By QUINTON SMITH/YachatsNews.com
WALDPORT – The city of Waldport has ended the lease of its former city shops to a distillery after its owners failed to get permits, including a certificate of occupancy, while operating there since 2016.
The owners of Gatsby Spirits, operating as Tides Distillery, has agreed to move out by Sept. 1 – five months before its five-year lease expires Dec. 1, said Waldport City Manager Dann Cutter.
The company couldn’t meet requirements that a deputy state fire marshal set for the building it has been using on Northeast Lint Slough Road.
In the original lease signed in December 2016, the city gave Gatsby up to a year of free rent before it got permits as an incentive to begin the business. But Cutter said little was done during that first year.
In addition to not having an occupancy permit from Lincoln County, a state fire marshal said the company did not install a fire sprinkler system, improperly stored large quantities of ethanol inside the building, did not provide proof of an adequate water supply to fight a fire, and had issues with the location of its still inside the building.
“They weren’t using it the way they were allowed to,” Cutter told YachatsNews, and its owners knew they would not be able to meet a deadline of Sept. 1 to correct issues.
The company’s owners, Dan Lewerenz of Sunnyvale, Calif. and John Scaramucich of Eatontown, N.J. on Tuesday disputed much of the city’s characterization of the issues. Scaramucich said they waited nine months to get permits to proceed from Lincoln County and then in August were told because of new federal regulations they would have to raise the building to get it out of the flood plain.
“Yes, there were fire issues and we were working with an architect to address those,” Scaramucich said. “Then we were told we had to lift the building … and we’re not going to spend $500,000 to lift that building. We were being asked to pay rent for a building we couldn’t conduct business in.”
Scaramucich also characterized planning guidance from Lincoln County as “poor.”
Scaramucich said the company didn’t make any liquor products until the end of 2019 and didn’t formally launch begin selling its vodka, run and flavored whiskey until October 2020. He said the company plans to continue its business, but move away from the coast and into a more central location in the Willamette Valley.
In an email this month to the owners, deputy state fire marshal Shannon Miller said until the county issued an occupancy permit, the building could not be used for “any type of business.” That followed a March inspection after which Miller said that hazardous materials had to be removed and a fire sprinkler system installed.
“I consider the building, as it stands with the mass quantity of flammable liquids stored, construction without approval, occupancy without a certificate of occupancy, as an unsafe building …” Miller wrote to company owners in March. She notified the Lincoln County planning department, the city of Waldport, and Central Oregon Coast Fire & Rescue of her order.
Central Coast Fire Chief Jamie Mason said he toured the property with Miller in early August during a third, follow-up inspection. That’s when Miller again told Alexander that pallets of ethanol had to be moved out of the building.
“It creates a big fire hazard if we have to go in there to fight a fire,” Mason said.
The ethanol was finally being moved outside the building last weekend.
There are two former city shop buildings on the property – a 5,000 square foot main structure and the 2,600 square foot building used by Gatsby/Tides.
Cutter said the city will seek businesses needing storage space until the City Council decides whether to try to sell, lease them again, or find other uses for the property.
It is not clear that Gatsby/Tides ever used the still that is set up in the building, but blended alcohol it purchased and infused it with flavors. On its website, the company says it produced vodka, rum and flavored whiskey under its Tide and Gatsby labels. The company’s distiller is Jeff Alexander of Newport.
Yachats allows non compliant businesses to operate why not Waldport?