of the Board’s support for expanding the use only to alcoholic beverages produced in British Columbia as LCLB approval of a “Food Primary Licence” would allow for the sale of non-BC produced alcoholic beverages.

Should the Board be supportive of this proposed amendment, Administration favours referring the amendment bylaw to the Okanagan Valley Electoral Area Advisory Planning Commissions (APCs) for review prior to first reading.

Staff recommendation to RDOS directors – discussion to occur October 3rd