Posted by: Patricia Salkin | July 21, 2013

Oregon Appeals Court Agrees that Use of Winery for Events in Proposed New Tasting Room Constitutes Permissible Commercial Activities in Conjunction with Farm Use Under Statute

In 2011, respondent, Stoller Vineyards (Stoller), a winery that is situated on a former turkey farm, in Oregon and is zoned for “exclusive farm use” (EFU) applied for and was issued a conditional use permit (CUP) for “commercial activities that are in conjunction with farm use.” This permitted the winery to host up to 44 wine marketing events per year in a proposed new tasting room. Yamhill County (county) approved the application under ORS 215.283(2)(a). The statute provides for wineries that meet certain requirements are permitted uses on property zoned EFU, and it does not foreclose wineries, which do not meet the requirements from seeking CUPs. The permit that was issued contained various conditions designed to ensure that Stoller’s business remained focused on growing grapes and making wine and that it did not impact the surrounding community.

Petitioners, The Oregon Department of Agriculture and the Friends of Yamhill County, a conservation group, appealed the county’s decision to the Land Use Board of Appeals (LUBA). The petitioners argued that the proposed wine marketing events were not connected to farm use. LUBA rejected this argument and affirmed the county’s decision.

On appeal to the Court of Appeals of Oregon, the petitioners argued that LUBA’s decision violated the limits of the statute by allowing a greater number and type of events than is allowed in commercial uses in conjunction with farm use under ORS 215.283(2)(a). Petitioner’s argument could be reduced to two contentions: (1) the approved commercial activity, in particular, the events venue and commercial food service facility was a new use that should not be considered to be in “conjunction with farm use” under ORS 215.283(2)(a); and (2) even if it is, the level of activity exceeds the incidental limitation imposed on such activity under the applicable law. The respondents on the other hand contended that this case represented a straightforward application of ORS 215.283(2)(a).

The petitioner’s first assertion that LUBA’s view of the approved use as an “expansion of a pre-existing winery” rather than a “brand new use of a ‘wine tasting facility hosting events at the winery and food service” tainted LUBA’s conclusion. They asserted that LUBA made an error in concluding that the county did not err in approving Stoller’s application under ORS 215.283(2)(a) to conduct farm-use related commercial activities. They also asserted that the commercial activities at issue, a tasting facility hosting events and food service, were not activities in conjunction with “farm use” but rather are activities in conjunction with “non-farm use”. The court rejected petitioner’s argument because as they previously held in (Craven v. Jackson County, 308 Or 281, 779 P2d), “incidental activities” like those stated above are permitted as farm-use related commercial activities “to the extent that they are secondary to and support the wine processing activities of the winery.”

Petitioner’s then asserted that the winery events and kitchen were not essential to the practice of agriculture, and what is permissible under ORS 215.283(2)(a). The statute provides in part that, “tasting rooms and associated retail sales activities are permitted as farm-use related commercial activities on EFU land, to the extent that they are secondary to and support the wine processing activities of a winery located on that land. The court here, held that a kitchen and additional events could be viewed as part of the winery, as long as they are both “incidental and secondary” to the processing and selling of wine. The court also held that LUBA was right to interpret “incidental and secondary” to include more intensive subordinate use at a “commercial activity in conjunction with farm use” than what was formerly believed to be the intent of the statute. The court agreed with LUBA that the 44 approved annual events and kitchen came to close to creating a scenario in which the ‘incidental and secondary’ activities (events and food service) might overtake the primary activity (the processing and selling of wine). However, they agreed with LUBA that Stoller’s application still did not fall outside the scope of ORS 215.283(2)(a) as construed in the Craven decision.

Moreover, the court stated that farm-use related commercial activity must promote the policy of preserving farmland for farm use. These activities at issue could reasonably be expected to enhance Stoller’s wine marketing and to improve the chances that the Stoller Winery will be successful in continuing to provide a customer for Stoller Vineyard’s grapes. The activities would also “reinforce the profitability of operations and the likelihood that agriculture use of the land would continue, thus promoting the goal of preserving farm land.” Accordingly, the Court of Appeals held that based on legislative history, LUBA did not err in affirming the county’s approval of Stoller’s application as “commercial activities that are in conjunction with farm use” under ORS 215.283(2)(a).

Friends of Yamhill County and Oregon Dept. of Agriculture, v. Stoller Vineyards, Inc. 2013 WL 1136795 (Or. App. 3/19/2013)

The opinion can be accessed at: http://www.publications.ojd.state.or.us/docs/A152666.pdf


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