City reaffirms its findings on TUP issue

City staff, and council with a Thursday-night approval of additional findings, reaffirmed their previous rulings on a controversial land-use application for events on a vacant lot on Cascade Avenue.

Sisters City Council voted on December 10 to approve a motion making additional findings as outlined in a remand by the Oregon Land Use Board of Appeals (LUBA) regarding an appeal by Sisters entrepreneur Celia Hung of a land-use application for a temporary-use permit (TUP).

Hung, owner of Bend/Sisters Garden RV Park, secured a long-term lease from property owner Nick Verosko on his property located on the northwest corner of Cascade Avenue and Oak Street, which had sat vacant for nine years after removal of a Chevron service station.

Hung's intention for the property was to hold a variety of events, including promoter Richard Esterman's Artists' Marketplace on the weekend of the Sisters Outdoor Quilt Show (SOQS). Hung said at the time her desire was to bring more visitors both during the summer and in the slower shoulder seasons. She has plans to build a hotel on property in Pine Meadow Village across from Les Schwab Tires. Part of her motivation was to attract more off-season tourists to help support the viability of the proposed hotel.

After Hung's application for a TUP was approved by City staff, a firestorm ensued, as full-time business owners flooded City Hall with letters and emails voicing concerns about the visual aesthetics of a "tent city" at the entrance to the newly refurbished Cascade Avenue, and parking in the area.

The Artists' Marketplace was held over the 2014 Quilt Show weekend and proved to be successful for its vendors. It did not take place under the language of the TUP granted Hung; rather it went forward under the transient merchant license (TML). In order to avoid each vendor having to pay the individual TML fee in addition to the fees to Esterman for their booths, Hung paid the City $15,000 to cover all the fees.

After calling up the staff decision regarding the TUP, the Planning Commission allowed it to stand, with several amendments. City Council subsequently adopted an amended version of Hung's TUP for multi-vendor events on her leased lot. It was the conditions imposed by the amendments that were the basis of Hung's appeal of the Council decision to LUBA in October 2014.

During all the public hearings and deliberations surrounding the TUP issued to Hung, the City was attempting to be responsive to all parties involved. As is often the case in those situations, no one was totally happy with the outcome, least of all Hung and Esterman. They maintained that charging transient-merchant fees for Esterman's event, after he had secured a City business license as an event coordinator, was a suppression of the applicant's constitutional right to artistic expression and represented fear of competition.

In August 2014, Council began in earnest to address the issues of all business licenses and fees in an effort to streamline City code by closing loopholes and simplifying the language and requirements. Local businesses had been asking the City to do this for a long time, and it had been put off until it no longer could be.

The City Council just recently passed code revisions that change how the City handles licensing, including elimination of the TUP. Whether or not these revisions will have any bearing on the issues in the remand remains to be seen. Esterman filed a letter of concern with the City regarding those code changes, stating his belief that they targeted his use of the lot on Cascade and Oak and alleging "manipulation by the Sisters Outdoor Quilt Show, the City Manager, and staff."

He believes his event should be grandfathered in.

LUBA finally issued their ruling in October 2015, remanding, in part, the appeal of Hung's land-use application back to the City Council to address three questions and make findings of fact to support the City's determination. The code sections at issue on this remand have now been removed from the City code.

•â¯Is a temporary-use permit the equivalent of a special-event permit?

The City replied that the term "special event permit" is not defined anywhere in the Sisters Code and the City does not - and never has - issued a special-event permit. They are not the same because a TUP is a land-use action under the development code and TML are a form of business license issued under the municipal code. The City's position was supported by a number of findings of fact.

•â¯Does the City exempt city business-license holders from paying individual transient-merchant license fees for their individual vendors and does the City not require the business-license holder from ever paying the transient-merchant fee?

The City finds that if an existing business will have multiple transient merchants using their property, each of the transient merchants must obtain a TML and pay the required fee. If the existing business is operating as a transient merchant, they are required to obtain the transient-merchant license, but do not pay the permit fee. This is because City code allows a business that is operating within the city and that has a valid business license, to obtain a TML to sell the same items typically sold at the business's permanent location. Staff proposed 10 findings of fact in support of their position.

•â¯Does issuing a City business license to conduct business as an "event coordinator" constitute issuing a special-event permit within the meaning of the code section 5.24.120(5)?

Hung asserts that when the City issued its business license to Richard Esterman as an event coordinator that it also issued Esterman and his business a special-event permit under the City code. City staff disagrees. Issuing a business license under one section of the code does not under any reading of the code issue any separate form of permit.

No one present in Council chambers provided any testimony for or against, and there was no request to leave the record open.

The current status of the appeal is that LUBA has issued the remand to the City and closed their files. The Council approved the findings of staff in regard to the three questions from LUBA. If there is no further action by Hung, in the way of another appeal or a law suit, the City is not required to do anything more.

There are, however, unanswered questions still remaining. Will Hung be refunded all or part of her $15,000 in fees paid in August 2014? Will she accept the City's findings in response to the LUBA remand or will a further appeal be filed? Will the newly revised codes be enough to avoid future contentious appeals?

Reporting by Jim Cornelius and John Griffith contributed to this story.