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Deep Divisions Among Oregon Wine Growers May Prevent
 Development of Two High-end Destination Hotels

By Dana Tims, The Oregonian, Portland, Ore.McClatchy-Tribune Business News

Apr. 5, 2007 - Plans for the Oregon wine country's first luxury hotel are on hold while attorneys representing those for and against the project decide whether to appeal a state land-use ruling.

But one wine industry leader says it won't be long before at least two high-end destination hotels spring up to accommodate the surging numbers of affluent wine-lovers seeking out the state's increasingly celebrated pinot noir.

"I'll guarantee you that some kind of luxury lodging will be built in the next 24 months in Yamhill County," said Kevin Chambers, Oregon Wine Board past president. "The market is there, and developers are deep into the game. It's just a question of who wins with the best plan and gets on the map first."

Chambers' comments Wednesday were in response to the state Land Use Board of Appeals' recent decision to send back to Yamhill County a proposal by Portland developer David Kahn. He wants to build a 50-room luxury hotel, spa and restaurant on land now zoned for agricultural use.

The proposal, which won unanimous approval from Yamhill County's three commissioners last year, has opened deep divisions among the area's winegrowers.

Some say it's long overdue and necessary to capture tourism dollars being spent for high-end lodging in Portland.

Opponents counter that commercial development on farmland would further deplete the acreage needed to sustain the next wave of Oregon vineyards. They say it also would destroy the area's rural ambience by opening the gates for more nonfarm uses.

Kahn's attorneys and those representing a group of wineries opposed to the hotel have until April 11 to appeal the board's ruling to the Oregon Court of Appeals. If no appeals are filed, Yamhill County's commissioners would hold a public hearing in the next few months to deal with the three errors that the land-use board found in the county's approval of the proposal.

Kahn said he thinks the hotel's opponents need to make the first move in deciding whether to appeal the board's decision. "Technically, I can also appeal, but we didn't lose. We were sent back to the county to provide more evidence. Our opponents lost on the other (five) counts."

Portland attorney Edward Sullivan, who is representing the wineries, said the case -- laced with a variety of active and on-hold Measure 37 claims -- is so complicated that "only a lawyer could love it." But he said the state panel dealt a significant blow to Kahn's proposal.

"The applicants based their whole plan on the idea that this need couldn't be met anyplace else," Sullivan said. "Now they have to go back and justify the land-use exception they are seeking in terms of reasons that will pass muster. I think that will be difficult for them."

The 65-acre parcel is just above Domaine Drouhin Oregon, a prominent Oregon winery and participant in the effort to halt the hotel. The site is roughly equidistant from the nearby towns of Dayton, Lafayette and Dundee.

David Millman, Domaine Drouhin's general manager, said the political and economic landscape have changed in the year since Kahn filed his application.

"What seemed like the only option a year ago may turn out to be a much less interesting choice now," he said. "I think we'll look back in a few years to find that we managed to add the rooms and amenities we all agree we need without destroying the fabric of Oregon's wine country."

In Kahn's opinion, the same market forces that prompted a Yamhill County task force to recommend construction of a luxury hotel as long ago as 1988 are still in effect.

"Not only has nothing changed," he said, "but with the explosion of Oregon's wine industry and corresponding explosion in tourism, the reason for having this facility is even more pronounced."

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To see more of The Oregonian, or to subscribe the newspaper, go to http://www.oregonian.com.

Copyright (c) 2007, The Oregonian, Portland, Ore.

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