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Attracting more craft beer, spirits, and wine to the County

Montgomery County’s craft brewery, winery, and distillery scene is gaining momentum with at least seven breweries, three wineries, and one distillery now calling the County home. There are nearly as many in-planning, too!

Several of these businesses have opened in recent years as the County has worked closely with State legislators and local businesses to address many regulatory and legal issues. To build on this momentum, Councilmember Leventhal and I have called for opening one of the County’s financial incentive programs to craft breweries, wineries, and distilleries. See our letter to County Executive Leggett here (pdf) and below.

Cheers!


October 17, 2017

Isiah Leggett
County Executive, Montgomery County
Executive Office Building
101 Monroe Street, 2nd Floor
Rockville, MD 20850

Dear County Executive Leggett:

Montgomery County is currently home to at least seven breweries, four wineries, and one distillery. Several of these have opened in recent years as your administration and the Council have worked closely with State legislators and local businesses to address many regulatory and legal issues. Many of the successes can be traced back to the great work done by the Night-Time Economy Task Force. These successes include:

  • Allowing craft brewers to self-distribute their own products
  • Allowing craft brewers to sell growlers
  • Repealing distance requirements of breweries from churches and schools
  • Extending hours of operation for alcohol licensees to 2 am on Sunday through Thursday and 3am on Friday and Saturday.
  • Reducing the food to alcohol ratios for alcohol licensees to allow for more flexibility
  • Clarifying rules to allow craft distilleries in the County’s urban and light industrial areas
  • Allowing craft brewers to sell more beer on-premise and allowing farm brewers to self-distribute

Later this fall the County Council will be considering zoning reforms that create more flexibility for brewing and distilling uses in the County’s commercial zones. These reforms, when taken as a whole, have made the County much friendlier to local production. Nevertheless, we are presumably at the earliest stages of growth in our locally-produced beer, wine and spirits sector. The potential for this sector in the County is great.

While the regulatory climate has improved and will continue to improve, there remains a significant financial barrier to entry due to very high capital costs. Initial investments for craft breweries, wineries, and distilleries can reach several million dollars, depending on the size and business plan. Much of that capital investment is front-loaded into equipment, build out, and lease costs. We have had many conversations with current and prospective craft alcohol production companies, and they cite this as one of the largest hurdles to launching a successful business.

The craft alcohol production sector is highly relevant to our economic development goals precisely because it creates good middle-income jobs in manufacturing, management, marketing, and sales, among others. The County’s economic development strategic plan, “A Plan for Economic Prosperity,” cites the dearth and relative decline of middle-skill, middle-income jobs in the County and suggests that it is important for the County to take steps to reverse these trends to help foster a balanced economy. Statewide studies have shown that Maryland brewers alone will generate nearly a billion dollars in economic impact by 2019, contribute over eleven million dollars in state tax revenue, and capture between 7.6%-11.5% of all beer sales. Those figures are sure to rise.

Supporting the sector also furthers the placemaking goal in the strategic plan. Wineries enrich and make more sustainable our Ag Reserve, while breweries and distilleries produce placemaking and night-time economy benefits that help us attract and retain talent by helping create the vibrant urban centers many employees and employers are looking for. We have already witnessed how the County’s seven breweries, four wineries, and one distillery, have contributed to the vitality of their respective neighborhoods, but much more can be done.

Given these challenges and the great benefits this sector brings to the County, we request that your administration modify the County’s MOVE program to allow eligibility for craft alcohol production companies whose primary use of the space is production, not retail. The current MOVE program precludes their eligibility simply because these businesses have a retail component, regardless of the primary use of the space. Under our proposal, these companies would still need to meet every other requirement of the program. Below you will find our requested language to the second criterion of the MOVE program (underlined).

2. All businesses are eligible except for retail, restaurant, and independent financial or insurance agent/broker establishments. Independent agent/broker establishments are defined as a sole proprietorship that primarily sells products underwritten by a third-party.
Craft alcohol production companies (breweries, cideries, distilleries, and wineries) whose primary use of the space is production are eligible notwithstanding their retail operations.

We appreciate your attention to this matter, and we look forward working to closely with you and your administration on our collective economic development goals.

