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C-1iii . Brewery Ordinance-CITY OF C HANHASSE N C, _J� Chanhassen is a Community for Life -Providing forToday and Planning for Tomorrow MEMORANDUM TO: Planning Commission FROM: MacKenzie Walters, Assistant Planner Bog Generous, Senior Planner OY14( DATE: May 15, 2018 SUBJ: Staff Report - Craft Alcohol Production City Code Amendment Proposed Motion: "The Chanhassen Planning Commission recommends that the City Council adopt the attached ordinance amending Chapters 1, 4, 10, and 20 of the City Code." ISSUE Various entities have contacted the city to inquire about the possibility of opening a brewery or distillery in Chanhassen; however, the City Code does not currently permit the licensing of brewpubs, taprooms, or cocktail rooms. Examples: Brewpub: Granite City Food & Brewery, 5500 Excelsior Boulevard, St. Louis Park Taproom: Excelsior Brewing Company, 421 3'a St. Excelsior Cocktail rooms: J. Carver Distillery, 1320 Mill Ln, Waconia In 2011 Minnesota passed the "Surely Bill" which allowed brewers to directly sell their own beer on site, pending the appropriate municipal licenses. This law and its subsequent amendments allow cities to create and issue cocktail room licenses, on- and off- sale licenses for brew pubs, brewer taproom licenses, and small brewer off -sale licenses. Cities may also authorize Sunday on -sale for holders of brewer taproom licenses, and Sunday off -sale for holders of small brewer off -sale licenses. Cocktail room licenses are limited to distilleries producing less than 40,000 proof gallons a year. Brew pubs are restricted from selling more than 3,500 barrels a year. Brewer taproom license are limited to breweries producing less than 250,000 barrels a year. PH 952.227.1100 • www.d.chanhassen.nnn.us • FX952.227.1110 7700 MARKET BOULEVARD • PO BOX 147 • CHANHASSEN • MINNESOTA 55317 Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 2 of 21 Small brewer off -sale licenses can only be issued to breweries producing less than 20,000 barrels are year. Cideries, facilities that produce hard cider, have also been gaining popularity; however, Minnesota law currently classifies hard cider as a wine which means the above licenses cannot be applied to cideries. A brief discussion on what steps the city would need to take to permit a cidery is included in the analysis section. It is possible that as craft cideries gain in popularity state law will be changed to treat them more similarly to craft breweries and distilleries. Many communities have amended their ordinances to take advantage of these provisions and allow taprooms, brew pubs, cocktail rooms, and other craft alcohol production and consumption venues. The increased permissiveness and flexibility in state and local laws, along with a growing market for craft alcohol, has led to a proliferation of craft alcohol producers. With the rapid growth of the craft alcohol industry and Chanhassen's strong demographics there has been interest in opening one of these facilities in our community. The City Code does not currently allow the city to license taprooms, cocktail rooms, or brew pubs, and any alcohol production would be restricted to Industrial Office Park Districts (IOP). The city may wish to preemptively consider if it wishes to allow craft alcohol production and under what terms. RELEVANT STATE LAWS Minn. Stat. 340A.101 -Definitions: Defines alcohol related terms like brewer, brewery, brew pub, etc. Minn. Stat. 340A.22-Microdistilleries: Specifies that microdistilleries can provide samples and that municipalities may create a cocktail room license allowing the on -sale of their product along with an off -sale license. Minn. Stat. 340A.24 -Brew Pubs: Grants municipalities the power to create and grant on -sale and off -sale licenses to brew pubs and restricts what companies can open brew pubs and limits brew pubs' off -sale volume. Minn. Stat. 340A.26 -Brewer Taprooms: Lets cities grant a brewer taproom license to qualifying breweries. It also allows for Sunday on -sale, if authorized by the city. Minn. Stat. 340A.28 -Small Brewer Off -Sale: States that municipalities may issue small brewer off -sale licenses, and stipulates volume and product off -sale limits. Minn. Stat. 340A.285 -Growlers: Places limits on the packaging of malt liquor sold under 340A.24 and 340A.28. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 3 of 21 Minn. Stat. 340A.301 -Manufacturers, Brewers, and Wholesalers Licenses: Governs the state level licensing of alcohol producers. Minn. Stat. 340A.404-Intoxicationg Liquor; On -Sale Licenses: Allows the city to issue temporary on -sale licenses brewers producing under 3,500 barrels a year and microdistilleries. Minn. Stat. 340A.510 -Samples: Allows for and places limits on alcohol producer's providing product samples. IMPACTED CITY CODE Chapter 1 -General Provisions, Sec. 1-2. —Rules of construction and definitions: Need to add definitions for various terms relating to alcohol production. Chapter 4 -License, Permit, and Administrative Fee, Article II. — License and other business and public safety related fees, Sec. 4-15. — Fees set.: Need to set fees for new liquor licenses. Chapter 10 — Licenses, Permits and Miscellaneous Business Regulations, Article H. — Alcoholic Beverages, Division 2 —Retail licenses, Sec. 10-19. — Types of license.: Will need to create and define licenses allowing for taprooms, brew pubs, cocktail rooms, amend to allow on -sale to issue samples, and add breweries and microdistillaries to temporary liquor license, etc. Chapter 20 — Zoning, Article IV. — Conditional, Division 4. — Standards for business, office, institutional and industrial districts: CUP criteria will have to be added for breweries with taprooms producing over 3,500 barrels per year. Chapter 20 — Zoning, Article XVII. — `BH" Highway and business services district. Will need to add to uses and conditional uses. Chapter 20 — Zoning, Article XVIII. — "CBD " Central Business district. Will need to add to uses and conditional uses. Chapter 20 — Zoning, Article XIX. — "BG" General business district. Will need to add to uses and conditional uses. Chapter 20 — Zoning, Article==. — "IOP"Industrial office park district. Will need to add to uses and conditional uses. Chapter 20- Zoning, Article XXIII. — General Supplemental Regulations, Division 2. - Performance Standards: Will need to add standards for taprooms, brew pubs, and cocktail rooms. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 4 of 21 Chapter 20 — Zoning, Article =V.. — Off -Street parking and loading, Division 2. — Parking and loading, Sec. 20-1124. — Required number of on-site parking spaces: Will need to add parking requirements. ANALYSIS Issue 1: Size Craft alcohol production can take a wide variety of forms and occur at vastly different intensities ranging from 250,000 barrel a year operations to nano -breweries producing well under 500 barrels a year. From a legal stand point important distinctions are made for breweries at the 250,000 (maximum size for a taproom), 20,000 (maximum size for growler off -sale), and 3,500 barrel (maximum size for a brew pub) marks and for distilleries at the 40,000 proof gallon (maximum size for a microdistillery) mark. Due to concerns about the potential for breweries and distilleries to generate offensive odors and large volumes of truck traffic, many municipalities choose to limit the size of breweries, especially those located in commercial and business districts. The most common thresholds are 3,500, 5,000, or 20,000 barrels. Communities which selected a limit of 5,000 barrels did so because it was the initial production limit for growler off -sale; however, as more and more breweries have expanded the state raised the limit to 20,000 barrels. Some cities have subsequently amended their ordinances to allow for an upward limit of 20,000 barrels, but most have kept the initial limit of 5,000 barrels. To provide context, the 25`h largest Minnesota brewery produced 1,800 barrels of beer in 2016 and Fulton Brewery in Minneapolis has an annual production of around 26,000 barrels and is the 41h largest brewery in Minnesota. In most communities the limits placed upon brewery size follows the statutory thresholds because it is convenient for the purpose of licensing, and also because breweries of similar sizes generate vastly different levels of traffic. Frequency of brewing and distribution methods all factor into the frequency and size of a brewery's shipments. Similarly, the presence or absence of a taproom and its size contribute substantially to a brewery's trip generation. Since each brewery has a substantially different traffic impact there is no good data available for projecting the traffic that will be generated by a typical brewery of a specified size. The same variables apply to microdistilleries as well. The other major size related concern is the potential for craft alcohol producers to generate offensive odors. Typically, a brewery gives off a yeasty smell similar to that of a bakery on days when brewing is occurring and microdistillaries can produce odors when aging their product. Cities with experience with craft alcohol producers do not report receiving complaints about odors generated by these uses in commercial and business districts, and anecdotally the scent generated is reported to be in line with that of a similarly sized bakery or restaurant. Again, there does not seem to be a clear correlation between size and odor generated, or an established threshold for when the odor becomes offensive. