Petition for Writ of Certiorari — BSW Development Group v. City of Dayton

Supreme Court brief1999

Ask Donna

What actually matters in this document.

Text

Supreme Court U.S.

' FILED

981320FEB 16 99

In The

Supreme Court of the United States

October Term, 1998

o¢—

BSW DEVELOPMENT GROUP,

Petitioner,

Vs.

CITY OF DAYTON, OHIO,

Respondent.

On Petition For Writ Of Certiorari

To The Supreme Court Of The State Of Ohio

PETITION FOR WRIT OF CERTIORARI

DwicHt D. BRANNON MIcHAEL M. BERGER*

P.O. Box 750425 BERGER & Norton

Dayton, OH 45475-0425

(937) 885-4687 1620 26th Street

Suite 200 South

Santa Monica, CA 90404

(310) 449-1000

Counsel for Petitioner

"Counsel of Record

(13eC

QUESTIONS PRESENTED

1. When faced with this Court’s doctrine that a 5th

Amendment taking occurs when government regulation

prevents a property owner from making economically via-

ble, productive, or beneficial use of land, may a state court

replace that standard with one that requires denial of all

use of the property, even if the remaining “use” is not

economically productive? When the Ohio courts so held,

they created conflict with the decisions not only of this

Court, but of numerous other state courts.

2. Is the substantive standard for a temporary regu-

latory taking — aside from its temporal quality — different

from the standard for a permanent regulatory taking?

When the Ohio courts held it was, they created conflict

with the decisions not only of this Court, but of

numerous other state courts.

3. Is the right to demolish an unusable, dilapidated

building, and develop the underlying property produc-

tively and in a manner that meets the owners reasonable,

investment-backed expectations, a constitutionally pro-

tected “stick in the bundle of property rights?” When the

Ohio Supreme Court held it was not, it created a direct

conflict with the New York Court of Appeals.

LIST OF PARTIES

The Petitioner BSW Development Group is a partner-

ship consisting of Dwight D. Brannon, William I. Schoen-

feld, and Dennis Williams.

Respondent City of Dayton, Ohio, is an Ohio munici-

pal corporation.

TABLE OF CONTENTS

Page

PETITION FOR WRIT OF CERTIORARI............ 1

So eo 1

Fs oo vin ons co voce vos kednswe cid 1

CONSTITUTIONAL AND STATUTORY PROVI-

EN So oie vn vw AN os ¢6ceeedeeeeusee.., 3

STATEMENT OF THE CASE....................... 3

SUMMARY OF ARGUMENT....................... 9

REASONS FOR GRANTING THE WRIT ........... 14

I. THERE IS CONFUSION IN THE LOWER

COURTS ABOUT THE MEANING OF “ECO-

NOMICALLY VIABLE USE” OF PROPERTY... 14

Il. LOGICALLY, THERE CAN BE ONLY ONE SUB-

STANTIVE STANDARD FOR A TAKING,

WHETHER IT IS PERMANENT OR TEMPOR-

ARY, BUT THERE IS CONFLICT IN THE

I IIT 65. is ov abies a ov 6s bho e cence... 20

Ill. THERE IS CONFLICT BETWEEN OHIO AND

NEW YORK ON WHETHER THE RIGHT OF A

BUILDING OWNER TO DEMOLISH A DERE-

LICT BUILDING AND REBUILD ON THE SITE

IS A CONSTITUTIONALLY PROTECTED

a Ue ) rc rs 26

ES ee ee ee ee 29

TABLE OF AUTHORITIES

Page

CASES

614 Company v. Minneapolis Community Dev.

Agency, 547 N.W.2d 400 (Minn. App. 1996)

PET eT Tey eee CET IT ree 11, 12, 16, 19, 24

Agins v. City of Tiburon, 447 U.S. 255 (1980)......... 14

Alexander v. Town of Jupiter, 640 So.2d 79 (Fla. App.

0G 2A oe ee ee 24

City of Chicago v. International College of Surgeons,

Dak Us. THO Ce i iveseececisetcanseukieiaveeanes 7, 8

Corrigan v. City of Scottsdale, 720 P.2d 528 (Ariz.

PD. FOE) 96 oc enn sencee ea Were seckeewaces FeeRres 17

Cumberland Farms, Inc. v. Town of Groton, 247

Comm. FRG Ch. Diels ook cccicvaeaes 12, 23, 244, DB

Dolan v. City of Tigard, 512 U.S. 374 (1994) ...13, 15, 19

First English Evangelical Lutheran Church v. County

of Los Angeles, 482 U.S. 304 (1987) ............ passim

Golf Club of Plantation, Inc. v. City of Plantation, 717

Sais BGG CUR. FD, TIRE onc n noc vsssisdnsensenns: 11

Hodel v. Virginia Surface Mining & Reclamation

Hoon, tc., Te Wi. BOS CEP ass 4 6s en eee cdusevvases 15

Hornstein v. Barry, 530 A.2d 1177 (D.C. App. 1987) .... 17

Kaiser Aetna v. U.S., 444 U.S. 164 (1979)...... 14, 28, 29

Kempf v. City of Iowa City, 402 N.W.2d 393 (Iowa

od a eer r ry Teer rrr rrr re nay ae 11, 17

Keystone Bituminous Coal Assn. v. DeBenedictis, 480

OF. Ee CED oc 6nd oece here deced deere 9, 15, 18

TABLE OF AUTHORITIES - Continued

Page

Kirby Forest Indus., Inc. v. United States, 467 U.S. 1

TEs she daksxiouvend ender ves Cedar eeeceRe ee 15

Lake Nacimiento Ranch Co. v. San Luis Obispo

County, 841 F.2d 872 (9th Cir. 1987)............... 15

Landgate, Inc. v. California Coastal Commn., 953 P.2d

SR CAPONE 80 ve ha od Renees case daws eso be50n ues eens 23

Loretto v. Teleprompter Manhattan CATV Corp., 458

ah ee MOD oh co pei y bac usec ueeaa rt ee Nea wae Cee 28

Lucas v. South Carolina Coastal Council, 424 S.E.2d

OD | PPE PT ETT O EEE T TONE TPE LETT 12, 23

Lucas v. South Carolina Coastal Council, 505 U.S.

OY CRE cresuen er dackureetceseenves 9, 13, 33, 18,

McQueen v. South Carolina Coastal Council, 496

eae GED TEA... BOs BOP E i og carne bse e ves eekss 16

Nectow v. City of Cambridge, 277 U.S. 183 (1928) ..... 17

Nollan v. California Coastal Commn., 483 U.S. 825

8g A ena Daneman fear erers oper ey tern, aa eA 9, 15, 26

Orion Corp. v. State, 747 P.2d 1062 (Wash. 1987) ..... 17

Penn Central Transp. Co. v. City of New York, 438

ch My Fi). Serre rrrr rr rrre Tr erro 14, 18, 29

Port Clinton Associates v. Board of Selectmen, 587

pe ee ow OR rrr Rare rrr rr ere 12

Ranch 57 v. City of Yuma, 731 P.2d 113 (Ariz. 1986) .... 17

Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) ..28, 29

San Diego Gas & Elec. Co. v. City of San Diego, 450

Eee. Gk CRUED bc seens ves ncceseeveueeuaerenneeeged 14

TABLE OF AUTHORITIES — Continued

Page

Schad v. Borough of Mount Ephraim, 452 U.S. 61,

CORE we cance cut deusvocccseucnSntctpeeeetaseeeaees 14

Seawall Associates v. City of New York, 542 N.E.2d

lt eee Ere Creer rrr 12, 13, 27, 28

Sintra, Inc. v. City of Seattle, 829 P.2d 765 (Wash.

BOD s 5.0 80 0456005860401 bR a OeE AERA ER ELON ORES py Ie

Standard Materials, Inc. v. City of Slidell, 700 So.2d

7S Cha. AO. TSGF) ccc cccncusescusesstcguceens 12, 22

State ex rel. BSW Development Group v. City of Day-

ton, 83 Ohio St. 3d 338, 699 N.E.2d 1271 (Ohio

RPPO vccccscoccedecebsveeussseeeuhe ses ke Uheueue eben 1

Steel v. Cape Corp., 677 A.2d 634 (Md. App. 1996) .... 17

Steen v. County Council, 76 A.2d 642 (Del. Ch.

Suitum v. Tahoe Reg. Plan. Agency, 520 U.S. 725, 137

Leen Gee CEORE Rs ace vccvcctveetesssoanse sen eenes 15

United States v. Riverside Bayview Homes, 474 US.

Dt CEPT 6 50 0545 0A vies sees esd aee et eraere ts 15

Wheeler v. City of Pleasant Grove, 833 F.2d 167 (11th

oS js ERE re ee re Tree ye ee 17

Whitehead Oil Co. v. City of Lincoln, 515 N.W.2d 401

PPOUEG DOSEN ss vivndvescshbucteusse yeuuenueus 12, 23, 24

Williamson County Reg. Plan Commn. v. Hamilton

Bank, 473 US. 372 (GGG) oi we vccccncscces duces 11, 18

Woodland Manor III Associates v. Keeney, 713 A.2d

DU Ged: NOOO xcs cecennneuandviegeeenees 12, 16, 24

TABLE OF AUTHORITIES - Continued

Page

STATUTES, CONSTITUTIONS & CODES

BS eg peor re terry rr, rere 4

Oe Te SE SA cc ce bricesdeud couays keeetaeeeaee ses 3

Fifth Amendment, United States Constitution

Lh bua ela Oe ee ied borate eae ois a en. a oe

Fourteenth Amendment, United States Constitu-

a 6 Fash as eaeee dd 684 woe OC aSaR ee weed kee ee 3

Ce Cee, AGE, 3. Bei on vec ccsavaceuevtecres 3

Gee ee Ce OD, cv cvcvden veces sasisuvereeny 4

Cte Tine. Cae Bartek OF OG iin is ccenecsccunsens 2, 8

OTHER AUTHORITIES

DeLong, Property Matters (1997).................505- 9

Hamilton, “Investor’s Corner,” Investor’s Busi-

ness Daily, p. A7 (March 3, 1997)................--. 7

Lawrence, Regulatory Takings: Beyond the Bal-

ancing Test [1988] 20 The Urban Lawyer 389...... 15

Miller & Starr, California Real Estate 2d [2nd ed.

Sy I SE i vnveveteccnveusseevenvans 10, 15, 17

Nichols on Eminent Domain [rev. 3d ed. 1998]...10, 15

Walter, Appraisal Methods and Regulatory Takings:

New Directions For Appraisers, Judges, and Econo-

mists, 63 Appraisal J. 331 (1995) ............... 14, 22

Williams, American Land Planning Law (1988 rev.

OE; CRE CUD. BIN 0 0 i sicic Cectvestccccnsvesss 43, 15

Zoning and Planning Law Handbook 14,342 (Gor-

don, Ed., 1988)

PETITION FOR WRIT OF CERTIORARI

Petitioner BSW Development Group respectfully

prays that a Writ of Certiorari issue to review a final

judgment and order of the Supreme Court of the State of

Ohio.

