Main Menu
Of Wineries and Weddings

The days of stopping by a roadside stand to buy a few ears of corn or a flat of strawberries from the local farmer have changed. 

 The organic, buy local and slow food movements have drawn urbanites wishing to experience the farm itself.  At first, farmers were able to supplement their farm income at farmstands with incidental farm supporting activities such as hayrides, corn mazes and u-cut flowers.  State law allowed for the sale of incidentals and fee-based activities that support farmstands so long as they were less than then 25 percent of the total annual sales at the stand.  Now, whether caused by patron demand or farmer creativity, the “agri-tainment” industry has percolated into farm to plate dinners, multi-day music festivals and weddings.  This has left counties to their own devices to review these activities and parse farm revenues and determine to what degree these various activities must promote farm activities.  Although planners are traditionally more concerned with analyzing physical impacts, such as traffic or noise, the continual review of sales receipts which are highly susceptible to manipulation makes the need for clear requirements a necessity.  Not to be outdone, wineries have joined the fray.  In 2010, the Oregon Legislature amended the law authorizing wineries to sell incidental items based on the same 25/75 percent rule in place governing farm stands as well as the sale of prepackaged foods.  However, unlike farmers who typically require larger tracts to reap a profit, a winery is allowed on land within an exclusive farm use zone (EFU) based on a mere 15 acres of an on-site or contiguous vineyard or has a contract to purchase grapes from a contiguous winery.  The grapes need only be planted in order to be authorized to sell the incidental items, packaged foods or host events.  A reasonable person might assume that the grapes must be sold for making wine in order for the 75 percent of the incidental sales rule to be triggered.  However, that reasonable person is not being as creative as some vineyard owners who have received county approval based solely on reporting direct revenues to the owner, rather than the revenue that is outsourced.  Using catering companies has also been used to circumvent the rules baring restaurant operations and, as outsourced revenue, it would not count as owner revenue.  Again, inconsistency in the application of these standards county-to-county has lead to some in the wine industry to claim that others are getting an unfair advantage.  Additionally, the 25/75 rule has proven problematic for very large wineries who would like to provide a wider variety of food service and event options.  Given this backdrop, there is a true sense of urgency, since the 2010 legislation authorizing these wineries will sunset in 2013.  The 2011 legislature responded by considering seven bills.  HB 2341, proposed by the Association of Oregon Counties, takes a tiered approach toward regulating the size and frequency of promotional events on both farms and wineries, allowing a certain number of events of a certain size every year.  However, it lacks any direction about what activities are included and does not regulate their length or intensity.  HB 2344, introduced by the House Agriculture Committee created an event authorization similar to the state’s complex mass gathering law.  HB 2868 would establish temporary or seasonal food service licenses for wineries.  HB 3280 and SB 829 would allow the largest scale wineries, producers of 150,000 gallons or more with large acreages, to establish restaurants.  This bill would affect two wineries in the state: King’s Hill Estates and Willamette Valley Vineyards.    HB 3234 would allow wineries to process other kinds of fruit along with grapes into wine.  When introduced, the hope was that these bills would be incorporated in a single, comprehensive piece of legislation to address activities on wineries and farm stands; however this objective is proving elusive.  As the remaining days of the legislative session continue to tick away, one group is trying again.  Made up of many established Willamette Valley vintners and representatives from 1000 Friends of Oregon, this group proposes allowing on-site activities at wineries that are “clearly incidental, related and subordinate to the primary operation of the winery as a production facility” including marketing events such as food and wine pairings, tastings, or wine tours where there are no menu options and food is provided without charge except for cost recovery.  Wineries producing over 150,000 gallons per year may have full-service restaurants. The bill would retain the 25 percent incidental sale limitation that is currently in place and authorizes a county to review gross income statements annually upon request.  In addition, the bill would allow local governments to issue a multi-year, temporary permit for up to five years for other events such as facility rentals, weddings, and outdoor concerts.  A winery would be able host up to 24 events with meal service, provided the attendance at each event was less than 50 people.  The bill would permit, on a conditional basis, 5 events that involve celebratory events (such as weddings), concerts or facility rental.  The bill authorizes counties to impose setback requirements to limit the sight and sound of events, providing adequate roads and parking.  In addition, the bill would authorize up to 18 celebratory events on other farmland. Although this draft has yet to be heard in committee, the draft appears to have gained the support of the Association of Oregon Counties and Willamette Valley vintners.  Uncharacteristically silent throughout this process has been the Department of Land Conservation and Development and the Governor’s Office whose endorsement could help move all of the parties to say “I do.”

Search This Blog

Subscribe

RSS RSS Feed

About Us
We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
Read More

Recent Posts

Topics

Select Category:

Archives

Select Month:

Contributors

Back to Page