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HomeMy WebLinkAbout11.A.1 Zoning Text Amendment: Breweries, Brewpubs, Taprooms, Tasting Rooms. Distilleries, and Wineries-Ord. No. 877 General Business 11. A. 1. SHAKOPEE TO: Mayor and City Council Mark McNeill, City Administrator FROM: Kyle Sobota, Senior Planner DATE: 12/03/2013 SUBJECT: Zoning Text Amendment: Breweries, Brewpubs, Taprooms, Tasting Rooms, Distilleries, and Wineries-Ord. No. 877 (B) Action Sought Approval of the proposed zoning text amendment regarding breweries, brewpubs, taprooms, tasting rooms, distilleries, and wineries. Background Recently several production breweries, taprooms, wineries, and micro-distilleries have been proposed or have become operational around the state of Minnesota. At this time in the City of Shakopee, the Light Industrial and Heavy Industrial Zones are the only areas that breweries, wineries, and distillery facilities would be permitted under the ordinance definition of manufacturing or processing operations. Currently city staff considers a brewpub as a similar use to a restaurant. Recently, City of Shakopee staff has had conversations with two different groups considering locating production breweries and taprooms in the City of Shakopee. The City of Shakopee had also previously submitted a proposal to Surly regarding different available development sites prior to their selection of a site in Minneapolis. While the Industrial zoning districts are the preferred location for large scale operations; industrial areas do not fit the conventions for small scale operations that rely on visibility and conventional retail, pedestrian, or tourist traffic that has become popular for these types of businesses around Minnesota and other states. In many cases the smaller operations function similarly to bars and restaurants. Staff believes that these types of businesses, in most cases upon review by the Board of Adjustment could be located within the standard commercial districts of Shakopee. Due to the increase in the interest, staff is initiating a proposed text amendment to review the potential allowance of smaller scale operations as Conditional Uses in Commercial zoning districts (Highway Business (B-1), Central Business District(B-3), Community Commercial (CC), and Neighborhood Commercial (NC), and Major Recreation(MR)). Staff is also including provisions to allow larger operations as permitted uses in Light Industry (I-1) and Heavy Industry (I-2) zones, with taprooms or tasting rooms as a conditional use, since it is viewed as more of a retail use. Retail uses are currently allowed by Conditional Use Permit in City Code. In 2011, Governor Dayton signed the Omnibus Liquor Bill, commonly known as the "Surly Bill", which allows breweries to sell pints of beer at the brewery in areas known as taprooms. Prior to the law, brewpubs were already permitted to sell pints of beer for consumption on premises because brewpubs serve food, and operate similar to restaurants, but breweries were not permitted. State Statute allows breweries that produce under 3,500 barrels to sell sealed 750 ml, bottles and sealed 64 oz containers, commonly known as "growlers" of beer for consumption off-premises. A purpose for the proposed text amendment is a way to clarify the different manufacturing levels in the City Code, as well as include definitions of common terms. Below for review are State Statutes and definitions for the different types of businesses related to wine, beer, and spirits. Staff recommends adding selected definitions to the City Code as part of the text amendment. The current pertinent definitions from MN State Statute are listed below. Distilled Spirits: Ethyl Alcohol, hydrated oxide of ethyl, spirits of wine, whiskey, rum, brandy, gin, or other distilled spirits, including all dilutions and mixtures thereof, for nonindustrial use. Farm Winery: A winery operated by the owner of a Minnesota farm and producing table, sparkling, or fortified wines from grapes, grape juice, other fruit bases, or honey with a majority of the ingredients grown or produced in Minnesota. Fortified Wine: wine to which brandy, or neutral grape spirits, has been added during or after fermentation resulting in a beverage containing not less than one-half of one percent nor more than 24 percent alcohol by volume for nonindustrial use. Malt liquor: any beer, ale, or other beverage made from malt by fermentation and containing not less than one-half of one percent alcohol by volume. 