OPINIONS BELOW

The Ohio Supreme Court’s opinion was filed on

October 14, 1998, and is reported as State ex rel. BSW

Development Group v. City of Dayton, 83 Ohio St. 3d 338,

699 N.E.2d 1271 (Ohio 1998). (App., p. 1.) BSW’s timely

Motion for Reconsideration was denied in an unreported

order filed November 18, 1998. (App., p. 15.) The decision

of the Ohio Court of Appeals appears at App., p. 16, and

the Report and Recommendation of the Special Master,

addressing the Court of Appeals’ sole question of

whether the City’s actions had denied BSW “all use” of

its property, appears at App., p. 18. An earlier decision of

the Ohio Court of Appeals and the Judgment of the Court

of Common Pleas holding illegal the City’s denial of a

demolition permit for BSW’s building appear at App., pp.

54 and 62, respectively.

JURISDICTION

This case involves the Ohio courts’ refusal to provide

a constitutional remedy for the four-year temporary tak-

ing of a 1 acre parcel of land in Dayton. In 1993, the Ohio

courts had declared invalid the City’s refusal to grant

BSW a demolition perrait. Thereafter, BSW filed suit seek-

ing 5th Amendment compensation for the four years that

the City’s actions had prevented it from making any

economically beneficial or productive use of its property.

The City removed the case to U.S. District Court because

of the substantial federal questions it contained. The fed-

eral question was thus raised at the earliest opportunity,

and was significant enough to warrant removal to federal

court. That court held the 5th Amendment takings claim

was not ripe because BSW had not sought a compensa-

tory remedy for that taking under state law.

The District Court’s order was the catalyst for this

suit. BSW filed suit in the Ohio Court of Appeals, seeking

a writ of mandamus that would command the City under

the 5th Amendment to condemn the subject property.

That is the local Ohio procedure when a property owner

claims that local government action has taken private

property without compensation. (Ohio Rev. Code

§ 2731.01 et seq.; App., p. 7.) The Court of Appeals

referred the matter to a Special Master with directions to

address the one question it believed was dispositive of

whether a regulatory taking had occurred within the

meaning of this Court’s 5th Amendment jurisprudence:

“whether the city’s 1989 denial of a demolition

permit deprived BSW of all use of its property.”

(App., p. 53; emphasis added.)

In a reductio ad absurdum ruling, the Special Master

found that, because the owners were storing two wrecked

cars and a boat in a dilapidated and boarded-up old

warehouse, there was no denial of “all use.” He thus

recommended that relief be denied. (App., p. 18.) The

Court of Appeals agreed. (App., p. 16.) The Ohio

Supreme Court affirmed (App., p. 1), based on its reading

of this Court’s 5th Amendment cases, and then denied

BSW’s timely Motion for Reconsideration (App., p. 15).

This Court's jurisdiction is invoked pursuant to 28 U.S.C.

§ 1257.

CONSTITUTIONAL AND STATUTORY PROVISIONS

Fifth Amendment, United States Constitution:

. . nor shall private property be taken for public

use, without just compensation.

Fourteenth Amendment, United States Constitution:

“Section 1. ... nor shall any State deprive any person

of life, liberty, or property without due process of

””

—a

Ohio Constitution, Art. I, § 19:

. . where private property shall be taken for public

use, a compensation therefore shall first be made in

money, or first secured by a deposit of money... . ”

Pertinent portions of the applicable local ordinances

are at App., p. 69 et seq.

STATEMENT OF THE CASE

In 1984, after completing intensive background inves-

tigations, BSW Development Group (BSW) (a partnership

composed of an accountant, a building contractor, and an

attorney) purchased two adjoining parcels of land in Day-

ton. The property had old, run-down buildings on it that

had suffered from years of intense use and, eventually,

neglect. No building was structurally sound; each

required repairs costing more than its value in order to

make it rentable in the Dayton market.

Accordingly, BSW planned to demolish the old build-

ings and construct a new complex of two buildings on the

property. Those plans were known to, and approved by, the

City. The property was properly zoned for such use at all

times, and was in an “enterprise zone,” so designated by

the City to encourage private redevelopment of older

properties like this to revitalize the area.

In 1988, BSW demolished and replaced the first of the

two buildings uneventfully. The City, however, was not

satisfied with the amount of parking provided. BSW

agreed, and the City understood, that additional parking

would be made available as soon as the second building

was demolished and replaced. When BSW’s project was

complete, the new structures would work together and

share an appropriate amount of parking space.

While this was going on, the City — without giving

BSW notice or opportunity to be heard — had taken steps

to try to have the remaining building added to the State’s

list of historical structures, even though the building had

not been included in lists of historic buildings created by

the City in 1981 (before BSW bought the property) and

1986 (after BSW’s purchase). Moreover, in 1978 and 1985,

the State had expressly rejected such listing. Under the

City’s ordinances, in contrast to both federal and state

law (16 U.S.C. § 470[a]; Ohio Rev. Code § 149.55), neither

notice to nor consent by the owner of the property was

required.

In 1989, when BSW sought a permit to demolish the

second dilapidated building and complete its project, the

City suddenly refused. The City’s secretive actions in

seeking (even though not obtaining) historical recognition

for the building were now said to have supposedly

changed its status. A City ordinance delegated prelimi-

nary demolition authority to the City’s Landmark Com-

mission for all property either listed on or eligible for

listing on the state or federal register of historic struc-

tures.! BSW thereupon asked the Landmark Commission

for a certificate of appropriateness for a demolition per-

mit, since City ordinances permit demolition even of

properly designated historic buildings if the cost per

square foot to rehabilitate a building will exceed the

market value per square foot of similar buildings in the

vicinity. Although the evidence showed without contra-

diction that that was indeed the case with BSW’s build-

ing, the Landmark Commission denied its demolition

request. On administrative appeal, the Board of Zoning

Appeals affirmed.

Of course, this building was no “landmark;” it was a

dilapidated, dangerous firetrap — literally so, as later

1 In fact, the City was playing fast and loose with its own

ordinances. As the evidence would later show, the City’s

request for historical recognition for this building was not filed

with the State until several months after BSW sought its

demolition permit. Thus, BSW’s enforced detour through the

Landmark Commission was wholly unwarranted legally, as

well as factually.

events proved. Nothing about it satisfied any standard of

historic interest, and the property had never been

included in any list of such buildings. What it was, was a

derelict in need of demolition. It was old, its maintenance

costs were high, and it was unable to compete economi-

cally for tenants with other buildings in Dayton. In fact,

throughout the administrative and judicial appeals pro-

cess, the City repeatedly threatened BSW with criminal

prosecution because of the nuisance created by this build-

ing that the City simultaneously asserted to be “histori-

cal” and in need of preservation. The City considered the

building so unsafe that it built a barricade fence around it

to prevent entry by the City’s homeless. But no effective

police protection was provided, and this supposedly

“landmark” building became a “hobo jungle,” in which

the trespassing occupants would periodically set fires for

warmth. They eventually set one fire too many and, in

November 1998, burned down the building. The City -

whose denial of a demolition permit began this whole

sorry charade — then ordered BSW to demolish its charred

remnants. In January 1999, the building was razed.

Back to 1989. BSW appealed the City’s administrative

denial of its permit to the Montgomery County Court of

Common Pleas. That court reversed the Board of Zoning

Appeals’ decision, holding that the City had denied BSW

due process and equal protection and that the City’s

ordinances were unconstitutional as applied to BSW’s

property. (App., p. 62.) The Ohio Court of Appeals

affirmed, holding that BSW’s evidence was ample to

prove that renovating the building would have cost more

than the market value of nearby buildings, and that

therefore the City’s interference with the owner’s plans

was unlawful. (App., p. 54.)

By the time the Court of Appeals ended that phase of

the litigation, it was 1993. Timing is everything in real

estate development, and the market in 1993, was not

what is had been in 1989. Costs had escalated and pro-

spective tenants were scarce. The economically sound

plans that BSW had drawn in 1989 were no longer appro-

priate.* Thus, when the City requested a reuse plan as a

condition to demolition approval in 1993, the request was

not a simple one to fulfill. Because of the need to start

from scratch with its planning, the radical change in the

market, and the losses it had suffered during the four

years the City had prevented economically productive

use, BSW — no longer able to proceed with its plans -

sued to collect compensation for the City’s constitutional

violations.

Although BSW filed its suit in state court, the City

removed it to U.S. District Court because of the presence

of substantial federal questions. (See City of Chicago v.

* The nationwide recession of the early 1990s hit the real

estate development market quite hard. (E.g., Hamilton,

“Investor’s Corner,” Investor’s Business Daily, p. A7 (March 3,

1997).

* In fact, the City’s demand was irrational because the

urgent need to demolish a derelict building has nothing

whatever to do with what will eventually be built on its site. The

notion that landowners must maintain a dangerous firetrap ina

declining market until they come up with a plan of

redevelopment of the site is simply absurd - it defies, not

promotes, the objective of public safety that lies at the core of

the police power.

International College of Surgeons, 522 U.S. 156 [1997].) Once

there, the City — contradicting its own contention that

federal issues needed to be resolved — succeeded in hav-

ing that court dismiss the 5th Amendment takings claim

on the ground of lack of federal jurisdiction for want of

ripeness because BSW had failed to adequately take

advantage of state court compensation procedures. As a

consequence, BSW timely filed this suit in the Ohio Court

of appeals under Ohio Rev. Code § 2731.01 et seq., seeking

a writ of mandamus to compel the City to condemn its

property. The Court of Appeals referred the matter to a

Special Master with directions to address the one ques-

tion it believed was dispositive of whether a regulatory

taking had occurred:

“whether the city’s 1989 denial of - demolition

permit deprived BSW of all use of its property.”

(App., p. 53; emphasis added.)

As noted earlier, the Special Master took that direc-

tion literally and, in a reductio ad absurdum ruling, decided

that “all” use had not been prevented because there were

two wrecked cars and a boat stored inside the derelict

building, and parts of the surrounding grounds were

used for parking.* Based on that solitary factual finding —

and without consideration of whether those “uses” were

economically viable, beneficial, or productive, as required

4 Please recall that the City had already told BSW that the

parking for its first building was inadequate and space on this

adjoining land would have to be found to augment what was

already provided. Of course, BSW’s plan was to construct a new

building where the subject derelict then stood and, in the

process, provide ample parking for both buildings.

by this Court’s settled holdings (e.g., Lucas v. South Caro-

lina Coastal Council, 505 U.S. 1003, 1015-1016 [1992]) — the

Court of Appeals denied the writ and the Ohio Supreme

Court affirmed.

SUMMARY OF ARGUMENT

Many people believed that, with the decisions this

Court issued in 1987,5 much of the lower court confusion

surrounding issues of regulatory taking would be dis-

pelled, because those decisions supplied substantially

more doctrinal guidance to lower courts than earlier

ones.

It hasn’t worked out that way. Confusion still

abounds, as both courts and commentators continue to

complain. One of the key problems lies in applyirig this

Court’s formula that a regulatory taking occurs when

government action denies property owners “economi-

cally viable” or “economically beneficial or productive”

use of their land. (E.g., Lucas, 505 U.S. at 1015-1016.) The

following comments are representative:

e “The basic rules seems to be that . . . no

taking occurs unless the owner is deprived of

all economically viable use of the property.

