After 2½ years spent marketing a business improvement district (BID) to Santa Barbara County winemakers, the Santa Barbara Vintners board on Wednesday suspended its efforts, in part due to what it termed a lawsuit threatened by those opposed to the efforts.
The threat in question may be a Sept. 30 letter from the Howard Jarvis Taxpayers Association sent to County Counsel Michael Ghizzoni.
“This letter regards the Vintners’ Association’s proposed Wine Bid for Santa Barbara County,” the document opens. “HJTA has two concerns: 1) It is a sales tax. 2) It is unconstitutional.”
The document states that “the new system the Vintners Association seeks is obviously a sales tax collection system. It wishes the county government had a sales tax collection system it could use, recognizes that none exists because sales tax collection is a state function, and then asks the county to intrude into state territory to create a new county-run system to collect its proposed Wine BID sales tax.”
If the proposed BID — renamed the Santa Barbara County Wine Preserve earlier this year — had succeeded in assessing fees on bottle sales, it could have raised about $1 million annually, more than double the SBV’s current budget and a figure more in line with that of other wine regions, including Paso Robles and the Napa Valley.
The most recent version of the Santa Barbara County Wine Preserve called for a 1 percent assessment on all direct-to-consumer sales that also incur the California sales tax. The funds would have been collected by a third party.
Kady Fleckenstein of Kadydid Consulting is contracted as the SBV’s Wine Preserve-specific publicist, and through Fleckenstein, CEO Alison Laslett answered questions via email Thursday.
Laslett declined to identify those who might have sued to block the Wine Preserve, which the Vintners had hoped to put before county winemakers for a vote before the year of the year.
“The association is not interested in discussing or disclosing who threatened the county legally, as our goal and our role has always been to unify the industry into a collective and production force,” she said in her email.
“While we are disappointed the BID was not realized, we recognize that the conflict arose from opposition to a funding source, not a fundamental difference in our collective desire to succeed.”
While many winemakers backed the Santa Barbara Vintners’ plan to assess a fee on bottle sales, others did not, citing opposition to passing on any kind of cost to consumers, especially during the COVID-19 crisis.
Last month the Lompoc City Council voted 5-0 to deny the Wine Preserve within the city limits even if the county approved it. Had the preserve been approved, the 60 bonded wineries within Lompoc would not have been required to pay the assessed fee.
Two members of the Santa Barbara Wine Country Coalition, a newly formed organization,” responded (to Noozhawk via this reporter) via email Sunday, disassociating the group as being the force behind a threat of a lawsuit.
In his email, member Rick Longoria, owner/winemaker of Longoria Wine, attached the letter from the Howard Jarvis Taxpayers Association. The letter, he said, argues that from a legal standpoint, the county would be on “shaky legal grounds” if it approved the BID.
“This letter did not come from any of the wineries opposed to the BID, and, in fact, we were surprised to see it emerge,” Longoria said. “Contrary to what Alison has implied, the facts are that the Vintners were not threatened with a lawsuit, and it did not come from within our wine community.”
Fellow SBWCC member David deLaski, owner/winemaker of Solminer Wines, also reached out Sunday after an email sent Thursday failed to reach him.
“The coalition of 80 wineries simply does not support an add-on marketing fee as a funding strategy,” he said. SBWCC’s website says it favors a “fair and more equitable marketplace for Santa Barbara Wine Country,”
While the BID was first proposed at 2 percent, subsequent versions decreased the percentage, Laslett said. When the proposed assessment was at 1.5 percent, wine club sales were excluded.
“We found that there was nearly equal support between the 1.5 percent and the final (most recent) 1 percent fee structures,” she wrote. “Those who preferred the 1.5 percent fee structure liked the fact that it did not include wine club sales. The supporters of the 1 percent fee structure liked how easy it was to audit and the lower cost to consumers.”
However, “there was a minority that opposed any kind of fee passed on to consumers,” Laslett said.
Longoria took issue with Laslett’s use of the phrase “a minority” in referring to the SBWCC.
“The 80 or so wineries that voiced their disapproval of the BID through the SB Wine Country Coalition’s canvassing effort is equal to or greater to the number of wineries that are members of the SB Vintners’ Association, so it’s hardly a ‘minority’ opposition as the Vintner’s consistently portrayed it,” he said.
In a letter emailed to all wineries Thursday, Laslett noted how the SBV had reached out to all county wineries — SBV members and nonmembers — throughout the coronavirus shutdown in an effort to gain compliance in the wake of “fast-changing” rules.
“We reached out to every winery in Santa Barbara County (nearly 300) to ensure they had access to timely information about COVID-19-related restrictions during and after the shutdown,” she said.
Fleckenstein on Thursday said the SBV wants to avoid the “us versus them” mentality that morphed with the creation of the Santa Barbara Wine Country Coalition.
In November 2019, the SBV received a $380,000 grant from the California Department of Food and Agriculture specifically to market itself to the greater Los Angeles region, Fleckenstein noted.
During the past six months, she said, the results were notable: Via geo-tracking, the promotions yielded 142,937 visits to Santa Barbara County wineries, 9.3 million impressions, 209,545 video views (700 hours of view time) and 27,182 ad engagements.
“This is actual proof,” she said, of an uptick in visits to the region following targeted marketing efforts, especially during the pandemic.
— Noozhawk contributing writer Laurie Jervis tweets at @lauriejervis and can be reached via winecountrywriter@gmail.com.