Sincerely,

Hans Riemer
Council Vice President

George Leventhal
Councilmember, At-large

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Making our zoning code more hospitable to breweries, wineries, and distilleries

Although Montgomery County’s local alcohol production industry is young and small, it has a lot of momentum. The County is already home to at least seven breweries, four wineries, and one distillery. There are, at least, four new breweries destined for Montgomery County in the next year or so. Recognizing the significant economic benefits, the County and State have already taken numerous legislative, zoning, and regulatory steps to facilitate the growth of this sector. Compared to communities in other parts of the county, however, our industry is small and our culture is nascent.

We can and should do more to accelerate the industry’s growth. The industry is relevant to our broader economic development goals because it creates good jobs and an appealing culture. Wineries have great potential for businesses in our Ag Reserve, while breweries and distilleries produce placemaking and night-time economy benefits that help us attract and retain talent by creating the vibrant urban centers many employees and employers are looking for.

This is why I introduced, with the support of seven of my colleagues, a zoning text amendment (ZTA) that would allow brewing and distilling as light industrial uses–with certain strictures on production limits to make sure that they are craft breweries/distilleries, not Bud Light factories–in the County’s commercial zones.

The current zoning ordinance’s restrictions on manufacturing in commercials zones make it difficult to open a breweries and distilleries in our urban centers, particularly if they are not attached to a restaurant. Last year I worked with the Department of Permitting Services to address to the distillery piece; we produced a policy that allowed distilling in commercial and light industrial zones under an interpretation of the artisanal manufacturing use. However, when a brewery-in-planning reached out to us with questions about zoning in downtown Silver Spring, it became clear that some changes to the zoning ordinance would be needed to make their business and others like it work.

The public hearing for the ZTA is on November 7, 2017 at 1:30pm. You can sign up to testify here.

Further reforms to zoning, regulations, and incentives are likely required to facilitate the growth of the industry. I look forward to working with all stakeholders in the coming months to address these challenges.

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A bold new vision for Bethesda

For decades, suburban communities like Montgomery County reaped the gains from choices made by executives to locate their companies outside of cities. But times have changed. Now, many entrepreneurs and workers want access to an urban lifestyle. Communities that cannot provide it are losing ground.

The good news: Montgomery County can compete in this new environment. Our beautiful neighborhoods and great schools and parks are still powerful assets. But we need to boost our urban areas for this new economy.

With this purpose in mind, I set to work on the Bethesda Downtown Plan, which we just completed. Here are some of the highlights:

New people, new life in Bethesda. The plan adds 4 million square feet of new development in the downtown area and raises heights for most buildings by 20%, reaching as high as 290 feet in certain locations. More people living in the downtown will mean better restaurants, retail and entertainment options for everyone — and the vibrancy that we enjoy will attract workers and companies to locate here.

A higher standard for affordable housing. Montgomery County continues to lead on affordable housing as the Bethesda Plan raises the requirement for new development to set aside 15% of all units for the county’s affordable housing program. Formerly the standard was 12.5% of units; I made the motion to raise that to 15% in Westbard and made sure it continued forward in Bethesda, another community that lacks affordable housing. With 4 million more square feet of development at a 15% MPDU mandate, the plan is aggressive on affordable housing.

Walkability and bikeability. New standards to promote walkability will mean more investment in safe crossings and bigger sidewalks. Continuing my efforts to champion bike lanes that are protected from traffic, the new Bethesda plan has a comprehensive new vision for biking. Thanks to a new development mitigation policy that requires developer payments for all modes of transportation including biking, we will have more resources to build this infrastructure.

Turning parking lots into parks. To be great, a downtown must have great parks and civic gathering spaces. Recognizing that Bethesda lacks them, I worked with the community and colleagues to champion a vision to turn existing surface parking lots into energetic urban parks. Where parking is still needed, we will have to put it underground. That’s expensive, but with a new park impact payment for new development, we also will have some of the resources needed to build them.