The exact point at which economic viability

is gone is unclear, though. .. . ” (DeLong,

Property Matters, p. 289 [1997].)

° Including First English Evangelical Lutheran Church v.

County of Los Angeles, 482 U.S. 304 (1987), Nollan v. California

Coastal Commn., 483 U.S. 825 (1987), and Keystone Bituminous

Coal Assn. v. DeBenedictis, 480 U.S. 470 (1987).

e “... there is no established judicial standard

to test when an owner has lost the ‘economi-

cally viable use’ of the property. ... ” (7

Miller & Starr, California Real Estate 2d,

§ 23.19 at 665 [1990, supp. 1999].)

e “The only thing that is certain is that various

courts — including the United States Supreme

Court — will be required to visit these issues

again.” (2A Nichols on Eminent Domain,

§ 6.04 at 6-51 [rev. 3d ed. 1998].)

In the case at bench, the Ohio courts exacerbated that

confusion. They injected a wild card into legal analysis

when they reasoned that a different standard applied to

temporary takings than to permanent takings. In their

view, a permanent taking would arise when all economi-

cally viable use was denied the property owner, but a

temporary taking could not occur unless the government

regulation denied the owner all use of the property. The

reasons for this distinction are obscure. Such a holding is

not only contrary to this court’s takings jurisprudence

that measures permanent and temporary takings by the

same substantive standard (e.g., First English, 482 U.S. at

318), it is virtually — if not always — impossible for prop-

erty owners to meet. This case is a paradigm. The Special

Master found that “all use” had not been denied because

the owners stored two wrecked cars and a boat inside a

boarded-up old warehouse and used some of the periph-

eral land for parking to serve another building. None of

that interim use made economic sense. None of it would

have warranted purchasing or carrying the property.

None of it was economically viable or productive or

calm iaal

beneficial. Yet such minimal uses can be said to be “avail-

able” in a wide variety of situations. If temporarily stor-

ing two disabled cars and a boat on a valuable downtown

parcel of property is all that is necessary to destroy the

Sth Amendment’s protective shield, then its constitu-

tional protection will be rendered illusory.

Guidance from this Court is made all the more neces-

sary because the core issue in these cases is the meaning

of the 5th Amendment. The interpretation and applica-

tion of that Amendment's protection should not change

depending on the state in which a citizen owns land.

However, because this Court has held that takings litiga-

tion must first be considered by the various state judici-

aries before the federal courts can even consider whether

the 5th Amendment has been violated (Williamson County

Reg. Plan. Commn. v. Hamilton Bank, 473 U.S. 172, 195

[1985]), state courts will continue to be the primary locus

of decision-making in these cases. It is thus imperative

that those 50 local jurisdictions have clear constitutional

guidelines to follow in applying protection of the U.S.

Constitution that will ultimately be measured by adher-

ence to that organic charter.© As shown hereafter, the

decision below conflicts in several important ways with

decisions of other state courts on the same issues. As

addition to the 5th Amendment, it is clear that state courts have

followed this Court’s lead in takings law. See, e.g., Golf Club of

Plantation, Inc. v. City of Plantation, 717 So. 2d 166 (Fla. App.

1998); Kempf v. City of lowa City, 402 N.W.2d 393 (lowa 1987); 614

Company v. Minneapolis Community Dev. Agency, 547 N.W.2d 400

(Minn. App. 1996).

things stand now, there is no uniform federal constitu-

tional law. Instead, geography is destiny.

For example, Louisiana and Delaware agree with the

Ohio courts’ view that a temporary taking does not occur

unless “all use” has been prevented.” But other states

disagree.®

The Ohio Supreme Court’s determination that “the

right to demolish a building and construct a new build-

ing” is not one of the “essential sticks in the bundle” of

property rights (App., p. 9) is directly contrary to the

New York Court of Appeals’ decision in Seawall Associates

v. City of New York, 542 N.E.2d 1059 (1989). In the New

York case, a city ordinance prevented the owners of run-

down, “single room occupancy” hotels from demolishing

them in order to build new structures. The Court held the

ordinance was invalid as a taking of property without

compensation, concluding that “the development rights

which have been totally abrogated by the local law are,

standing alone, valuable components of the ‘bundle of

? Standard Materials, Inc. v. City of Slidell, 700 So.2d 975, 984,

fn. 13 (La. App. 1997); Steen v. County Council, 576 A.2d 642, 649

(Del. Ch. 1989). Connecticut briefly flirted with this standard

(see Port Clinton Associates v. Board of Selectmen, 587 A.2d 126,

133, fn. 15 [Conn. 1991]), but has since abandoned it

(Cumberland Farms, Inc. v. Town of Groton, 247 Conn. 196, 214, fn.

15 [Conn. 1998]).

8 E.g., Lucas v. South Carolina Coastal Council, 424 S.E.2d 484

(S.C. 1992); Sintra, Inc. v. City of Seattle, 829 P.2d 765, 774 (Wash.

1992); 614 Company v. Minneapolis Community Dev. Agency, 547

N.W.2d 400, 406-407 (Minn. Apy. 1996); Woodland Manor III

Associates v. Keeney, 713 A.2d 806, 813 (R.I. 1998); Whitehead Oil

Co. v. City of Lincoln, 515 N.W.2d 401, 407 (Neb. 1994),

rights’ making up their fee interests.” (Seawall, 542 N.E.2d

at 1067.)

It is hardly surprising that such conflict and confu-

sion would appear in lower court Opinions. As this court

itself conceded:

“Regrettably, the rehetorical force of our

‘deprivation of all economically feasible use’

rule is greater than its precision... . ” (Lucas,

505 U.S. at 1016, fn. 7.)

The lack of coherence in the law leads only to confu-

sion and injustice in the lower courts, as each wanders its

Own way to apply standards that lack clear guideposts.

The late Professor Norman Williams put it accurately, if

somewhat pungently, in his nationally recognized text:

“If there are no rules specific enough to control

future decisions, then every case is decided

according to the gastronomic school of jurispru-

dence; that is, this is an area where government

acts according to gut feeling in the individual

case, instead of by rule of law.” (1 Williams,

American Land Planning Law 136 [1988, supp.

1998].)

Bluntly, it is simply intolerable for an important com-

ponent of the Bill of Rights to be applied according to

“gut feeling in the individual case, instead of by rule of

law.” Such chaos would not be tolerated in any other area

of constitutional law - neither should it be permitted

here. (See Dolan v. City of Tigard, 512 U.S. 374, 392 [1994].)

This case presents the Court with the opportunity to

provide clarity to its “economically viable” or “benefi-

cial” or “productive” use test, a formulation that, absent

some elucidation by this Court, remains confusing to the

lower courts and, perhaps more importantly, to

appraisers and land economists who are called upon to

provide testimonial substance to this judicial expression

of principle. As one valuation commentator aptly put it,

this is “one of the most important and perplexing areas of

appraisal theory and practice... . ” (Walter, Appraisal

Methods and Regulatory Takings: New Directions For

Appraisers, Judges, and Economists, 63 Appraisal J. 331

[1995]; emphasis added.) While it is lawyers and judges

who have been wrestling with definitional terms, it is

appraisers and economists who must ultimately apply

them and try to make sense of them in concrete applica-

tions. At the moment, they have precious little to work

with; confusion — not clarity — appears to reign.

REASONS FOR GRANTING THE WRIT

THERE IS CONFUSION IN THE LOWER COURTS

ABOUT THE MEANING OF “ECONOMICALLY

VIABLE USE” OF PROPERTY

Thirteen times in the last two decades, this court has

repeated that, if a regulation deprives a property owner

of the “economically viable use” of his property, a taking

has occurred.

% Penn Central Transp. Co. v. City of New York, 438 U.S. 104,

124 (1978); Kaiser Aetna v. United States, 444 U.S. 164, 174 n. 8

(1979); Agins v. City of Tiburon, 447 U.S. 255, 260 (1980); San Diego

Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 653 (1981)

(dissenting opinion expressing the substantive views of five

Justices); Schad v. Borough of Mount Ephraim, 452 U.S. 61, 68

However, in none of those cases did the Court explain

the criteria of economic viability. The phrase was simply

stated and lower courts were left to shift for themselves.

Not surprisingly, those courts have developed no consis-

tent, or even predictable, definition, leaving litigants (as

well as those who would prefer to order their lives by

clear rules and avoid litigation) adrift.

Commentators are in accord that chaos prevails. The

following is typical:

“This virtually standardless inquiry has pro-

vided little predictability” for property owners,

nor has it served as a reliable guide for govern-

ment action.” (Lawrence, Regulatory Takings:

Beyond the Balancing Test [1988] 20 The Urban

Lawyer 389, 400; emphasis added.)1!0

As the 9th Circuit put it, ” .. . the precise meaning of

‘economically viable use’ of land is elusive and has not

been clarified by the Supreme Court.” (Lake Nacimiento

(1981); Hodel v. Virginia Surface Mining & Reclamation Assn., Inc.,

452 U.S. 264, 296 (1981); Kirby Forest Indus., Inc. v. United States,

467 U.S. 1, 14 (1984); United States v. Riverside Bayview Homes,

474 U.S. 121, 126 (1985); Keystone Bituminous Coa! Assn. v,

DeBenedictis, 480 U.S. 470, 485 (1987); Nollan v. California Coastal

Commn., 483 U.S. 825 (1987); Lucas v. South Carolina Coastal

Council, 505 U.S. 1003, 1015 (1992); Dolan v. City of Tigard, 512

U.S. 374, 385 (1994); Suitum v. Tahoe Reg. Plan. Agency, 520 U.S.

725, __, 137 L.Ed.2d 980, 991, fn. 10 (1997).

'0 For similar assessments, see, e.g., 1988 Zoning and

Planning Law Handbook 14,342 (Gordon, Ed., 1988); 2A Nichols

on Eminent Domain, § 6.03[5] at 6-50 [rev. 3d ed. 1998]; 7 Miller

& Starr, California Real Estate 2d, § 23:19 at 666-667 [2nd ed.

1990, supp. 1999]; 1 Williams, American Land Planning Law,

§ 4.03 at 93 (1988 rev. ed., cum. supp. 1998),

pen ai iii i i

Ranch Co. v. San Luis Obispo County [9th Cir. 1987] 841

F.2d 872, 877.)!! In that case, the absence of standards

permitted the court to ignore testimony that each of the

supposedly permitted uses of land had no economic

value to private property owners. The same thing seems

to have happened below. Here, the Ohio Supreme Court

concluded that there was no deprivation of economically

viable use because of BSW’s two wrecked cars and boat,

and because some space outside could also be used for

parking required for its other building. But none of that

was economically viable use. Those uses were trivial;

they were merely attempts to mitigate the financial sink-

hole that the property became after the City refused to

permit its demolition at the time when redevelopment of

the site would have been productive and feasible.

