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OREGON LIQUOR CONTROL COMMISSION MINUTES

December 17, 2009

Thursday, December 17, 2009 9:11 A.M. The Commissioners present were Ron Roome, Cassandra SkinnerLopata and Chairman Phil Lang. Others present were Deputy Directors Merle Lindsey and Rudy Williams, and members of staff. Minutes – Commissioner SkinnerLopata moved to approve the minutes of the November meeting. Passed 3/0. PUBLIC FORUM Mike D came forward with general concerns about the lack of information on the website, licensing practices in general and the way OLCC handles personal information about volunteers. Chairman Lang thanked him for his comments. Trey McNulty came forward with concerns about his license application and the time it has taken to make a decision on the application. Chairman Lang said he would ask staff to review with him the circumstances that are causing the delay. COMPLIANCE Becky Voelkel, Administrative Process Program presented. There were 17 settlement agreements before the commissioners for ratification; Pizza Factory, Corner Saloon, Bottoms Up, Margaritas, Pizza Hut, Bill’s Market, Hiroshi’s Anzen, Woody’s Pub & Grille, Scotts Mills Market, Wine Depot & Deli, La Azteca, Stillwater, Boulevard Café/Jesse James Club, Center Market #12, B Mers Can Can Room, Iggy’s Bar & Grill, and Boom’s Restaurant. Commissioner Roome asked about item #6- the proposed settlement did not have the mandatory four days of suspension listed. Ms. Voelkel said that he was correct and the reason was that since the aggravation of this violation moved the fine over $5000, the standard 30% reduction for settlement dropped the fine below that amount. The mandatory four day suspension was dropped as it was tied to the dollar amount which no longer applied. Commissioner Roome moved to ratify the 17 settlement agreements. Passed 3 /0. LICENSE MATTERS Dan Croy, License Services Division presented. Covered Bridge Coffee House N. Main St, Scio. Limited On-Premises Sales, New Outlet. Applicant Nadji Vogel appeared before Commissioners. The city of Scio gave an unfavorable recommendation on the application, but never submitted written explanation for the recommendation. There were no questions from Commissioners. Commissioner Roome moved to grant the license. Passed 3/0. Gresham Texaco, NE 181st Ave. Gresham. Off-Premises Sales, New Outlet. Both applicants Peter Nguyen and Anthony Doan appeared before Commissioners. There were no questions. Commissioner SkinnerLopata moved to grant the license. Passed 3/0.

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Commissioner Duarte joined the meeting. In & Out Food Market N Killingsworth, Portland. Off-Premises Sales, New Outlet. The application is before the Commissioners based on an unfavorable recommendation from the City of Portland citing Applicant Wael Mousa appeared before the Commissioners. Commissioner Roome asked about the applicant’s willingness to stop sale of alcohol at 11pm and the fact that there have only been 25% of the problems at that point in the day. Commissioner SkinnerLopata confirmed that this application is in the city of Portland’s alcohol impact area. Chairman Lang commented that there have been instances of limiting the types of alcohol that are sold as another option of ways to further influence problems. The applicant commented that there are two other stores in the immediate vicinity that also have liquor licenses and he doesn’t see that his store would make any difference. Commissioner Duarte asked about the possibility of placing probationary restrictions on the license. Mr. Croy said that the option was possible, but the process usually has the licensee requesting that restrictions be removed, not a set review period. Chairman Lang asked the applicant if the other licensees sell after 11p.m. Mt. Mousa indicated that the other businesses close at 9 or 8 p.m. Chairman Lang asked if the applicant was opposed to stop selling at 11 p.m. The applicant said he was fine with closing at 11 p.m. Commissioner Duarte moved to grant with a restriction to stop selling alcohol at 11 p.m. and ask staff review need for restriction after a year. Passed, 3/1, SkinnerLopata, no. International Wine Discoveries, SE Alder, Portland. Off-Premises Sales, New Outlet. This application is before Commissioners due to an unfavorable recommendation from the City of Portland citing applicant is not of good repute and moral character and the belief that the applicant made false statements to the Commission. Applicant Wayne Oppenheimer appeared before commissioners. Charles Harris, Liquor License Investigator, Portland Police Drugs and Vice Unit, came forward in opposition to the application. Mr. Harris said that Mr. Oppenheimer has not been released from custody for five years, they do not consider time on probation, so they consider his time out of custody as two years. He mentioned concerns about the applicant’s assets and former fraud and money laundering charges. Commissioner Duarte asked why Mr. Harris’ points are not addressed in the letter from the city and are not documented in that letter and in the record. Mr. Harris said that he has only been on the job for a few weeks and apologized for the lack of information provided in the letter. He just wanted the Commission to be aware of the information he has found since he took over the investigation. Mr. Oppenheimer said that he has moved on from those mistakes of the past and would like the opportunity to have a chance to move on and pursue his new life. He said that being on probation forced him to live his life under a microscope and he has learned to conduct himself appropriately. Commissioner Duarte asked if Mr. Oppenheimer had any response to the specific allegations brought forward by Mr. Harris. Mr. Oppenheimer said that he understands that there are very few who are have changed but that he is one of the few who has been rehabilitated. Commissioner Duarte asked about Mr. Oppenheimer’s family and friend support comment he had made and asked if he would elaborate. Mr. Oppenheimer said that his daughter was a newborn when he went to prison, and after many years of work and gaining trust he is now very involved with his family who lives here in town. He has friends who help support him and would appreciate the opportunity to start this new part of his business. Commissioner Roome moved to grant the license although he is very cognizant of the concerns expressed by Officer Harris.

