Court has agreed to review appellate decision to close winery
A controversial split decision on agricultural zoning from the Fifth District Court of Appealswill go before the Ohio Supreme Court. The court has agreed to review Terry v. Sperry, 2010-Ohio-1299 (March 23, 2010), an appellate decision that endorsed a township's desire to close down a winery in an exurban residential area. The court agreed with the township's assertion that Myrrdin Winery could not utilize Ohio's "agricultural exemption" from township zoning authority because the winery imported more grapes than it grows on the premises and thus does not meet the statute's definition of "agriculture." Because the winery did not qualify as "agriculture," the court held that the township could enjoin its operation. We disagree with the court's reliance on the definition of "agriculture" because the statute also includes specific exemption language for wineries that bypasses the agriculture definition. See our earlier post, Ohio court allows township to use zoning to prohibit winery.
The Supreme Court's decision to review the case should result in much needed clarification of township zoning authority over wineries, a recurring issue in Ohio. With more and more wineries developing in Ohio, many will be anxious for the Supreme's Court's interpretation of the statute. The court should reach a decision in early 2011.
Court says winery must grow more grapes to be defined as "agriculture."
In a split decision, the Seventh Distict Court of Appeals has ruled in favor of a township in Mahoning County that wants to close down a small winery. Milton Township claims that the winery violates township zoning regulations because it is located in a residential zoning district and does not qualify for the "agricultural exemption" from local zoning. The court of common pleas and the majority on the appeals court agreed with the township, but a strong dissent by Court of Appeals Judge DeGenaro challenges the courts' rulings and illustrates the need for clarity in Ohio's rural zoning laws.
Myrddin Winery is a family owned business located on Lake Milton in Milton Township, on property that also contains a residence. A free standing addition serves as the winery, and the property also has a vineyard containing 20 grape vines, with 12 vines producing grapes for harvest. The Sperry family uses their grapes for wine, and must also import grapes and grape juices for their wine production--5% of their wine derives from their grape vines. They make and bottle the wine on the premises. Customers visit the winery to taste and purchase the wine and food items.
Before opening in 2005, the Sperry family asked the township zoning inspector if the township required any permits for the winery. The zoning inspector advised that the family could begin operations immediately because the township did not require any permits. In 2008, however, the township changed its opinion and notified the Sperrys that they were in violation of the township zoning resolution. The township filed a complaint and requested the court to issue an injunction that would prohibit continued operation of the winery.
Two issues were before the Mahoning County trial court upon hearing the Myrddin Winery case: 1) whether a winery is "agriculture" for purposes of the agricultural exemption in Ohio zoning law, and 2) whether Ohio zoning law exempts wineries from local zoning regulation. The trial court answered both questions in the negative. The Sperry family appealed the decision to the Court of Appeals.
The court of appeals examined the Ohio Revised Code's agricultural exemption from township zoning authority, but focused its decision on the statute's definition of "agriculture" in O.R.C. 519.01, which states:
- "As used in section 519.02 to 519.25 of the Revised Code, 'agriculture' includes farming; ranching; aquaculture; apiculture; horticulture; viticulture; animal husbandry, * * *; poultry husbandry * * *; dairy production; the production of field crops, tobacco, fruits, vegetables, nursery stock, ornamental shrubs, ornamental trees, flowers, sod, or mushrooms; timber; pasturage; any combination of the foregoing; the processing, drying, storage, and marketing of agricultural products when those activities are conducted in conjunction with, but are secondary to, such husbandry or production." (Emphasis added.)
As Judge DeGenaro points out in the dissent, the court should have relied on the actual agricultural exemption language contained in R.C. 519.21(A), which provides:
- "Except as otherwise provided in division (B) of this section, sections 519.02 to 519.25 of the Revised Code confer no power on any township zoning commission, board of township trustees, or board of zoning appeals to prohibit the use of any land for agricultural purposes or the construction or use of buildings or structures incident to the use for agricultural purposes of the land on which such buildings or structures are located, including buildings or structures that are used primarily for vinting and selling wine and that are located on land any part of which is used for viticulture, and no zoning certificate shall be required for any such building or structure." (Emphasis added.)
I agree with the dissent's interpretation of the statute, which is that a township may not prohibit the use of buildings or structures that are used primarily for vinting and selling wine and that are located on land used for viticulture, which is the growing of grapes for wine. Under this interpretation, Myrddin Winery could not be prohibited by way of zoning regulation. However, the majority chose to read R.C. 519.21(A) to require that "any buildings or structures used primarily for vinting and selling wine" must also fit within the definition of "agriculture" in R.C. 519.01. That definition includes "viticulture" and the processing and marketing of agricultural products, but only if processing and marketing of products is "secondary to" production. Because Myrddin Winery was importing more grapes and grape juice for its wine than it was growing on the property, the court concluded that the processing and marketing of the wine was not secondary to production, but was the primary use of the property. Thus, the agricultural exemption from zoning regulation would not apply and the township could prohibit the winery.