In sharp contrast with the decisions of the 9th Circuit

and the Ohio Supreme Court, other courts hold that when

this Court insisted that a takings inquiry must examine

all economically viable use of the subject property, the

Court must have intended something beyond any use at

all. Surely, the concept must mean more than some trivial

or theoretical use that consumes more than any property

owner could recoup - or more than some interim storage

of junk, as happened below. It should not even take

11 To this day, courts continue to echo this sentiment. See,

e.g., McQueen v. South Carolina Coastal Council, 496 S.E.2d 643,

650 (S.C. App. 1998) (“the ‘deprivation of all economically

beneficial use’ rule is not imbued with precision”); Woodland

Manor, 713 A.2d at 810 (takings law “hardly a model of clarity”);

614 Company v. Minnesota Community Dev. Agency, 547 N.W.2d

400, 405 (Minn. 1996) (takings law “in a state that remains

unclear”).

cia iii

reference to a dictionary to conclude that “economically

viable” means a use that is capable of producing a pre-

sent (or at least foreseeable or potential) income.!? A

“use” that engenders a loss (or that lacks even the possi-

bility of producing a gain) cannot be considered to be

“economically viable.”}> If anything, such a “use” is eco-

nomically moribund. As one commentator put it:

“Presumably, these concepts require at least

that a property owner be allowed a fair and

reasonable return or profit from his property.”

(7 Miller & Starr, California Real Estate 2d,

§ 23:19 at 667 [2d ed. 1990, supp. 1999].)

It has been the law at least since Nectow v. City of Cam-

bridge, 277 U.S. 183, 187 (1928), that a municipal insistence

on uses that fail to provide the landowner with the

opportunity for a reasonable return is unconstitutional.

12 See Orion Corp. v. State, 747 P.2d 1062, 1073 (Wash. 1987)

(“some present, possible, and reasonably profitable use”); Ranch

57 v. City of Yuma, 731 P.2d 113, 122 (Ariz. 1986) (“a use is not

reasonable unless the landowner can make it economically

productive”); Steel v. Cape Corp., 677 A.2d 634, 648-649 (Md.App.

1996) (“economically viable” means “reasonable”; not

reasonable to expect owner to build pie shaped house); Corrigan

v. City of Scottsdale, 720 P.2d 528, 538 (Ariz. App. 1985)

(“reasonable economic return on his investment”); Hornstein v.

Barry, 530 A.2d 1177, 1185 (D.C.App. 1987) (“reasonable

financial return”).

13 Kempf v. City of lowa City, 402 N.W.2d 393, 398 (lowa

1987) (“the cash flow income would not retire the debt”);

Wheeler v. City of Pleasant Grove, 833 F.2d 167, 271 (11th Cir. 1987)

(“an injury to the property’s potential for producing income or

an expected profit”).

This Court’s decisions provide an additional guide-

post that any use is not the equivalent of economically

viable or beneficial or productive use, by repeatedly refer-

ring to a property owner’s ability to generate a profit from

the property. In Penn Central Transp. Co. v. City of New

York, 438 U.S. 104 (1978), this Court emphasized that the

regulations permitted Penn Central “not only to profit

from the Terminal, but also to obtain a ‘reasonable return’

on its investment” (438 U.S. at 136), which is what saved

the regulation from being a taking of Penn Central's

property. A few years later, in Williamson County, 473 U.S.

at 200, this Court said that one indicator that a taking had

occurred was if the regulation interfered with the

owner's “investment-backed profit expectations.” In Key-

stone, the Court upheld Pennsylvania’s coal mining

restrictions because there was no indication that they

inhibited the mine operators’ ability to “profit” from their

properties. (480 U.S. at 485, 496.) And, in Lucas, 505 U.S.

at 1017, this Court quoted Lord Coke’s famous observa-

tion, “for what is the land but the profits thereof[?]”

The Minnesota Court of Appeals recently concluded

that Lucas elevated the concept of profitable use as a

consideration in the takings analysis and also required

”,

examination of each permitted “use” to determine its

economic viability:

“Lucas calls for compensation based on loss

of economic value. It views property in terms of

uses or options for use and requires that the

uses, seemingly each of them if more than one,

be examined for lack of economic benefit.

Although not including ‘unprofitable’ in its lit-

any of words tied to the concept of economic

use of property, the court (a) uses the synonym

‘beneficial,’ (b) speaks of developmental and

productive uses, and (c) deals with a trial court

finding that evidently equated ‘valueless’ with

the loss of the most profitable use.” (614 Com-

pany v. Minneapolis Community Dev. Agency, 547

N.W.2d 400, 405 [Minn. App. 1996].)

If the ability (or at least the opportunity) to profit

from one’s land is an important part of the takings equa-

tion, then surely this Court’s standard cannot be satisfied,

as the courts below seem to believe, by the storage of a

couple of junk cars and an old boat on a valuable down-

town building site.

Over the years, this Court has steadily increased the

protection it said that property owners are entitled to. In

Nollan, the Court offered protection against the “ . . . cle-

verness and imagination . . . ” of governmental word

games. (483 U.S. at 841.) In First English, the Court said

that such protection was constitutionally mandated even

if it “ . . . lessen{[s] to some extent the freedom and

flexibility of land use planners and governing bodies of

municipal corporations... . ” (482 U.S. at 321.) And, in

Dolan, the Court emphasized that the protection of prop-

erty owners under the 5th Amendment was on the sarne

plane with the protection of other Bill of Rights Guaran-

tees. (512 U.S. at 392.) If those words are to have mean-

ing, then the criteria to be used by the lower courts must

be clear enough that they can be predictably applied. As

of now, they are not.

LOGICALLY, THERE CAN BE ONLY ONE SUBSTAN-

TIVE STANDARD FOR A TAKING, WHETHER IT IS

PERMANENT OR TEMPORARY, BUT THERE IS CON-

FLICT IN THE LOWER COURTS

Although serious problems remain in applying this

Court’s “economically viable use” standard for regula-

tory takings, the decision below intensifies the problems

by adding another layer of confusion —- concluding, for

obscure reasons, that the substantive standards for per-

manent and temporary regulatory takings are different.

The use of such different standards becomes clear in

the opinions of the Court of Appeals (App., p. 44) and the

Recommendation of the Special Master (App., p. 19). The

Court of Appeals evidently believed that, in order for a

property owner to recover for a temporary taking, the

regulatory action must have caused a loss of all use of the

property. (App., p. 44.) Thus, when the Court of Appeals

referred the matter to a Special Master for trial, it set

forth only this single issue:

“whether the city’s 1989 denial of a demolition

permit deprived BSW of all use of its prope. *y.”

(App., p. 53; emphasis added.)

The Special Master plainly felt bound by that state-

ment of the issue and therefore reported that, because

there were things stored inside the boarded-up ware-

house, and some parking for another building available

on the building’s periphery, the City’s action had not

deprived BSW of all use of the property. (App., pp.

26-27.) Based on that finding, the Court of Appeals held

there was no temporary taking. (App., p. 16.)!4 Please

note that this conclusion was consciously divorced from

any concept of economic viability of the remaining

“uses.” All the Special Master and the Court of Appeals

were interested in was whether there was any use remain-

ing, irrespective of its economic rationality.

With respect, that standard makes no sense either

legally or economically, and it creates conflict with the

decisions of other state courts on the same issue.

First, if nothing else, regulatory takings law is com-

plex and confusing enough as it is. There is no reason to

make it worse. Moreover, in First English, this Court's

seminal temporary takings decision, the Court quite evi-

dently was trying to align the law of eminent domain — in

all its facets, whether direct condemnation or physical or

regulatory inverse condemnation, whether permanent or

temporary —_so that elemental doctrinal features would

apply across the board. Thus, in its analysis of a tempor-

ary regulatory taking, this Court relied on permanent

physical inverse condemnation cases (482 U.S. at

316-317), temporary direct condemnation cases (482 U.S.

14 The record below is somewhat blurred because the Ohio

Supreme Court’s opinion abruptly abandons the “all use”

language and says it is applying the standard deprivation of “all

economically viable use” discussed earlier. (App., pp- 6, 7, 8,

11.) But that is not what the Special Master or the Court of

Appeals decided, as the record plainly shows. The decisions the

Ohio Supreme Court reviewed plainly sought only to learn

whether there was a deprivation of all use. Note also, as shown

in the preceding section, that, if the Ohio Supreme Court

thought it was applying the “economically viable use”

standard, the facts simply cannot support it.

at 318), and cases dealing with the fundamental powers

of different branches of government to control the duties

entrusted to them by the Constitution (482 U.S. at

319-321).

Second, as a matter of practical reality, appraisers

and economists are having enough difficulty working

with the standards this Court has already announced. As

a recent appraisal commentary summed it up, “there is

almost universal consensus in the prodigious takings lit-

erature that takings theory is a ‘muddle,’ ‘chaotic,’ ‘unsat-

isfactory,’ ‘unpredictable,’ lacking in ‘doctrine,’ and a

‘mess.’ ” (Walter, Appraisal Methods and Regulatory Takings:

New Directions For Appraisers, Judges, and Economists, 63

Appraisal J. 331 [1995].) There is no reason to add to that

litany, and every reason to simplify it.

Third, there is already conflict in the lower courts on

this issue. The courts below, along with those in Louisi-

ana and Delaware have concluded that First English

requires compensation for a temporary taking only when

“all use” has been precluded. (Standard Materials, Inc. v.

City of Slidell, 700 So.2d 975, 984, fn. 13 [La. App. 1997];

Steen v. County Council, 576 A.2d 642, 649 [Del.Ch.

1989].)!5 And California simply refuses to consider time

15 It is possible that these courts were confused by the

procedural posture of First English. The case had been dismissed

on the pleadings without trial. Thus, what this court had before

it was only the complaint that alleged a deprivation of “all use.”

(First English, 482 U.S. at 308.) Thus, when this Court discussed

the case before it, it did so in the context of the case that had

been pled, i.e., one in which “all use” had been precluded. It

was error for the Ohio courts to translate that contextual

discussion into a categorical legal restriction.

spent in litigation (after a final denial of use) to prove

that the regulation was invalid (or invalidly applied) as a

temporary taking. (Landgate, Inc. v. California Coastal

Commn., 953 P.2d 1188 [1998].)

Other courts have reached a contrary conclusion. For

example, in Cumberland Farms, Inc. v. Town of Groton, 247

Conn. 196 (Conn. 1998), the town denied a variance.

Notwithstanding that the property owners retained some

use of the service station on their property, the Connecti-

cut Supreme Court held that they could pursue compen-

sation for a temporary taking of their property during the

time that it took to litigate the invalidity of the town’s

denial. The court expressly noted that the town’s argu-

ment was “contrary to the holding of First English... . ”

(247 Conn. at 196.) Likewise, in Whitehead Oil Co. v. City of

Lincoln, 515 N.W.2d 401 (Neb. 1994), the Nebraska

Supreme Court rejected the city’s argument that it should

not be liable for a temporary taking because all use of the

property had not been taken, by referring to “the line of

cases which recognizes relief is possible from regulatory

takings which do not deprive the owner of all economic

use of the property.” (5i5 N.W.2d at 407.) On remand

from this Court’s decision in Lucas, the South Carolina

Supreme Court held that a temporary taking had

occurred as a matter of law. (Lucas v. South Carolina

Coastal Council, 424 S.E.2d 484 [S.C. 1992].) This, in spite

of the fact that Mr. Lucas could still “picnic, swim, camp

in a tent, or live on the property in a movable trailer.”