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 5 of 21 Limiting brewers to 5,000 barrels and distilleries to 40,000 proof gallons within commercial and business districts would be consistent with most communities of our size and should not generate either traffic or odor issues. It may be appropriate to allow distribution oriented brewers in industrial districts to produce up to 20,000 barrels. Concerns about the impact of craft alcohol producers on adjacent properties should be mitigated by classifying breweries producing over 3,500 barrels as conditional uses. Smaller craft alcohol producers are unlikely to have impacts significantly different from other permitted uses and should be classified as permitted uses. Issue 2: Type offacility Craft alcohol producers often wish to have an onsite taproom or cocktail room, and some also operate on-site restaurants. Craft alcohol producers with these types of associated on -sale activities can take on the feel of bars or restaurants and have a similar impact on surrounding properties; however, due to the unique nature of their products and atmosphere they tend to draw from a larger market area. These types of uses have the capacity to become significant destinations within a community. Breweries and distilleries that desire to provide food service have the ability to co -locate a restaurant onsite with their cocktail room or taproom, if a city's zoning code permits both alcohol production and restaurants. Often times breweries and distilleries are located in industrial districts where restaurants are not permitted. Some cities have placed prohibitions to prevent the holders of taproom and cocktail room licenses from operating on-site restaurants, but the state licensure permits establishments to hold both a restaurant and taproom or cocktail room license. Breweries interested in on-site food service also have the option of operating as brew pub. Brew pubs are best understood as restaurants with alcohol production as an accessory use. In practice they operate in a manner virtually indistinguishable from restaurants and have similar impacts. Taprooms and cocktail rooms that do not serve food on site often engage food trucks or allow patrons to carry in food from home or nearby restaurants. In instances where taprooms are located adjacent to restaurants and other commercial uses this can help attract visitors and generate revenue for surrounding businesses. Since Chanhassen does not allow food trucks, except in conjunction with approved outdoor events, it is anticipated that a taproom or cocktail room locating in the city would partner with local restaurants or have an onsite restaurant component to provide food options for their patrons. There is not a strong rational for allowing craft alcohol producers but not permitting them to have taprooms or cocktail rooms, and some communities require that craft alcohol producers located in commercial districts have an associated taproom or cocktail room. Many communities choose to regulate the size of these taprooms or cocktail rooms, either by percentage of floor space or by setting an absolute cap on square footage. The rational for this is presumably to prevent an intensive commercial use within industrial districts and to avoid the creation of spaces that function as de facto bars. For most of the city's industrial districts the limits imposed by the city's parking requirements and existing stipulation that no more than 20 percent of floor area may be retail space would make large taprooms or cocktail rooms unworkable. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 6 of 21 Encouraging or requiring craft alcohol producers to have a taproom or cocktail room helps them to serve as local or regional destinations; however, brewpubs may not have a synergistic effect with existing businesses as they are a self-contained restaurant. It is not apparent that explicitly limiting the size of taprooms or cocktail rooms is necessary, although it is a somewhat common practice. Issue 3: Permitted versus Conditional Use Cities that choose to allow taprooms and cocktail rooms have the choice of either allowing them as a permitted or conditional use. The general trend is for cities to either classify all alcohol production as a conditional use or to establish size or production volumes beyond which a CUP is required. Typically, cities allow for higher volumes of production but less retail activity in industrial districts and lower production limits but larger retail footprints in commercial districts. Allowing craft alcohol production as a permitted use often makes sense in districts designed for industrial activities where considerations such as odor, truck traffic, and the location/screening of loading docks are easily addressed by general conditions or district standards. Other provisions within City Code, such as parking requirements or a cap on the percentage of an industrial site that can be used for retail purposes, limit the impact that the taproom or cocktail room can have upon adjacent land uses. Similarly, allowing a brewpub, which is essentially a restaurant with a small accessory production element, to locate as a permitted use within commercial districts makes sense as the existing provisions governing restaurants are often sufficient to address the brew pub's impacts. Since breweries of similar size tend to generate drastically different amounts and types of traffic depending on their business plan, it can be difficult to account for their potential impacts through general conditions. For example, a distribution oriented brewery with a small taproom would have an impact very similar to a food processing plant; whereas, a brewery that sold the vast majority of its product through its taproom would have an impact very similar to a bar or tavern. A zoning provision allowing a small brewery with associated taproom as a permitted use would allow for both of these business models, and staff does not believe that breweries producing under 3,500 barrels a year using either model are likely to negatively impact surrounding land uses. Classifying taprooms and cocktail rooms as conditional uses allows for cities to better evaluate the proposed use and site in the context of the surrounding sites and ensure that potential negative impacts are mitigated. Staff believes that larger hybrid industrial/retail uses like taprooms and cocktail rooms have unique needs and impacts that justify classifying them as conditional uses when production volumes exceed 3,500 barrels per year. Issue 4: Location One of the reasons that municipalities have been so keen to embrace craft alcohol producers is that they have the capacity to become destinations within a community. They can draw people to downtowns or commercial districts and can even serve as catalysts for redevelopment when located in vacant industrial properties. Some cities restrict all alcohol production, regardless of Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 7 of 21 scale, to industrial districts, but many allow smaller facilities with associated taprooms/cocktail rooms to locate in commercial and business districts. Some cities restrict breweries and distilleries from having an on-site restaurant; whereas, others limit brew pubs to commercial districts. The majority of Chanhassen's commercial properties are located downtown; however, the recently approved Avienda development will also create a new commercial hub near the intersection of 212 and Lyman. Since the city does not have a significant inventory of industrial properties in need of redevelopment, staff believes that commercial districts intended to serve the entire community or have a regional draw are the most appropriate places to allow taprooms and cocktail rooms, especially if they have associated restaurants. Some sites zoned for industrial use may also be appropriate locations for breweries or distilleries with a more distribution oriented business model where the taprooms or cocktail rooms have a more accessory function. The table below shows staff's recommended zoning for craft alcohol producers. Proposed Craft Alcohol by Commercial and Industrial Districts Zoning District Production only Taproom/Cocktail Room (< 3,500 barrels) Taproom/Cocktail Room (> 3,500 barrels) Brewpub/Restaurant component Neighborhood Business (BN) No No No No Highway and Business Services (BH) No Yes CUP Yes Central Business (CBD) No Yes CUP Yes Community Commercial (CC) No No No No General Business District (BG) No Yes CUP Yes Fringe Business District (BF) No No No No Office and Institutional District (OI) No No No No Industrial Office Park (IOP) CUP* Yes CUP No Note: Production only facilities are currently allowed within the city's IOP districts as a conditional use under the "food processing" category. hi addition to the above general zoning districts the city also has the ability to create or amend Planned Unit Development (PUD) Districts. Existing PUDs can be amended to allow craft alcohol production when their underlying zoning district would otherwise permit it and/or when the proposed use is a good fit for the district. The inclusion of craft alcohol production in future PUDs would be established by the Planning Commission