A new Napa: No. 11: American Canyon, Calif.

Open spaces. Napa's bounty. A downtown still in the making.

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Jeff Mezzetta admires the vineyard near his headquarters in American Canyon, Calif.

AMERICAN CANYON, CALIF. (FORTUNE Small Business) -- His brown hair encased in a paper hairnet, Jeff Mezzetta strides through the aisles of his bottling facility in American Canyon, Calif., six miles south of the city of Napa.

"When we first moved here," he says, gesturing around the 200,000-square-foot space, "this was all cow pasture."

The land now houses his headquarters, where he produces the brined olives and peppers that his family company, G.L. Mezzetta, sells to upscale grocers all over the country. The business started small in San Francisco 70 years ago, and later relocated to nearby Sonoma County. When Mezzetta and his father, Ron, decided to expand their product lines, they started looking for a larger location.

At first they assumed that staying in wine country was out of the question - everything "had been either planted on or built up," Mezzetta says - but then Ron found American Canyon, near San Pablo Bay. Driving around, he discovered that the town flanks a four-mile stretch of the wine country's main artery, Highway 29, and boasts acres of undeveloped land. The company could maintain its Northern California roots after all.

The move was easier than expected. The city council has encouraged new industries - a green hotel, independent coffee shops, wine distributors - by appropriating more than 300 acres for business development and by granting more than 100 business licenses a year since 2003. Entrepreneurs also enjoy less restrictive zoning laws than in the rest of Napa.

Helene Marshall, co-founder of Marshall's Farm Honey, moved her business to American Canyon because it was the only town in Napa County that allowed her to market a product not completely produced in the region. She now sells more than 20 varieties of honey - many culled from hives in other counties - and works out of a 4.5-acre ranch dotted with sage and thistle. Napa's culinary bounty is just a few minutes up the road, and she can drive to the farmers' market in San Francisco's Ferry Building in less than an hour.

Although real estate is cheaper than in neighboring cities - the median price of a new house is about $430,000, vs. $560,000 in the city of Napa - it still exceeds the national median of $246,900. Jeff Mezzetta doesn't mind paying a premium to do business in California, one of the most expensive, highly taxed, and heavily regulated states for entrepreneurs. While American Canyon's downtown is still in its infancy, residents enjoy miles of hiking paths and the glassy Napa River - an unparalleled natural playground.

"A few of our employees run along the wetlands of the bay, just west of our facility," says Mezzetta, 39. "That's another hidden treasure in Napa Valley."  To top of page

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