(Lucas, 505 U.S. at 1044 [Blackmun, J., dissenting].)

The facts in Sintra, Inc. v. City of Seattle, 829 P.2d 765

(Wash. 1992) resemble those at bench. The plaintiff

owned a building the court characterized as being in “an

advanced state of disrepair” (829 P.2d at 768), and its new

owner wanted to improve it. At that time, the city had an

ordinance requiring all those who wanted to remove low

income housing units from the market to contribute to a

housing fund. That ordinance was eventually struck

down, but not before it caused the owner of this building

to lose years’ worth of use. The Washington Supreme

Court held that an action for compensation for a tempor-

ary taking was appropriate even though all use had not

been denied. In the court’s words, “a temporary taking is

compensable under the Fifth Amendment, and Sintra

need not prove that the property remained unusable after

the [regulation] was invalidated. [Citing First English.]”

(829 P.2d at 774.) Please note that the same kind of

interim “uses” found available to BSW were available to

Sintra. Nonetheless, Sintra’s action was allowed to pro-

ceed.!6

Moreover, in denying compensation for the years of

non-use caused by the litigation to invalidate illegal regu-

latory action, courts like Ohio and California are in con-

flict with others, including Connecticut, Rhode Island,

Nebraska, and Florida.!”7 These courts have held that a

16 See also 614 Company v. Minneapolis Community Dev.

Agency, 547 N.W.2d 400, 406-407 (Minn. App. 1996) (reduced

occupancy of building sufficient to state claim for temporary

taking where complaint alleged that remaining uses were not

economically viable).

17 Cumberland Farms, Inc. v. Town of Groton, 247 Conn. 196

(Conn. 1998); Woodland Manor III Associates v. Keeney, 713 A.2d

806 (R.I. 1998); Whitehead Oil Co. v. City of Lincoln, 515 N.W.2d

401 (Neb. 1994); Alexander v. Town of Jupiter, 640 So.2d 79 (Fla.

App. 1994).

claim for a temporary taking is proper when the adminis-

trative proceedings have concluded and a final adminis-

trative decision has been made. As the Connecticut

Supreme Court put it, “It is unnecessary for the plaintiff

to await judicial review of the administrative action”

because, as this Court held in First English, invalidation of

the regulatory action would not suffice to provide the

constitutionally-mandated compensation. (Cumberland

Farms, 247 Conn. at 213; emphasis, the Court's.) The

Ohio/California approach, in failing to compensate for

the loss of economically viable use during the litigation

period, conflicts with these state court decisions as well

as First English.

Thus, this Court is now faced with a clutch of utterly

incompatible doctrinal approaches leading to diverse

results in the lower courts. Yet all those courts claim to

apply the same constitutional provision to similar facts.

With all due respect, this isn’t constitutional law - it’s a

Tower of Babel.

State courts, individuals, and government agencies

are in need of a workable rule. There has been enough

litigation in enough courts to demonstrate to this Court

that the application of its doctrine is in disarray. Without

some authoritative indication of the parameters of eco-

nomic viability required to avoid a regulatory taking

claim, lower courts are certain to go on needlessly

expending their own and the litigants’ time and resources

in pursuit of some sort of elusive legal Holy Grail. With-

out intervention and instruction by this Court, the disar-

ray in the lower courts will endure, making the 5th

Amendment rights of individuals (not to mention the

working rules of regulatory agencies) vary depending on

—————————

their geographic location. That defies the basic concept of

supremacy of coherent federal constitutional law. It

should not be permitted to continue.

THERE IS CONFLICT BETWEEN OHIO AND NEW

YORK ON WHETHER THE RIGHT OF A BUILDING

OWNER TO DEMOLISH A DERELICT BUILDING

AND REBUILD ON THE SITE IS A CONSTITU-

TIONALLY PROTECTED PROPERTY RIGHT

When the Ohio Supreme Court reviewed the facts

below, it concluded that preventing BSW from demolish-

ing its decrepit building and replacing it with a modern

one did not destroy “a fundamental attribute of BSW’s

ownership” (App., p. 9) because “the right to demolish a

building and construct a new building” is not one of the

“essential sticks in the bundle of rights that are com-

monly characterized as property” (App., p. 9). Even while

exclude others rose to that protected level, the court

refused to accord similar protection to the owners’ right

to rid themselves of a useless, derelict building (App., p.

9), and build on their land subject only to reasonable

regulations. (Compare Nollan v. California Coastal Commn.,

483 U.S. 825, 834, fn.2 [1987].)

New York’s highest court disagrees. Flatly. On indis-

tinguishable facts. In the mid-1980s, at about the same

time that BSW began its trek through Dayton’s bureau-

cratic labyrinth, New York City enacted a law that

directly affected the rights of investors who bought run-

down residential buildings (called single room occupancy

hotels, or SROs) in order to improve them. To protect the

city’s stock of low income housing, the new law forbade

the demolition of SROs.

When challenged, the law was struck down by the

New York courts. (Seawall Associates v. City of New York,

542 N.E.2d 1059 [N.Y. 1989].) The reasons for that result,

and the judicial reasoning, are directly in conflict with the

result reached below by the Ohio courts. The New York

Court of Appeals recognized the reality that people who

buy dilapidated buildings generally do so with the intent

to demolish them and replace them with something of

greater utility and value, which is a positive thing. Just

like BSW intended here. As the New York court put it

“Unquestionably, the effect of the law is to strip

owners of SRO buildings - who may have pur-

chased their properties solely to turn them into

profitable investments by tearing down and

replacing the existing structures with new ones

(as plaintiffs claim they have) - of the very right

to use their properties for any such purpose.”

(542 N.E.2d at 1066.) “Local Law No. 9 totally

prohibits the sole use - entirely permissible

before the enactment of the law - for which

investment properties are purchased: commer-

cial development.” (542 N.E.2d at 1067.)

Acknowledging that reality, the New York Court of

Appeals next examined whether the right of investors to

purchase old buildings in order to raze and replace them

rose to the level of a constitutionally protected right

within the “bundle of sticks” that we generally view as

property.'® Plainly, it did:

“There can be no question that the develop-

ment rights which have been totally abrogated

by the local law are, standing alone, valuable

components of the ‘bundle of rights’ making up

their fee interests. .. . [D]Jevelopment rights ‘are

an essential component of the value of the

underlying property’... .” (542 N.E.2d at 1067.)

The decisions of Ohio and New York are thus in a

head-on conflict on the question of whether the 5th

Amendment protects the right to demolish and replace a

derelict building. Each opinion professes to be enforcing

the same constitutional provision and purports to be

applying the same precepts from this Court’s jurispru-

dence. Each leads to an opposite result. Both cannot be

right. BSW believes that the New York approach is the

proper one, and the considered reasoning of Seawall Asso-

ciates is preferable to the curt ipse dixit of the Ohio

Supreme Court.!? Whatever the merits of this judicial

18 This Court has frequently used the “bundle of sticks”

analogy when examining property rights. E.g., Ruckelshaus v.

Monsanto Co., 467 U.S. 986, 1011 (1984); Kaiser Aetna v. U.S., 444

U.S. 164, 174 (1979); Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419, 435 (1982).

19 Whatever can be said in support of laws that require

owners of truly historical structures to preserve them

necessarily falters when the municipal usage to conserve

applies to a decrepit derelict of a building with no pretense of

historical or architectural significance. The police power does

not stretch far enough to justify the conscription of American

citizens as involuntary keepers of useless and economically

irreparable structures. It is one thing to say of a building,

dispute, however, the one clear thing that emerges is that

the country will be better off if this Court provides some

guidance now, before the confusion spreads further,

needlessly consuming the time, efforts, and resources of

litigants and courts alike.

CONCLUSION

For years, this Court has emphasized the “ad hoc”

nature of regulatory takings law. (E.g., Ruckelshaus v,

Monsanto Co., 467 U.S. 986, 1005 [1984]; Kaiser Aetna v,.

U.S., 444 U.S. 164, 175 [1979]; Penn Central Transp. Co. v.

City of New York, 438 U.S. 104, 124 [1978].) Acknowledg-

ing the merit in the Court’s reluctance to declare “one

size fits all” rules, there comes a point beyond which the

need for some more rigorous doctrine asserts itself.

Courts and commentators from around the country and

from all points of the regulatory / political spectrum decry

the absence of useful criteria for determining when gov-

ernmental action crosses the line and violates the consti-

tution. A situation in which neither the regulators nor the

regulated can tell what action is constitutional until the

last appeal to the last available court is exhausted serves

neither the regulators nor the regulated - nor the courts.

But that is essentially where this branch of jurisprudence

finds itself today.

George Washington slept here;” it is quite another to force a

landowner to provide sleeping quarters to transients and

vandals. That is simply unreasonable, and unconstitutional.

[his case presents the Court with the opportunity to

take the first badly needed step to clarify the law defining

‘economically viable use,” as weli as the substantive

requirements for temporary takings. BSW prays that the

Court take that opportunity and grant certiorari to review

the manifest injustice wrought below.

Respectfully submitted,

MicHaet M. Bercer*

BerGer & Norton

and

DwicHt D. BRANNON

Counsel for Petitioner

*Counsel of Record

APPENDIX CONTENTS

Appendix

Page No.

A. OPINION FROM THE OHIO

SUPREME COURT

ENTERED 10/14/96 ..........-ccccoccoccescecseseccesseseore. l

B. RECONSIDERATION ENTRY

OHIO SUPREME COURT

ENTERED 11/18/98 00000....ccccccsccscssesesescesceceecee. 15

ts ENTRY OVERRULING REALATOR’S

OBJECTIONS AND DENIAL OF

WRIT OF MANDAMUS*

ENTERED 01/23/1998 .00...eccccceccecceceecesceeees 16

D. REPORT AND RECOMMENDATION

OF SPECIAL MASTER*

ENTERED 10/15/1997 ooo. ccccccccccecessesseeees 18

FE. JOURNAL ENTRY*

ENTERED 10/15/97 .0....cccccccsesscccececceceessesee. 29

’. DECISION AND ORDER*

BOW BPRS ED CID TIDE cacccsvcsevversesecesressessecesssdaves, 3]

: COURT OF APPEALS FOR MONTGOMERY

COUNTY, OHIO, SECOND APPELLATE

DIVISION

G. OPINION

COURT OF APPEALS FOR

MONTGOMERY COUNTY, OHIO

SECOND APPELLATE DISTRICT

Eade 8 RIED SP FTI siicencecvnvnscconesvcancuvsneusovidentel 54

H. JUDGMENT ENTRY

COMMON PLEAS COURT OF

MONTGOMERY COUNTY, OHIO

CIVIL DIVISION

BIN EERE? (PAP OUIIE D cecicceseseciverserssesreresseseectas 62

I. DAYTON ZONING CODE

HISTORICAL DISTRICT

AL AEAD. © EDU S IPN NAOD wrcksscessievvvcessnestesys 69

J REVISED HISTORIC DISTRICT

ORDINANCE

R.C.G.O. §§44.50-44.52, 44.55, 44.57,

150.45, 150.230-150.2599 ....ccccscccsessesseesseeeees 108

App.