3.2 percent malt liquor: malt liquor containing not less than one-half of one percent alcohol by volume nor more than 3.2 percent alcohol by weight. Micro-distillery: a distillery operated within the state of Minnesota producing premium, distilled spirits in total quantity not to exceed 40,000 proof gallons in a calendar year. Proof gallon: one liquid gallon of distilled spirits that is 50% alcohol at 60 degrees Fahrenheit. Small Brewer License: A brewer licensed under subdivision 6, clause (c), (i), or 0), may be issued a license by a municipality for off-sale of malt liquor at its licensed premises that has been produced and packaged by the brewer. The license must be approved by the commissioner. The amount of malt liquor sold at off-sale may not exceed 500 barrels annually. Off-sale of malt liquor shall be limited to the legal hours for off-sale at exclusive liquor stores in the jurisdiction in which the brewer is located, and the malt liquor sold off-sale must be removed from the premises before the applicable off-sale closing time at exclusive liquor stores. The malt liquor shall be packed in 64-ounce containers commonly known as "growlers" or in 750 milliliter bottles. The containers or bottles shall bear a twist-type closure, cork, stopper, or plug. At the time of the sale, a paper or plastic adhesive band, strip, or sleeve shall be applied to the container or bottle and extended over the top of the twist-type closure, cork, stopper, or plug forming a seal that must be broken upon opening of the container or bottle. The adhesive band, strip, or sleeve shall bear the name and address of the brewer. The containers or bottles shall be identified as malt liquor, contain the name of the malt liquor, bear the name and address of the brewer selling the malt liquor, and shall be considered intoxicating liquor unless the alcoholic content is labeled as otherwise in accordance with the provisions of Minnesota Rules, part 7515.1100. (b)A brewer may only have one license under this subdivision. (c) A municipality may not issue a license under this subdivision to a brewer if the brewer seeking the license, or any person having an economic interest in the brewer seeking the license or exercising control over the brewer seeking the license, is a brewer that brews more than 20,000 barrels of its own brands of malt liquor annually or a winery that produces more than 250,000 gallons of wine annually. (d) The municipality shall impose a licensing fee on a brewer holding a license under this subdivision, subject to limitations applicable to license fees under section 340A.408, subdivision 3 paragraph (a). Table or sparkling wine: a beverage made without rectification or fortification and containing not more than 25% alcohol by volume, made by the fermentation of grapes, grape juice, other fruits, or honey. Wine: the product made from the normal alcoholic fermentation of grapes, including still wine, sparkling and carbonated wine, wine made from condensed grape must, wine made from other agricultural products than sound, ripe grapes, imitation wine, compounds sold as wine, vermouth, cider, perry and sake, in each instance containing not less than one-half of one percent nor more than 24 percent alcohol by volume for nonindustrial use. Wine does not include distilled spirits as defined in subdivision 9. State of Minnesota Limits: At this time Minnesota Statute does not permit the on or off-premises sale of distilled spirits at a micro-distillery. State Statute permits the sampling of up to individual 15 mL samples, and no more than a total of 45 mL, or approximately 1.52 oz of samples per person in one day. If State Statute were to be amended to allow sales by micro-distilleries, it is staffs position that micro-distilleries be permitted for on or off-premises sales of product, provided they receive a Liquor License from the City Clerk's Office. It should be noted that the State licensing fee for micro-distilleries has been reduced from $30,000 to $1,000. It is likely that there will be greater interest in micro-distilleries. State statute limits breweries to off-premises sales of 750 mL bottles and 64 oz containers at breweries to 500 barrels per year. Brewpubs are limited to total production of 3,500 barrels per year. Farm Wineries are limited to sales of 50,000 gallons per year. Farm Wineries are permitted to produce up to 5,000 gallons of distilled spirits from MN grown grapes, grape juice, or honey per year, which is considered part of the 50,000 gallon limit. Proposed Production Limitations: Since the proposed text amendment is for commercial zoning districts, city staff proposes limits to the production for these types of facilities in the commercial districts that are similar to existing limits currently noted in various State Statutes: Brewpub: current State Statute. Small Brewery: 20,000 barrels per year. Farm Winery: 50,000 gallons per year. Micro-distillery: 40,000 proof gallons per year. Brewpubs are noted as current State Statute, due to recent proposals in legislation that may raise the production cap on brewpubs. If State Statute were to be revised, staff prefers that the ordinance not require an amendment if State Statute were to be modified. Staff is also proposing the addition of breweries (regardless of size), farm wineries (regardless of size), distilleries (regardless of size), and to the Light Industry (I-I) and Heavy Industry (I-2) as permitted uses, because