March 17, 2009

Key Largo Associates, Ìnc.
David Elliott, President/Secretary/Director
Key Largo Acquisition Group LLC, Stockholder
dba: OHM (F-Com)
31 NW 1st
Portland, OR 97209

CERTÌFÌED MAÌL

NOTICE OF PROPOSED LICENSE CANCELLATION
AND REMOVAL FROM THE RESPONSIBLE VENDOR PROGRAM

Pursuant to ORS 471.315, the Commission may cancel or suspend your license or assess
a civil penalty for any violation. Pursuant to OAR 845-009-0135(8)(d), the Commission
shall remove you from the Responsible Vendor Program for a Category Ì violation. The
Public Safety Program proposes that the Commission remove you from the Responsible
Vendor Program and cancel your license for the following violation:

There is a history of serious and persistent problems involving disturbances, lewd or
unlawful activities or noise either in the premises or involving patrons of the establishment
in the immediate vicinity of the premises. This is a violation of ORS 471.315(1)(c). The
problems include the following:

On February 24, 2008 at about 2:24 AM, a Portland Police Bureau (PPB) officer responded
to a call from a patron who had been slapped and punched in the face by another patron
while they were at the premises. The victim reported the incident to security staff; the victim
told police that "[security staff] didn't do anything.¨

On April 3, 2008 at about 1:37 AM, PPB officers responded to the premises on a report of
an assault by one of the bouncers. A patron's purse had been stolen and the patron alerted
premises staff. Staff retrieved the purse, and, believing that the patrons were going to
confront the thief, a bouncer threw the patron to the ground in an attempt to deescalate the
situation. When the bar manager intervened the bouncer then threw another patron to the
ground.

On April 6, 2008 at about 12:21 AM, PPB officers on patrol observed an extremely
intoxicated female patron yelling at a bouncer in front of the premises. The patron charged
the bouncer. Officers determined the patron was a minor and had used her sister's
identification to enter the premises. PPB officers took the patron to the Hooper
Detoxification Center (detox).

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March 17, 2009
Page 2

On April 13, 2008 at about 2:12 AM, PPB officers on patrol in the area saw security outside
the premises placing a patron in custody. The officers stopped to assist licensee's security
staff and learned that a patron had punched another patron inside the club and then ran
outside. Officers later cited the patron for Disorderly Conduct ÌÌ. During this time the
premises was closing and over 100 patrons were exiting. These patrons, many of whom
were visibly intoxicated and hostile towards the officers, surrounded the officers and tried to
intervene. A patron shoved an officer and hit the officer in the face, causing a bruise and
pain. The patron was arrested for Assaulting a Public Safety Officer, Resisting Arrest, and
Harassment. Another patron swung at another officer and hit the bill of his hat. Another
patron attempted to push another officer. One male patron had to be tased into custody
and pepper spray was deployed towards at least one patron. Multiple patrons were carried
from the premises because they were too intoxicated to walk. All available Central Precinct
officers and officers from other precincts were called in to control the situation. Officers
were concerned for their own safety and were concerned that patrons would begin a riot.

On April 26, 2008 at about 2:28 AM, PPB officers on patrol in the area followed a crowd of
patrons exiting the premises. Two fights began among patrons in a nearby parking garage.
Officers broke up the fights and one officer reported that "a large police presence was
required to maintain order until the bulk of the crowd dispersed.¨

On May 11, 2008 at about 3:22 AM, a PPB officer responded to a call from a patron who
had been punched inside the premises at approximately 11:00 PM on May 10, 2008. The
extremely intoxicated patron was in the waiting room at an urgent care clinic when he
contacted police to report the assault.

On May 18, 2008 at about 2:55 AM, a PPB officer responded to a call from a patron whose
car was damaged by licensee's security when she was leaving the premises. At about 2:30
AM, a security person made some comments to the patron as she was walking away from
the premises and then when her car was stuck in traffic the security person kicked her car
leaving two dents. Five other individuals, two of whom were thought to be security staff at
the premises, then joined the security person and punched the patron's car windows.

On May 24, 2008 at about 4:28 AM, a PPB officer responded to a call from patron who had
been assaulted at the premises earlier in the evening. The patron was struck twice in the
head by another patron, causing him to fall to the ground. The victim needed several
stitches.

On May 25, 2008 at about 1:13 AM, PPB officers were on patrol outside the premises
when an intoxicated male patron was escorted from the premises as he wielded a knife
causing an officer to point his gun at the patron. An intoxicated female patron jumped in the
way of the officers to prevent them from taking the male patron into custody. PPB officers
took the female patron to detox. Officers noted that during this time there were "numerous
people on the sidewalk and [in] the general area shouting and becoming verbally
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March 17, 2009
Page 3

aggressive¨ and that "numerous other unrelated altercations broke out in the club and in
the immediate area . . .¨

On June 1, 2008 at about 12:50 AM, PPB officers saw a large group of individuals enter
the premises without being checked by security. Shortly after that a security guard came
out and said there was a fight in the premises. Officers could see 20-30 people fighting
inside and chairs flying through the air. The officers waited for additional police cover to
arrive before entering the "riot-like¨ scene. Officers had the music turned off and
announced that the bar was closed because of the large number of patrons fighting inside,
using chairs as weapons, and security could not control the situation without police
involvement.

