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CUP No. 2016 -04 March 28, 2016 Page 2 Proiect Description Blinking Owl is requesting approval of a CUP to allow a Type 74 ABC license to allow educational tours, limited tastings, and limited direct sales of bottled distilled spirits to consumers. Pursuant to Section 41 -2007 of the SAMC, establishments offering alcoholic beverage sales or consumption require approval of a CUP; however, the use of the property as a manufacturing facility is permitted by right. The tenant is currently undergoing tenant improvements to establish a new craft distillery at the subject property. The distillery will occupy a 5,596- square foot portion of a multi -unit industrial building. The tenant space will contain a manufacturing area with distillery equipment, offices, and an area for public tours and service with an alcohol service area and moveable furniture. The tenant space has been designed to comply with State Department of Alcoholic Beverage Control standards for establishments that produce distilled spirits and offer tours, tastings, and sales to the public (Exhibits 4 and 5). The proposed hours of operation for the tasting room and tours that are open to the public are Friday from 3:00 p.m. to 6:30 p.m., Saturday from 11:00 a.m. to 6:00 p.m., and Sunday from 12:00 p.m. (noon) to 4 :00 p.m. Tours and tastings are to be scheduled by appointment only on Monday through Thursday. Proiect Backgraund In October 2015, Governor Brown approved Assembly Bill No. 1295 and signed into law the Craft Distillers Act of 2015. The Act resulted in the new Type 74 ABC license to allow production, limited tastings, tours, and limited sales to consumers of distilled spirits. The Type 74 ABC license responds to a rapidly- emerging industry of craft distillers throughout the United States. In California, 50 facilities currently manufacture distilled spirits; the Type 74 ABC license would allow these facilities to open to the public. The applicant filed a CUP application in January 2016 to allow a Type 74 ABC license at the subject location. If approved, Blinking Owl would be the first "grain to glass" distillery in Santa Ana and Orange County. To minimize any impacts to the residential uses in the vicinity, all operations, including tours and tastings, will be conducted within the building. State regulations for the Type 74 ABC license limit the amount of production and sales at craft distilleries. The license allows the production of up to 100,000 gallons of distilled spirits per fiscal year (excluding brandy). Facilities can package, export, and sell only their own products to primarily wholesalers and other manufacturers but not directly to retailers, with the exception of limited sales to consumers at each site. Craft distillers may sell up to 2.25 liters of their own pre - packaged product in conjunction with instructional tastings or tours that occur on the premises. The license also allows on -site tastings of the facility's own craft limited to a 1.5 -ounce pour per person daily. 31 B -4