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Real Property & Development Review

Oregon Land Use Board of Appeals Clarifies Permitting Pathways for Wine Businesses on Farmland

Posted in Land Use

The Oregon Land Use Board of Appeals (LUBA) has issued two important new decisions regarding wine businesses on Exclusive Farm Use (EFU) land. Across Oregon, wineries and other wine-related businesses utilize several different permitting pathways to secure land use approval for their activities. The rules governing these pathways are convoluted, and the differences between the various permit types have created considerable confusion. LUBA’s new decisions bring some clarity to the situation, but the Legislature will likely make additional changes to state law next year.

Friends of Yamhill County v. Yamhill County (the Stoller Vineyards case)

One type of permit held by many wineries across Oregon is a conditional use permit (CUP) for “commercial activities that are in conjunction with farm use.” In Friends of Yamhill County v. Yamhill County, LUBA upheld a CUP for a new tasting room and a slate of 44 wine marketing events at Stoller Vineyards. The Stoller property is nearly 400 acres and includes a winery and approximately 180 acres of vineyards. The permit issued to Stoller by Yamhill County contained 16 conditions designed to ensure that Stoller’s business remained primarily focused on growing grapes and making wine and did not impact the surrounding farming community.

The Oregon Department of Agriculture (ODA) joined the Friends of Yamhill County (FYC), in appealing Stoller’s permit to LUBA. ODA and FYC argued, among other things, that Stoller’s proposed wine marketing activities were not sufficiently connected to local agriculture. LUBA rejected ODA’s and FYC’s arguments and upheld the county’s decision based on an analysis of twenty-plus years of legislative history and case law.

LUBA’s Yamhill County decision removes the cloud of uncertainty that this litigation has placed over wineries with CUPs across the state. There are many such wineries, including nearly 70 wineries in Yamhill County alone.

Keith v. Washington County (the Garden Vineyards case)

LUBA’s Yamhill County decision contrasts sharply with another recent case out of neighboring Washington County. In Keith v. Washington County, LUBA struck down a farm stand permit for a vineyard to host events featuring wine. This is the second time that the vineyard, known as Garden Vineyards, has been before LUBA. After the first appeal, which involved the permitted use winery pathway, Washington County issued Garden Vineyards a farm stand permit. Neighbors appealed the permit to LUBA and the county responded that LUBA lacked jurisdiction over the case because the permit was not a “land use decision” under state EFU rules. LUBA disagreed and held that the county was required to complete a land use process to evaluate whether Garden Vineyards’ operation met the state law criteria for a farm stand.

As a result of the Washington County case, counties will need to closely examine the state EFU rules to determine the extent to which wine tasting rooms and other wine-related activities qualify as farm stands. These rules are not entirely clear, and counties have been utilizing a variety of approaches for some time.

Conclusion

LUBA’s Yamhill County and Washington County decisions set the stage for the Legislature’s consideration of wine-related land use issues in 2013. Key provisions of the 2011 permitted use winery statute, HB 3280, are scheduled to sunset at the end of next year, and various bills are being proposed to amend wine-related zoning rules. More changes are therefore on the way in this oddly complex area of law.