Michigan town could be forced to sell lighthouse to pay off wineries
Peninsular Township in Michigan is considering selling off public assets including the Mission Point Lighthouse in order to pay a US$50,000 fine to 11 local wineries after a judge ruled that unfair zoning rules had damaged their businesses.
Peninsular Township in Michigan is having to raid the town coffers after a federal court instructed it to pay US$49.3 million in damages to 11 local wineries. The conflict arose when the wineries in question filed a complaint claiming that over-zealous zoning rules had stifled their businesses and violated their constitutional rights.
The wineries had been at loggerheads with the council over the latter continually blocking the wineries from holding events on their properties including weddings, live music concerts, charity fundraisers and even wine tastings. Attorney Steve Ragatzki, who represented the wineries, argued that the restrictions were unlawful, and had taken place over many years.
“Over and over and over again the wineries tried to do things, and over and over and over again the township zoning officer said no. He didn’t say why it was no. It was just ‘no,’” Ragatzki said, adding that the wineries felt they had no option left but to sue.
One winery owner described in court how after a local schoolteacher has been diagnosed with Stage 4 breast cancer the winery decided to “throw a fundraiser for her…with 100% of proceedings going to her”. The day of the event, the winery received a “threatening” phone call from the town clerk accusing the winery of not having a permit, despite a permit not being needed for a gathering of less than 75 people.
Winery ordinance
The five-year legal dispute eventually played out over an 11-day trial in August, where the town council argued that its winery ordinance was designed to “balance the rights of the wineries with the right of residents to enjoy the peace and quiet of the region.” As such, the council had attempted to limit the number of guests the wineries could welcome to their estates.
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In his ruling, Federal district court judge Paul L. Maloney found that the town council had indeed violated the wineries’ constitutional rights, as well as violating the Dormant Commerce Clause, which prohibits state legislation that discriminates against, or unduly burdens, interstate commerce.
Town residents to foot the bill
Peninsular Township is appealing the decision but Township Clerk Maura Sanders has warned that in order to generate the hefty fine, all real estate owned by the town, including the historic Mission Point Lighthouse, might have to be put up for sale, as well as the council instating “austerity measures” such as cutting back on park and cemetery maintenance. The council has also hinted that taxes may have to be raised for its 6,000 residents.
“Even if the appeal gets cut in half, that’s still $25 million,” Sanders said. “That is still a heck of a lot of money for some people to bear on their tax bill. It’s a real concern.”
In 2023, before the judge settled on the sum of the fine, the Old Mission Peninsular Wine Trail highlighted on its website the tax burden that the wineries already shouldered. “These family businesses pay over $650,000 annually in property and personal property tax and employ hundreds of people, utilising local businesses and fellow farms as vendors and partners,” it wrote.
The wine trail organisers spoke of “a great rift” that now exists amongst neighbours “due to a lack of understanding about what wineries are seeking in a lawsuit against Peninsula Township and how we got where we are. Would wineries destroy the very community that nurtures their produce, raises their families, and provides recreational opportunities for all? No. Would the wineries have preferred to find compromise and resolution years ago through collaboration and frank discussions with all involved stakeholders? Of course!”
Continuing, those behind the wine trail asserted: “The wine industry has changed and wine businesses need to adapt. The Township director of Planning and Zoning put it plainly herself, ‘A zoning ordinance is intended to be a living document.”
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