3 days Ago By Jennifer Best Contributing Writer
The Santa Barbara County Board of Supervisors gave preliminary approval to the formation of a Santa Barbara County Wine Improvement District on Tuesday , an idea first floated by Santa Barbara Vintners Association in 2019. The association, a nonprofit founded in 1983 to support and promote the Santa Barbara County wine region, will now seek consent from each of the county's eight cities for inclusion in the business improvement district. “It’s about time we give more stability to that organization and the funding for it because, yes, it has economic benefits, but it has a lot of cachet and restaurants and culture and there’s so much about quality of life that comes with good wine that we all .
.. benefit from,” said 3rd District Supervisor Joan Hartmann, before the unanimous vote.
The issue is scheduled to return to the board Jan. 14 for public input, then Feb. 11 for final consideration.
According to the League of California Cities , business improvement districts are programs that levy assessments against businesses or properties to fund services or improvements that directly benefit those businesses or properties. While government agencies determine the use of tax assessments, nonprofit associations generally manage the collection and expenditure of improvement district fees. Improvement districts are plentiful throughout the state and vary in focus.
Examples include tourism business improvement districts such as that seen in Santa Ynez Valley and along the South Coast, lighting districts like that in Solvang, the Old Pasadena Property and Business Improvement District whose services include sponsoring a film festival, nightly sidewalk washing, and 24-hour street patrols, and two existing wine improvement districts: Temecula Valley and Livermore Valley. Gina Reed, a consultant from Civitas Advisors, said the wine improvement district aims “to provide a stable funding source that allows owners to work together through a winery association to improve business activity.” Santa Barbara Vintners, which would administer the program, proposes assessing a 1% fee on all direct-to-consumer retail sales made by Santa Barbara County wine properties to California customers.
Anything that already incurs a sales tax such as tasting room sales, wine club, events, food and merchandise would be subject to that assessment, said Santa Barbara Vintners CEO Alison Laslett. There would be no assessment on wholesale sales or out-of-state sales. Board of Supervisors - County of Santa Barbara - 12/17/24 District assessment fees must be reinvested in county wine industry growth efforts through programs including marketing and promotional efforts, community industry and government engagement and education, in a focused effort to build the region’s wine reputation and attract new visitors to wine properties, Reed said.
Laslett said the district assessment will provide “predictable and stable funding” which will put the county’s wine region on a more level playing field with Napa, Sonoma and Paso Robles with budgets of $10 million, $6-8 million and $2 million, respectively. Based on Santa Barbara County’s 2019 winery retail sales of $165 million, the assessment would provide the local association an estimated $1.6 million boost to its existing annual operating budget of $600,000.
“We should be able to bring recognition to our region and visitation to our region in a way that we have not been able to do before,” Laslett said. Though Reed reported well over the state-mandated 51% of impacted businesses have already responded in support of the move, not all are on board. Steve Pepe, co-owner of Clos Pepe Vineyards in Lompoc, discouraged the board from supporting a measure that would force businesses to fund programs they may not support.
“Small mom-and-pop wineries object to this charge because the majority of their customers are local. They do not advertise nationwide. They don’t need to advertise to Santa Barbara, to Paso Robles, Ventura and L.
A. where their customers come from. "There are about 300 wineries in the county, and only 96 of them or 27% belong to the (Santa Barbara) Vintners.
So, 73% of the county wineries have already voted with their feet for a long time,” Pepe told the board. Margerum Wine Co. was one Santa Barbara County winery participating in Behind the Scenes, a series of expert panels and experiences presented in 2023 by the Santa Barbara Vintners Association.
The association won preliminary approval from Santa Barbara County Tuesday for a wine improvement district. But an overwhelming majority of public speakers Tuesday supported the assessment district, including Keith Saarloos of Saarloos & Sons in Los Olivos, Tim Snider of Fess Parker Winery in Los Olivos, Santa Ynez’s Crown Point Vineyards Estate Director AJ Fairbanks and Gainey Vineyard Estate Director Steven James. “We are making some of the best wines in the world and we deserve a strong and well-funded association to help us in such a competitive market,” said Santa Barbara Vintner Board President Pierre LaBarge IV, of LaBarge Winery.
LaBarge said he staunchly opposed the measure when it was initially proposed in 2019. He said he has since educated himself about how an assessment district works and its potential impacts on his industry. He became a member of the association, and after experiencing the organization firsthand, rose in its volunteer ranks.
At his request, more than a dozen people in the audience stood to mark their support for the district. “We have general managers, owners, winemakers from Los Olivos to Santa Barbara all here in support of the BID today,” LaBarge said. The association experienced a sort of test run of an increased marketing budget with an $800,000 grant from the Department of Food and Agriculture, which took them through 2020-2023.
During that period, wineries reported a 28.8% increase in retail sales over the previous four-year period. “This sounds like a smart economic endeavor to me,” said 2nd District Supervisor Laura Capps.
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