article: First Beer, Cider & Spirits conference in Sonoma County

[originally published in Oak Leaf News Nov. 18, 2013]

Conference Pans Out New Job Prospects For SRJC Students In Liquid Gold Rush

Sonoma County EDB's confernece on Beer, Cider & Spirits

Sonoma County’s first-ever Beer, Cider and Spirits Conference tapped opportunities for Santa Rosa Junior College students in the county’s $200 million home-brewed industry. Speakers and panelists included 2nd District Assembly member Wes Chesboro and brewers from 20 breweries, five cideries and four distilleries in Sonoma County, the birthplace of the modern microbrewery.

2nd Dist. Wes Chesboro addresses the EDB conference.

Chesboro said California’s 422 craft breweries, opening at a rate of about one a week, employ 48,000 people, pay $850 million in taxes and add $4 billion to the state’s economy. Chesboro described California’s craft beer industry as “guerilla capitalism” battling the “culture of sameness placing mediocrity over adventure”  and tapping into the barrels of people looking for a new favorite.

California Craft Beer Association Executive Director Tom McCormick outlined the industry’s positive impact on city and state economies, as well as Sonoma County’s world-wide fame as the cradle of the craft beer countermovement.

When Sonoma’s now-tapped-out New Albion Brewery opened in 1976, Jack McAuliffe transformed used dairy equipment to build from the ground up what became the first microbrewery in the U.S. McCormick said New Albion is known around the world, even in recently-visited Denmark where he said, “they treat you like a rock star if you say you’re a brewer from Sonoma County.”

Keynote speaker Tom Magee of Lagunitas Brewing Co.

Tom Magee, owner of Lagunitas Brewing Company in Petaluma, delivered the keynote address, dropping only one F-bomb in the process. Lagunitas accounts for 70 percent of the county’s beer sales and half the county’s 680 craft beer employees, and their soon-to-open expansion in Chicago will quadruple their production. Magee said the decision to expand came after “running the numbers” of their shipping costs of $150,000 per week and discovering he could borrow $25 million with that kind of cash flow.

Magee also spoke about “bankers, not brewers” running multinational beer conglomerates like InBev, the world’s largest brewing company that owns Budweiser, Busch, Löwenbräu, Michelob, Natural Light and several other brands found in supermarkets. Magee said Budweiser’s release of American Ale was “full of capitulation; it gave drinkers permission to leave the reservation” by offering an option besides the standard pilsner style.

“If the tail can wag the dog that hard, it’s not the tail anymore,” Magee said. Lagunitas attracted the interest of several Dartmouth MBA students “turning their backs on the morass of soullessness of Wall Street.”

"Branding of Sonoma County" panel

Ken Weaver, author of “The Northern California Craft Beer Guide,” sat on the panel “Branding of Sonoma County.” Weaver said the county’s craft breweries benefit from the tourism industry already deeply rooted and growing for another purpose, Sonoma County wine.

Jay Brooks, a syndicated beer writer on the same panel, spoke about the built-in recognition of the Sonoma name. While wine drinkers might view Napa and Sonoma interchangeably, craft beer drinkers only know Sonoma. “Around the world, people know the Big Three,” Brooks said, referring to Lagunitas Brewing Company, Bear Republic Brewing Company and Russian River Brewing Company. “People come to visit the Big Three and find out about the other 17.”

The panel on “Liquid Assets” included Richard Norgrove, owner of Bear Republic Brewing Company in Healdsburg, who said his biggest resource was his employees, but even with great employees a company still needs to have a product. “There is no such thing as a ‘loss leader,’” Norgrove said. “Every aspect of your business must be profitable, every decision has to make sense – but your bottom line is not always key.”

On the same panel, Fred Groth described using the Kickstarter website to raise $25,000 for equipment to expand his Sonoma distillery, HelloCello & Prohibition Spirits.

Natlie Cilurzo [left] on "Brewing Solutions" panel

Natalie Cilurzo, owner of Russian River Brewing Company in Santa Rosa spoke on the “Brewing Solutions” panel about the country’s most regulated industry. Of the nine regulatory challenges she raised, waste water topped her list as a barrier for new or expanding breweries. Cilurzo said Russian River Brewing Company, whose annual limited release of their Pliny the Younger brought Sonoma County $2 million in tourist dollars this spring, is not considering expanding their world-famous brewery partly because of regulatory barriers.

While brewery waste water is not toxic, it provides rich nutrients for organisms that overpower sewer systems. Assuming Russian River invested $1 million in a water treatment system for a brewery three times their current size that discharged only 100 percent pure water, sewage hook-up fees would be $1.2 million in addition to any monthly fees, Cilurzo said.

During the tasting session after the conference, some of Sonoma County’s world-famous home-brewed legends offered advice to SRJC students intent on tapping into the craft beer industry.

Russian River pours the world-famous Pliny the Elder

“Biochemistry knowledge is critical if you want to be a brewer,” said Lagunitas’ maketing head Ron Lindenbusch. “If you want to be in the marketing end of things, SRJC has a great culinary program to be able to take the whole ‘beer & food’ thing to a whole other place.” Students interested in restaurants and hospitality, already in place for the wine tourism industry, benefit by incorporating craft beer into those existing programs. “You learn that, and then you try to put a ‘beer’ angle to it, and you’ve got something that has a dual purpose in the consumer’s mind,” Lindenbusch said.

“There’s not currently any type of brewing science class [at SRJC],” Lindenbusch said, “but anything you know about making wine translates into beer in a lot of ways – a lot of the same chemistry, the same biochemistry. But you’ve got to make sure you’re old enough to drink before I can encourage that!”

