Putting the Cork on Napa Valley Growth Plans : Wine: Faced with mounting tourist-related problems, the county adopts stiff restrictions on new wineries. : Putting the Cork on Napa Valley Growth Plans

Napa Valley’s cup runneth over with tourists.

Sobered by the crush of visitors--an estimated 2 million last year--the nation’s most famous wine region has imposed unprecedented restrictions on wineries to curb congestion and preserve precious vineyard land.

An ordinance adopted last Tuesday by the Napa County Board of Supervisors will prohibit future wineries from luring tourists with souvenir shops and drop-in tasting rooms. It will also require that at least 75% of the grapes processed by new wineries or used in expanded production by present wineries be grown in the valley--a rule designed to help protect its agricultural lands.

Moreover, future wineries must be located on at least 10 acres, with buildings set back 600 feet from Highway 29 or Silverado Trail, the two arteries running up either side of the valley from Napa to Calistoga.

The new law culminates a years-long brouhaha among vintners, growers and preservationists in the valley, where vineyards are now aglow with bright yellow mustard blooms and the winter stillness is broken only by the occasional snipping sounds of workers pruning dormant vines.

The battle pitted the region’s leading industries--wine and tourism--and involved the deceptively simple task of defining just what constitutes a winery.

“It was something that had to be, to maintain the valley, the vineyards and the life style,” Jack Cakebread, owner of Cakebread Cellars and president of the Napa Valley Vintners Assn., said of the resulting ordinance. “We . . . looked around one day and said, ‘Let’s not let this turn into a Santa Clara.’ ” (That high-tech hotbed previously was a leading producer of prunes, grapes and other crops.)

Visitors to Napa Valley probably will notice few changes as a result of the law, however. Under a “grandfathering” agreement, those 70 or so wineries that already offer public tours and concerts or sell T-shirts and posters will be allowed to continue. Robert Mondavi Winery, for example, plans to continue its summer jazz festival and its high-profile cooking seminars featuring chefs such as Julia Child and Paul Bocuse--events that have helped make the winery famous.

But the ordinance clearly will make it more difficult to start a winery in the valley, and it seeks to ensure that any that does get going will be, as it states, “an agricultural processing facility used for the fermenting and processing of grape juice into wine.”

That limitation pleases residents alarmed by the growth of “boutique” operations that seem more intent on selling corkscrews than on making and selling wine. Moreover, when they do sell wine, critics contend, much of it is processed outside the county from grapes grown elsewhere. Cakebread dismisses such enterprises as “ZIP Code” wineries that, for reasons of prestige, capitalize on a Napa address.

The controversy over what constitutes a winery started about five years ago when Tony Peju, owner of a Los Angeles nursery company, opened amid some of the valley’s finest vineyards just south of St. Helena what was primarily a tasting room with a lone fermentation tank. Most of the wine he sold was “custom-crushed” elsewhere.

Although Peju secured the necessary winery permits, county officials said he did not abide by their terms. For example, they said, when he finally began installing a number of large stainless steel fermenting tanks, they stood in the open for years. County officials sued Peju but found that their loosely written legal definition was weak. Although they forced some modifications, he has been slow to comply, which has continued to rile people.

Peju, whose winery building is finally under construction, contends that a failed partnership and other financial difficulties delayed the project.

“We’re still here,” Peju said in French-accented English one evening recently in the tasting room. “The wines are thriving. We used to have more souvenirs. We became more wine makers.”

Of his role as catalyst for the new ordinance, Peju said: “I like to be an instigator.”

According to Jeffrey R. Redding, Napa County planning director, local officials have historically processed 10 to 12 winery applications a year. But early in 1988, the threat of a moratorium in the wake of the Peju controversy prompted a flurry of filings. Since March, 1988, the county has processed about 60. Partly as a result, Redding said, the threat of a moratorium became “a self-fulfilling prophecy.” Consequently, the temporary ban expired the day that the new ordinance was adopted.

Napa County, which counted 71 wineries as recently as 1974, now has about 186, with 52 more approved for construction. Had no action been taken, Redding estimated, the valley might have contained 455 wineries 20 years from now--and it still will probably hold 350 by then.