and City Council as part of the creation of those districts; however, staff anticipates that PUDs in areas guided for mixed commercial and residential uses could be well suited for craft alcohol production. Issue 5: Parking Craft alcohol producers with associated retail features have both production and retail characteristics. This can create difficulties in determining how much parking is appropriate. Most Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 8 of 21 municipalities have solved this dilemma by requiring the facility's production area to meet manufacturing parking requirements and its retail area to meet bar or restaurant parking requirements. In Chanhassen this would mean one space for each 1,000 square feet of gross production area and one space for each 50 square feet of gross retail area. Issue 6: Craft Cider The City Code allows for the production of craft cider within any area zone IOP, but the manufacturer would be unable to sell their product on premise. If the manufacturer operated a restaurant at the location of manufacture the city could possibly issue either a wine license or on - sale liquor license to the facility. To accommodate this arrangement, the city would need to amend the zoning code to allow restaurants as an accessory use at a production facility, production as an accessory use at a restaurant, or create cideries as a permitted use in one or more districts. Since there are currently no state level licenses designed to accommodate cideries and there is significantly lower interest in craft cider than either craft breweries or distilleries, staff recommends waiting for state action. If the city were to receive a request to open a cidery under the current regulatory scheme, the city could examine what ordinance amendments it feels are appropriate to accommodate the proposed use. Note: Sociable Cider Werks, a cidery in Minneapolis, does operate a taproom under a brewery license. This is due to the fact that they use grains and hops as bittering agents rather than spitters (bitter apples). This means their product is technically graft rather than cider. Graft is classified as a malt liquor and, thus, its production can be governed by brewery provisions. Issue 7: Temporary Liquor Licenses State law allows for municipalities to issue to temporary on -sale licenses to brewer's manufacturing fewer than 3,500 barrels of malt liquor in a year or microdistilleries in connection with a social event within the municipality sponsored by the brewer or microdistillery. No more than one of these license can be issued per organization per month, and for no more than a total of twelve days per year. The city's existing provisions governing temporary liquor licenses were adopted before the state loosened its restrictions on craft alcohol production, and it limits temporary liquor licenses recipients to clubs, religious, nonprofit, or political committees. hi order to allow a local brewery or microdistillery to organize and serve alcohol at off premise social events the city would need to amend its temporary liquor license to include the state provisions that allows craft alcohol producers to receive these licenses. Many craft alcohol producers organize summer block parties, street festivals, outdoor concerts, and other off premise social events. These events can draw significant numbers of people and are part of how craft alcohol producers help promote and bring visitors to a community. Staff anticipates that any brewery/microdistillary that located in Chanhassen would be interested in the possibility of sponsoring social events within the city and recommends that the city's temporary on -sale license be amended to include craft alcohol producers. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 9 of 21 Issue 8: Samples State law allows for the holders of both on- and off -sale liquor licenses to offer product samples; however, the City Code restricts this to off -sale licenses. It is common practice for craft alcohol producers to provide patrons with samples of their product in order to help them identify which style of drink they would like purchase. The state's microdistillery statute includes a sampling provision, but the brewer taproom provision does not. To avoid confusion staff recommends that the city's sampling ordinance be amended to include the states language specifically allowing holders of both on- and off- sale liquor licenses to offer product samples. ALTERNATIVES 1) Wait until the city is formally approached by a party interested in opening a craft alcohol production facility and limit any ordinance changes to those specifically required to accommodate the proposed use. 2) Amend the City Code to allow breweries with taprooms and microdistilleries with cocktail rooms as conditional uses in specific districts. 3) Amend the City Code to allow breweries with taprooms, microdistilleries with cocktail rooms, and brew pubs as conditional uses in specific districts. 4) Amend the City Code to allow breweries with taprooms and microdistilleries with cocktail rooms in specific districts 5) Amend the City Code to allow breweries with taprooms, microdistilleries with cocktail rooms, and brew pubs in specific districts. 6) Amend the City Code to allow breweries with taprooms, microdistilleries with cocktail rooms, and brew pubs in specific districts, with breweries with taprooms producing over 3,500 barrels per year being classified as conditional uses. RECOMMENDATION Staff believes that a craft alcohol producer with an associated taproom, cocktail room, or restaurant could be an assent to downtown and recommends alternative 6. A possible regulatory scheme for craft alcohol production is provided below: Chapter 1 — General Provisions Sec. 1-2. - Rules of construction and definitions. Brew Pub is a brewer who also holds one or more retail on -sale licenses and who manufactures fewer than 3,500 barrels of malt liquor in a year, at any one licensed premises, the entire production of which is solely for consumption on tap on any licensed premises owned by the brewer, or for off -sale from those licensed premises as permitted in Minn. Stat. 340A.24. subdivision 2. Brewer is a person who manufactures malt liquor for sale. Planning Commission Craft Alcohol Production – City Code Amendment May 15, 2018 Page 10 of 21 Brewery is a location where malt liquor is manufactured for sale. Cocktail room is a location in or adjacent to a microdistillery where the owner of the is a location in or adjacent to a distillery where the owner of the distillery sells distilled spirits produced by the distiller for consumption on the premises or for off-site consumption as provided for in Minn. Stat. sells distilled spirits produced by the distillery for consumption on the premises or for off-site consumption as provided for in Minn. Stat. 340A.22. Distiller is a person who manufactures distilled spirts for sale. Distilled spirits is ethyl alcohol, hydrated oxide of ethyl, sprits of wine, whiskey, rum, brandy, gin, and other distilled spirits, including all dilutions and mixtures thereof, for nonindustrial use. Malt Liquor "Malt liquor" is any beer, ale or other beverage made from malt by fermentation and containing not less than one-half of one percent alcohol by volume. Microdistillery is a distillery operated within the state producing premium distilled spirits in a total quantity not to exceed 40,000 proof gallons in a calendar year. Small Brewer is a brewery that produces less than 20,000 barrels of malt liquor in a year. Tap Room is a location in or adjacent to a brewery where the owner of the brewery sells malt liquor produced by the brewery for consumption on the premises or for off-site consumption as provided for in Minn. Stat. 340A.28 and 340A.285. Chapter 4 – License, Permit, and Administrative Fees ARTICLE lI. - LICENSE AND OTHER BUSINESS AND PUBLIC SAFETY RELATED FEES Sec. 4-15. - Fees set. The fees for the various licenses required by this Code are set forth in this section as follows: (a) Liquor license fees: 1. The annual license fee for an on -sale intoxicating liquor license shall be: Floor Area: Floor Area: Floor Area: Under 3,000-6,000 Over 6,000 3,000 Sq. Ft. Sq. Ft. Sq. Ft. Restaurant $6,115.00 $ 9,609.00 $13,104.00 Exclusive liquor store $7,862.00 $11,356.00 $14,851.00 Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 11 of 21 2. Various other license fees shall be set as follows: Off -sale intoxicating .....$200.00* Off -sale nonintoxicating .....58.00 On -sale nonintoxicating .....410.00 Sunday sales .....200.00* Wine/beer license .....410.00 On -Sales Brewer Taproom.....$400.00 On -Sales Cocktail Room.....$400.00 Small Brewer Off-Sale.....$200.00 Microdistillery Off-Sale.....$200.00 *Fees that are established by state statute. 3. The fees to conduct a background investigation on liquor license applications for owners, officers or operating managers shall be (per person investigated) .....250.00 This includes new applications as well as changes in officers or operating managers of existing license holders. 4. Temporary on -sale liquor licenses shall be .....1.00 Chapter 10 — Licenses, Permits and Miscellaneous Business Regulations Article II. — Alcoholic Beverages Division 2 — Retail Licenses Sec. 10-19. - Types of licenses. The following types of licenses are issued under this article: (h) Temporary on -sale intoxicating liquor licenses. 