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Passed 3/1, Chairman Lang, no and he added that this is to remind Mr. Oppenheimer to remain on his best behavior and to not repeat his past mistakes. Fat Jack’s Saloon/Mynt Gentlemen’s Club NE Sandy Blvd., Portland. Full-On Premises, New Outlet. This application is before the Commissioners based on an unfavorable recommendation from the City of Portland and the Laurelhurst Neighborhood Association. Both groups based their recommendation on the applicant’s problems at another licensed location. Other neighbors have cited problems at the location when there was a prior owner. Mr. Croy noted that Mr. Doss was only the manager at the other licensed location (Fusion) which was the basis of the city and neighborhood’s recommendation. The history of problems at the premises (on Sandy) have a passage of time which is too long to consider and the other problems were noise complaints which are not considered under ORS 471.313(5). Chairman Lang asked how long it has been since the previous licensee has been in operation at the Sandy location. Mr. Croy noted that it has been closed since July 2008. Mr. Tracy Doss and his attorney, Duke Tufty, appeared before the Commissioners. Chairman Lang asked them if they would like to speak now, or if they would rather speak after the people signed up to speak in opposition. Mr. Tufty asked to speak after the opposition. Eric Fruits, Laurelhurst Neighborhood Association President, appeared before the Commissioners in opposition to the license. He said that the application is incomplete and does not list all of the owners. Also he said that potential false or misleading information was submitted by the applicant, and provided substantial information he obtained from the Ohio Liquor Board to show Mr. Doss’s history as a licensee. Based on the information he introduced, he believes that Mr. Doss is unlicenseable and he asked that the license be denied or that Mr. Doss have no involvement with the license. Gary Naylor, Board of Directors for the Laurelhurst Neighborhood Association, came forward to share his experiences attempting to negotiate a good neighbor agreement with the applicants. He noted that Tracy did all of the talking and represented that he was the decision maker in all negotiations. Mr. Naylor commented on staff’s weak words about the results of a good neighbor agreement and that he was concerned that staff had paraphrased 471.313, only dealing with (5) and not addressing (1-4). He commented that (1) would apply (sufficient licensed premises or demanded by public interest or convenience). He noted that the written public notice was not received within the 14 days as is required. John Perkins, Hollywood Boosters district liaison, came forward to read the Hollywood Boosters Board of Directors opinion on the application into the record. The Boosters indicated that they conditionally support the application if the good neighbor agreement is signed of all parties. Commissioner Roome clarified that the good neighbor agreement has not been reached. Vernon Jones, neighbor of the proposed location, came in to object to the application. He shared his experiences with other licensees in that location. He is concerns about the livability of his neighborhood should another night-club type business open in the location again. Kay Bridge, next door neighbor to property. Ms. Bridge shared changes to the neighborhood, as her family has lived in this house since 1914. She commented on the fragile nature of the other neighbors in the area- mentally and physically challenged individuals and young people- who may be adversely impacted by the applicant.