On June 1, 2008 at about 1:20 AM, a PPB officer conducting a walk-through of the
premises after police closed the bar saw an assault in the premises. A male patron struck a
female patron's face causing pain. The male patron was arrested for Assault ÌV.

On September 14, 2008 at about 2:19 AM, PPB officers responded on a report of a man
with a gun threatening people at the premises. Police found the patron with the gun in his
car near the premises. The patron had drawn his weapon after another patron, who was a
friend of his, was involved in a disturbance inside the premises and was asked to leave.
The patron pointed the gun at several security guards. Police arrested the armed patron for
Menacing and Disorderly Conduct ÌÌ. The patron's friend was arrested for Menacing and
Possession of a Controlled Substance (Cocaine). An intoxicated female patron told police
that someone had threatened her with a gun or a knife; she said someone was going to kill
her, but could not answer questions about the person who threatened her. The female
patron was taken to detox.

On September 20, 2008 at about 12:01 AM, PPB officers on patrol near the premises were
advised that security staff were chasing a patron from the premises after the patron fought
with another patron inside the premises. The fleeing patron was aggressive and
threatening towards staff; after leaving the premises he broke two passenger side rearview
mirrors on cars in the area. The patron was arrested for Criminal Mischief ÌÌ and Disorderly
Conduct ÌÌ.

On October 4, 2008, a PPB officer responded to a call about excessive noise from the
premises. A neighbor complained that the music was so loud on three or four nights of
every week that his bed vibrated.

On October 8, 2008 at 2:19 PM, a PPB officer responded to a noise complaint from a
neighbor. The officer observed the neighbor's windows rattling because of the vibrations
from the music. The officer then went to the premises and spoke with the co-managers
who were on-duty. The co-managers turned the music down. The officer noted that one of
the managers had an odor of an alcoholic beverage on his breath and red, watery eyes.
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March 17, 2009
Page 4


On October 19, 2008 at 1:22 AM, PPB officers on patrol in the area observed a fight in the
courtyard of the premises. Multiple patrons were fighting with one of licensee's security
guards, whose lip was bleeding. A patron, who was visibly intoxicated, was arrested for
Disorderly Conduct ÌÌ.

On November 1, 2008 at 1:21 AM, PPB officers observed bouncers escorting a patron
from the premises. The patron indicated he was going to fight. Officers stepped in to assist
the bouncers and had to use two tasers to subdue the patron before they could remove
him from the premises. The patron was arrested for Ìnterfering with a Peace Officer,
Resisting Arrest, and Disorderly Conduct. The patron's brother tried to intervene and was
also arrested for Ìnterfering with a Peace Officer.

On December 1, 2008 at about 8:03 PM, a PPB officer responded to a call from a patron
who had been harassed by another patron at the premises on November 30, 2008. The
patron told police that the other patron put her fingers in her face, pushed her forehead
back with her finger, and called her names.

On January 1, 2009 at about 12:45 AM, PPB officers were flagged down by a patron at the
premises. The patron's fiancé pulled her out of the restroom and hit her face in the
premises and knocked her to the ground. The patron's bottom lip and her left eye were
swollen. The fiancé had fled the premises, but was arrested later for Assault ÌV and
Harassment.

On January 4, 2009 at about 2:28 AM, a PPB officer responded to Emanuel Hospital to
take a report of an assault that occurred at the premises. A patron hit another patron on the
side of the head with a glass beer bottle, causing the bottle to break, and leaving the
patron with a two-inch laceration on her head.

Willingness and Ability

There have been 20 serious incidents at Ohm since February 24, 2008. Ìncidents have
included public drunkenness, fights, altercations, harassment, criminal mischief, and
disorderly conduct. Every incident has required the involvement of one or more officers of
the Portland Police Bureau. Numerous incidents included one or more patrons who were
intoxicated. Eighteen incidents have involved harm or the threat of harm, with feet and fists
frequently being used as weapons as well as guns, knives, chairs, and beer bottles.

On at least 13 occasions between May 2000 and November 2006 Licensee received verbal
instructions from OLCC inspectors including instructions regarding disorder and/or
neighborhood livability. On seven occasions between May 2000 and October 2002 and
again on February 21, 2008, Licensee received verbal instructions from OLCC inspectors
regarding the sale and service of alcohol to Visibly Ìntoxicated Persons (VÌPs). Between
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March 17, 2009
Page 5

May 30, 2000 and February 21, 2008, Licensee also received verbal instructions from
OLCC inspectors on unlawful activity, after hours consumption, allowing open containers of
alcohol to leave the licensed premises, drinking on duty, and food service. On July 19,
2006, OLCC staff taught a training class to licensee's employees.