1) The city council may issue to a club or charitable religious or nonprofit organization in existence for at least three years or to a political committee registered under M.S. § 10A.14 a temporary license for the on -sale of intoxicating liquor in connection with a social event within the city sponsored by the licensee. The license may authorize the on -sale of intoxicating liquor for not more than four consecutive days, and may authorize on -sales on premises other than premises the licensee owns or permanently occupies. The license may provide that the licensee may contract for intoxicating liquor catering services with the holder of a full -year on -sale liquor license issued by the city. The licenses are subject to the terms, including license fee, imposed by the city. The licenses issued under this section are subject to all laws and ordinances governing the sale of intoxicating liquor except M.S. § 340A.409 and § 340A.504, subd. 3, paragraph (d), and the laws and ordinances which by their nature are not applicable. 2) The city council may issue to a brewer who manufactures fewer than 3,500 barrels of malt liquor in a year or a microdistillery a temporary license for the on -sale of intoxicating liquor in connection with a social event within the municipality sponsored by the brewer or microdistillery. The terms and conditions specified for temporary licenses under paragraph (1) shall apply to a license issued under this paragraph, except that the requirements of section M.S. § 340A.409 subd.1 to 3a, shall apply to the license. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 12 of 21 3) Limitations on temporary on -sale intoxication liquor licenses. Temporary licenses must first be approved by the commissioner of public safety before they become valid. No more than three four-day, four three-day, or six two-day temporary licenses, in any combination not to exceed 12 days per year, may be issued for the sale of alcoholic beverages to any one organization or registered political committee, or for any one location, within a 12 -month period. Not more than one temporary license may be issued to any one organization or registered political committee, or for any one location, within any 30 -day period. (k) On -Sales Brewer Taproom License. May be issued to a brewery licensed under Minn. Stat. Section 340A.301, subdivision 6, clause (c), (i), or (j) for the on sale of malt liquor produced by the brewer for the consumption on the premises of or adjacent to one brewery location owned by the brewer as provided in Minn. Stat. Section 340A.26. (1) On -Sales Brewer Taproom License Holders are allowed Sunday on -sales as provided in Minn. Stat 340A.26 and do not require a separate On Sale Sunday Liquor License. No Sunday on -sales are allowed before 10:00 a.m. or after 10:00 p.m. (1) Small Brewer Off -Sale License. May be issued to a brew pub or brewery licensed under Minn. Stat. Section 340A.301 for the off -sale of malt liquor at its licensed premises that has been produced and packaged by the brewer as provided in Minn. Stat. 340A.24, 340A.28, and 340A.285. (1) Small Brewer Off -Sale License holders are allowed Sunday off -sale of as provided in Minn. Stat. 340A.24 and 340A.28, and 340A.285. No Sunday off -sales are allowed before 10:00 a.m. or after 10:00 p.m. (m) On -Sales Cocktail Boom license may be issued to a microdistillery for the on sale of distilled spirits produced by the distiller for the consumption on the premises of or adjacent to one distillery location owned by the distiller as provided in Minn. Stat 340A.22. (1) On -Sales Cocktail Room License Holders are allowed Sunday on -sales as provided in Minn. Stat 340A.22 and do not require a separate On Sale Sunday Liquor License. No Sunday on -sales are allowed before 10:00 a.m. or after 10:00 p.m. (n) Microdistillery Off -Sale License. May be issued to a microdistillery for the off -sale of distilled spirits as provided in Minn. Stat. 340A.22. (1) Microdistillery Off -Sale License Holders are allowed Sunday off -sales as provided in Minn. Stat 340A.22 and do not require a separate On Sale Sunday Liquor License. No Sunday off -sales are allowed before 10:00 a.m. or after 10:00 p.m. Sec. 10-53. - Samples. On- or off -sale licensees may provide or permit a licensed manufacturer or wholesaler or its agents to provide on the premise of the retail licensee samples of malt liquor, wine, liqueurs, cordials, and distilled spirits which the licensee currently has in stock and is offering for sale to the general public without obtaining an additional license, provided the malt liquor, wine, liqueur, cordial, and distilled spirits samples are dispensed at no charge and consumed on the licensed Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 13 of 21 premises during the permitted hours of off sale in a quantity less than 100 milliliters of malt liquor per variety per customer, 50 milliliters of wine per variety per customer, 25 milliliters of liqueur or cordial, and 15 milliliters of distilled spirits per variety per customer. Chapter 20 — Zoning Article IV. — Conditional DIVISION 4. - STANDARDS FOR BUSINESS, OFFICE, INSTITUTIONAL AND INDUSTRIAL DISTRICTS 20-285.5 Brewery operated in conjunction with a taproom, producing more than 3,500 barrels of malt liquor per year. The following applies to all breweries operated in conjunction with a taproom: (1) The brewery shall not produce more than 5,000 barrels of malt liquor per year, unless they are located in an area zoned Industrial Office Park (IOP), in which case the brewery shall not produce more than 20,000 barrels of malt liquor per year. (2) An outdoor seating area is permitted provided: it has an enclose and the enclosure is not interrupted; access to the seating area must be through the principle building; its hours of operation shall be no later than 10:00 p.m. Sunday -Thursday and 12:00 a.m. Friday -Saturday; and, the outdoor seating area must be located and designed so as not to interfere with pedestrian and vehicular circulation. (3) Shipping and receiving areas shall be located behind the facility or otherwise screened from view. (4) Compliance plan must be submitted to the city including: a. An inventory of potential or identified odor emission point sources associated with the industry or source. b. An engineering quality plan detailing best available control technologies and appurtenances designed to eliminate or achieve the maximum reduction of odor pollution from an emission point source inclusive of, but not necessarily limited to certain processes, procedures, or operating methods intended to mitigate or control odor pollution. C. A detailed explanation of the specifications and operating parameters of the best available control technologies, monitoring instrumentation and equipment, and processes and procedures intended for the mitigation or control of odor pollution. d. A specification of the documentation that will be made available for the city's review which will verify the data produced by the monitoring equipment, and which will verify that processes and procedures are conducted consistent with the specifications in the facility's odor control study and plan. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 14 of 21 C. An approved schedule which states, in a time certain manner, the implementation and installation of the best available control technology, processes, procedures, operating methods, and monitoring instrumentation designed to mitigate or control odors at the facility inclusive of an approved completion date. C An acknowledgment of the authority of the city and its agents to enter into the facility or its property in order to investigate complaints and to verify the facility's adherence to the compliance plan. Article XVII. — `BH" Highway and Business Services District Sec. 20-712. - Permitted uses. The following uses are permitted in a "BH" district: (1) Antennas as regulated by article XXX of this chapter. (2) Car wash. (3) Community center. (4) Convenience stores without gas pumps. (5) Day care center. (6) Fast-food restaurant. (7) Financial institutions with/or without drive-through services. (8) Funeral homes. (9) Health services. (10) Liquor stores. (11) Miniature golf. (12) Motels and hotels. (13) Offices. (14) Personal services. (15) Private clubs and lodges. (16) Reqeiwed Brewery operated in conjunction with a taproom producing less than 3,500 barrels per year. (subject to the requirements of section 20-969) (17) Shopping center. (18) Specialty retail shops. (19) Standard restaurants. (20) Utility services. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 15 of 21 (21) Brew pub (subject to the requirements of section 20-968) (22) Microdistillery operated in conjunction with a cocktail room. (subject to the requirements of section 20-967) Sec. 20-714. - Conditional uses. The following are conditional uses in a "BH" district: (1) Automobile rental facilities. (2) Automotive repair shops. (3) Convenience stores with gas pumps. (4) Emission control testing stations. (5) Garden centers. (6) Motor fuel stations. (7) Outdoor storage. (8) Brewery operated in conjunction with a taproom, producing over 3,500 barrels per year. (9) Small vehicle sales. (10) Supermarkets. (11) Towers as regulated by article XXX of this chapter. Article XVIII. — "CBD" Central Business District Sec. 20-732. - Permitted uses. The following uses are permitted in a "CBD" district: (1) Antennas as regulated by article XXX of this chapter. (2) Ballroom. (3) Barber and beauty salons and spas including hair, nail, skin and scalp services. (4) Bars and tavems. (5) Bowling center. (6) Clothing rental. (7) Clubs and lodges. (8) Coin-operated service machines. (9) Community center. