Restrictions on location

[Jeli]

Hello Everyone. I have a question about DSP (Distilled Spirits Plant) locations.

I have read much of 27 CFR 19 and have found this excerpt:

§ 19.52 Restrictions on location of plants.

A person who intends to establish a distilled spirits plant may not locate it in any of the following places:

a) In any residence, shed, yard, or enclosure connected to a residence;

On any vessel or boat;

c) Where beer or wine is produced;

d) Where liquors are sold at retail; or

e) Where any other business is conducted except as provided in § 19.54.

(26 U.S.C. 5178)

Based on my interpretation, as long as the plant is not physically inside the residence, this should be allowed. Is this correct?

If I'm wrong, what about two adjoining parcels with the home on one parcel and the DSP on the other? I have already contacted my zoning board and they are fine with creating a conditional-use-permit for me either way. I emailed TTB my question and they say I can't have it all on one parcel, but he didn't answer if it could be on an adjoining parcel. Rather than take what he said at face value, I'd like to hear from the industry as well.

Thanks very much!

Jesse

[Mars]

From what I have gathered the biggest concern is having the distillery in a structure connected to a residence. If the building is on its own parcel unconnected to a residence I think you should be fine, especially if there is a reasonable distance between the two.

[Greg McAllister]

There are precedents for locating a DSP on the same property/parcel as a residence. See separate thread on the forum:http://adiforums.com/index.php?showtopic=1309&view=findpost&p=7479&hl=%2Bdsp+%2Blocation. Another thread seemed to make the distinction based on the 2 buildings being unconnected and having separate entrances. Unfortunately, the reg at issue is sufficiently vague as to allow for varying, unlearned and spot determinations against co-location of a DSP and residence. Given that the TTB regs came post-Prohibition I suspect any residence restriction has less to do with health and safety concerns than it does with revenue raids on dwelling houses. At any rate I plan to locate my start-up DSP on my rural property across the pavement from my home and will keep you posted.

[pressure9pa]

The large distilleries used to have homes built on their property in which the master distiller would live, thus the intent is seperate buildings, not seperate parcels. However, given the lack of consistancy of the TTB, YMMV.

[bluestar]

Physical separation of residence from non-residence, but in the end is open to the interpretation of the TTB officer that reviews and approves your application. You can always query your field TTB rep in advance, but they could end up with a different opinion that the final one.

[Jedd Haas]

Your zoning board sounds like they are very accommodating. Perhaps they'll let you subdivide your property into two municipal addresses.

[Jeli]

I don't understand how each officer could basically make up their own mind on this. I am purchasing my home based on the ability to build a DSP on the parcel. I have cleared everything with my county and we have agreed on zoning requirements; all I want is a straight answer from the TTB, is that so much to ask? haha. I will call my local TTB office and discuss it directly with them. I am relieved to hear that it has been done before, and if there is precedence I think I will go ahead with the home purchase and submit my application and see how it goes.

Jedd, splitting the parcel is an option in certain cases. The zoning board is only willing to create the conditional-use-permit for me on an agricultural zone, which requires a 5 acre minimum. Some of the properties I am looking at are already only 5 acres. It could be an option, or it may not depending on what I can find.

[Greg McAllister]

26 USC 5178 (a)(1)( states: "( No distilled spirits plant for the production of distilled spirits shall be located in any dwelling house, in any shed, yard, or inclosure connected with any dwelling house..." and this is the authorizing statute for 27 CFR 19.52 without which there would be no such regulation. When reading the statutory sentence in its entirety and considering the additional "in" relating to shed, yard, or "inclosure" making that a separate phrase from that contained in the reg, it seems the interpretation turns on the definition of "yard". "Sheds" are slight structures open on one or more sides and "inclosures" are courtyard areas open to the sky and all 3 must be "connected with". By definition "yards" are the grounds immediately surrounding a residence or dwelling house and it becomes a point of interpretation and argument where a yard begins and ends, especially in a rural setting where agricultural activities have long taken place in association with, but separate from, a house. It seems to me certain agents read the statute (or only the reg since I doubt interpretation goes that deep) too narrowly and if their interpretation were to hold there would be no rural or farm based DSPs. For more specifics on how it might be interpreted in law one would have to look at Congressional intent in the authorizing statute or comments in the rule making process. To me the intent is clear to have a DSP separate and distinct from a residence but not to ban them from close proximity altogether.