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Dennis Breslin, owner of the car dealership next door, expressed concerns over businesses that promote alcohol over food service. Chairman Lang asked if the parking lot between the properties belongs to the dealership. Mr. Breslin said that half belongs to him and the other belongs to the restaurant. In the past they had an agreement to share the lot, but there is no current agreement. Robert Cinnamon Portland Teen Challenge, concerned about the effect of the business on his treatment facility and the disabled treatment facility next door. He is concerned of the effects of the business on people seeking treatment residing at this facility. Adrian Levou, a neighbor, expressed concerns over Mr. Doss’ past experience managing an establishment in the past and his problems. Jan Chappuis, neighborhood resident, brought in a map to share a recent incident in area where driver attempted to solicit her daughter walking down the street, in the same area as the proposed license. She expressed concerns over the impact that this application would have on the children in the neighborhood. James Knopp, lives in adjoining property. He commented of the trust and credibility of applicants. He reviewed his personal experiences with Mrs. Doss and the Neighborhood Association and his doubts that the Doss’s ever intended to reach an agreement with the Neighborhood Association. He believes that they have no credibility. He briefly commented that the neighborhood was designated as prostitute free zone. Megan Aichler, of Minds in Motion Tutoring a neighboring business, came forward to testify in opposition to the application. She is designated as a school for insurance purposes and there are over 100 families coming in and out of her office twice a week. She was never notified of the application. She is very concerned about the location and proximity to her business. John Bauman, operator of a service business across street from the proposed location, came forward in opposition to the application. He shared his negative experiences with the past licensee. He said that the primary characteristic of neighborhood is residential area, even though Sandy Blvd. is a busy highway. Pat and Gerald Arthur, 8th Church of Christ Scientist neighbors, came forward to testify in opposition. Mr. Arthur shared the definition of ‘Gentlemen’ from Webster’s dictionary and said that by describing the establishment as a ‘Gentlemen’s Club’ made the application invalid as it was based on a misconception. Also he shared that he and his wife spoke with over 25 close neighbors and 100% were opposed to application based on previous experience with past licensees, including a murder in the parking lot. Mrs. Arthur elaborated on the discussions she and Mr. Arthur had with close neighbors of the establishment. Norm Stoll, past president of Hollywood Boosters, Hollywood Neighborhood Association and the Hollywood Lions, but not representing those groups, and came in to voice opposition based on past experience with prior licensees at the location. Wayne Stoll, business operator in Hollywood, shared his personal experiences as a property owner of a business which became a strip club. He is concerned about the impact of the strip club on the other businesses in this area which is already struggling to keep businesses thriving. Zach Kenney, a neighbor, pointed out that the neighbors were opposed to this business before they decided to become a strip club. The recent licensee in that location had many problems of which he thinks will return. He also noted that the application is full of omissions; and believes that Mr. Doss is not of good repute based on working with him on the good neighbor agreement. Charlie Harris, Liquor License Investigator, Portland Police Drugs and Vice Unit , expressed concerns over the serious and persistent problems of the previous licensee and