On April 16, 2008, OLCC and PPB officers held an intervention meeting with Licensee and
his staff to discuss licensee's history of serious and persistent problems. Licensee
discussed hiring off-duty police officers to provide security services. Licensee agreed to
come up with a plan to reduce problems and provided that plan to OLCC on April 25, 2008.
The Ohm Policy Manual for Dealing with Ìntoxicated and/or Unruly Patrons includes large
sections taken verbatim from copyright-protected articles on two security consultants'
websites. The plagiarism of security guidance for use as employee guidelines further
indicates that Licensee has neither the willingness nor ability to adequately address the
problems at the premises. Furthermore, in spite of Licensee's stated commitment to make
the necessary changes to reduce the fights and to reduce problems, 16 additional serious
incidents have occurred since that meeting.

Licensee has not been able to control the serious problems that have repeatedly occurred
in and around the premises. Licensee's failure to take immediate and effective action to
prevent such serious and persistent problems is evidenced by the on-going nature of these
incidents. Numerous incidents have involved harm or the threat of harm and weapons.

Licensee has not demonstrated a willingness or ability to control adequately the licensed
premises and patrons' behavior in the premises and its immediate vicinity. Licensees
unwillingness and inability to obey liquor laws on the licensed premises and in areas the
Licensee controls make it a poor risk for future compliance.

DETERMINING THE PENALTY

OAR 845-006-0500 defines this violation as a Category Ì violation and recommends
cancellation for the first violation of this type within two years. This is your first.

OAR 845-009-0135(8)(d) requires that a licensee be removed from the Responsible
Vendor Program for a Category Ì violation.

PROPOSED PENALTY

The Public Safety Program proposes that the Commission remove you from the
Responsible Vendor Program and cancel your Full On-Premises Sales license.

Ìf a licensee's interest in the license expires before a Final Order is issued, the
Commission's Public Safety Program recommends that under the authority of ORS
471.030, 471.040, 471.313 and 471.730, the Commission issue the licensee a Letter of
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March 17, 2009
Page 6

Reprimand. This reprimand will become a permanent part of the licensee's Commission file
and may be considered in any future application for a liquor license by the licensee.

RESPONSIBILITY FOR VIOLATIONS

"Licensee¨ is defined as including the principal officers of a corporation and stockholders
who own or control 10% or more of any class of stock (OAR 845-006-0301 and OAR 845-
006-0475(1)(d)). Therefore, the licensee includes David Elliott, President/Secretary/
Director and Key Largo Acquisition Group, LLC, Stockholder of Key Largo Associates, Ìnc.
Additionally, Key Largo Associates, Ìnc. is responsible for the acts and omissions of its
employees and representatives in violation of any law affecting license privileges (OAR
845-006-0362).

HEARINGS RIGHTS

You have the right to a hearing to dispute removal from the Responsible Vendor Program,
the charges, or the proposed cancellation. Ìf you want a hearing, please sign and date the
enclosed form and return it to the address listed on the form by April 16, 2009. Ìndividuals
have a right to be represented by an attorney. Per OAR 137-003-0550, Iimited IiabiIity
companies must be represented by an attorney.

Hearings are conducted by the Office of Administrative Hearings under the jurisdiction of
the Oregon Liquor Control Commission, according to the Administrative Procedures Act
(ORS Chapter 183), Attorney General's Rules for the Office of Administrative Hearings
(OAR Chapter 137) and Commission Administrative Rules (OAR Chapter 845 Division 03).

Ìf you do not request a hearing, or if you request a hearing and then withdraw your request,
a final order by default will be issued by the Commission Administrator. Ìf you fail to appear
at a scheduled hearing, a final order by default will be issued by either the Administrative
Law Judge or the Commission Administrator, as authorized by OAR 845-003-0670.

Ìn each of these instances, the Commission will designate its file or files in this matter,
including all materials you have submitted, as part or all of the record supporting its final
order by default.

Once a final order by default is issued, you will be removed from the Responsible Vendor
Program and your license will be cancelled.






OHM (F-Com)
March 17, 2009
Page 7

OREGON LÌQUOR CONTROL COMMÌSSÌON



Stephen A. Pharo
Executive Director

SAP:AD
Ìf you have any questions, please call 503-872-5128 or 800-452-6522, extension 5128.



CERTIFICATE OF SERVICE


Ì certify that on March 17, 2009, Ì served the attached Notice of Proposed License
Cancellation and Removal from the Responsible Vendor Program by certified mail, in a
sealed envelope, with first class postage prepaid, addressed as follows:

Key Largo Associates, Ìnc.
David Elliot, President/Secretary/Director/Stockholder
Key Largo Acquisition Group
dba: OHM (F-Com)
31 NW 1st
Portland, OR 97209

Bruce Knivila
4000 SW 45
th
Avenue
Portland, OR 97221



____________________________________
Karen Maia
Administrative Specialist
Administrative Policy & Process Division
OREGON LÌQUOR CONTROL COMMÌSSÌON