of their similarity to manufacturing and processing operations, which is already permitted, taprooms would be added as a conditional use in the Industrial zones because of their retail nature. Staff believes the proposed text amendment would allow for popular destination type businesses to be located in the City, as well as clarify definitions for the future. Planning Commission Recommendation: The proposed text amendment was heard by the Planning Commission at the November 7th meeting and received a unanimous positive recommendation. Staff has further reviewed the language and has made changes to the language since the Planning Commission's review. One change is in relation to the operation of a Small Brewery, Winery, or Micro-Distillery in the Central Business, B-3 zone. Staff believes it is important for a retail component to exist in the downtown, and has changed the language to require that a taproom or tasting room be part of the operation of a small brewery, farm winery, or micro-distillery in the Central Business District Zone and some of the other retail zones. Staff has also added the Major Recreation Zone and Business Park zone to the districts where these types of businesses would be permitted, since a large amount of the vacant available land that may be attractive to these uses is in these two zoning districts. Staff has also removed the requirement for a conditional use permit for brewpubs in the commercial zones, since a brewpub would have been previously permitted as a similar use to a restaurant, which is consistent with other cities regulations. The production for a brewpub is limited by statute, so staff would not anticipate potential issues that would require review by the Board of Adjustment. Although state statute does not directly mention tasting rooms for wineries and distilleries as it does for taprooms, staff believes it is important to clarify and have standards for these areas. Staff has also drafted conditions for the City Council's review for Parking standards, and Conditional Use Permit standard sections in City Code Chapters 11.87 and 11.88. The conditions are in the attached language document and relate to disposal of waste products, production reporting, and outdoor seating areas. The parking standards proposed for these uses match standards already in code relating to bars and restaurants, or manufacturing operations. The standard for Class II Restaurants, which are restaurants that serve alcohol is 1 space per 3 seats +plus 1 space per 50 square feet for areas that people are typically standing, such as a dance floor, areas near a stage, or in the vicinity of a bar area, or areas where there are tables and no seats. The same standard used for Class II Restaurants is proposed for Brewpubs, Taprooms, and Tasting Rooms. The parking standard proposed for breweries, wineries, and distilleries is 1 space per 500 square feet, or 1 per employee on the largest shift, whichever is larger. This standard is consistent with the standards for manufacturing facilities. If the production operation has a tasting room or taproom component, the additional parking requirements for those uses would apply. Recommendation Staff recommends approval of Ordinance No. 877, an ordinance amending several sections of Chapter 11 (Zoning). Budget Impact There is no immediate budget impact as a result of this ordinance, however it may encourage the construction of a new facility in Shakopee or encourage the use of a currently vacant space, which would result in an increase in the tax base. Relationship to Vision This text amendment relates to City Goal B in that it allows for the development of potential destination type businesses, which is in line with Shakopee's marketing as an entertainment and tourist destination. The craft brewing, distilling, and winemaking industries have grown significantly in recent history. The proposed text amendment allows for Shakopee to be part of a growing industry and to be ready to attract new businesses that are similar to existing businesses and can be operated without interfering with surrounding land uses, whether residential or commercial. Staff have already been contacted by other cities and counties researching regulations for these types of businesses. Requested Action Make a motion to approve Ordinance No. 877, an ordinance amending the zoning code relating to breweries, brewpubs, taprooms, tasting rooms, wineries, and distilleries and move its adoption. Attachments: Ordinance No. 877 ORDINANCE NO. 877 AN ORDINANCE OF THE CITY OF SHAKOPEE APPROVING AN AMENDMENT TO CITY CODE SECTIONS 11.02 (DEFINITIONS), 11.35 (NEIGHBORHOOD COMMERCIAL), 11.36 (HIGHWAY BUSINESS), 11.37 (COMMUNITY COMMERCIAL), 11.40 (CENTRAL BUSINESS DISTRICT), 11.42 (MAJOR RECREATION), 11.44 (LIGHT INDUSTRY), 11.46 (HEAVY INDUSTRY), 11.47 (BUSINESS PARK), 11.61 (PARKING), 11.87 (CONDITIONAL USE PERMIT STANDARDS FOR BUSINESS ZONES), 11.88 (CONDITIONAL USE PERMIT STANDARDS FOR INDUSTRY