SUPREME COURT, JANUARY TERM, 1998

(83 Ohio St. 3d

Statement of the Case

[THE STATE EX REL.] BSW DEVELOPMENT GROUP.

APPELLANT,

v. CITY OF DAYTON ET AL. APPELLEES.

[Cite as Sate ex rel. BSW Dev. Group v. Dayton (1998), 83

ra Ohio St. 3d 338.]

Mandamus to compel respondents to commence

appropriation proceedings on relator’s building

after respondents denied a demolition permit for a

building listed on theNational Register of Historic

Places — Writ denied, when.

(No. 98-473-submitted August 19, 1998-Decided October

14, 1998.)

APPEAL from the Court of Appeals for Montgomery

County, No. 15186.

In the late-nineteenth century, a building now

known as the Wilcon Building was constructed along the

Miami-Erie Canal in Dayton. The building was Originally

used for various enterprises, including linseed oil

manufacturing, flour milling, and wheat and tobacco

storage. By the 1980's, Wilcon Corporation (“Wilcon”).

Dayton Tire Sales, and Wat-kem Mechanical, Inc. (““Wat-

kem”) each occupied one-third of the building. Wilcon

Corporation, a construction company owned and operated

by Dennis Williams, had its office as well as a millwork

shop and storage area in the building. Dayton Tire used its

portion of the building for tire sales and installation in

App. |]

addition to other automotive services. Wat-kem, a

mechanical contracting company, had an office and storage

space in the building.

In 1984, BSW Development Group (“BSW”), a

partnership composed of attorney Dwight D. Brannon,

accountant William I. Schoenfeld, and Williams, purchased

the Wilcon Building and adjoining property for $315,000.

BSW subsequently sold a portion of the property that did

not include the Wilcon Building for $250,000. BSW

decided to develop an office park consisting of two new

buildings on the remaining land. Pursuant to its

development plan, BSW demolished the existing building

on the property adjacent to the Wilcon Building and

constructed a new building called Canal North, which BSW

made available fur lease. BSW planned then to tear down

the Wilcon Building and construct a new building to be

known as Canal South on the property.

In anticipation of the demolition of the Wilcon

Building, Wilcon moved to the Canal North building in

January 1989, and Dayton Tire vacated the Wilcon

Building after BSW brought an eviction action. Wat-kem

had previously vacated the Wilcon Building. At the time

that Wilcon and Dayton Tire vacated the Wilcon Building.

Wilcon and Dayton Tire were paying approximately

$18,000 and $23,000 in annual rent, respectively. Before

moving out of the building, Wilcon renovated its space by

constructing new offices, including a computer room and a

kitchenette, leveling and carpeting the floors, and

reworking the electrical and sanitary systems to bring that

portion of the building into compliance with the Dayton

Building Code.

In March 1989, BSW applied to appellee city of

Dayton for a permit to demolish the Wilcon Building.

App 2

Dayton refused BSW’s application because BSW had not

complied with Section 150.45 of the Dayton Revised Code

of General Ordinances, which provides that “[w]henever an

application is made for a demolition permit for any

structure or site listed on or eligible for the National

issued until the applicant has complied with the provisions

of Section 150.246 of the R.C.G.O. irrespective of any

other provisions of this subchapter.” BSW then applied

under Section 150.246 of the city code for a certificate of

appropriateness from appellee Dayton Landmark

Commission. In July 1989, the commission denied BSW’s

application because BSW failed to introduce clear evidence

that the square foot cost of meeting the minimum building

code would exceed the square foot market value of

similarly used and improved structures in the planning

district. In October 1989, appellee Dayton Board of

Zoning appeals affirmed the decision of the Landmark

Commission. The “as is” value of the Wilcon Building and

property at that time was $220,000.00.

Section 150.246 of the Revised Code of General Ordinances of

Dayton provides:

“ A demolition permit shall not be issued unless

accompanied by an approved Certificate of Appropriateness.

(he Landmark Commission may only approve a Certificate of

Appropriateness if:

“(A) The applicant has given clear evidence that one of

the following conditions exist(s):

“ee *

(4) The square foot cost of meeting the minimum

building code would exceed the Square foot market value of

similarly used and improved structures in the planning district.”

App. 3

BSW appealed the board’s decision to the

Montgomery County Court of Common Pleas. In 1991, the

common pleas court reversed the board’s decision. The

common pleas court concluded that the Landmark

Commission and the board of zoning appeals had denied

BSW due process and equal protection and that Dayton’s

historic preservation ordinances were unconstitutional as

applied to BSW’s property. Upon further appeal by the

board in May 1993, the Court of Appeals for Montgomery

County affirmed the common pleas court’s decision. In so

holding, however, the court of appeals determined that it

was unnecessary to pass upon the constitutionality of the

ordinances because “BSW fulfilled the stringent

requirements of R.C.G.O. 150.246(A)(4) for obtaining the

certificate of appropriateness and therefore should have

been granted the demolition permit.”

Following the court of appeals’ May 1993

judgment, the Dayton Historic Preservation Officer notified

BSW that the Landmark Commission would issue a

certificate of appropriateness for the requested demolition

permit when BSW _ complied with the remaining

requirements of Section 150.246 by submitting a reuse plan

and requesting a waiver of the fee and bond requirements.

The reuse plan requirement is not burdensome, and Dayton

was willing to waive the fee and bond requirements.

Instead of submitting a reuse plan and requesting a

waiver of the fee and bond requirements, BSW filed an

action in the common pleas court alleging, among other

things, that appellees, Dayton, the Landmark Commission,

and the board of zoning appeals, had taken BSW’s Wilcon

Building property, thereby entitling BSW to compensation

for the taking. In 1995, following removal of the action to

a federal district court, the district court granted summary

judgment against BSW on its Fifth Amendment takings

claim because BSW had not exhausted its state remedies by

App. 4

iin

seeking a writ of mandamus to compel Dayton to

commence appropriation proceedings.

BSW then filed a complaint in the Court of Appeals

for Montgomery County for a writ of mandamus to compel

appellees to commence appropriation proceedings on the

Wilcon Building property. BSW claimed that it was

entitled to be compensated for the city’s unconstitutional

taking of its property, which resulted from appellees’ denial

of BSW’s demolition permit. BSW did not assert any

claim that it was entitled to extraordinary relief because the

Dayton ordinances relied upon by the Landmark

commission and the board of zoning appeals were

unconstitutional or that the city officials fraudulently and

intentionally misrepresented the landmark status of the

Wilcon Building.

The parties submitted evidence and BSW filed a

motion for summary judgment. In its summary judgment

motion, BSW raised the claim that the Dayton historic

preservation ordinances were unconstitutional. The

evidence established that after the city's 1989 denial of the

demolition permit, BSW abandoned the Wilcon building

property, resulting in hazards to the public, including to

homeless persons trespassing on the property. BSW had

the heat and electricity to the building disconnected

Despite several requests by city officials for BSW to secure

the property for the safety of the public, BSW failed to act.

Dayton then secured the entrance to the Wilcon building to

prevent the general public from accessing the property in

order to keep the premises safe. BSW, however, was

provided keys to all of the padlocks and was never

prevented from accessing the property after the demolition

permit was denied. Following the court of appeals’ 1993

judgment, Dayton did not restrict BSW’s right and ability

to use the property or to demolish the Wilcon Building

App. 5

In March 1996, the court of appeals issued a

decision denying BSW’s motion for summary judgment

because BSW had not established a permanent, temporary,

or physical taking of its property. The court of appeals

declined to address BSW’s contention that the Dayton

historical preservation ordinances were unconstitutional.

The court of appeals referred the case to a special master in

order to determine the sole issue of whether the city’s 1989

denial of the demolition permit deprived BSW of all

economically viable use of its Wilcon Building property.

The special master then conducted hearings on the

foregoing issue. At the hearings, the evidence established

that following the 1989 denial of the demolition permit,

BSW used the property surrounding the Wilcon Building

for parking, including spaces for one of its Canal North

tenants and monthly rental spaces for the general public.

BSW also stored a boat and two wrecked cars in the

building.

In addition, Michael Cromartie, the city’s chief

building official, testified that the building was structurally

sound and that the city did not require a prospective

building tenant to obtain a new certificate of occupancy

before leasing the property even if code violations existed

in other parts of the building, as long as the use of that

portion of the building remained the same as it had been for

the previous tenant. Cromartie admitted, however, that

BSW had to remedy a few serious hazards, i.e., lack of fire-

wall enclosures for the elevator and parts of stairways, and

repair of the building’s electrical system, before any tenant

could move back into the building. These hazards existed

at the time that appellees denied BSW’s demolition permit.

In 1997, the special master issued a report

recommending that the court of appeals deny the writ of

mandamus because appellees’ denial of a demolition permit

did not deprive BSW of all economically viable use of its

property. In 1998, the court of appeals overruled BSW’s

objections to the special master’s report, adopted the

special master’s findings of fact and conclusions of law,

and denied the writ.

This case is now before the court upon a appeal as

of right.

Dwight D. Brannon & Associates, Dwight D. Brannon and

Walter J. Krygowski, for appellant.

Freund, Freeze & Arnold, Neil F. Freund and Shawn M

Blatt, for appellees.

Per Curiam. BSW asserts that the court of appeals erred

by denying a writ of mandamus to compel appellees to

commence appropriation proceedings. Mandamus is the

appropriate vehicle for compelling appropriation

proceedings by public authorities where an involuntary

taking of private property is alleged. State ex rel. Levin y

Sheffield Lake (1994), 70 Ohio St. 3d 104, 637 N.E. 2d

319, 323, citing State ex rel. McKay v. Kauer (1951), 156

Ohio St. 347, 46 O.0. 204, 102 N.E. 2d 703, paragraph

three of the syllabus. In these actions, the court, as the trier

of fact and law, must determine whether the private

property had been taken by the public authority. Levin, 70

Ohio St. 3d at 108, 637 N.E. 2d at 323. The United States

and Ohio Constitutions guarantee that private property shall

App. 7

not be taken for public use without just compensation.

Fifth and Fourteenth Amendments to the United States

Constitution; Section 19, Article |, Ohio Constitution; see,

also, R.C. Chapter 163.

In its various propositions of law, BSW contends

that the court of appeals erred by (1) limiting the special

master’s evidentiary hearings to a single issue, (2) placing

the burden of proof on BSW, (3) concluding that the

evidence did not establish a compensable taking, (4)

refusing to grant BSW’s request for a declaratory judgment

on the constitutionality of Dayton’s historic preservation

ordinances, and (5) declining to grant the writ based on

Dayton officials’ fraudulent and intentional

misrepresentation regarding eligibility of the Wilcon

building for landmark status.

For the following reasons, however, BSW’s

contentions are meritless, and we affirm the judgment of

the court of appeals.

First, the court of appeals properly limited its

special master’s evidentiary hearings to the single issue of

whether BSW had been denied all economically viable use

of its property during the period that the city improperly

denied the demolition permit. BSW argues that it

established a permanent taking of its Wilcon Building

property in which the city physically invaded the property.

