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ECty lk - _ Request for Action River To Item Number Planning Commission 4.3 Agenda Section Meeting Date Prepared by Planning Items November 25, 2014 Zack Carlton,Planner I Item Description Reviewed by Ordinance Amendment Request by City of Elk Jeremy Barnhart, Deputy Director CODD River Relating to Tap Rooms,Brewpubs, Reviewed by Microbreweries, and Wineries Public Hearing, Case No. OA 14-11 Action Requested Recommend, by motion, modifications to the city ordinance to permit brewer taprooms, microbreweries, and wineries. Background/Discussion The craft brewing and distilling industry continues to grow at a rapid pace and the city proposes amending the ordinance to encourage a craft brewer to locate in Elk River. Current city ordinances do not permit these uses in any district and the following changes are needed to permit the businesses to locate within the city. Brewing There are two types of brewing establishments that the city may consider permitting. The first, microbreweries (small brewers), focus on production for distribution and may sell no more than 500 barrels on-site for off-sale consumption, per state statute. The on-site sale must be in the form of a 64- ounce container commonly known as a growler or in 750 milliliter bottles. On-sale beer sales are not permitted. These uses are manufacturing in nature and would be best suited in light industrial districts with access to city water. The bottling phase of production can be very loud and may be a potential nuisance to nearby uses. In addition, they are often high water users, and require significant distribution infrastructure. For those reasons staff recommends adding them as a Conditional Use in the I-1 (Light Industrial) and BP (Business Park) districts and as a permitted use in the I-2 (Medium Industrial) district. The second type, brewer taprooms and brewpubs, have been some of the fastest growing segments of the brewing market since being approved by the state legislature. A brewer taproom must be licensed by the state and the city via Sec. 6-52 (9) and is limited in the amount of beer they may produce. These businesses may include food service or may be an accessory use to an existing one. Staff recommends adding brewer taprooms as both a permitted and accessory use in the C-1 (Central Commercial), C-3 (Highway Commercial), and DD (Downtown Districts). This will provide brewer taprooms with the opportunity to locate in a vacant space or establish their business as an accessory use to an existing operation they own. Finally, brewer taprooms are manufacturing in nature and the impacts of a manufacturing business located in or near commercial operations must be considered. Current state and city regulations limit a brewer taproom to producing 250,000 barrels annually, or approximately 21,000 gallons of beer per day. rNATUREJ I1EIEI 1 Template Updated 4/14