In short, the court's ruling requires a winery to ensure that production of grapes is the primary use of the property and any processing and marketing of wine is the secondary use of the property. Otherwise, local zoning can prohibit a winery. This outcome is especially problematic for beginning operations, because grape vines require many years of cultivation prior to successful harvest for wine production. It also raises challenges for the winery landowner who must prove whether the grapes or the wine are the "primary" use of the property. The specific exemption for wineries in 519.21(A) avoids these complications.
The Myrddin Winery case is one example of the confusion surrounding Ohio's agricultural exemption from township and county zoning authority, and the court's ruling strays too far from the intent of the law--to ensure that agricultural activities can persist outside of municpal areas. The Sperry family has a strong basis for appealing the decision to the Ohio Supreme Court and seeking final clarification of the winery provision in the agricultural exemption. But the Ohio legislature could alleviate the problem for landowners like the Sperry family, as well as townships and counties, by providing statutory clarification to the agricultural exemption. Cases like the Myrddin winery case pervade the state and continuously raise the issue of which agricultural activities can and cannot be regulated by zoning. With growing interests in agriculture and with state and federal policies that promote new types of agricultural production, direct marketing, and on-site processing by agricultural producers, Ohio will continue to experience conflicts between agriculture and local zoning regulation. It's time for the legislature to simplify and clarify the relationship between agricultural land uses and local zoning authority.
The Myrddin Winery case is Terry v. Sperry, 2010-Ohio-1299 (March 23, 2010), and is available here.
Can Ohio townships use their zoning authority to regulate outdoor signs on agricultural property? This is a question I've received many times. I can now refer townships to legal guidance provided by the Ohio Attorney General in an opinion issued October 20, 2009 (OAG 2009-041). The OAG opinion walks us through an analysis of the persistently problematic Ohio Revised Code section 519.21, commonly referred to as the 'agricultural zoning exemption,' which states that townships may not use their zoning authority "to prohibit the use of any land for agricultural purposes or the construction or use of buildings or structures incident to the use for agricultural purposes of the land on which such buildings or structures are located," with a few exceptions.
The OAG opinion provides the following explanation of how the agricultural exemption applies to an outdoor sign on agricultural property:
"1. Pursuant to R.C. 519.21(A), officials of a township that has not adopted a limited home rule government under R.C. Chapter 504 may not regulate the location, height,bulk, or size of a fee-standing outdoor sign that is located on a lot greater than five acres and deemed to be a structure when the use of the sign relates directly and immediately to the use for agricultural purposes of the lot on which the sign is located.
2. The use of a free-standing outdoor sign is directly and immediately related to the use for agricultural purposes of the lot on which the sign is located when the sign advertises the sale of agricultural products derived from the lot on which the sign is located.
3. The use of a free-standing outdoor sign is not directly and immediately related to the use for agricultural purposes of the lot on which the sign is located when the sign advertises the sale of (1) agricultural products not derived from the lot on which the sign is located or (2) things other than agricultural products.
4. Township officials may consider any information or facts they deem necessary and relevant in order to determine in a reasonable manner whether the use of a free-standing outdoor sign is directly and immediately related to the use for agricultural purposes of the lot on which the sign is located or an attempt to promote an activity that is not conducted in conjunction with, and secondary to, the production of the agricultural products derived from the lot on which the sign is located."
Note that the opinion pertains only to townships that have not adopted a limited home rule form of government--most of our townships have not taken the action necessary to adopt limited home rule powers. The opinion also notes that the 'farm market exception' may provide townships with limited authority to regulate outdoor signs, and that a different outcome could result for regulation of lots less than five acres in a subdivision setting.
The OAG's guidance is consistent with the history of the agricultural exemption and the many court cases that have interpreted the law. When the Ohio legislature gave townships zoning authority over 50 years ago, it tried to ensure that townships would not "zone out" all agricultural land uses in rural areas. The legislature's foresight on the issue of agricultural land use was remarkable, but their statutory language has yielded uncertainty and confusion. The OAG's opinion attempts to clarify some of that language, but the opinion forces townships into a careful analysis of each individual situation that may prove difficult and problematic for zoning officials.