Transportation management. The Plan calls for aggressive use of another policy I have worked hard to advance: Transportation Demand Management. For a location like Bethesda, expanding auto capacity is not realistic or desirable, but growth in traffic can be reduced if we work aggressively with employers to promote public transportation, carpooling, walking and biking. The plan calls for the county to moving 50% of all trips to Bethesda to non-auto modes. We will soon get a concrete plan to achieve that.

Building community consensus. Thanks to careful attention to building heights and school capacity, the plan passed by the County Council had substantial community support while promoting strong policy goals. While surely not everyone is pleased, by working closely and inclusively with residents we achieved more than we could have otherwise.

Energy efficiency and great architecture. The new plan includes a groundbreaking requirement for energy efficiency in new buildings — one of the most important steps a local government can take to combat climate change. It also includes a new approach to sparking better architecture, something that has been lacking in the county generally.

I have no doubt that our progress on a new Bethesda is why Marriott’s leaders decided to move their company to one of Montgomery County’s urban centers, rather than DC or NoVA. And while there is good news to share, we have a lot of work ahead of us to build on our momentum.

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Bethesda Downtown Sector Plan

The County Council recently approved a dynamic new master plan for the Bethesda Downtown – one that clearly defines goals for the future and seeks to create options for accomplishing those goals. This vision for the future was the result of a two year planning process, including a major community outreach effort led by the Planning Department at MNCPPC, then continued through the Council public hearings, bus and walking tours, meetings with property owners, residents and advocacy groups, lengthy PHED Committee worksessions, Council deliberations and, finally, County Council approval.

This was no simple debate about building heights and architectural styles, as some news accounts may have implied. The complexities of planning for a future one cannot accurately predict but hopes to influence anyway are enormous. Our work is not yet done. The plan relies on the completion and approval of other fairly sophisticated legislative and policy elements such as:

  • The Bethesda Overlay Zone which will, among other things, define the point system available to developers who must earn their way to the maximum zoning height by providing priority elements such as affordable housing, dedicated parkland or monetary contributions for public benefits;
  • Development of a Unified Transportation Mobility Plan for Downtown Bethesda (to replace the Local Area Traffic Review) which identifies all costs associated with transportation facilities (including roads, sidewalks, bikeways, transit) needed to support the development potential prescribed in the master plan; and, to formulate a pro rata share to be charged each developer at time of development; and,
  • Development and adoption of a Countywide Transportation Demand Management Ordinance to replace the individual Transportation Management Agreements DOT currently negotiates for any development plan that cannot meet APFO standards without using measures to reduce traffic generated by their use.

These supportive components are being developed by DOT and County Council staff and will be brought to the County Council within the year. They are the linchpins on which the Downtown Plan hinges; and, these will be in place by the time any new development plans based on the new Downtown Master Plan are reviewed and approved.

I am proud to have worked diligently with the community, the planners and all others involved in this effort to find and fix potential challenges to implementing the Plan; and, I have great confidence that the ambitious goals defined in the Bethesda Downtown Master Plan will be completely achievable.

Here are the goals:

  • Preserve, create and expand housing opportunities to meet a growing population of diverse ages, household size, income level, and unit types;
  • Transform the urban district to provide safe bike routes and a better pedestrian environment
  • Change the transportation policy focus to include all modes, like walking, biking, and public transportation, that reflect the healthier, smarter, more environmentally sensitive preferences of our community; over time this will be our best approach to reducing the growth of traffic
  • Transform county-owned surface parking lots into urban parks and recreation spaces. Exchange concrete for plants and fresh air by converting surface parking lots into parks and concentrating parking under and in buildings in appropriate locations to meet the essential needs of both residents and businesses.
  • Improve collaboration and cooperation between MCPS and the County agencies involved in planning and development to ensure schools that are adequate and efficient and meet our standards of excellence in education for ALL students.
  • Identify, create or generate new ways to finance those elements of the master plan without dedicated sources of funding to ensure implementation of the priority goals defined in the plan. This point is particularly important for our plan to turn parking lots into parks; without a new source of funding, existing county budgets can provide only a small fraction of the money that is needed to bring the ambitious and transformative vision to reality.

Thank you for participating in this process. I am pleased that we got a much better Bethesda Downtown Plan as a result of the community’s effective engagement.