[bluestar]

The yard provision is interpreted to prevent any distilling or distillery operations to occur on the premises associated with the dwelling, including its yard. So, somehow, you have to simply make clear if you are distilling in one building that is separated from your dwelling, how it is obvious that the "yard" of the house is differentiated from the premises of the distillery. There is another concept associated with this: the distillery premises have to be accessible directly from a public thoroughfare. In other words, you can't have to cross your residential property, or yard, in order to gain access to the distillery. That I think is the real sense of it not being in the "yard". The idea here is that the TTB officer should be able at any time to access the distillery without having to get permission from someone to enter or cross their residential property, including the owners of the distillery. In rural areas this just means there has to be a public access road and walkway to the entrance of the distillery.

Regarding relying on any TTB officer's individual interpretation, hey, that is how all guberment stuff works: an individual has to interpret the regs to make an evaluation for the approval. Better get used to it, this is the way it is for every TTB approval you will ever submit for.

[Jeli]

Thanks everyone for their input.

[Bier Distillery]

Does the definition of "connected" still mean simply sharing a common wall? If two rooms share a wall but you have to go outside to go from one room to the other, are those rooms connected?

Is there any possibility of the TTB interpreting "connected" as there being an internal path from one room to the other?

[bluestar]

They can, and do, interpret things differently at different times. The only way to know how they might interpret is to give them the specific example to interpret. From our discussions, connected would mean if you are in the same building as a residence or an ancillary building to a building that includes a residence, but being in a different building that has common or immediately adjacent wall to the building with a residence would be allowed (common in urban areas). However, we also were told they would not allow the distillery premises to share a common wall with a residential premise, even if they were in different buildings. Your "sharing a common wall" example does not indicate if they are the same building or if you mean common wall between distillery premises and residential premises, as opposed to buildings. Different entrances in the same building might not be enough to fit their definition. Of course, now the ruling could also hinge on the interpretation of what is a different building.

[bluestar]

By the way, most local governments will not allow a distillery to share a common wall* with a residence, in any case, or be in the same building, in any case, because of fire protection concerns. We know of some local governments that would not allow a distillery to be located next to a residential lot, for that matter. *(unless 4-hour rated, which would mean a separation in most cases)

[Bier Distillery]

In this case the specific example would be a building in a downtown commercial/retail area with the commercial/retail on the first floor and apartments/condos above. The above apartments/condos would of course share a common wall (the ceiling), but have a separate entrance.

So they're connected in the sense of being in the same building sharing a common wall, but not connected in the sense of being able to easily/quickly get from one to the other.

Is the consensus that this would never be allowed or likely not be allowed (and might be worth asking the TTB directly)?

[stillwagon]

I just received my DSP and our distillery is on the same property as our residence. Their requirements for us were that it had to be at least 100 feet from any residence (300 feet from our own and 150 feet from our neighbor), asked if the neighbor had any reservations (none), and there be some physical barrier between the distillery and our residence (forested green belt.) They sent a satellite image to us to identify all structures on the property and neighboring properties.

[TetonDistillery]

§ 19.52 Restrictions on location of plants.

A person who intends to establish a distilled spirits plant may not locate it in any of the following places:

d) Where liquors are sold at retail; or

(26 U.S.C. 5178)

That is interesting. Many craft distilleries seem to regularly ignore section (d).

Based on local state laws, if they allow direct distillery sales, many craft distilleries offer direct retail sales from their tasting rooms.

This seems to be in conflict with the federal regulations. Or am I missing something?

[bluestar]

In this case the specific example would be a building in a downtown commercial/retail area with the commercial/retail on the first floor and apartments/condos above. The above apartments/condos would of course share a common wall (the ceiling), but have a separate entrance.

So they're connected in the sense of being in the same building sharing a common wall, but not connected in the sense of being able to easily/quickly get from one to the other.