The opinion itself recognizes the challenges posed by a "mixed use" situation, where the sign includes multiple products or partial products--some that derive from the property and others that do not, or promotes an activity related to the property's agricultural use. The Attorney General doesn't resolve this problem, but defers to the townships on these types of situations. The opinion states that when addressing these situations, township officials may consider "any information or facts they deem necessary and relevant in order to determine in a reasonable manner whether the use of an advertising device is drectly and immediately related to the use for agricultural purposes of the lot on which the device is located," or conversely is an "attempt to promote an activity that is not conducted in conjunction with and secondary to the production of the agricultural prouducts derived from the lot." Once again, township zoning officials may find themselves in a state of uncertainty over how or whether to regulate a land use on an agricultural property.
Read OAG opinion 2009-041 at http://www.ohioattorneygeneral.gov/Legal/Opinions.
If you heard a collective sigh of relief around Ohio on Thursday, it was likely coming from Ohio townships after learning the outcome of the long-awaited “Phantom Fireworks” court case. The Ohio Supreme Court unanimously agreed that Ohio townships may rely on countywide comprehensive land use plans as a basis for township zoning, rather than preparing individual township comprehensive plans. B.J. Alan Co. v. Congress Twp. Bd. of Zoning Appeals, Slip Opinion No. 2009-Ohio-5863 (Nov. 12, 2009).
I tend to like the pragmatic opinions authored by Justice Pfeifer, and this case is no exception. The decision answers with brevity the question of whether a township must prepare its own comprehensive land use plan in order to comply with Ohio zoning law. Examining the language of Ohio Revised Code 519.02, which grants townships the authority to utilize zoning “in accordance with a comprehensive plan,” the court determined that the statute does not require each township to develop its own comprehensive plan. Such an interpretation would be reading additional language into 519.02, said the court, and “the law requires only that a zoning resolution be ‘in accordance with a comprehensive plan.’” A countywide comprehensive plan is sufficient, and “accounts for the interrelationship of communities and marshals resources and expertise.”
Had the court reached a different conclusion, it would have invalidated hundreds of Ohio township zoning resolutions that are based on county land use plans. This was the hope of the B.J. Alan Company, which brought the case as a challenge to a zoning decision by Congress Township in Wayne County. The township denied the company’s request for a use variance to allow it to construct a Phantom Fireworks store on land zoned for agricultural use. When the case went to the court of appeals, that court agreed with the company’s argument that Congress Township’s zoning resolution was invalid according to ORC 519.02 because it was not based on a township comprehensive plan.
The controversial nature of the case led to parties lining up in interesting partnerships on both sides of the appeal to the Ohio Supreme Court. Backing the township were the Ohio Township Association, the Ohio Farm Bureau Federation, the Wayne County Farm Bureau and the Ohio Prosecuting Attorneys’ Association. On the opposite side in support of B.J. Alan Company’s appeal were the Ohio Home Builders’ Association, American Planning Association and Ohio Planning Conference.
The Supreme Court referred the case back to the court of appeals to resolve the question of whether Congress Township’s zoning is indeed “in accordance with” the Wayne County comprehensive plan. The court did examine the county plan, and held that the plan itself is a valid comprehensive plan for purposes of ORC 519.02. Sidestepping the fact that Ohio law does not clearly define a “comprehensive plan,” the court concluded that the Wayne County plan “presents a thorough study of the region and sets forth comprehensive land-use goals for the County.”
For now, townships need not panic about finding the time and funds to develop township comprehensive plans. Townships may continue to enforce their zoning resolutions based on county plans. Unknown to us is whether B.J. Alan Company will need to find a new piece of land for its Phantom Fireworks store—that decision is now in the hands of the appellate court.
The question from a local official at a recent zoning workshop was "...doesn't a landowner need a certain amount of property to be considered agricultural for zoning purposes?" and the answer is quite simple: no. He was asking the question because Ohio law doesn't allow counties and townships to use their zoning authority to prohibit agricultural land uses, except in a few limited circumstances such as platted subdivision situations. But the law doesn't require a minimum amount of acreage to qualify the land as "agriculture"--any amount of land can be deemed agricultural as long as the use itself fits within the definition of agriculture provided by the zoning statute. And if the land use is within the definition of agriculture, then zoning can't prohibit it unless an exception applies. The confusion over this issue is understandable; I believe it originates with requirements for the Current Agricultural Use Valuation (CAUV) tax assessment program. CAUV participation requires a minimum of ten acres devoted to agricultural use, but less than ten acres will qualify for CAUV if the land is devoted to agricultural use and provided at least $2500 in average gross income over the prior three years. Whether or not land meets the CAUV acreage requirement, the land use can still be agricultural for zoning purposes if it fits within the definition of agriculture. For more on Ohio's rural zoning laws, visit our website's zoning library at http://aede.ag.ohio-state.edu/programs/aglaw/zoning_law.htm.