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 16 of 21 (10) Convenience stores without gas pumps. (11) Convention and conference facilities. (12) Costume rental. (13) Cultural facilities. (14) Day care center as part of shopping center. (15) Fast-food restaurants as part of shopping center. (16) Financial institutions. (17) Health and recreation clubs, instructions and services. (18) Health services, outpatient only. (19) Hotels. (20) Laundry and garment services including self-service. (21) Locker rental. (22) Multiple -family dwellings, including senior citizen housing. (23) Newspaper offices. (24) Offices. (25) Parking ramp. (26) Photographic studios. (27) Print shops. (28) Quilting and scrap booking. (29) Retail sales. (30) Schools. (31) Shoe repair shops and shoeshine parlors. (32) Shopping center. (33) Sporting goods rental. (34) Standard restaurants. (35) Tattoo and body art and piercing services (MS ch. 14613). (36) Theatrical producers and services. (37) Utility service. (38) Wedding chapel. (39) Brewery operated in conjunction with a taproom producing less than 3,500 barrels per year. (subject to the requirements of section 20-969) Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 17 of 21 (40) Brew pub (subject to the requirements of section 20-968) (41) Microdistillery operated in conjunction with a cocktail room. (subject to the requirements of section 20-967) Sec. 20-734. - Conditional uses. The following are conditional uses in a "CBD" district: (1) Brewery operated in conjunction with a taproom, producing over 3,500 barrels per year. (2) Freestanding fast-food restaurants. (3) Reserved (4) Convenience store with gas pumps. Article XIX. — `BG" General Business District Sec. 20-752. - Permitted uses. The following uses are permitted in a'BG" district: (1) Animal hospital. (2) Antenna. (3) Bars and taverns. (4) Bowling center. (5) Community center. (6) Convenience stores without gas pumps. (7) Day care center. (8) Entertainment. (9) Fast-food restaurants. (10) Financial institutions, including drive-in service. (11) Funeral homes. (12) Garden centers. (13) Hardware goods. (14) Health and recreation clubs. (15) Health services. (16) Home improvement trades building supply centers. (17) Miniature golf. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 18 of 21 (18) Motels. (19) Newspaper and print shop. (20) Offices. (21) Personal services. (22) Private clubs and lodges. (23) Reserved. (24) Senior citizen housing. (25) Small appliance and similar repair shops. (26) Specialty retail. (27) Standard restaurants. (28) Supermarkets. (29) Utility services. (30) Veterinary clinic. (31) Brewery operated in conjunction with a taproom producing less than 3,500 barrels per year. (subject to the requirements of section 20-969) (32) Brew pub (subject to the requirements of section 20-968) (33) Microdistillery operated in conjunction with a cocktail room. (subject to the requirements of section 20-967) Sec. 20-754. - Conditional uses. The following are conditional uses in a "BG" district: (1) Brewery operated in conjunction with a taproom, producing over 3,500 barrels per year. (2) Truck, automobile, farm implement, recreational vehicles and boat sales and service. (3) Equipment rental. (4) Screened outdoor storage. (5) Major auto repair and body shops. (6) Convenience stores with gas pumps. (7) Motor fuel stations. Article XXII.- "IOP" Industrial Office Park District Sec. 20-812. - Permitted uses. The following uses are permitted in an "IOP" district: Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 19 of 21 (1) Antennas as regulated by article XXX of this chapter. (2) Automotive repair shops. (3) Conference/convention centers. (4) Health services. (5) Indoor health and recreation clubs. (6) Light industrial. (7) Offices. (8) Off -premises parking lots. (9) Print shops. (10) Recording studios. (11) Utility services. (12) Vocational school. (13) Warehouses. (14) Brewery operated in conjunction with a taproom producing less than 3,500 barrels per year. (subject to the requirements of section 20-969) (15) Microdistillery operated in conjunction with a cocktail room. (subject to the requirements of section 20-967) Sec. 20-814. - Conditional uses. The following are conditional uses in an "IOP" district: (1) Contracting yards. (2) Day care centers as part of a multi -tenant building. (3) Day care centers as a separate facility. (4) Food processing. (5) Gun range, indoor. (6) Home improvement trades. (7) Hotels and motels. (8) Lumber yards. (9) Motor freight terminals. (10) Outdoor health and recreation clubs. (11) Screened outdoor storage. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 20 of 21 (12) Research laboratories. (13) Brewery operated in conjunction with a taproom, producing over 3,500 barrels per year. (14) Commercial towers as regulated by article XXX of this chapter. (15) Electrical distribution and underground electric distribution substations. Article XXIII. — General supplemental regulations Division 2. — Performance Standards Sec. 20-967 Microdistillery operated in conjunction with a cocktail room The following applies to all Microdistilleries operated in conjunction with a cocktail room: (1) The Microdistillery shall not produce more than 40,000 proof gallons of distilled spirits per year. (2) An outdoor seating area is permitted provided: it has an enclose and the enclosure is not interrupted; access to the seating area must be through the principle building; its hours of operation shall be no later than 10:00 p.m. Sunday -Thursday and 12:00 a.m. Friday -Saturday; and, the outdoor seating area must be located and designed so as not to interfere with pedestrian and vehicular circulation. (3) Shipping and receiving areas shall be located behind the facility or otherwise screened from view. Sec. 20-968 Brew Pub The following applies to all brew pubs: 1) The brew pub shall not produce more than 3,500 barrels per year. 2) An outdoor seating area is permitted provided: it has an enclose and the enclosure is not interrupted; access to the seating area must be through the principle building; its hours of operation shall be no later than 10:00 p.m. Sunday -Thursday and 12:00 a.m. Friday -Saturday; and, the outdoor seating area must be located and designed so as not to interfere with pedestrian and vehicular circulation. 3) Shipping and receiving areas shall be located behind the facility or otherwise screened from view. Planning Commission Craft Alcohol Production — City Code Amendment May 15, 2018 Page 21 of 21 Sec. 20-969 Brewery operated in conjunction with a taproom, producing less than 3,500 barrels of malt liquor per year. The following applies to all breweries operated in conjunction with a taproom: (1) The brewery shall not produce more than 3,500 barrels of malt liquor per year. (2) An outdoor seating area is permitted provided: it has an enclose and the enclosure is not interrupted; access to the seating area must be through the principle building; its hours of operation shall be no later than 10:00 p.m. Sunday -Thursday and 12:00 a.m. Friday -Saturday; and, the outdoor seating area must be located and designed so as not to interfere with pedestrian and vehicular circulation. (3) Shipping and receiving areas shall be located behind the facility or otherwise screened from view. Article XXIV. — Off -Street Parking and Loading Division 2. — Parking and Loading Sec. 20-1124. - Required number of on-site parking spaces. (2) The minimum number of required on-site parking spaces for the following uses shall be: z. Brew pub, Brewery operated in conjunction with a taproom, or Microdistillery operated in conjunction with a cocktail room- One space for each 50 square feet of gross taproom, cocktail room, or restaurant floor area, and one space for each 1,000 square feet of gross production area. ATTACHMENTS 1) Craft Alcohol Production Ordinance 2) Key Terms G:\PLAN\City Code\2018\PC PH 5-15-I8\Brewery\Craft Alcohol Production—PC CITY OF CHANHASSEN CARVER AND HENNEPIN COUNTIES, MINNESOTA ORDINANCE NO. [insert number] AN ORDINANCE AMENDING CHAPTER 1, GENERAL PROVISIONS, CHAPTER 4, LICENSE, PERMIT AND ADMINISTRAIVE FEE, CHAPTER 10, LICENSE, PERMITS AND MISCELLANEOUS BUSINESS REGULATIOSN, AND CHAPTER 20, ZONING OF THE CHANHASSEN CITY CODE THE CITY COUNCIL OF THE CITY OF CHANHASSEN, MINNESOTA ORDAINS: Section 1. Section 1-2 of the Chanhassen City Code is amended to read as follows: Brew Pub is a brewer who also holds one or more retail on -sale licenses and who manufactures fewer than 3,500 barrels of malt liquor in a year, at any one licensed premises, the entire production of which is solely for consumption on tap on any licensed premises owned by the brewer, or for off -sale from those licensed premises as permitted in Minn. Stat. 340A.24. subdivision 2. Brewer is a person who manufactures malt liquor for sale. Brewery is a location where malt liquor is manufactured for sale. Cocktail room is a location in or adjacent to a microdistillery where the owner of the is a location in or adjacent to a distillery where the owner of the distillery sells distilled spirits produced by the distiller for consumption on the premises or for off-site consumption as provided for in Minn. Stat. sells distilled spirits produced by the distillery for consumption on the premises or for off- site consumption as provided for in Minn. Stat. 340A.22. Distiller is a person who manufactures distilled spirts for sale. Distilled spirits is ethyl alcohol, hydrated oxide of ethyl, sprits of wine, whiskey, rum, brandy, gin, and other distilled spirits, including all dilutions and mixtures thereof, for nonindustrial use. Malt Liquor "Malt liquor" is any beer, ale or other beverage made from malt by fermentation and containing not less than one-half of one percent alcohol by volume. Microdistillery is a distillery operated within the state producing premium distilled spirits in a total quantity not to exceed 40,000 proof gallons in a calendar year. Small Brewer is a brewery that produces less than 20,000 barrels of malt liquor in a year. Tap Room is a location in or adjacent to a brewery where the owner of the brewery sells malt liquor produced by the brewery for consumption on the premises or for off-site consumption as provided for in Minn. Stat. 340A.28 and 340A.285. Section 2. Section 4-15(a)(2) of the Chanhassen City Code is amended to read as follows: 2. Various other license fees shall be set as follows: Off -sale intoxicating .....