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even though there has been a passage of time since those occurred, they should still be considered. He asked Commissioners to postpone the decision, or at least placing restrictions on the license should it be granted. Theresa Marchetti, Liquor License Specialist, Portland Office of Neighborhood Involvement, asked that Commissioners give staff more time to evaluate the information provided about Mr. Doss when he was a licensee in Ohio. Jim Atwood, the attorney for the property owner, came forward in support of the application and asked that commissioners consider granting the license. He commented on the applicant’s current workplace which he found to be very well run and thought that the neighbors should go to this establishment to see what kind of an operator the Dosses would be in their neighborhood. Chairman Lang noted for the record that we have received letters from Representative Ben Canon and Senator Jackie Dingfelder in opposition to the application. Duke Tufty attorney for licensees appeared before commissioners to ask them to consider granting the application and respond to some of the comments made by those in opposition. Commissioner Duarte commented on his understanding of what matters commissioners must consider. But the information presented before him today is of great concern. He asked for comments on the Ohio liquor license issues, specifically from Mr. Doss. Mr. Doss commented on the licensing system in OH and the discrepancies that were brought up by Mr. Fruits. He said that he was the license holder at only one establishment, others were in the process of being purchased and failed, or he was just the manager. Chairman Lang said that he would rather have this item postponed until staff can further clarify the issues. Commissioner Duarte said he agrees with Chairman Lang and would like to have the opportunity to further review the information that came in at the last minute. He would also like to have the time to understand the different requirements of Ohio and how the correspond with Oregon’s liquor laws. Mr. Tufty asked if setting this matter aside might set a precedent for neighbors to further delay applicants in the future by submitting information at the last minute to drag out the process for the application even further. Commissioner SkinnerLopata said that the inverse could also be true; that by delaying today it encourages truthfulness and honesty in the future from applicants. Chairman Lang said that he believes the licensee is doomed for failure if there is not a good neighbor agreement- it rests on the shoulders of both the applicant and the neighborhood association. Mr. Doss said that he did not omit any information on his application. Chairman Lang said that he hopes the investigation will support that statement. Chairman Lang moved that further consideration be delayed until the February meeting. Passed 4/0. Recessed 11:10 Reconvened 11:20 Service Permit Refusals- There were 11 service permit refusals before the Commissioners for ratification. Licensing Settlement Agreement There is one licensing settlement agreement before Commissioners for The Mouse Trap Tavern. Commissioner Roome moved to ratify the service permit refusals and settlement agreement under tabs 2A & B. Passed 4/0.

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RULES Jennifer Huntsman, Rules Coordinator, presented. INITIAL ACTION OAR 845-006-0340 Minor Postings (Housekeeping)This rule describes the minor postings that the Commission assigns to those licensed premises that allow on-premises consumption. Staff recommends a series of housekeeping amendments to both standardize rule language with other recent rule changes and also add clarifying language. Commissioner Duarte moved to initiate rulemaking to amend OAR 845-006-0340 and to hold a rulemaking hearing at staff’s discretion. Passed 3/0. 845-009-0150 Approved Training Programs This new rule provides information on Commission-approved training programs that can be used by alcohol sellers to receive a reduced criminal penalty when they sell to a minor. The 2009 legislature passed House Bill (HB) 3343, effective January 1, 2010, giving sellers this new option. Commissioner SkinnerLopata moved to initiate rulemaking to adopt and hold rulemaking hearing at staff’s discretion. Passed 4/0. OAR 845-013-0040 Advertising, ORS 471.398(4) This rule describes the types of advertising that manufacturers or wholesalers are allowed to provide to retailers under the limited exceptions in the financial assistance statutes. Staff proposes amending this rule to allow manufacturers or wholesalers to furnish lists of all the retailers who carry their products. The proposal includes a requirement that any such lists include all retailers without discrimination, and may include only the names and addresses of the retailers. Commissioner Roome moved to initiate rulemaking to amend OAR 845-013-0040 and to hold a rulemaking hearing at staff’s discretion. Passed 4/0. ADMINISTRATION Introduction of New Staff- Deputy Directors Merle Lindsey and Rudy Williams introduced two new directors to the Commission: Retail Services Director Brian Flemming and Licensing Services Director Farshad Allahdadi. RETAIL SERVICES Brian Flemming, Retail Services Director, presented Distillery Agent Contract Renewals- Four distillers who are also retail sales agents for the purpose of selling their products through their own tasting rooms have Distillery Retail Sales Agent Agreements that are in need of renewal. The agents are: Tad Seestedt for Ransom Spirits Jim Bendis for Bendistillery Lee Medoff for House Spirits Brian McMenamin for Edgefield-Troutdale Staff recommends that the Commissioners reappoint each of these retail sales agents for five years. Commissioner Duarte moved to reappoint as noted. Passed 4/0.