ZONES) WHEREAS, The City of Shakopee has proposed amendments to several sections of the Zoning Ordinance regarding breweries,wineries, brewpubs,distilleries, and taprooms; and WHEREAS,notices were duly sent and posted, and a public hearing was held before the Planning Commission on November 7,2013 at which time all persons present were given an opportunity to be heard; and WHEREAS,the Planning Commission recommended that City Code Sections 11.02, 11.35, 11.36, 11.37, 11.40, 11.42 11.44, 11.46, 11.47, 11.61, 11.87, 11.88 be amended to include language pertaining to breweries,brewpubs, wineries, distilleries,tasting rooms and taprooms; and WHEREAS,the City Council heard the matter at its meeting on December 3, 2013; and THE CITY COUNCIL OF THE CITY OF SHAKOPEE,MINNESOTA, ORDAINS: Section 1 —That City Code Chapter 11 (Zoning) is amended to add the language as follows: Language which is underlined shall be added. Language which is stmel4hrettgh shall be deleted. Section 11.02, (Definitions) 16.Brewery: A facility that produces for sale beer, ale, or other beverages made from malt by fermentation and containing not less than one-half of one percent alcohol by volume. 17. Brewpub:A Small Brewery that operates a restaurant on the same premises as the brewery, whose malt liquor production per calendar year may be limited by MN State Statute. 33.Distillery: A facility that produces Ethyl Alcohol,hydrated oxide of ethyl, spirits of wine, whiskey,rum,brandy, gin, or other distilled spirits, including all dilutions and mixtures thereof, for nonindustrial use. 43.Farm Winery: A winery operated by the owner of a Minnesota farm and producing table, sparkling, or fortified wines from grapes, grape Juice, other fruit bases, or honey with a majority of the ingredients grown or produced in Minnesota. A Farm Winery may include a tasting room. oom. 81.Malt Liquor: any beer, ale, or other beverage made from malt by fermentation and containing not less than one-half of one percent alcohol by volume. 83.Micro-distillery: A facility that produces Ethyl Alcohol, hydrated oxide of ethyl, spirits of wine,whiskey,rum, brandy, gin, or other distilled spirits, including all dilutions and mixtures thereof, for nonindustrial use not to exceed 40,000 proof-gallons per calendar year. 151. Small Brewery: A brewery that produces no more than 20,000 barrels of malt liquor in a calendar year. 158. Taproom: An area for the on-sale consumption of malt liquor produced by the brewer for consumption on the premises of or adjacent to one brewery location owned by the brewer.A taproom may also include sales for off-premises consumption of malt liquor produced at the brewery location or adjacent to the taproom and owned by the brewer for off-premises consumption, packaged subject to MN Statute 340A.301, subdivision 7(b), or its successor. 159. Tasting Room, Winery/Distillery: An area for the on-sale consumption of distilled spirits or wine produced on the premises of, or adjacent to one winery or one distillery and in common ownership to o the producer of the wine or distilled spirits. The tasting room area may include sales for off premises consumption of products produced by the owner of the winery or distillery location if permissible by state law. (Re-letter all entries accordingly). Section 11.35,(Neighborhood Commercial, NC), Subd. 2 (Permitted Uses) I.) Brewpubs: Section 11.35,(Neighborhood Commercial, NC), Subd.3 (Conditional Uses) Q. Farm Wineries producing less than 50,000 gallons of wine per calendar year with tasting rooms; M.)Micro-Distilleries with tasting rooms; N.) Small Breweries with taprooms; O.)Taprooms. (Re-letter all entries accordingly). Section 11.36, (Highway Business,B-1), Subd. 2 (Permitted Uses) P.)Brewpubs; Section 11.36, (Highway Business, B-1), Subd. 3 (Conditional Uses) AC). Farm Wineries producing less than 50.000 gallons of wine per calendar}ear; AD.) Micro-Distilleries; AE.) Small Breweries; AF.)Taprooms. (Re-letter all entries accordingly). Section 11.37, (Community Commercial,CC), Subd. 2 (Permitted Uses) L.)Brewpubs Section 11.37, (Community Commercial, CC), Subd. 3 (Conditional Uses) N). Farm Wineries producing less than 50.000 gallons of wine per calendar}ear; O.) Micro-Distilleries; P.) Small Breweries; O.) Taprooms. (Re-letter all entries accordingly). Section 11.40, (Central Busines District, B-3), Subd.2 (Permitted Uses) O.)Brewpubs; Section 11.40, (Central Business District,B-3), Subd. 3 (Conditional Uses) N). Farm Wineries producing less than 50,000 gallons of wine per calendar year with tasting rooms; O.)Micro-Distilleries with tasting rooms; P.) Small Breweries with Taprooms (Re-letter all entries accordingly). Section 11.42, (Major Recreation,MR), Subd. 2 (Permitted Uses) M.) Brewpubs; Section 11.42,(Major Recreation,MR), Subd.3 (Conditional Uses) N). Farm Wineries producing less than 50,000 gallons of wine per calendar year; O.)Micro-Distilleries; P.) Small Breweries with Taprooms (Re-letter all entries