$200.00* Off -sale nonintoxicating .....58.00 On -sale nonintoxicating .....410.00 Sunday sales .....200.00* Wineibeer license .....410.00 On -Sales Brewer Taproom.....$400.00 On -Sales Cocktail Room.....$400.00 Small Brewer Off -Sale ..... $200.00 Microdistillery Off-Sale.....$200.00 Section 3. Section 10-19(h) to of the Chanhassen City Code is amended to read as follows: (h) Temporary on -sale intoxicating liquor licenses 1) The city council may issue to a club or charitable religious or nonprofit organization in existence for at least three years or to a political committee registered under M.S. § 10A.14 a temporary license for the on -sale of intoxicating liquor in connection with a social event within the city sponsored by the licensee. The license may authorize the on -sale of intoxicating liquor for not more than four consecutive days, and may authorize on -sales on premises other than premises the licensee owns or permanently occupies. The license may provide that the licensee may contract for intoxicating liquor catering services with the holder of a full -year on -sale liquor license issued by the city. The licenses are subject to the terms, including license fee, imposed by the city. The licenses issued under this section are subject to all laws and ordinances governing the sale of intoxicating liquor except M.S. § 340A.409 and § 340A.504, subd. 3, paragraph (d), and the laws and ordinances which by their nature are not applicable. 2) The city council may issue to a brewer who manufactures fewer than 3,500 barrels of malt liquor in a year or a microdistillery a temporary license for the on -sale of intoxicating liquor in connection with a social event within the municipality sponsored by the brewer or microdistillery. The terms and conditions specified for temporary licenses under paragraph (1) shall apply to a license issued under this paragraph, except that the requirements of section M.S. § 340A.409 subd.1 to 3a, shall apply to the license. 3) Limitations on temporary on -sale intoxication liquor licenses. Temporary licenses must first be approved by the commissioner of public safety before they become valid. No more than three four-day, four three-day, or six two-day temporary licenses, in any combination not to exceed 12 days per year, may be issued for the sale of alcoholic beverages to any one organization or registered political committee, or for any one location, within a 12 -month period. Not more than one temporary license may be issued to any one organization or registered political committee, or for any one location, within any 30 -day period. Section 4. The Chanhassen City Code is amended by adding Section 10-19(k) to Section 10- 19(n) to read as follows: (k) On -Sales Brewer Taproom License. May be issued to a brewery licensed under Minn. Stat. Section 340A.301, subdivision 6, clause (c), (i), or 0) for the on sale of malt liquor produced 2 by the brewer for the consumption on the premises of or adjacent to one brewery location owned by the brewer as provided in Minn. Stat. Section 340A.26. (1) On -Sales Brewer Taproom License Holders are allowed Sunday on -sales as provided in Minn. Stat 340A.26 and do not require a separate On Sale Sunday Liquor License. No Sunday on -sales are allowed before 10:00 a.m. or after 10:00 p.m. (1) Small Brewer Off -Sale License. May be issued to a brew pub or brewery licensed under Minn. Stat. Section 340A.301 for the off -sale of malt liquor at its licensed premises that has been produced and packaged by the brewer as provided in Minn. Stat. 340A.24, 340A.28, and 340A.285. (1) Small Brewer Off -Sale License holders are allowed Sunday off -sale of as provided in Minn. Stat. 340A.24 and 340A.28, and 340A.285. No Sunday off -sales are allowed before 10:00 a.m. or after 10:00 p.m. (m) On -Sales Cocktail Room license may be issued to a microdistillery for the on sale of distilled spirits produced by the distiller for the consumption on the premises of or adjacent to one distillery location owned by the distiller as provided in Minn. Stat 340A.22. (1) On -Sales Cocktail Room License Holders are allowed Sunday on -sales as provided in Minn. Stat 340A.22 and do not require a separate On Sale Sunday Liquor License. No Sunday on -sales are allowed before 10:00 a.m. or after 10:00 p.m. (n) Microdistillery Off -Sale License. May be issued to a microdistillery for the off -sale of distilled spirits as provided in Minn. Stat. 340A.22. (1) Microdistillery Off -Sale License Holders are allowed Sunday off -sales as provided in Minn. Stat 340A.22 and do not require a separate On Sale Sunday Liquor License. No Sunday off -sales are allowed before 10:00 a.m. or after 10:00 p.m. Section 5. Section 10-53 of the Chanhassen City Code is amended to read as follows: Sec. 10-53. - Samples. On- or off -sale licensees may provide or permit a licensed manufacturer or wholesaler or its agents to provide on the premise of the retail licensee samples of malt liquor, wine, liqueurs, cordials, and distilled spirits which the licensee currently has in stock and is offering for sale to the general public without obtaining an additional license, provided the malt liquor, wine, liqueur, cordial, and distilled spirits samples are dispensed at no charge and consumed on the licensed premises during the permitted hours of e€f sale in a quantity less than 100 milliliters of malt liquor per variety per customer, 50 milliliters of wine per variety per customer, 25 milliliters of liqueur or cordial, and 15 milliliters of distilled spirits per variety per customer. Section 6. The Chanhassen City Code is amended by adding Section 20-285.5 to read as follows: 20-285.5 Brewery operated in conjunction with a taproom, producing more than 3,500 barrels of malt liquor per year. The following applies to all breweries operated in conjunction with a taproom: (1) The brewery shall not produce more than 5,000 barrels of malt liquor per year, unless they are located in an area zoned Industrial Office Park (IOP), in which case the brewery shall not produce more than 20,000 barrels of malt liquor per year. (2) An outdoor seating area is permitted provided: it has an enclose and the enclosure is not interrupted; access to the seating area must be through the principle building; its hours of operation shall be no later than 10:00 p.m. Sunday -Thursday and 12:00 a.m. Friday -Saturday; and, the outdoor seating area must be located and designed so as not to interfere with pedestrian and vehicular circulation. (3) Shipping and receiving areas shall be located behind the facility or otherwise screened from view. (4) Compliance plan must be submitted to the city including: a. An inventory of potential or identified odor emission point sources associated with the industry or source. b. An engineering quality plan detailing best available control technologies and appurtenances designed to eliminate or achieve the maximum reduction of odor pollution from an emission point source inclusive of, but not necessarily limited to certain processes, procedures, or operating methods intended to mitigate or control odor pollution. c. A detailed explanation of the specifications and operating parameters of the best available control technologies, monitoring instrumentation and equipment, and processes and procedures intended for the mitigation or control of odor pollution. d. A specification of the documentation that will be made available for the city's review which will verify the data produced by the monitoring equipment, and which will verify that processes and procedures are conducted consistent with the specifications in the facility's odor control study and plan. e. An approved schedule which states, in a time certain manner, the implementation and installation of the best available control technology, processes, procedures, operating methods, and monitoring instrumentation designed to mitigate or control odors at the facility inclusive of an approved completion date. f. An acknowledgment of the authority of the city and its agents to enter into the facility or its property in order to investigate complaints and to verify the facility's adherence to the compliance plan. Section 7. Section 20-712 to of the Chanhassen City Code is amended to read as follows: Sec. 20-712. - Permitted uses. The following uses are permitted in a "BH" district: (1) Antennas as regulated by article XXX of this chapter. (2) Car wash. (3) Community center. (4) Convenience stores without gas pumps. (5) Day care center. 