The proliferating wineries not only attract more visitors but also employ workers whose families need housing, strain county services and further clog local streets. Moreover, the increase in wineries and products squeezes vintners at a time when prices for premium wines, such as those from the Napa Valley, are rapidly rising.

“The Napa Valley as a wine-making area has run into a crossroads,” said James Laube, who writes for the Wine Spectator. “The popularity of wine and the number of wineries have come into conflict.”

Mel Varrelman, a St. Helena accountant and a county supervisor, agreed that the wine industry is having to cope with tougher marketing as well as public wrath over tourism, a double-edged sword for the valley.

“Over the years, there has been a mounting groundswell of antagonism against the wine industry,” he said. “It’s a $1-billion business that creates jobs but also a lot of the problems.”

A few years ago, county officials urged wine growers and vintners--often at odds in Napa--to reach agreement on an ordinance for the good of the valley. The new ordinance grew out of months of wrangling between the industry and land preservationists favoring far stricter regulations. About the only thing all sides agreed on was that a stop had to be put to the proliferation of wineries that one executive called “theme parks.”

Peju Province is not the only sore point.

Cosentino, under construction along Highway 29, has only a paved parking lot between it and the road. Established vintners also cite the furor created a few years back by Jan Schrem when he staged a contest sponsored by the San Francisco Museum of Modern Art to see who would design his Clos Pegase Winery near Calistoga. During construction, Schrem further rankled county officials when it was suggested that he would erect a public sculpture museum that they had not approved. Instead, Schrem is installing some sculptures on the winery grounds.

Just last year, Swiss businessman and art collector Donald M. Hess imported his multimillion-dollar modern art collection, including works by Frank Stella and Robert Motherwell, to his decade-old operation on Mt. Veeder in southwestern Napa Valley. Visitors tour the art collection for free but pay $2.50 to taste Hess Collection wines.

For some visitors, the art can be as much a draw as the wine. “The art collection made it worth going up there,” said Rob Saunders of Seattle after having negotiated the twisting 4 1/2-mile drive from the valley floor. “As long as the wines stay as good as the art, it’ll be fine,” added brother Ken of Pacific Palisades.

New wineries too will be allowed to display art, but only if it is not offered for sale. And visitors will have to phone ahead for tours and tastings.

Established vintners are relieved that their extracurricular activities have been grandfathered in, even though some observers fear that this “unlevel playing field” could invite a legal challenge. Michael Mondavi, son of Robert, defended such activities as the cooking schools and the serving of snacks with wine samples. Mixing food and wine has been a marketing tool for centuries, he said.

“We have found that is a very successful way of showing how wine should be served,” Mondavi said. He also noted that Robert Mondavi Winery began requiring visitors three years ago to sign up for tours, which are limited in size. The winery turns away 50,000 to 75,000 visitors a year, he said.

Louis M. Martini Winery in St. Helena, one of the valley’s oldest operations, was a big beneficiary of a late change in the ordinance that will enable it to continue to use the grapes it grows in adjoining Sonoma County, which amount to about half of its total vineyards.

The winery, which sells about 250,000 cases of wine annually, has a permit that will allow it to expand to 850,000 cases. The county planning commission had initially urged that the expanded production fall under the “75% rule” that requires three-quarters of the grapes to come from Napa Valley vineyards, but Martini prevailed.

“We raised a little fuss and pointed out to them that they’re our own vineyards,” said Chairman Louis P. Martini, son of the founder.

Martini moved to Napa Valley in 1940 while a junior in college. He is remarkably philosophical about the valley’s growth, although he said he wishes it had been “stifled in 1933” when the family’s winery began.

His son, Michael, expects that the 75% rule will drive up the cost of Napa grapes and land, making it less feasible for wine makers to stave off housing developments and other ventures. But grower Andrew Beckstoffer, a transplanted Virginian who owns 500 acres in the valley, defended the rule, which at first met stiff resistance from vintners.

“There is a legitimate opportunity for vineyards here in this beautiful valley to be the best use of the land,” Beckstoffer said. “We might just be able to keep it this way, 60 miles from San Francisco.”