Sebastopol's family-owned organic Devoto Orchards cider

Cilurzo advised SRJC students interested in opening a beer bar or a brewery that having enough start-up money is essential. “You need to have tons of capital, and you need a plan,” Cilurzo said. “You need money. No matter what you’re going to do, get money. If you just get to the almost-open point, but don’t have enough money to open, or once you get open and can’t get people in your door, it’s not going to work. It looks like a money-making venture, but it’s not; it’s a money-spending venture.”

Santa Rosa City Council member Gary Wysocky, former adjunct professor of accounting at Sonoma State University, advised SRJC students interested in any industry, “It’s all about personal connections. You do what you can to get in front of people, you do whatever job is offered, and you work your way up the food chain. But people skills are what matter.”

Wysocky also said desire was essential and “timing’s not the only thing – it’s everything. You can have forever-bad timing but you just have to be ready when that break comes your way – and it will. You just have to be patient for it and ready for it.”

Don Winkle, business attorney with Spaulding McCullough & Tansil LLP and moderator of the Brewing Solutions panel, advised SRJC students against sloppy texting habits to set themselves apart. “Learn how to write,” Winkle said. “Learn how to express yourself clearly and professionally and you will have a leg up on many, many people – regardless of what degree you get."

article: Holzworth's "poisoned taint"

[originally published in Oak Leaf News Oct. 28, 2013]

The criminal trial against former SRJC campus cop Jeffrey Holzworth, accused of embezzling campus parking meter money, slowed to a standstill by motions defense attorneys filed to dismiss evidence police found when acting on three search warrants due to the “poisoned taint of illegality” behind the search warrants.

Holzworth, who held sole responsibility over collecting cash from campus parking machines, is charged with 11 charges of receiving stolen property over $400 and one charge of embezzlement exceeding $150,000. Prosecutors say Holzworth pilfered $400,000 since 2005 from the SRJC campuses in Santa Rosa, Petaluma and Windsor. Holzworth’s wife Karen received three charges of receiving stolen property over $400 and one count as an accessory to a crime.

In a follow-up hearing on the morning of Oct. 10 in Courtroom 3 of Sonoma County Superior Court, Judge Kenneth Gnoss sustained the defense attorneys’ motions to unseal affidavits leading to three search warrants issued to Santa Rosa Police detectives. Assistant District Attorney Amy Ariyoshi did not oppose the motion to unseal, and Judge Gnoss issued copies of the affidavits to the defense.

In court, defense attorney Joe Passalaqua said he would like the opportunity to examine the newly unsealed documents to see if other issues arise, but was not sure if other motions would be filed later.

Two affidavits issued on Nov. 13, 2012 allowed detectives to place GPS tracking devices on Holzworth’s vehicles and to search his bank accounts and Equifax credit report. A third affidavit granted a warrant allowing SRPD detectives to search Holzworth’s police car, private truck and house on Nov. 28, 2012, where they discovered gambling records, casino players club cards, receipts from ATMs and SRJC parking machines and caches of stashed cash in 19 bags and 5 glass jars full of quarters, $1 and $5 bills totaling $13,487.

Outside the courtroom, Prosecutor Ariyoshi said the motions filed by the defense all challenge the probable cause for issuing the three search warrants. Ariyoshi said the situation now depends entirely on the judge’s ruling, but it is highly unlikely the judge would toss out all evidence obtained.

“I can’t even guess on the number of potential scenarios,” Ariyoshi said.

When asked about witnesses subpoenaed to appear, Ariyoshi said she could not release their names, but said the witness pool derived entirely from those named in the search warrants. “This is a purely legal issue, not dependent on witnesses,” Ariyoshi said.

Outside the courtroom defense attorney Passalaqua said, “I have no comment at this time.”

Judge Gnoss set another hearing for Nov. 21, 2013 to rule on the motions to suppress all three unsealed search warrant affidavits, based on their claim that SRJC Sgt. Potter’s observations of money inside Holzworth’s personal vehicle, which launched the embezzlement investigation by SRPD detectives Azzouni and Lazzarini, constituted an illegal search and invalidated the probable cause supporting the search warrants.

Passalaqua’s motions to suppress are based on the concept of the “fruit of the poisonous tree,” which restricts new warrants growing from prior illegal search warrants and rejects the “fruit” of evidence illegally obtained by them. Passalaqua’s motion said Holzworth “made incriminating statements only after he was confronted with a pile of evidence” by SRPD detectives, but the tainted “illegally acquired evidence” invalidated Holzworth’s confession and “made it appear as if the ‘cat was already out of the bag’ and therefore defendant had nothing to lose – and perhaps something to gain – by confessing his guilt and making incriminating statements.”

Holzworth’s cash collections from campus VenTek International System VI parking machines followed “procedure developed by SRJC and its police department,” the motion said. “Defendant collected money from the machines and delivered money to the SRJC accounting department. In the process, defendant ‘zeroed-out’ the machines with a computer which effectively wiped out the machines’ computer memories,” the motion said, adding there was no direct supervision, secondary checks or any other type of accountability over Holzworth’s cash collections.

The district attorney’s counter motions said enough probable cause exists for issuing the warrants, even after removing Sgt. Potter’s allegedly tainted testimony of discovering money in Holzworth’s duffle bag in 2006 and in his vehicle’s center console in 2012. “The social cost of suppressing the evidence of the embezzlement operation discovered is substantial,” the DA’s counter motion said.

Holzworth’s next court date is scheduled at 1:30 p.m. on Nov. 21, 2013 in Courtroom 3 of Sonoma County Superior Court.