Nightclub Landlords Sue Portland City Hall Over Controversial Sprinkler Ordinance

Property owners behind 14 clubs say city exceeded authority and selectively enforced expensive 2013 code change.

Three landlords of prominent Portland nightclubs today filed a lawsuit against the city of Portland, alleging that the city overstepped its authority in imposing a 2013 sprinkler ordinance, and that it compounded the damages by applying the ordinance inequitably.

“The City’s enforcement of the Retroactive Sprinkler Ordinance has been uneven, unfair, unpredictable, arbitrary and capricious,” says the lawsuit, filed in Multnomah County Circuit Court on behalf of the club owners Philip Ragaway, James Atwood and Daniel Lenzen, their companies, and other nightclubs.

When the 2013 ordinance went into effect, the plaintiffs either owned or managed buildings that housed such clubs as Backspace (now defunct), Biddy McGraw’s, Dante’s, the Dixie Tavern, Duke’s Country Bar and Grill, Silverado, Star Theater and others.

The ordinance required the landlords of clubs with a capacity of more than 100 to upgrade existing systems or install new sprinkler systems.

The affected clubs and their landlords at the time complained the ordinance exceeded city requirements at the time each club got its operating permits.

The battle over the sprinklers was the subject of a WW cover story in 2016.

Related: Inside an illegal crackdown that put Portland nightclubs out of business.

The WW story drew heavily on a 2016 investigation by the Oregon State Building Codes Division, which concluded that the city knowingly exceeded its authority—and in fact infringed on the Building Codes Division's authority—gave nightclubs insufficient warning and time to comply, and, selectively enforced the ordinance, requiring some clubs or their landlords to invest heavily while ignoring others.

"Many property and business owners paid from two to five times the city's [cost] estimate, resulting in costs for some businesses approaching $100,000," the state's investigative report said. "At least two shuttered their doors, citing the costs of compliance with Portland's ordinance as the reason."

Earlier this year, in an administrative filing, the Building Codes Division, sought to overturn the city's ordinance and sought civil penalties against the city. That proceeding is still pending.

Dean Aldrich, the lawyer who represents all the plaintiffs, says in his complaint that his clients are seeking at least $750,000 in damages.

“The City’s conduct was arbitrary, capricious, improper, and misleading,” Aldrich alleges in the lawsuit. “Additionally, some of the plaintiffs experienced retaliation and harassment in the form of increased inspections, and additional unmerited scrutiny of their businesses and buildings by the City.”

City Attorney Tracey Reeve says her office has not yet seen the complaint and has no comment.

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