Portland is standing by its rule that requires large nightclubs to have automatic fire sprinklers after a state agency demanded the city rescind the requirement and pay fines.

The state Building Codes Division informed Portland in a July 24 letter that it plans to fine the city at least $20,000 for implementing the sprinkler rule. State officials believe state building codes preempt it.

The Portland City Council on Wednesday unanimously decided to appeal the state's challenge to an administrative judge. Commissioner Nick Fish was absent.

"This is a clear example . . . of a state agency overstepping its bounds and overstepping it in the wrong direction," Fire Commissioner Dan Saltzman said. The state, he said, is "reverting back to an old standard, which could result in a tragedy none of us want to see."

He called on Governor Kate Brown to take note of the city's concerns, saying "she can make this go away."

Brown's office did not respond to multiple requests for comment.

In 2003, a fire in a Rhode Island nightclub killed 100 people and injured 187 others. The club lacked an automatic fire sprinkler system that could have put out the fire within minutes, a National Institute of Standards and Technology study found. The federal agency recommended state and local agencies set sprinkler system standards for nightclubs that fit 100 people or more.

Saltzman introduced such a rule in 2013, when he first started managing the fire bureau. He wanted to avoid a tragedy, he said.

The policy requires all nightclubs that hold 100 people or more to have automatic sprinklers. It is stricter than the state rule that exempts existing buildings from having to add sprinklers via a "grandfather clause," so long as the building met codes when built.

The state became aware of the city's rule after the Oregon Restaurant and Lodging Association complained to the state that Portland's standard was financially burdensome. The association took issue with the city blazing its own trail, said Greg Astley, the lobbying group's Director of Government Affairs.

"If the City of Portland had an issue with the safety standards the state had set forth, the city should have gone to the state to figure out a way to change those standards to make sure there was the same uniformity across the state," Astley said.

The Building Codes Division, which is part of Oregon's Department of Consumer and Business Services, spent years investigating the policy and its impact on Portland nightclubs.

The city estimated the sprinkler updates would cost businesses $20,000. But a state investigation published in April 2016 found that many businesses ended up paying $40,000 to $100,000. Some businesses took out small loans, the report said. At least two clubs closed, citing the cost of compliance, it found.

"One of our (guiding principles) as a regulatory agency is consumer protection," said Andrea Simmons, enforcement manager at the Oregon Building Codes Division. "Building owners are definitely one of our customers."

The state division wrote to the Portland city attorney's office in January 2015. They said that enforcing the order "may be in violation" of state law.

That same year, Building Codes Division Administrator Mark Long lobbied state lawmakers to pass two bills that would expand his division's authority. He then worked with Brown's office after the 2015 session to try to transfer responsibility for fire and safety inspections of healthcare facilities to the Department of Consumer and Business Services.

Healthcare facilities asked the department to try to take the responsibility because fire marshals often had more stringent requirements and would require the organizations to make upgrades that the building department deemed unnecessary beforehand, Simmons said. Long did not succeed.

"It was an expansion of above and beyond what we would normally look at," Simmons said.

Her department only has the ability to examine buildings that are undergoing construction or major repair, she said.

"If it's an existing building that has a fire hazard, that's something the fire marshal looks at," Simmons said. "That's under their authority, not ours."

Saltzman senior policy director Matt Grumm told The Oregonian/OregonLive Thursday that the state fire marshal "had no problems" with the city's sprinkler policy. He said the city notified the state fire marshal in 2013 and received no opposition.

Officials from the state fire marshal's office said they could not comment by deadline.

Portland Deputy City Attorney Ellen Osoinach wrote that the city's higher sprinkler standard impacted about 14 nightclubs. Astley said that estimate sounded right, noting the rule put two clubs out of business.

Grumm said the fire bureau tried to minimize the burden on clubs by limiting the requirement to businesses of a certain size and giving them 18 months to comply. That would give them time to increase their ticket prices to prepare for the cost, he said. Inspectors also extended timelines for business owners who couldn't afford the upgrade as long as they worked with the city to comply, Grumm said.

It will likely be at least five months before an administrative judge hears the city's and state's positions, Simmons said. The city has previously asserted that Portland is exempt from rules administered by the state fire marshal because the state fire marshal has designated the Portland fire marshal as the "approved authority for exercising the functions relating to fire prevention and fire safety measures in the City or Portland."

Grumm asserted that state building codes exempting certain businesses do not preempt local fire codes.

"We understand grandfathering for certain issues, but when it comes to people's lives that doesn't seem like a good excuse for not putting in some sprinkler systems," Grumm said.

--Jessica Floum

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