In cases of either physical invasion of the land or the

destruction of a fundamental attribute of ownership like the

right of access, the landowner need not establish the

deprivation of all economically viable uses of the land.

See, e.g., Lucas v. South Carolina Coastal Council (1992),

505 U.S. 1002, 1015, 112 S. Ct. 2886, 2893, 120 L.Ed. 2d

798, 812-813; State ex rel. OTR v. Columbus (1996), 76

Ohio St. 3d 203, 667 N.E. 2d 8, syllabus.

App. 8

Notwithstanding BSW’s assertions, appellees

established that any alleged taking was not permanent.

After the court of appeals’ May 1993 judgment holding that

BSW should have been granted the certificate of

appropriateness for the demolition permit, the city advised

BSW that the Landmark Commission would issue a

certificate of appropriateness for the requested demolition

upon satisfaction of certain ministerial requirements. But

BSW refused to seek the demolition permit at that time,

although appellees would not have opposed its issuance.

The evidence also established that any alleged

taking resulted neither from physical invasion of BSW’s

land nor destruction of a fundamental attribute of BSW’s

ownership, such as the right to access public streets or

highways on which the land abuts. See, e.g., Lucas, 505

U.S. at 1015, 112 S. Ct. at 2893, 120 L.Ed. 2d at 812-813:

OTR, 76 Ohio St. 3d 203, 667 N.E. 2d 8, syllabus.

Dayton’s attempts to safeguard the public after BSW

essentially abandoned the Wilcon Building did not restrict

BSW'’s ability to access and use the property. And BSW

cites no persuasive authority that mandates a holding that

the right to demolish a building and construct a new

building is “’one of the most essential sticks in the bundle

of rights that are commonly characterized as property.’”

Dolan v. Tigard (1994), 512 U.S. 374, 384, 114 S. Ct.

2309, 2316, 129 L.Ed. 2d 304, 316 quoting Kaiser Aetna v

United States, (1979), 444 U.S. 164, 176, 100 S.Ct. 383.

391, 62 L.Ed 2d 332, 344 (involving issues of access, i.e.

the right to exclude others); OTR (right of access); see.

also, Corn v. Lauderdale Lakes (C.A. 11, 1996), 95 F.3d

1066, 1074-1075, where the court held that the developer

had to prove that the alleged taking deprived him of all

economically viable uses of land because his land had not

been physically invaded and he did not “contend that the

App. 9

right to build a mini-warehouse is a fundamental attribute

of ownership.”

Therefore, given BSW’s failure to properly raise

any constitutional issue of whether the Dayton historic

preservation ordinances substantially advance legitimate

state interests, as discussed infra, BSW could only establish

entitlement to appropriation proceedings if it established

that appellees’ denial of the demolition permit denied BSW

all economically viable use of the Wilcon Building

property. In other words, “in order for the landowner to

prove a [regulatory] taking, he or she must prove that the

application of the ordinance has infringed upon the

landowner’s rights to the point that there is no

economically viable use of the land and, consequently, a

taking has occurred for which he or she is entitled to

compensation.” Goldberg Cos., Inc. v. Richmond Hts. City

Council (1998), 81 Ohio St. 3d 207, 210, 690 N.E.2d 510,

512.

More specifically, the United States Supreme Court

held as follows regarding when the denial of a property-use

permit constitutes a regulatory taking:

“A requirement that a person obtain a permit before

engaging in certain use of his or her property does

not itself ‘take’ the property in any sense: after all,

the very existence of a permit system implies that

permission may be granted, leaving the landowner

free to use the property as desired. Moreover, even

if the permit is denied, there may be other viable

used available to the owner. Only when a permit is

denied and the effect of the denial is to prevent

‘economically viable’ use of the land in question

can it be said that a taking has occurred.”

(Emphasis added.) United States v. Riverside

App. 10

Bayview Homes, Inc.(1985), 474 U.S. 121, 127, 106

S.Ct. 455, 459, 88 L.Ed. 2d 419, 426.

Based on the foregoing, the court of appeals

appropriately restricted the scope of its special master’s

task to resolving the sole issue of whether the denial of the

demolition permit deprived BSW of all economically

viable use of its property.

Second, the court of appeals did not err by placing

the burden of proof on BSW. BSW had the burden of

proving entitlement to extraordinary relief in mandamus,

including the establishment of a clear legal right to

appropriation proceedings because of the deprivation of all

economically viable use of the land. See, e.g., State ex rel.

Serv. Emp. Internatl. Union, Dist. 925 v. State Emp.

Relations Bd.(1998), 81 Ohio St. 3d 173, 176-177, 689

N.E. 2d 962, 965; Goldberg Cos., 81 Ohio St.3d at 210,

690 N.E. 2d at 512; Ketchel v. Bainbridge Twp. (1992), 70

Ohio App. 3d 174, 179, 607 N.E. 2d 22, 25.

hird, the court of appeals correctly concluded that

BSW did not establish a compensable taking. The court of

appeals held that the denial of BSW’s demolition permit

did not deprive it of all economically viable use of the

Wilcon Building property. Reviewing courts defer to a

lower court’s factual determination if it is supported by

competent, credible evidence. State ex rel. Fleming v.

Rocky River Bd. of Edn.(1997), 79 Ohio St. 3d 200, 205,

680 N.E. 2d 981, 984-985.

Here, competent, credible evidence supports the

court of appeals’ holding. The city’s chief building official

testified that the Wilcon building is structurally sound and

that building tenants would not require new certificates of

occupancy if they continued previous tenants’ uses. In

App. 11

addition, at least two-thirds of the building had been used

by at least two different businesses for several years just

before the denial of the demolition permit, and that portion

of the building could have continued to have been used by

those businesses if they had not vacated the building. See,

The Shopco Group v. Springdale (1990), 66 Ohio App. 3d

702, 708, 586 N.E. 2d 145, 150, holding that a “deprivation

of * * * economic or development rights does not amount

to a denial of all use of one’s property, including the rights

of possession and use of the property.” The property

continued to be used for parking and storage after the

denial of the permit. Further, any serious hazards that

requ:zed repair prior to leasing the building existed before

the permit denial. Finally, “something more than loss of

market value or loss of the comfortable enjoyment of the

property is needed to constitute a taking.” State ex rel. Pitz

v. Columbus (1988), 56 Ohio App. 3d 37, 41, 564 N.E. 2d

1081, 1086; see, also, First English Evangelical Lutheran

Church of Glendale v. Los Angeles C ty.(1987), 482 U.S.

304, 320, 107 S. Ct. 2378, 2388, 96 L.Ed. 2d 250. 267.

Fourth, the court of appeals did not err by refusing

to consider BSW’s request for a declaratory judgment on

the constitutionality of Dayton’s historic preservation

ordinances. BSW did not request this relief in its complaint

and did not amend its complaint to include this claim.

When BSW raised this constitutional issue in its initial

merit brief and motion for summary judgment in the court

of appeals, appellees did not expressly or impliedly consent

to litigation of the claim. Therefore, the court of appeals

did not need to consider this constitutional claim. State ex

rel. Massie v. Gahanna-Jefferson Pub. Schools Bd of Edn.

(1966), 76 Ohio St. 3d 584, 589, 669 N.E. 2d 83. 843.

BSW does not assert that it properly pled this claim in the

court of appeals.

App. 12

In addition, while the constitutionality of a statute

or ordinance may in certain limited circumstances be

challenged by mandamus, see State ex rel Purdy vy.

Clermont Cty. Bd. of Elections (1997), 77 Chio St. 3d 338,

341, 673 N.E. 2d 1351, 1354, courts decide constitutional

questions only when “absolutely necessary.” Norandex,

Inc. v. Limbach (1994), 69 Ohio St. 3d 26, 28, 630 N.E. 2d

329, 331. Resolution of the constitutionality of Dayton’s

historic preservation ordinances was not absolutely

necessary here because, as the court of appeals concluded,

any alleged taking resulted from the improper denial by

appellees of the demolition permit under the pertinent

ordinances rather than the unconstitutionality of those

ordinances. Therefore, the constitutional issue was not

properly before the court of appeals in that the true

objective of BSW’s request was a declaratory judgment,

which the court of appeals lacked jurisdiction to grant.

Wright v. Ghee (1996), 74 Ohio St. 3d 465, 466, 659 N.E.

2d 1261, 1262. See, e.g BSW’s summary judgment

motion, where it claimed entitlement to a “declaration of

the constitutionality of the [historical preservation

ordinances], in whole and/or in part, and in its application

to the entire public and/or BSW, under the circumstances at

bar or in its general application to all.”

Finally, BSW also waived its claim that it was

entitled to the requested writ of mandamus because of

appellee’s fraudulent and intentional misrepresentation by

not properly pleading or raising this claim in the court of

appeals. Massie, 76 Ohio St. 3d at 589, 669 N_E. 2d at 843.

Reviewing courts do not consider questions that have not

been presented to the court whose judgment is sought to be

reversed. State ex rel. Quarto Mining Co. v. Foreman

(1997), 79 Ohio St. 3d 78, 81, 679 N.E. 2d 706, 709.

Based on the foregoing, the court of appeals

properly denied BSW’s request for extraordinary relief in

mandamus. Accordingly, the judgment of the court of

appeals is affirmed.

Judgment affirmed

MOYER, D.J.,. DOUGLAS, RESNICK, F.E. SWEENEY,

PFEIFER, COOK and LUNDBERG STRATTON, JJ..

CONCUTr.

App 14

THE SUPREME COURT OF OHIO

1998 TERM

BSW Development Group, * Case No. 98-473

Appellant,

* RECONSIDERATION

V. * ENTRY

The City of Dayton, et al. .

Appellees. * (Montgomery County)

(Filed 11/18/98)

IT IS ORDERED by the Court that the motion for

reconsideration in this case, and hereby is, denied.

(Court of Appeals No. 15186)

s/s THOMAS J. MOYER

Chief Justice

App 15

IN THE COURT OF APPEALS FOR MONTGOMERY

COUNTY, OHIO

BSW DEVELOPMENT GROUP*

Relator CASE NO. 15186

V. °

THE CITY OF DAYTON. FT AL.

Respondents

° 28 et 2 8.2.2 e 4

PER CURIAM:

On October 15, 1997, the Special Master, Steven C.

Hollon, issued his report and recommendations in this

matter. He recommended that the petition for writ of

mandamus compelling appropriation be denied.

On November 12, 1997, the Relator filed its

objections to the Special Master’s Ieport and

recommendations. On December 1, 1997. the Respondent

filed its response to the Relator’s objections.

After careful consideration, we overrule the

Relator’s objections and adopt the actual findings of the

Special Master and conclusions of law by him in their

entirety. Accordingly, the petition for writ of mandamus is

hereby DENIED.

IT IS SO ORDERED.

s/s JAMES A. BROGAN. Judge

App. 16

s/s WILLIAM _H. WOLFF, JR.