4 (6) Fast-food restaurant. (7) Financial institutions with/or without drive-through services. (8) Funeral homes. (9) Health services. (10) Liquor stores. (11) Miniature golf. (12) Motels and hotels. (13) Offices. (14) Personal services. (15) Private clubs and lodges. (16) Brewery operated in conjunction with a taproom producing less than 3,500 barrels per year. (subject to the requirements of section 20-969) (17) Shopping center. (18) Specialty retail shops. (19) Standard restaurants. (20) Utility services. (2 1) Brew pub (subject to the requirements of section 20-968) (22) Microdistillery operated in conjunction with a cocktail room. (subject to the requirements of section 20-967) Section 8. Section 20-714 to of the Chanhassen City Code is amended to read as follows: Sec. 20-714. - Conditional uses. The following are conditional uses in a "BH" district: (1) Automobile rental facilities. (2) Automotive repair shops. (3) Convenience stores with gas pumps. (4) Emission control testing stations. (5) Garden centers. (6) Motor fuel stations. (7) Outdoor storage. (8) Brewery operated in conjunction with a taproom, producing over 3,500 barrels per year. (9) Small vehicle sales. (10) Supermarkets. 5 (11) Towers as regulated by article XXX of this chapter. Section 9. Section 20-732 to of the Chanhassen City Code is amended to read as follows: Sec. 20-732. - Permitted uses. The following uses are permitted in a "CBD" district: (1) Antennas as regulated by article XXX of this chapter. (2) Ballroom. (3) Barber and beauty salons and spas including hair, nail, skin and scalp services. (4) Bars and taverns. (5) Bowling center. (6) Clothing rental. (7) Clubs and lodges. (8) Coin-operated service machines. (9) Community center. (10) Convenience stores without gas pumps. (11) Convention and conference facilities. (12) Costume rental. (13) Cultural facilities. (14) Day care center as part of shopping center. (15) Fast-food restaurants as part of shopping center. (16) Financial institutions. (17) Health and recreation clubs, instructions and services. (18) Health services, outpatient only. (19) Hotels. (20) Laundry and garment services including self-service. (21) Locker rental. (22) Multiple -family dwellings, including senior citizen housing. (23) Newspaper offices. (24) Offices. (25) Parking ramp. (26) Photographic studios. (27) Print shops. (28) Quilting and scrap booking. C (29) Retail sales. (30) Schools. (31) Shoe repair shops and shoeshine parlors. (32) Shopping center. (33) Sporting goods rental. (34) Standard restaurants. (35) Tattoo and body art and piercing services (MS ch. 146B). (36) Theatrical producers and services. (37) Utility service. (38) Wedding chapel. (39) Brewery operated in conjunction with a taproom producing less than 3,500 barrels per year. (subject to the requirements of section 20-969) (40) Brew pub (subject to the requirements of section 20-968) (41) Microdistillery operated in conjunction with a cocktail room. (subject to the requirements of section 20-967) Section 10. Section 20-734 to of the Chanhassen City Code is amended to read as follows: Sec. 20-734. - Conditional uses. The following are conditional uses in a "CBD" district: (1) Brewery operated in conjunction with a taproom, producing over 3,500 barrels per year. (2) Freestanding fast-food restaurants. (3) Reserved (4) Convenience store with gas pumps. Section 11. Section 20-752 to of the Chanhassen City Code is amended to read as follows: Sec. 20-752. - Permitted uses. The following uses are permitted in a "BG" district: (1) Animal hospital. (2) Antenna. (3) Bars and taverns. (4) Bowling center. (5) Community center. (6) Convenience stores without gas pumps. (7) Day care center. 7 (8) Entertainment. (9) Fast-food restaurants. (10) Financial institutions, including drive-in service. (11) Funeral homes. (12) Garden centers. (13) Hardware goods. (14) Health and recreation clubs. (15) Health services. (16) Home improvement trades building supply centers. (17) Miniature golf. (18) Motels. (19) Newspaper and print shop. (20) Offices. (21) Personal services. (22) Private clubs and lodges. (23) Reserved. (24) Senior citizen housing. (25) Small appliance and similar repair shops. (26) Specialty retail. (27) Standard restaurants. (28) Supermarkets. (29) Utility services. (30) Veterinary clinic. (31) Brewery operated in conjunction with a taproom producing less than 3,500 barrels per year. (subject to the requirements of section 20-969) (32) Brew pub (subject to the requirements of section 20-968) (33) Microdistillery operated in conjunction with a cocktail room. (subject to the requirements of section 20-967) Section 12. Section 20-754 to of the Chanhassen City Code is amended to read as follows: Sec. 20-754. - Conditional uses. The following are conditional uses in a'BG" district: (1) Brewery operated in conjunction with a taproom, producing over 3,500 barrels per year. (2) Truck, automobile, farm implement, recreational vehicles and boat sales and service. (3) Equipment rental. H (4) Screened outdoor storage. (5) Major auto repair and body shops. (6) Convenience stores with gas pumps. (7) Motor fuel stations. Section 13. Section 20-812 to of the Chanhassen City Code is amended to read as follows: Sec. 20-812. - Permitted uses. The following uses are permitted in an "IOP" district: (1) Antennas as regulated by article XXX of this chapter. (2) Automotive repair shops. (3) Conference/convention centers. (4) Health services. (5) Indoor health and recreation clubs. (6) Light industrial. (7) Offices. (8) Off -premises parking lots. (9) Print shops. (10) Recording studios. (11) Utility services. (12) Vocational school. (13) Warehouses. (14) Brewery operated in conjunction with a taproom producing less than 3,500 barrels per year. (subject to the requirements of section 20-969) (15) Microdis611ery operated in conjunction with a cocktail room. (subject to the requirements of section 20-967) Section 14. Section 20-814 to of the Chanhassen City Code is amended to read as follows: Sec. 20-814. - Conditional uses. The following are conditional uses in an "IOP" district: (1) Contracting yards. (2) Day care centers as part of a multi -tenant building. (3) Day care centers as a separate facility. (4) Food processing. (5) Gun range, indoor. 0 (6) Home improvement trades. (7) Hotels and motels. (8) Lumber yards. (9) Motor freight terminals. (10) Outdoor health and recreation clubs. (11) Screened outdoor storage. (12) Research laboratories. (13) Brewery operated in conjunction with a taproom, producing over 3,500 barrels per year. (14) Commercial towers as regulated by article XXX of this chapter. (15) Electrical distribution and underground electric distribution substations. Section 15. Section 4. The Chanhassen City Code is amended by adding Section 20-967 to Section 20-969 to read as follows: Sec. 20-967 Microdistillery operated in conjunction with a cocktail room The following applies to all Microdistilleries operated in conjunction with a cocktail room: (1) The Microdistillery shall not produce more than 40,000 proof gallons of distilled spirits per year. (2) An outdoor seating area is permitted provided: it has an enclose and the enclosure is not interrupted; access to the seating area must be through the principle building; its hours of operation shall be no later than 10:00 p.m. Sunday -Thursday and 12:00 a.m. Friday -Saturday; and, the outdoor seating area must be located and designed so as not to interfere with pedestrian and vehicular circulation. (3) Shipping and receiving areas shall be located behind the facility or otherwise screened from view. Sec. 20-968 Brew Pub The following applies to all brew pubs: 1) The brew pub shall not produce more than 3,500 barrels per year. 2) An outdoor seating area is permitted provided: it has an enclose and the enclosure is not interrupted; access to the seating area must be through the principle building; its hours of operation shall be no later than 10:00 p.m. Sunday -Thursday and 12:00 a.m. Friday -Saturday; and, the outdoor seating area must be located and designed so as not to interfere with pedestrian and vehicular circulation. 