Too Legit to Quit

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A new year has dawned and I've spent the holiday season getting legit. The meeting with Fess Parker, where the staff patiently outlined to me the various agencies I had to satisfy, had a lasting, and beneficial, effect. In the month of December I have met with the Alcoholic Beverage Commission (ABC). I have met with State Board of Equalization. I have met with Los Angeles Planning Commission. I have sent money to the Franchise Tax Board. I have sent a letter to Fess Parker that will be passed on the Alcohol and Tobacco Tax and Trade Bureau (TTB). I have opened a business checking account at Wells Fargo. I have refinanced my house (again) to build my war chest for the capital-intensive year to come, whence I not only pay for another harvest and crush season but also for my first bottling run.

 

The ABC (Alcoholic Beverage Commission) and TTB (Tobacco and Trade Bureau) are the main agencies in charge of blessing alcohol sales and production in California.  I knew the ABC process would be long and tortuous; it was time to get started.

 

I had my first meeting with the ABC early in the month. The ABC requires an applicant to walk in with their "package". The package consists of a variety of forms, permits, affidavits, floor plans, etc depending on what kind of license is being applied. There are far more license related to alcohol than I would have imagined, although in hindsight I can't see why I was surprised. There are myriad options for making, selling and distributing beer, wine, hard liquor, etc. You can do it retail. You can do it wholesale. You can do both. You can do it on a temporary basis (e.g. a catered event). You can do it mail order only, or in a store, or at an event. You get the idea.

 

It was confusing to precisely discern which permit I was going to apply for. Originally the thinking by me and the Fess Parker people was that I would apply to the San Luis Obispo branch, which was the closest to Parker Station, the official name of my imminent storage and bottling facility. The staff at the SLO ABC is friendly and used to dealing with wine industry people (especially neophytes with naive questions). After a few phone calls I had figured out which forms comprised my package, and which licenses I would need. I needed a 17 and a 20. The 17 is for a beer and wine wholesaler, which I will be since I don't own or control my production facility. I'll also be a 20, wine retailing, although with the qualifier of "internet sales only". This struck me as perhaps being a separate license but no, apparently I just assure them it's "internet only" and I don't have to meet the facilities requirements for a normal "20".

 

My package in early December comprised a number of official ABC forms:

 

140 CERTIFICATION RE CHAPTER 15TIED-HOUSE RESTRICTIONS

208A INDIVIDUAL PERSONAL AFFIDAVIT

208B INDIVIDUAL FINANCIAL AFFIDAVIT

217 APPLICATION QUESTIONNAIRE

253 SUPPLEMENTAL DIAGRAM

255 ZONING AFFIDAVIT

256 LLC LIMITED LIABILITY COMPANY QUESTIONNAIRE

257 NR LICENSED PREMISES DIAGRAM (NON-RETAIL)


Some of these are very easy to deal with. The 140 form only required me to assure the powers that be that I did not own wine production, distribution and retail facilities at the same time. Ah, another arcane liquor law (there were many more to come). Frankly this has me completely confused, as any winery operation with a tasting room is involved with production, distribution and retail operations but I'm sure there are many detailed rules and loopholes.

 

Some of the other documents made little sense. The two diagram forms (253 and 257NR) required diagrams of the premises and surrounding areas. Obviously these were directed towards liquor stores and/or warehouse/production facilities, not my little home office. When I called the ABC for assistance they assured me that it in fact meant my office. OK, no problem, I found a zoning map of my neighborhood and stick it in my folder (er, package).

 

There were many other questions on the forms, most requiring reiteration of basic information (addresses, personal data, etc), several times. The Man (state division) wanted to know where I got the money for my little venture and if, officially, I was a stand-up guy.

 

The most puzzling was the zoning affidavit, requiring a signoff from the City Planning Department that my facility (what facility?) was copasetic.

 

The ABC requires an appointment - you have to show up in person with the package and sign everything in front of the BC person, as well as clarify any ambiguous or missing information. As is my occasional wont I'd waited until two days before the appointment to get started on filling out the forms. Naturally it took much longer I'd anticipated. The Zoning affidavit threw me for a complete loop but I reasoned that once I explained the situation the ABC person would agree that form 255 was not required.

