Portland developers are hoping a state appeals board will overturn a Salem City Council decision blocking a 24-acre shopping center on the city's southeast side.

PacTrust on Wednesday filed a notice of intent to appeal the council's decision with the Oregon Land Use Board of Appeals.

The move marks the latest volley over whether developers should build the Kuebler Gateway Shopping Center with a 168,550-square-foot Costco Wholesale store, a fueling station and four retail buildings on a grassy lot along Kuebler Boulevard SE.

Neighbors had argued they were hoodwinked into believing the shopping center would have a smaller draw than a Costco, which could bring customers from around the region.

A lawyer for the developers said earlier that the possibility of a Costco at the site had been a publicly disclosed for years.

Wendie Kellington, the lawyer, could not immediately be reached for comment Thursday. Salem Mayor Chuck Bennett declined to comment.

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Local real estate officials have criticized the council's move, saying it could damage relations between Salem and developers.

PacTrust officials said they've already spent about $3.7 million on the project, including off-site improvements such as widening Kuebler Boulevard SE.

"The vote to stop the Costco project sends the wrong message based upon the facts," said Alex Rhoten, owner of Coldwell Banker Commercial Mountain West Real Estate.

"It will be remembered and talked about for years to come," Rhoten said. "Developers may avoid our community after what happened."

The council earlier this month voted 5-3 to reverse an October decision by city planning staff approving a site plan for the shopping center. Councilors formalized their decision Monday in a brief meeting.

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The crux of the argument — along with concerns about removing trees on the lot — was a 2007 decision easing the way for development on the land.

The council's decision reads: "Council finds that the representations made by the applicant in 2006/2007 that the proposed development would be a community shopping center, and not a regional shopping center were relied on by the city when it accepted the applicant's 'vicinity' for purposes of reviewing the proposed comprehensive plan change to commercial.

"The current proposal will have a regional market area and is therefore inconsistent with the representations made by the applicant in 2006/2007, and inconsistent with the comprehensive plan change decision," the decision reads.

This story will be updated as more information becomes available.

Email jbach@statesmanjournal.com, call (503) 399-6714 or follow on Twitter @jonathanmbach.

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