Grand Lake Business Battle: Artisanal Wine Shop vs. City of Oakland

In this corner: Peter Mustacich, a mechanical engineer, and his fiancee Tova Herman, who's been working as the lead curator for an online wine club. Excited by the bloom of new restaurants and wine bars in their Grand Lake neighborhood, they want to start a business of their own — a shop selling premium, locally sourced artisanal wines and distilled spirits, with an upstairs art gallery and weekly wine tastings.

In the opposite corner: City of Oakland planning staff who say Mustacich and Herman's chosen location on Grand Avenue is too close to a small grocery that also sells liquor.

On the sidelines: Local residents and business owners, including several members of the Grand Lake Neighbors group, who think Mustacich and Herman's shop would be a good fit for a business block that includes Boot and Shoe Service, Monkey Forest Road and the soon-to-open Star pizzeria and Penrose & Sons restaurant. They would like to see the city issue the conditional use permit and variance that would allow the new wine and spirits shop.

(They have also created an online survey to see how other neighborhood residents view the wine shop proposal. You can take that survey here and read more about the proposed business at grandlakeneighbors.org.)

The deadline: Mustacich and Herman have been given until this Friday, May 3, to sign a lease for a portion of 3258 Grand Ave., the building that formerly housed Ford's Fine Furniture, before the landlords begin seeking other tenants.

The cost: About $8,000 to apply for the necessary city variance and conditional use permit, according to Mustacich. Since the fees aren't refundable, Mustacich says he and Herman aren't willing to apply without some assurance that city planners will recommend approval by the Oakland Planning Commission. Without that assurance, they will start looking at locations outside Oakland, he says.

So far, that assurance hasn't come. Aubrey Rose, a City of Oakland planner who often works with projects in the Grand Lake area, says that Mustacich and Herman's proposal is "just a liquor store" in city planners' eyes. 

Special permission from the planning commission would be needed, Rose says, because the proposed location is outside city guidelines for new liquor stores. It's within 1,000 feet of another retail liquor outlet, the Grand Lake Market at 3217 Grand Ave., which is across the street and down the block. It's also within 1,000 feet of a park — a portion of Lakeside Park.

One problem, Rose says, is that a variance and conditional use permit would remain with the space even if Mustacich and Herman's shop closed. The city can't impose conditions that would control what type of liquor outlet could occupy the space in the future, he said.

There's a discussion planned today, April 30, with the city's zoning manager and Planning Commission secretary, Scott Miller, about whether to support a variance and conditional use permit if Mustacich and Herman apply formally, he said.

Ken Katz, who's active with Grand Lake Neighbors and publishes the online Splash Pad Newsletter about businesses on Grand and Lakeshore avenues, is one local supporter of Mustacich and Herman's proposed shop. He's one of the people who hope the online survey will show neighborhood support for the shop.

A City of Oakland survey several years ago concluded that the business area on Grand between the Grand Lake Theatre and Ace Hardware should focus on entertainment and restaurants, and the wine and spirits shop would be a good fit with that plan, Katz said.

"They [city planners] are giving the applicants a hard time and making it difficult for them to pursue their dream," Katz said.

Mustacich said one inspiration for his and Herman's business proposal was the lifting of a nearly century-old ban on importing liquors flavored with wormwood to the U.S.

Absinthe is the best-known example, he said, but there's a whole range of wormwood-flavored aperitifs and fruit-flavored liqueurs that are still unfamiliar to many U.S. residents, he said.

"Our concept would be to carry premium locally sourced wines and distilled spirits from places like the Donkey and Goat winery in Berkeley, Dashe Cellars in Oakland, St. George Spirits in Alameda and Anchor Distilling Company in San Francisco," Mustacich said Monday.

"As an example of what we want to do, we use Cask in San Francisco, which has been a huge success and hasn't caused any problems," he said. 

He said that his and Herman's proposed business — Santé Wines and Distilled Spirits — would not sell tobacco, lottery tickets or related items.

Mustacich said it's his  understanding that the Planning Commission is unlikely to approve a variance and conditional use permit unless the application comes with a positive recommendation from city staff — and that to date, city planners have consistently said they would not support his and Herman's application.

If the shop goes forward, it would occupy half the space formerly occupied by Ford's Fine Furniture — the other half was recently leased to a consignment shop. Mijori restaurant is also located in the building.

Mustacich said he and Herman have been discussing a lease with the building's landlords, the Saribalis family, since January but don't feel they can sign a lease unless their application is supported by planning staff.

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