3) Shipping and receiving areas shall be located behind the facility or otherwise screened from view. 10 Sec. 20-969 Brewery operated in conjunction with a taproom, producing less than 3,500 barrels of malt liquor per year. The following applies to all breweries operated in conjunction with a taproom: (1) The brewery shall not produce more than 3,500 barrels of malt liquor per year. (2) An outdoor seating area is permitted provided: it has an enclose and the enclosure is not interrupted; access to the seating area must be through the principle building; its hours of operation shall be no later than 10:00 p.m. Sunday -Thursday and 12:00 a.m. Friday -Saturday; and, the outdoor seating area must be located and designed so as not to interfere with pedestrian and vehicular circulation. (3) Shipping and receiving areas shall be located behind the facility or otherwise screened from view. Section 16. Section 20-1124(2)(z) to of the Chanhassen City Code is amended to read as follows: z. Brew pub, Brewery operated in conjunction with a taproom, or Microdistillery operated in conjunction with a cocktail room- One space for each 50 square feet of gross taproom, cocktail room, or restaurant floor area, and one space for each 1,000 square feet of gross production area. Section 17. This ordinance shall be effective immediately upon its passage and publication. PASSED AND ADOPTED this [xx] day of [Month], 2018 by the City Council of the City of Chanhassen, Minnesota Todd Gerhardt, City Manager Denny Laufenburger, Mayor (Summary Ordinance [insert number] published in the Chanhassen Villager on [insert date]) 11 CITY OF C HANHASSE N Chanhassen is a Community for Life - Providing forToday and Planning for Tomorrow MEMORANDUM TO: Planning Commission FROM: MacKenzie Walters, Assistant Planner DATE: May 15, 2018 SUBJ: Legal Meaning of Key Terms The proliferation of the craft alcohol production has been accompanied by a host of new statutes and legal definitions for the different types of production and sales venues. In some cases, the legal definition of a term does not line up with colloquial use. For example, many people refer to any establishment with foodservice and a focus on craft beers as a brewpub and many of these establishments market themselves as brewpubs; however, under Minnesota law, most of these establishments are classified as restaurants. Minnesota's alcohol laws and licensing can be byzantine, but the sections below will clarify the most important terms and provide examples these types of businesses from surrounding communities. Brewpub Definition: "Brew Pub" is a brewer who manufactures less than 3,500 barrels of beer a year at any single location. This beer must be exclusively for consumption on tap at a premise owned by the brewer, except for limited growler* off sales. Examples: 1. Granite City Food & Brewery (5500 Excelsior Boulevard, St. Louis Park) 2. Northbound Smokehouse & Brewpub (2716 E 381h Street, Minneapolis) 3. Barley John's Brew Pub (781 Old Highway 8 SW, New Brighton, MN 55112) Key points: • Restaurant and brewery must be owned and operated by the same entity. • Tend to have atmosphere very similar to a traditional sit down restaurant. • Beer must be brewed on premise or exclusively for sale at the brewpub. • Municipality may issue "small brewer off -sale" license for growler sales. PH 952.227.1100 • www dchanhassen.mn.us • FX 952.227.1110 7700 MARKET BOULEVARD • PO BOX 147 • CHANHASSEN • MINNESOTA 55317 Planning Commission Craft Alcohol - Legal Meaning of Key Terms May 15, 2018 Page 2 of 5 • Brewpubs maybe issued on -sale intoxication liquor or 3.2 percent malt liquor licenses, allowing for the sale of alcohol not brewed on site. Note: Restaurants with large tap lists that are not owned by a brewery and do not brew their own beer on premise cannot sell growlers and are not technically brewpubs. *Growlers are 64 -ounce jugs of beer which are filled from a tap. The growler provision also allows for the sale of 750 -milliliter bottles. Brewpubs may sell no more than 750 barrels of beer a year in the form of growlers/bottles. Taproom Definition: Apart of the brewery or location adjacent to the brewery owned by the brewer where people can buy and consume beer produced by the brewery. A taproom may also conduct growler sales. Examples: 1. Excelsior Brewing Company (421 3rd St, Excelsior) 2. ENKI Brewing Company (1495 Stieger Lake Ln, Victoria) 3. LTD Brewing Co. (8 8`h Ave N, Hopkins) Key Points: • Generally foodservice is provided by food trucks or carrying/ordering in food from other establishments. • Tend to have unique/distinct atmospheres. • Beer must be brewed on premises or adjacent to premise, and brewer must own. • Municipality may issue "small brewer off -sale" license for growler sales. Note: Breweries with a taproom license may also hold a restaurant license to operate a restaurant at the brewery. A brewery with a taproom licenses cannot have ownership interest in a brewpub, nor may a brewery have multiple taproom licenses or both a taproom and cocktail room license. Cocktail Room Definition: A part of a microdistillery or location adjacent to the microdistillery owned by the distiller where people can buy and consume liquor produced by the microdistillery. A microdistillery/cocktail room may also sell one 375-milliter bottle of liquor produced on site per customer per day. Planning Commission Craft Alcohol - Legal Meaning of Key Terms May 15, 2018 Page 3 of 5 Examples: 1. J. Carver Distillery (1320 Mill Ln, Waconia) 2. Copperwing Distillery (6409 Cambridge St, St Louis Park) 3. Du Nord Craft Spirits (2610 E 32nd St, Minneapolis) Key Points: • Liquor must be distilled on premise or adjacent to premise, distiller must own. • Allowed limited off sales though municipal issued off -sale license. Note: Microdistilleries with a cocktail room license may also hold a restaurant license. No microdistillery may have multiple cocktail room licenses or both a taproom and cocktail room license. Frequently Asked Questions What is the difference between a brewpub and brewery with a taproom license and an onsite restaurant? Brewpubs cannot sell the beer brewed at their site at liquor stores or other locations; however, they can have a general liquor license allowing them to serve cocktails and other beer brands in addition to their locally made product; whereas, breweries can distribute their beers to bars, restaurants, or liquor stores, but are restricted to selling only beers made on site by the taproom license. A brewery with an onsite restaurant could potentially forgo the taproom license and have the restaurant receive a general intoxicating liquor on -sale or wine with strong beer license and alcohol regardless of type and place of origin, similar to any other restaurant with the same licensure. A brewery interested in having a restaurant component would decide which licensing route to go based on its production size, distribution plan, facility and other aspects of its business model. What is the difference between a restaurant with lots of craft beers and "brewpub"? A brewpub has a light manufacturing component and can, if allowed by the city, sell growlers for off premise consumption. A craft beer focused restaurant cannot sell alcohol for off premise consumption and does not brew its own beer. Other than the types of alcohol served, is there a difference between a cocktail room and a taproom? No. Both can receive a municipal license for limited off sale and both can be co -located with a restaurant. Both must also be owned by and located within or adjacent to the site of production and can only sell alcohol produced on site. Planning Commission Craft Alcohol - Legal Meaning of Key Terms May 15, 2018 Page 4of5 What about hard ciders? Minnesota classifies these as wines, so they cannot be sold under a taproom or cocktail room license. If a brewery/distillery/cidery wanted to sell hard ciders produced onsite, they would need to be able to qualify for either an intoxicating liquor or wine licenses. In many communities that would require an associated onsite restaurant, but they could potentially receive a license as an exclusive liquor store. An increasing number of breweries are adding ciders to their production lines and a few dedicated craft cider producers are beginning to gain notice in Minneapolis. It is likely that if demand and interest in ciders continues to increase state laws will be amended to explicitly address ciders. Some cideries have side stepped the state's restrictions by using grains and hops as bittering agents rather than spitters (bitter apples). This means their product is technically graft rather than cider. Graft is classified as a malt liquor and, thus, its production can be governed by brewery provisions. Licensing 101 There are several different licenses that municipalities can issue for restaurants, brewpubs, taprooms, and cocktail rooms. Below is a general breakdown of what license governs what use, and what licenses Chanhassen currently issues. Brewer taproom license: (No) Allows a brewer to operate a taproom. Cocktail room license: (No) Allows a microdistillery to operate a cocktail room. Off -sale of distilled spirits: (No) Allows microdistillery to sell one 375 -milliliter bottle per customer per day of product manufactured on site. On -sale intoxicating liquor: (Yes) Allows restaurants to sell intoxicating liquor. Brewpubs would typically request this license, as would a restaurant with a large selection of craft beers. On -sale 3.2 percent malt liquor license: (Yes) Brewpubs can be granted this license; however, it is unlikely a brewpub would be interested in only producing 3.2 percent malt liquor. Planning Commission Craft Alcohol - Legal Meaning of Key Terns May 15, 2018 Page 5 of 5 Small Brewer off -sale: (No) Allows breweries producing less than 20,000 barrels a year to off -sale growlers. Taprooms and Brewpubs could utilize this license. Wine License: (Yes) This could potentially allow a cidery/brewery with a restaurant to sell hard ciders onsite. It cannot be granted to a facility without a restaurant. G:\PLAN\City Code\2018\PC PH 5-15-18\Brewery\Key Terms_ Attachment 2.docx