by: TRIBUNE PHOTO: CHRISTOPHER ONSTOTT - Chris Huskey and his drug sniffing dog Riley keep an eye on the lottery row strip mall on Hayden Island for suspicious activity. Neighbors and police are cranking up the pressure on the Lottery Row owners.Hayden Island residents are finally getting some attention to address crime and vice problems at “Lottery Row,” a strip mall with 12 side-by-side lottery bars and delis across the street from the Jantzen Beach Center.

Wednesday night, for the second time in two months, several high-ranking government officials addressed angry neighbors at a Hayden Island Neighborhood Network meeting. This time neighbors also heard from two of the primary business owners who have been profiting from Lottery Row, which collectively offers 72 electronic slot machines — owned by the Oregon State Lottery — in a mini-casino-like atmosphere.

Mike Leloff, commander of Portland Police Bureau’s North Precinct, revealed that 26 drug arrests were made soon after police mounted a targeted law enforcement campaign at the strip center last fall. One of those arrested on drug charges worked at one of the 12 bars, Leloff said.

Most of the arrests were for selling methamphetamine, said Portland police officer Mark Friedman, who was assigned to the targeted enforcement campaign. The drug dealers tend to be addicts who are selling drugs to support their habits, he said.

Any time you mix gambling, cheap cigarettes and alcohol, you tend to attract people who are susceptible to addictions, Friedman observed. “There’s no place in Oregon that I can think of where you have 12 bars back to back to back,” he said.

One of the conditions for those prosecuted, who are predominantly from Washington, is that they stay away from Hayden Island, said Jim Hayden, a neighborhood district attorney for Multnomah County who focuses on that part of town.

City police also are building cases to use the city’s “time, place and manner” ordinance, which gives the city more authority to regulate bars and not rely solely on the Oregon Liquor Control Commission, Friedman said.

After Leloff recommended that the OLCC not renew the 12 bars’ liquor licenses that expire this spring, the state liquor board’s commissioners will take a formal vote on the license renewals on April 24 and 25, reported Merle Lindsey, interim OLCC director.

The OLCC also is continuing to find violations at the 12 bars and has been sending warning letters and issuing fines, reported OLCC inspector Jeff Bell.

Many of those allegations stemmed from OLCC investigations conducted in tandem with Portland police.

Larry Niswender, director of the Oregon State Lottery, also appeared before neighbors for the second time in two months. Niswender revealed that he issued a dozen warning letters of his own on Dec. 13 to the 12 lottery retailers. The letters note the recent drug arrests at the strip mall, and that the retailers have received warning letters from the OLCC.

“Such activity creates an unpleasant and potentially dangerous environment for lottery players and lottery staff and it reflects negatively on the lottery,” according to Niswender’s letters. “The lottery will pursue any action deemed necessary if it is determined that a retailer has failed to perform its obligations under the retailer contract, or if the lottery has reason to believe a retailer may pose a threat to the actual or apparent fairness, integrity, security, or honest of the lottery.”

Niswender also issued a notice to one of the 12 lottery bars that the lottery intends to terminate its lottery contract. Niswender won’t cite the retailer, and says the retailer asked for the lottery to reconsider its notice. No final decision has been made, Niswender said, and the retailer can appeal the decision in court.

Sitting in the back of the hall Wednesday were Dan Fischer, president of Nevada-based Oregon Restaurant Services Inc., which owns six of the 12 lottery bars and delis at Lottery Row, including Dotty’s; and John Hare, a managing partner at the Eugene-based CJ’s chain, which owns three of the lottery bars and delis.

Hare said he wants to work with the neighbors to fix the crime problems at the strip mall. Fischer insisted that “95 percent” of the crime problems at the strip center are not tied to patrons of the dozen establishments, but are passing through the area.

Leloff disagrees with that assessment, and has been pressing the lottery bar owners to add security staff to work the doors at the 12 establishments. In some cases, Leloff said, the bartender is the only one on duty, and can’t be in position to monitor the door to check IDs and perform other duties.

Leloff scheduled a private meeting today with Fischer.

New House Speaker Tina Kotek, the Portland Democrat who represents the Hayden Island area in the Legislature, also sent one of her staffers to attend Wednesday’s meeting.

Attracting less notice in the audience was Elisa Dozono, who was appointed recently by Gov. John Kitzhaber as chairwoman of the Oregon State Lottery Commission. The volunteer assignment raised concerns about a conflict of interest, because Dozono is a partner at the Miller Nash law firm, which represents Fischer’s company — Oregon’s largest lottery retailer.

When a Hayden Island resident, apparently unaware Dozono was there, complained about the conflict of interest, Niswender rose to her defense. Dozono, he said, has been diligently doing her homework to get abreast of lottery issues. “She’s doing the right changes for the right reasons, and it’s irrespective of where she works,” he said.

On multiple occasions Wednesday night, the audience of several dozen applauded officials, particularly the Portland police, for taking steps to remedy problems at Lottery Row. However, several remained skeptical.

Two residents scoffed at the lottery’s so-called audits of retailers’ books, designed largely to prove they aren’t getting a majority of their sales from gambling, and thus running afoul of the Oregon Constitution’s ban on non-tribal casinos. Niswender acknowledged the lottery doesn’t use trained auditors, and largely relies on “self-reporting” by retailers.

Hayden Island resident Deborah Heckhausen said it was “socially irresponsible” for the state lottery and OLCC to have ever allowed a dozen side-by-side lottery bars in one site. “They don’t care that they’re stacked up against each other,” she said. Neighbors must not rely on those agencies, Heckhausen said, and must be vigilant to prevent a similar concentration from happening elsewhere.

Lottery Row is slated to be condemned eventually to make way for the planned Columbia River Crossing to Vancouver. Neighbors are wary that with a built-in market from Vancouver gamblers, that Lottery Row will simply be moved elsewhere on the island.

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