Winters' storm.

United Energy CEO James Winters sues city of Portland, Oregon

Don't tell James Winters you can't fight City Hall. The CEO of United Energy Inc. is suing the city of Portland, charging city officials are gunning to put one of his franchises out of business.

United Energy, No. 75 on the BE INDUSTRIAL/SERVICE 100 list with $32 million in revenues, is a distributor of petroleum products, and generally sells wholesale to customers such as the major airlines. But in January 1998 Winters decided to take his product directly to consumers when he purchased a Chevron service station and convenience store in Portland for approximately $1 million. The purchase was made possible because the city forced the station's previous owner to sell after repeated reports of drug sales around the station's premises.

Winters says he came in with high expectations. He executed a purchase agreement with the previous owner and opened an escrow account to process the sale. But he says the city stepped in at the last minute and forced him to submit to a police background check before the sale could be finalized. Winters was required to sign a "stipulation" in order for the city's nuisance lawsuit against the property to be dismissed. United Energy agreed to improve lighting, hire security guards and keep violators of a posted code of conduct from trespassing at an additional cost of $100,000.

With all that out of the way, Winters thought he was in for relatively smooth sailing. He was wrong. Last December, the city of Portland asked the Multnomah County Circuit Court to reinstate the nuisance suit. The city then recommended the state Liquor Control Commission deny the station a liquor license. Winters says the sale of liquor at the station would boost revenue by as much as 20%. Total annual sales at similar stores, says Winters, are typically $1.5 million to $2 million.

So why did the city jump back into the mix? According to municipal officials, the station was still being cited by neighborhood residents as a spot for criminal activity. "Every property owner has the responsibility to make sure that nuisance activity does not take place on his or her property," says Harry Auerbach, deputy city attorney. "When they [United Energy] bought the property, they understood what the situation was. They agreed to what would be expected of them to help make sure that their property was not a nuisance to the neighborhood. All that we're asking they do is live up to the agreement they signed."

But Winters says the majority of criminal incidents were arrests made when police pulled vehicles from nearby traffic onto the Chevron station's large and well-lighted lot. He also says a little research dug up a peculiar discrepancy. "We've noted that there have been higher [criminal] incidences at other properties that are not owned by African Americans," says James Winters.

In February, Winters filed a suit against the city at U.S. District Court in Portland, seeking compensatory damages of $1.6 million and unspecified punitive damages. The lawsuit charges the police with neglecting to investigate reports of crime at the station and alleges the city knowingly gave the state inaccurate information to ensure a liquor license would not be granted. In large part, a liquor decision is based on the number of police incidents at a property.

"Historically, they have rules and regulations along that street that have dissuaded people from developing there and have prevented businesses from coming there," says Gregory Allen, Winters' business partner. "It seems like the city of Portland loses sight of the fact that economic empowerment is what is really going to improve the neighborhood." If unprofitable, Allen and Winters maintain a shuttered Chevron would join a street already full of abandoned businesses.

It could take up to a year before the lawsuit is settled or goes to trial.