State denies license for Brainerd winery ahead of opening
While the owners of a winery south of Brainerd are planning a grand opening next month, they're also contending with the state's denial of a required license.
The Dennis Drummond Wine Co. was not approved for a farm winery license, which permits the sale of wine produced on site. Although the business owners are not intending to grow their own grapes to produce their wine, agricultural land is required for licensure. This requirement was not part of the state law when Dennis and Jody Drummond first purchased the property in 2009 with plans to build a winery.
Chris Pence, Crow Wing County land services supervisor, said the business finds itself in an uncommon situation when tension between county rules and state rules is preventing it from doing what it planned.
While an on-sale liquor license was approved for an event center on site, the winery cannot sell its produced wine without a farm winery license. County ordinance, meanwhile, only permits a liquor license be issued to an entity located within a commercial zone.
"I'm not sure that it's the state position to tell counties what zoning district certain businesses should be located in," Pence said. "It seems odd to me that the state would tell the county that you have to have a business located on agricultural property, where our ordinance is clear these types of uses have to be on commercial property."
The basis for the denial, according to the Alcohol and Gambling Enforcement Division of the Minnesota Department of Public Safety, was state law requiring farm wineries be operated by the owner of a Minnesota farm or on agricultural property.
"(The division) inspected Mr. Drummond's property and confirmed that the land does not comply with the statute," stated Scott Wasserman, public information officer for DPS in an emailed statement. "Crow Wing County also confirmed that Mr. Drummond's property is located on land zoned as commercial and also noted that Mr. Drummond's property does not qualify for agricultural zoning, since the property does not meet the 35-acre requirement."
Solving the permit problem
Pence said from his perspective, the options the winery has to acquire the license are to purchase additional property or to seek a change to state law. If the Drummonds were able to purchase additional property adjacent to the 5 acres they already own, they could seek a variance to convert the property to agricultural zoning.
"It's neat, and it's a great opportunity for the Drummonds, and I feel bad that it's not working out the way they hoped," Pence said. "Depending on which approach they go, either with trying to get laws changed or acquiring more land, I sure hope they do it so they can be successful out there."
Pence said they could theoretically seek a variance now to convert 4 of 5 acres to the agricultural/forestry zone, although it would be a stretch considering the required 35-acre lot size.
"With that size, that's a pretty drastic reduction," Pence said. "I'm not sure that that would get approved, because I think it would be just a little bit too small to be considered ag. I think they would have to acquire a little more to try to meet the standards of the state statute what would be the reasons to approve the variance."
Brainerd lawyer Ray Charpentier is the attorney for the Dennis Drummond Wine Co. Charpentier said the business must work with numerous governmental agencies to ensure its in compliance with a series of complex laws.
"When I was in law school, I used to think somebody gives you a statute and you look at it and say, 'OK, that's what that means,'" Charpentier said. "It doesn't work that way. We're dealing with multiple entities here."
Charpentier said while the process was a slow one, he was comfortable it would eventually return the desired outcome for the winery.
"We're just trying to work through some of the definitional things, I think, and get everybody on the same page," Charpentier said. "All of these things, I think, end up being pretty fact intensive. I tell people all the time, fact isn't what you think it is. Fact isn't what I think it is. Fact is what a finder of fact thinks it is."
Charpentier said the winery planned to go ahead with its May 6 grand opening and the weddings and other events on the property already scheduled would proceed as planned. He said his interpretation of the law meant the winery could even proceed with its wine production—although it might not be worth it at this point.
"I think they could produce wine, probably, and I say that with a little caution, but what they can't do at the moment is if they were producing wine, they couldn't do anything with it," Charpentier said. "It doesn't make sense until you get everybody's OK on everything."
A matter of timing
One issue at play with the Drummond's business is the lag between when they acquired the property, and when they began construction. Pence said the Drummonds acquired a conditional use permit and a zoning change in 2009 for the property located on the corner of Thiesse Road and Highway 25. In the meantime, both the county and the state made changes that impacted the business's future.
In 2011, the county revamped its land use ordinance. Among a multitude of changes was an increase in the parcel size permitted for agricultural zoning from a 10-acre minimum to a 35-acre minimum. Pence said this was done after feedback from those in the agricultural community, who were concerned about the potential for subdivision.