accordingly). Section 11.44, (Light Industry,I-1), Subd. 2 (Permitted Uses) K.)Breweries; L.)Distilleries; M.) Wineries (Re-letter all entries accordingly). Section 11.44, (Light Industry,I-1), Subd. 3 (Conditional Uses) S.)Taprooms; T.)Winery/Distillery Tasting Rooms(Re-letter all entries accordingly). Section 11.46, (Heavy Industry, I-2), Subd. 2 (Permitted Uses) P.)Breweries; O.)Distilleries; R.)Wineries (Re-letter all entries accordingly). Section 11.46, (Heavy Industry, I-2), Subd. 3 (Conditional Uses) O.)Taprooms; R.)Winery/Distillery Tasting Rooms (Re-letter all entries accordingly). Section 11.47, (Business Park,BP), Subd.2 (Permitted Uses) K.)Breweries: L.)Distilleries; M.) Wineries (Re-letter all entries accordingly). Section 11.47, (Business Park,BP), Subd.3 (Conditional Uses) L.) Taprooms; M. Winery/Distillery Tasting Rooms (Re-letter all entries accordingly). Section 11.61,(Parking), Subdivision 4E (Table 2) ##3 (Business/Industry) a.) Breweries: 1 per 500 square feet of floor area, or employee on largest shift,whichever is rg eater b.)Brewpubs: 1 per 3 seats+ 1 per 50 square feet of congregation area. c.)Distilleries: 1 per 500 square feet of floor area, or employee on largest shift, whichever is greater+ 1 per 50 square feet congregation area. d.)Wineries: 1 per 500 square feet of floor area, or employee on largest shift,whichever is greater. e.) Taprooms: 1 per 3 seats + 1 per 50 square feet of congregation area. f.) Tasting Room, Winery/Distillery: 1 per 3 seats + 1 per 50 square feet of congregation area Section 11.87, (Conditional Use Permit Standards for Business Zones), Subd.2 Farm Wineries: 1. Waste products must be disposed of in a timely manner and in such a way to reduce odors. 2. Outdoor seating areas are to operate no later than 10:00 p.m. 3. The operator must supply the Planning Department with annual production reports. Micro-Distilleries: 1. Waste products must be disposed of in a timely manner and in such a way to reduce odors. 2. Outdoor seating areas are to operate no later than 10:00 p.m. 3. The operator must supply the Planning Department with annual production reports. Small Breweries: 1. Waste products must be disposed of in a timely manner and in such a way to reduce odors. 2. The operator must supply the Planning Department with annual production reports. Taprooms: 1. On or Off premises sales require a liquor license. 2. Outdoor seating areas are to operate no later than 10:00 p.m. Tasting Rooms, Winery/Distillery 1. On or Off premises sales require a liquor license. 2. Outdoor seating areas are to operate no later than 10:00 p.m. Section 11.88, (Conditional Use Permit Standards for Industry Zones), Subd. 2 Taprooms: 1. Taproom and retail areas must not exceed 25%of the floor area of the brewery operation. 2. On or Off premises sales require a liquor license. 3. Outdoor seating areas are to operate no later than 10:00 p.m. Tasting Rooms, Winery/Distillery 1. Tasting room and retail areas must not exceed 25%of the floor area of the operation. 2. On or Off premises sales require a liquor license. 3. Outdoor seating areas are to operate no later than 10:00 p.m. Section 2. The City Council adopts the following findings of fact relating to the request to modify the language in the City's zoning ordinance regarding Landscape Services and Contractors in the Highway Business Zone. Criteria#1 That the original zoning ordinance is in error; Finding 41 There has been no evidence that the original zoning classification is in error, the proposed text amendment is for uses that are similar to some of the existing uses permitted by the zoning ordinance. The proposed text amendment brings clarity to the zoning ordinance for businesses that do not necessarily ft within current classifications, and also provides defined quantities regulating the size of facilities within commercial areas versus industrial areas. Criteria#2 That significant changes in community goals and policies have taken place; Finding#2 There have not been significant changes in community goals and policies, however Shakopee has developed as a tourist destination and the proposed text amendment allows for destination type businesses. Criteria#3 That significant changes in City-wide or neighborhood development patterns have occurred; Finding#3 There has been no evidence presented that either city-wide or neighborhood development patterns have changed. The proposed text amendment is for uses that are similar to bars and restaurants or other currently permitted industrial uses. Criteria#4 That the Comprehensive Plan requires a different provision; Finding#4 The Comprehensive Plan does not require a different provision. Section 3. Effective Date. This ordinance shall be in effect from and after the date of its passage and publication. Adopted in session of the City Council of the City of Shakopee, Minnesota held this day of 2013. Brad Tabke,Mayor ATTEST: City Clerk Published in the Shakopee Valley News on the day of 2013.