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Gearhart’s video lottery decision challenged

Owner files land use appeal
By R.J. Marx

The Daily Astorian

Published on May 12, 2017 9:45AM

The owner of Gearhart Crossing challenged a decision to deny the installation of video poker machines at his restaurant.

R.J. Marx/The Daily Astorian

The owner of Gearhart Crossing challenged a decision to deny the installation of video poker machines at his restaurant.

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The owner of Gearhart Crossing filed a notice of appeal of the city’s denial of four video lottery machines.

R.J. Marx/The Daily Astorian

The owner of Gearhart Crossing filed a notice of appeal of the city’s denial of four video lottery machines.

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GEARHART — A Gearhart cafe owner wants video poker in his establishment, and he’s planning to take the city to the state Land Use Board of Appeals to get it.

After a denial by the Planning Commission and a subsequent denial of his appeal by the City Council, Gearhart Crossing owner Terry Lowenberg announced his intent to challenge that decision at the state level. If he wins the appeal, he could install at least four video poker machines to be located behind an 8-foot-tall wall display in an area adjacent to the restrooms.

“It appears to me there’s a difference of opinion whether or not the city can actually regulate the location of those machines in the cafe itself, within the city of Gearhart,” Lowenberg’s land use attorney Greg Hathaway of Hathaway Coback and Connors said Thursday. “It looks to me as if the use itself is actually allowed as an accessory use to the cafe. We would disagree with the city’s decision because we believe the city probably had the authority to approve it. Therefore, the denial was not legal.”

Citing losses, Lowenberg went before the Planning Commission in March 2016 seeking approvals for a brew pub and deli on the site of the 4,100-square-foot Gearhart Grocery. Lowenberg said the business was unable to compete with larger grocery stores. Commissioners approved the plan.

But when Lowenberg presented building plans to the city, drawings designated an area of four video poker machines isolated from the main seating area by an 8-foot wall display. Lowenberg was told by city staff his revised plans would require additional review.

In January, Lowenberg submitted a request to place video poker machines in an enclosed area of his cafe.

Lottery dollars support many resources in Oregon, he wrote in an accompanying document, and if customers want to participate in lottery while waiting on a meal, “this is good for Gearhart and good for Oregon.”

At that meeting, Lowenberg said he has been subsidizing the former grocery store for the community for a “very long time” and the store has never supported itself since he purchased it. Lowenberg told commissioners 30 to 40 percent of his income would need to come from the lottery to help his business.

Commissioners determined the request was inconsistent with the city’s comprehensive plan and neighborhood commercial zoning.

According to city staff, the narrow definition of a neighborhood cafe does not include or allude to lottery machines, gambling or gaming. City staff determined the inclusion of the video poker machines “was not included in the original application for a neighborhood cafe.”

His request was denied by the Planning Commission by a 5-2 vote.

Lowenberg’s appeal to City Council challenged the Planning Commission’s denial, contesting what he called “biased statements” and arguments against the machines by linking gambling and drinking.

In his appeal to the City Council, Lowenberg said city code does not exclude lottery machines, gambling or gaming in any section.

He said the city’s decision fails to provide any supporting evidence linking gambling and drinking, “and characterizes the Oregon Lottery as something other than the entertainment the lottery is.”

The council affirmed the Planning Commission’s denial at its April meeting, stating that the request “is not in compliance with some of the comprehensive plan policies,” and there is “no evidence of demand for the machines in the central city core.”

“It’s hard for me to see a public need was proven,” Mayor Matt Brown said in casting his “no” vote.

Brown signed the decision on April 14. According to city’s zoning code, the owner may appeal within 21 days of the final order. The notice of intent was submitted to the state on May 5.

“One of the primary issues is whether or not state law literally trumps local land use law is going to be an issue that will be before the land use board of appeals,” Hathaway said. “The city also determined the use was not allowed in the underlying zone for cafes. And I believe that that use is allowed as an accessory use that’s regulated by the state. Those are the issues we will definitely address at LUBA.”


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