"As we went through the process of doing the zoning map update, that was feedback from all the townships, that we want to keep these large forested and agricultural lands intact in larger tracts," Pence said.
This differs from the lot size requirements of several area counties.
In Aitkin County, agriculture is permitted in three zoning districts: farm residential, open and public. Terry Neff, environmental services director, said the minimum lot size is 5 acres.
To the west in Wadena County, one split of a 40-acre agricultural parcel is permitted, with the minimum lot size at 2.5 acres. Deana Malone, zoning administrator, said no further subdivision is permitted at that point.
In Morrison County, the majority of the county is zoned for agriculture. The minimum parcel size is 5 acres, said Amy Kowalzek, land services director, and a winery is one of the permitted uses in the agricultural zoning district.
In Cass County, Environmental Services Director John Ringley said the agricultural zoning districts are already created, but agricultural uses are permitted within several zoning districts. Ringley said there aren't size restrictions on land use districts, but he could not recall an instance when someone sought to convert land to an agricultural zone from a residential or commercial zone. Ringley said if someone wanted to open a winery in Cass County, it would likely be permitted through a conditional use permit within most zones.
In Todd County, one residence is permitted per every 40 acres within the agricultural/forestry zone, although agricultural uses are permitted in other zoning districts.
The second change affecting the Drummonds was at the state level. In 2012, the Legislature amended the farm winery license statute to include the provision requiring agricultural land.
"A farm winery license must be issued for operation of a farm winery on agricultural land, operating under an agricultural classification, zone or conditional use permit," states the law. "Farm wineries with licenses issued prior to March 1, 2012, are exempt from this provision."
Although neither of these changes were made with the Dennis Drummond Wine Co. in mind, both are now part of the equation that's preventing issuance of the license.
An experience in neighboring Todd
The Drummonds' winery is the first to open in Crow Wing County. Planning and zoning officials from several surrounding counties noted the first time a land use is introduced within one's jurisdiction, it can present challenges.
Tim Stieber, planning and zoning director in Todd County, recently faced a similar situation to that of the Drummonds' winery. Stieber previously worked in a county in Oregon in which more than 400 wineries were located before assuming his role in Todd County. In 2016, a resident wishing to open a winery in Todd County approached the planning and zoning office.
Stieber said to square the uses permitted by the county with the business plan of the winery, it required a zoning change. Like Crow Wing County, Todd County does not permit a bar or restaurant within the agricultural zone. It does permit this type of business within the shoreland district, however, along with agricultural use. Stieber said a change in zoning from agricultural to shoreland for the property, which is near a lake, satisfied requirements at both levels of government.
Stieber said although it worked out in the case of the first winery in Todd County, more work was needed to accommodate this use in the future.
"That was a special case," Stieber said. "I'm not ready for the next one."
Curt Richter is the owner of the Todd County winery Stieber discussed. The Dragon Willow Winery is located south of Long Prairie on Highway 71. Richter was eager to recount his own experience with navigating the complexities of government.
"To put it mildly, let's just say it's not a good experience working with government," Richter said. "There's nothing like dealing with the government red tape."
Richter detailed a series of required steps he went through to establish his farm winery, starting with the federal government down to the county level. Although he did not run into the same issue as the Drummonds because agriculture is permitted on his property, he's dealing with a separate issue with the Minnesota Department of Agriculture. The federal Food Safety Modernization Act declaring wine a food enacted a whole new set of regulations for the winery's tasting room.
Richter said he has 18 months to comply with the provisions outlined in the food code, which included seeking county approval as a bar.
"Ultimately, wine is still an agricultural product," Richter said. "We grow grapes, we crush the grapes, we make the wine and we sell it. But because we have the tasting room, suddenly we are treated like a bar."
Lawsuit challenges another wine provision
The statute governing farm winery licenses is under a different kind of scrutiny as two of the state's oldest wineries initiated a federal lawsuit over another provision in the law. The Star Tribune reported the lawsuit seeks to eliminate a provision requiring more than 50 percent of the grapes used in wine production be grown in Minnesota. Those seeking the change note the same requirement is not applied to the state's beer or spirit makers.