 

There are several ABC offices in the state of California. I had spoken mostly with the San Luis Obispo office, since they were local to the Fess Parker facility (you must deal with your local ABC office). In fact until I called for an appointment and the San Luis Obispo office checked my zip code and informed me I belonged to the Van Nuys office. After calling the Van Nuys office they directed me to the Montrose (a suburb northeast of Pasadena) office, who redirected me to the LA Metro.

 

This was frustrating. All I was doing was trying to get an appointment and these guys couldn't even figure out what office I was supposed to get to. LA Metro in fact thought I belonged to the Inglewood office but my attempts to contact Inglewood revealed the fact that Inglewood had been merged into LA Metro. Back to LA Metro, who grudgingly accepted my appointment, set for the middle of holiday season about a week before Christmas.

 

The morning dawned cold and bright and off I went. I strolled into LA Metro, of course clutching my package. The administrator took a quick look and immediately terminated the process. No zoning affidavit. No diagram of the inside of the premises. And my nifty little printout of my neighborhood was unacceptable - it in fact had to be an ink drawing of the neighborhood.  I was missing a couple of documents as well.

 

The San Luis Obispo office is used to processing winery applications and its personnel are well-versed in winery issues. As you might guess, the LA Metro office processes very few winery applications (apparently almost none) - LA Metro is oriented to entities like liquor stores and restaurants. I could quickly see that I would have to strictly follow the rules and that a trip to the Planning Department was in my future, where I would hopefully persuade them to approve my little wine enterprise in the heart of a residential area. I had to make another appointment; the earliest one I could get was mid-January.

 

I decided to dedicate the day after Christmas, December 26, as my Planning Department day. I also hoped to get to the State Board of Equalization office to get my Seller's permit, a necessity for anyone selling most anything retail in the state of California. This would prove a wise and prescient decision.

 

The Los Angeles Department of City Planning is located in a large office plaza on the edge of downtown. They take up the entire fourth floor of one of the buildings. I had been warned in advance that dealing with them was an all day affair; the office is usually mobbed with applicants toting stacks of blueprints, forms and legal documents, as this agency has authority over what kinds of businesses and construction projects can be undertaken in various parts of the city. Including neophyte wine businesses of course.

 

When I arrived bright and early on the 26th I found the whole floor largely deserted, with most of the employees lolling around chatting. Apparently I had picked a good day to show up. Probably the best day of the year. After getting oriented I went to the likeliest station and presented my affidavit to a bored but pleasant man killing time behind the counter. As he examined my form he frowned and began muttering that a wine business in an R1-1 area was completely against the rules, not allowable, etc. In other words, no go. My heart sank - after all this I was faced with getting some crappy little office somewhere to satisfy the bureaucracy.

 

After more frowning and more mumbling (both to himself and me) the man suddenly straightened up and said in a normal tone "I don't see how we can allow this. But actually I'm not the person to see. You have to go across the room to the zoning people".

 

A reprieve? Maybe. If this guy was so certain I was non-copasetic what would zoning say? Off I went. Even though things were largely dormant today the man I had to see was busy with other applicants. He was poring over blueprints with some businessmen types. I took a number and waited.

 

While I was waiting I was already adjusting my budget and timetable. I would have to rent an office, change all the applications to reflect the new (hopefully approved) business address, and basically spend money for essentially nothing except a legal requirement (welcome to the small business world!)

 

It was finally my turn. The person at the zoning desk seemed very relaxed. I showed him my affidavit and assured him that no inventory (i.e. wine) was going to be warehoused there, just my bad self (and my bad records and files). He seemed agreeable and signed his name, after scribbling "No inventory to be kept at this address"). It was that easy. I think on that day this particularly staffer might have approved most anything at my address: an airport, nuclear power plant, cement factory, etc. Just don't harsh his post-Christmas mellow. My gut feeling is that the venture is not strictly by the book but ... I was in! At least in this respect.

 

I practically floated out of the Planning Department and headed to Van Nuys. I knew the mojo was with me and sure enough, the State Board of Equalization was nearly empty. They approved my application on the spot (no charge!) and I strolled out of there in less than an hour with my newly minted resale permit. Certainly the most productive day after Christmas I've ever had.

 

 

 

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