A proposed oceanfront home in Cannon Beach faces another hurdle.

CANNON BEACH — The City Council is reviewing an application for a development permit for a new home overlooking Haystack Rock after the state Land Use Board of Appeals found that public notice was not properly given when city staff approved the permit last year.

Stanley and Rebecca Roberts, a couple that has been battling with the city and their neighbor since 2021 to build a home on a steep hillside off of Hemlock Street, originally submitted an application to the city to build a 2,712-square-foot home.

The application did not advance because it did not meet the city’s oceanfront setback standard, so the couple submitted an application for a smaller 1,290-square-foot home and vehicle access.

City staff approved the development permit for the smaller house in conjunction with a building permit in March 2022. The decision was appealed to the Land Use Board of Appeals by Haystack Rock LLC, the owner of land to the north of the Roberts’ property.

Haystack Rock LLC argued that the property owner was entitled to notice and a hearing under state law. The appeals board agreed in a ruling in March.

The appeals board said the city must provide notice and an opportunity for a local appeal and a de novo — or new — hearing.

During a public hearing on the permit, city staff, in a reversal from last year, recommended the City Council deny the permit.

Bill Kabeiseman, the city’s Portland-based land use attorney, said city staff believes the Roberts have failed to carry their burden regarding several criteria, including addressing geotechnical hazards and meeting the oceanfront setback standard.

He said that both the elevated roadway and at-grade driveway proposed do not comply with the oceanfront setback standard.

Wendie Kellington, a Lake Oswego-based attorney with Kellington Law Group representing the Roberts, argued that former city planning director Jeff Adams “got it right” when he decided to approve the smaller house last year.

“And the new staff report was quite a surprise when I received it about seven days ago, which reflected new interpretations of the city code that were 180 degrees different from interpretations of the city’s code that are reflected in final decisions of this council, as well as decisions of other members of the city’s professional staff,” she said. “As well as in one respect, LUBA.”

Kellington argued that city staff is changing the goal post when evaluating the same application.

“The plain fact is it really kind of looks like the staff report was working really hard to find a basis to deny,” she said. “I know there’s a lot of political pressure. There’s a lot of folks who’ve been told a lot of untrue things about what the Roberts want to do. And so I want to reinforce, all they want to do is build a house — it’s about 1,200 square feet — and improve an access that exists in a public street to get to it.”

About a dozen people and organizations spoke in opposition to the application, including William Rasmussen, an attorney with Portland-based Miller Nash LLP representing Haystack Rock LLC.

Haystack Rock LLC’s property to the north of the Roberts’ lot includes a replica of a historic cabin once owned by former Gov. Oswald West. To the south of the Roberts’ property is an undeveloped city-owned lot called Inspiration Point, which was purchased in the early 2000s with the help of the public to preserve green space along the coastal cliff.

Rasmussen argued the City Council should deny the application for failing to meet criteria and address hazards and safety concerns.

“I really think this council wants to do the right thing in assessing this application,” he said. “And there’s the code-based right thing and then there’s the commonsense, public safety right thing. And fortunately, both those things align in this application. They both point to denial.”

Rasmussen urged the City Council to follow city staff’s guidance.

“For decades Cannon Beach has required developers to comply with the city’s code to get a permit, nothing more, nothing less,” he said. “This has served the city very well. It’s enabled the city to maintain its village character and avoid undesired development patterns that are sometimes seen in other coastal communities.”

Rasmussen is also representing Haystack Rock LLC in a lawsuit that was filed in Circuit Court against the city and the Roberts in 2022 asking a judge to determine the rights and obligations of the city and the couple.

He claims the Roberts do not have the right to build a driveway on an unimproved public right of way and that the city has the authority to deny the easement request.