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Agent Appointment- Amity, #1039 This vacancy occurs as a result of the resignation of Sae Lee. The interview committee interviewed two applicants. The two finalists; Chuck Lawrence and Steve Kim presented their qualifications to the Commissioners. Agent Appointment- Grants Pass, #1214 This vacancy occurs as a result of Judith Falconer’s resignation. The interview committee interviewed seven applicants. The three finalists; Kent Bell, Herb Heir and Robert Zepf appeared before commissioners to present their qualifications. Recessed: 12:10 p.m. Reconvened: 12:48 p.m. Agent Appointment Amity- Commissioner Duarte moved to appoint Steve Kim as the agent of 1039, Amity. Passed 4/0 Agent Appointment Grants Pass- Commissioner SkinnerLopata moved to appoint Herb Heir as agent of 1214, Grants Pass. Passed 4/0. Recessed for lunch break: 12:55 Reconvened: 2:00 pm CONTESTED CASE HEARINGS Judith Bracanovich, Administrative Process Division Director, presented. Deluxe Billiards, Baisch, Inc. Mark Baisch, Pres/Dir/Stkhldr,dba; OLCC-08-L-008- In response to the request from the licensee’s attorney, Chairman Lang moved to continue the hearing until the February meeting. Passed 3/0. (Commissioner Duarte was not in the room at voting.) Commissioner Duarte returned to the room. Michelle Lipinski, OLCC-09-SPR-009- Ms. Lipinski appeared before commissioners to provide her exceptions to the proposed order. Staff did not comment. Grocery Outlet, Clackamas Grocery Outlet Warehouse, OLCC-08-M-001- Lynn Rosik,AAG; Party Intervenor, Paul Romain, Oregon Beer and Wine Distributors Association; and John DiLorenzo, attorney for Grocery Outlet appeared before Commissioners. Mak’s- Attorney James Monsebrotten appeared by telephone. Case presenter Becky Voelkel presented staff comments. Recessed to deliberate contested case items: 3:15 p.m. Reconvened 4:40 pm DECISIONS ON CONTESED CASES

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Michelle Lipinski – Commissioner SkinnerLopata moved to continue deliberation until the February meeting. Passed 4/0. Mak’s Old City Hall Lounge – Commissioner Duarte moved to amend the amended proposed order per the list that will accompany the minutes and adopt the amended proposed order as the final order. Passed 4/0. Spot 79- Commissioner Duarte moved to amend per the list that will accompany the minutes and adopt the amended order as final order of the Commission. Passed 3/1. US Market 109- Commissioner SkinnerLopata moved to amend per the list that will accompany the minutes and adopt the amended order as the final order. Passed 4/0. Arco AM/PM- Commissioner Roome moved to adopt the orders denying licensee’s request for reconsideration of order denying stay of cancellation and order denying licensee’s request for reconsideration of order denying relief from default/late hearing request. Passed 4/0. Knothole Market- Commissioner SkinnerLopata moved to approve the order denying the request for reconsideration of final order. Passed 4/0. Friday, December 18, 2009 9:30 a.m. The Commissioners present were Alex Duarte, Ron Roome, Cassandra SkinnerLopata and Chairman Phil Lang. Others present were Executive Director Steve Pharo, Deputy Director Rudy Williams and members of staff. RETAIL SERVICES Brian Flemming, Retail Services Director, presented Agent Appointment- Bend, North, #1163 This vacancy occurs as a result of the resignation of Ray Holmberg. The interview committee interviewed eleven applicants. The seven finalists; John Biber, Patty Bumbarger, Robert Dickey, Ann Herold, Tobi Nielsen, Eric Stroup and Robert Wallace; presented their qualifications to the Commissioners. Recessed to Executive Session: 10:15 Reconvened: 10:35 Agent Appointment Bend, North Commissioner Roome moved to appoint John Biber as the agent of Bend 1163. Passed 4/0. Recessed to continue contested case deliberations: 10:36 a.m. Reconvened: 11:30 a.m. DECISIONS ON CONTESED CASES Grocery Outlet- Commissioner Duarte moved to continue deliberations until the February meeting. Passed 4/0.

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US Market 109-Commissioner SkinnerLopata corrected the motion made yesterday to read amend and reverse per the list that will accompany the minutes and adopt amended order as the final order of the commission. Passed 4/0. Administrative Policy and Process Director Judith Bracanovich noted that this was a technical amendment to the form of the motion. The outcome was the same. Adjourned 11:34 ________________________________ Phil Lang, Chairman _______________________________ Alex Duarte, Commissioner _______________________________ Bob Rice, Commissioner _______________________________ Ron Roome, Commissioner _______________________________ Cassandra SkinnerLopata, Commissioner _______________________________ Stephen A. Pharo, Executive Director and Secretary to the Commissioners