Is the consensus that this would never be allowed or likely not be allowed (and might be worth asking the TTB directly)?

From all my discussions with TTB, that would never be allowed by them, since it is in the same building (a ceiling is NOT a wall in this sense). Also, in our area, you would likely never be allowed by any of the fire marshals either.

[bluestar]

I just received my DSP and our distillery is on the same property as our residence. Their requirements for us were that it had to be at least 100 feet from any residence (300 feet from our own and 150 feet from our neighbor), asked if the neighbor had any reservations (none), and there be some physical barrier between the distillery and our residence (forested green belt.) They sent a satellite image to us to identify all structures on the property and neighboring properties.

Yup, that makes sense, and is consistent with what I have heard (we also sent satellite photo to verify relation to residential property), except they were specifically concerned about a public thoroughfare access to the location. Did you have to address that issue?

[bluestar]

That is interesting. Many craft distilleries seem to regularly ignore section (d).

Based on local state laws, if they allow direct distillery sales, many craft distilleries offer direct retail sales from their tasting rooms.

This seems to be in conflict with the federal regulations. Or am I missing something?

My understanding is that the distillery premises can not be common with retail premises, not that it can't be adjacent. This is the reason why you can not have your retail sale and tasting shop in the distillery premises, bonded or general, and have to have a physical isolation and security between them and any retail space. This is a revenue protection issue: you must have barriers between taxed (retail) activity and untaxed (manufacturing) activity. Similarly between spirit production areas and wine or beer production areas. For a while this separation was sometimes simple demarcations, but now my understanding is they almost always require secure physical separations. But it is still case by case. JMO, YMMV.

[Bier Distillery]

From all my discussions with TTB, that would never be allowed by them, since it is in the same building (a ceiling is NOT a wall in this sense). Also, in our area, you would likely never be allowed by any of the fire marshals either.

Would separate offices above similarly be a deal breaker with the TTB and fire marshals?

[bluestar]

Would separate offices above similarly be a deal breaker with the TTB and fire marshals?

Fire marshals are an unknown (it is not an issue for us, for example).

TTB is only concerned with residences.

[stillwagon]

Yup, that makes sense, and is consistent with what I have heard (we also sent satellite photo to verify relation to residential property), except they were specifically concerned about a public thoroughfare access to the location. Did you have to address that issue?

We had no issues about a public thoroughfare access. Our private driveway is the only access to the distillery which comes from the main street.

[Bier Distillery]

I just received my DSP and our distillery is on the same property as our residence. Their requirements for us were that it had to be at least 100 feet from any residence (300 feet from our own and 150 feet from our neighbor), asked if the neighbor had any reservations (none), and there be some physical barrier between the distillery and our residence (forested green belt.) They sent a satellite image to us to identify all structures on the property and neighboring properties.

So just to be clear, they didn't require 150, they required 100 and you just happened to be 150 feet away. Right?

Attached is a satellite pic of a location I'm considering. The small building (highlighted in yellow) is roughly 110 feet away from the nearest residence (not my own -- mine is more than a quarter mile away) and also has a heavily forested green belt between. Does this look like it might be approved?

Sorry for the number of questions on this. I appreciate all the answers and help so far.

[bluestar]

So just to be clear, they didn't require 150, they required 100 and you just happened to be 150 feet away. Right?

Attached is a satellite pic of a location I'm considering. The small building (highlighted in yellow) is roughly 110 feet away from the nearest residence (not my own -- mine is more than a quarter mile away) and also has a heavily forested green belt between. Does this look like it might be approved?

Sorry for the number of questions on this. I appreciate all the answers and help so far.

Do what we did: send that pic to your local TTB field representative and have them give you an opinion. It might not be final, but it is better feedback than asking any of us, I think, or certainly in parallel.

[Bier Distillery]

Makes sense. So next stupid question, how do I found out who that is? This website (http://www.ttb.gov/about/locations.shtml) gives the field representative located several hundred miles away in another state (MN). Doesn't seem too "field" to me hence the question. No contact email address is given for sending in a pic other than the general one at TTBInternetQuestions@ttb.gov. Or perhaps ttbspirits@ttb.gov or even permits.online@ttb.gov?