Judge

S/S TH¢ IMAS J ( iR ADY, Judge

Copies mailed to

Dwight D. Brannon, Esquire

Walter J. Krygowski, Esquire

P.O. Box 750425

Dayton, Ohio 45475-0425

Neil F. Freund, Esquire

1800 One Dayton Centre

| S. Main Street

Dayton, Ohio 45402-2017

IN THE COURT OF APPEALS FOR MONTGOMERY

COUNTY, OHIO

SECOND APPELLATE DISTRICT

BSW DEVELOPMENT GROUP * Case No. CA 15186

Plaintiff-Relator * Issued October 15, 1997

THE CITY OF DAYTON

Defendant-Respondent

REPORT AND RECOMMENDATION

This matter is before the court upon a petition for a

writ of mandamus filed by relator, BSW Development

Group, seeking this court to direct respondent, the city of

Dayton, to commence appropriation proceedings regarding

certain property owned by relator and located on South

Patterson Boulevard in Dayton. In a per curiam decision

and order issued on March 27, 1996, this court overruled

BSW’s motion for summary judgment on its petition.

In its ruling, the court framed the pertinent issue as

“whether a temporary regulatory taking occurred from

October 16, 1989, when the Dayton Board of Zoning

Appeals affirmed the Landmark Commission’s decision

denying a demolition permit, until May 7, 1993, when this

court ruled that BSW should receive a permit.” BSW

Development Group v. City of Dayton (March 27, 1996),

Montgomery App. No. 15186, unreported. Furthermore,

the court found First English Evangelical Luthern (sic)

Church of Glendale v. City of Los Angeles (1987), 482 U.S.

App. 18

;

Re ee eee eek ko

ee a er ee

;

304, controlling on the issue of whether a temporary,

regulatory taking occurred. The court noted that under

First English the government’s conduct must deprive a

property owner of “all use” of his property before a

temporary, regulatory taking will arise. Also in its March

27, 1996 ruling the court found that a factual dispute

existed regarding whether the city’s 1989 denial of a

demolition permit deprived BSW of all use of the property

in question. As a result, the court ordered an evidentiary

hearing to be conducted by the undersigned as a special

master on that narrow issue. The hearing took place on

May 15, May 16, and June 24, 1997. Based upon

testimony presented at those proceedings, other evidence

before the court, and applicable law, the special master

finds that the city’s denial of a demolition permit did not

deprive BSW of all use of its property. Consequently,

BSW has not demonstrated a temporary, regulatory taking

of its property, and its petition for a writ of mandamus

compelling appropriation should be denied.

;. Findings of Fact

The court’s March 27, 1996, decision and order

denying

summary judgment on BSW’s petition includes a thorough

review of the facts and circumstances giving rise to the

present dispute. Those facts need not be repeated in detail

here. Following the court’s summary judgment ruling, the

only remaining issue is whether the city of Dayton’s denial!

of a demolition permit deprived BSW of all use of its

property from October 1989 to May 1993. BSW had

sought permission from the city to demolish a structure

known as the “Wilcon Building” sited on the property

Testimony presented at the evidentiary hearing established

that in the months preceding October 1989 two commercial!

tenants occupied the Wilcon Building. The Wilcon

App. 19

Corporation, a construction company owned by Dennis

Williams, a BSW partner, occupied approximately one

third of the building and paid BSW somewhere between

$12,200 and $18,000 annually in rent. The Dayton Tire

Company also occupied approximately one-third of the

building. It paid BSW about $23,000 annually in rent.

These companies had used the Wilcon Building for

warehouse and/or office space. Additionally, a third

company, Wat-Kem, had occupied a portion of the Wilcon

Building until 1985, but no evidence was presented

regarding the company’s payment of rent.

The parties do not dispute that in January of 1989

the Wilcon Corporation voluntarily vacated the building in

anticipation of BSW securing a demolition permit, razing

the building, and erecting a new office complex. Based

upon the testimony presented at the hearing, the special

master also finds that BSW informed Dayton Tire of its

intention to demolish the Wilcon Building and that Dayton

Tire agreed to vacate the premises by March !, 1989. After

Dayton Tire failed to vacate as promised, however, BSW

initiated eviction proceedings against the company in May

of 1989, and Dayton Tire subsequently left the property.

As a result, when the Dayton Board of Zoning Appeals

affirmed the Landmark Commission’s denial of a

demolition permit on October 16, 1989, the Wilcon

Building was empty and, at BSW’s request, the Dayton

Power & Light Company had discontinued power to the

building.

Following the demolition permit denial, Dwight

Brannon, a BSW partner, and his associates, stored two

wrecked automobiles and a boat in the Wilcon Building.

Additionally, from 1989 to the present, BSW has used the

Wilcon Building property for public and private parking.

More specifically, BSW has utilized the property to create

fifty-eight public parking spaces and twenty-eight private

spaces for United Way employees. Of the fifty-eight public

App. 20

parking spaces, approximately thirty were rented at the

time of the hearing, with each space generating $25 per

month in income. The private spaces were provided to the

United Way in conjunction with its lease of space in

BSW’s adjacent Canal North Building. Consequently, the

parking space availability at the Wilcon Building site has

assisted BSW in filling space in its other building.

The special master finds credible the testimony

from Michael Cromartie, chief building official for the city

of Dayton, that following the city’s denial of the demolition

permit no new certificate of occupancy would have been

required before a tenant could occupy the Wilcon Building,

provided the new tenant used the same area that the Wilcon

Corporation or Dayton Tire had used, and that the new

tenant utilized the space in the same way as the former

tenants. Cromartie admitted on cross-examination,

however, that irrespective of the certificate of occupancy

issue, his office would have required any new tenant to

correct existing “serious hazards” before occupying the

Wilcon building.

Consequently, after the Wilcon Corporation and

Dayton Tire vacated the building in 1989, BSW could not

have leased space in the Wilcon Building, whether for

warehouse or office use, without first repairing certain

“serious hazards.” In light of this requirement, BSW

suggests that it would have been required to spend

$457,000 to bring the Wilcon building “up to code.”

BSW’s estimate, however, is an estimate for causing the

entire building to meet the specifications in the building

code. The special master finds that simply repairing the

“serious hazards” in the portions of the building formerly

occupied by the Wilcon corporation and Dayton Tire would

have cost significantly less and would have allowed BSW

to lease those portions of the building to a tenant

performing the same function as either Dayton Tire or the

Wilcon Corporation. This reduced investment would have

App. 2]

allowed BSW to make the same use of the Wilcon Building

as it had before its tenants left and the city of Dayton

denied its demolition permit. Bringing the building “up to

code” would not have been required if a new tenant had

moved into an area for which a certificate of occupancy had

been issued and had performed the same function as the

former tenants. (Vol. 3, Pgs. 168-170). The only

requirement was that serious hazards be corrected.

Furthermore, any hazardous conditions in the Wilcon

Building existed before the city denied the demolition

permit and stemmed solely from BSW’s failure to maintain

the building and not from the city’s permit denial. The

city’s failure to issue a permit in October of 1989 did not

cause any “serious hazards” existing at that time.

Additionally, testimony from John Price, a witness

for BSW, revealed that in the 1980s the Wilcon

Corporation renovated a portion of the Wilcon Building’s

third floor, brought that portion of the building “up to

code,” and used the area for office space. The Wilcon

Corporation also used other portions of the building for

warehouse and storage space. Likewise, Dayton Tire used

a significant part of the building for storage, office space,

and service bays shortly before BSW sought the demolition

permit. Finally, testimony from the evidentiary hearing

established that the Wilcon Building property retained a

value of more than $200,000 even after the city denied the

demolition permit. The majority of this value, however,

rested in the land itself and not the Wilcon Building.

Il. Conclusions of Law

In its March 27, 1997, decision and order denying

BSW’s motion for summary judgment, the court

determined that a temporary, regulatory taking exists only

when government regulations deprive a property owner of

“all use” of his land during the time the regulations are in

App. 22

effect. As the court recognized, the United Sates Supreme

Court in First English, supra, determined that “where the

government’s activities have already worked a taking of all

use of property, no subsequent action by the government

can relieve it of the duty to provide compensation for the

period during which the taking was effective.” First

English, supra, at 321.

The First District Court of Appeals in The Shopco

Group v. City of Springdale (1990), 66 Ohio App. 3d 702,

recognized First English’s requirement that a temporary,

regulatory taking requires a property owner to be deprived

of “all use” of his land. The Shopco appellants argued that

the city’s zoning restrictions upon their real estate

constituted a taking for the time the restrictions were in

effect. The regulations, which ultimately were amended,

had prevented the appellants from transforming their

property from a park into commercial real estate. The

appellants contended “that the property could not be

profitably developed in conformance with the zoning

restrictions previously in effect, that the restrictions, before

their amendment, deprived [the appellants] of the ability to

sell or obtain any economic value from the property, and

that such a deprivation amounted to a temporary taking of

the property."” /d. at 704.

Finding the appellant’s argument unpersuasive, the

Hamilton County Court of Appeals first recognized the

general rule that “the application of a general zoning law to

a particular property effects a taking if the ordinance does

not substantially advance legitimate state interests or denies

an Owner economically viable use of his land.” /d. at 705.

[he court then noted that Ohio cases following this rule

involved the “permanent deprivation of at least a portion of

a property owner's use of his property***.” /d By

contrast, the court found the foregoing “weighing analysis”

inapplicable in cases involving temporary, regulatory

takings. Instead, the court found First English, supra.

App.

applicable to cases involving the temporary deprivation of

a property owner's rights. /d. at 705-706. The Shopco

court aiso expressed its inability to locate binding precedent

extending “First English’s remedy of compensation for

temporary takings to facts other than a deprivation of ‘all

uses’ of the property.” /d. at 706.

In light of First English, the Shopco court

subsequently rejected the appellants’ takings claim, stating:

“We also hold that the trial court did not err

when it granted summary judgment because

there was not before it any evidence that

supported the inference that the plaintiffs

had been deprived of all use of their

property, even though the materials before

the court indicated that they may have been

deprived of some property rights related to

economic development. Although the right

to dispose of a piece of property has been

described as one of the property rights in a

physical thing, along with the right to

possess and use it, and the deprivation of

rights to develop or to secure reasonable

investment-backed expectations have been

viewed as subject to compensation in

permanent-taking cases, such cases have

involved either permanent takings or a

physical occupation of property that

constitutes a per se compensable taking.” A

deprivation of such economic’ or

development rights does not amount to

denial of all uses of one’s property.”

Id. at 708 (citations omitted).

Significantly, the Shopco court noted that the

appellants had used their property as a park before the

App. 24

city’s failure to rezone the area, and they continued to use

the area as a park at the time of trial. In addition, the court

noted that the property retained value even if the zoning

regulations prohibited profitable commercial development.

Id. Similarly, in Westendarp, Couch & Co. vy. City of

Strongsville (Nov. 10, 1993), Cuyahoga App. No. 63699,

unreported, the Eighth District Court of Appeals recognized

that “[I]n temporary regulatory taking cases, it is incumbent

upon plaintiff to demonstrate the denial of all use of the

subject property, not just the reasonable economic use as

argued by the appellant.” In that case, the Cuyahoga

County Court of Appeals rejected the appellant’s takings

argument, stating:

“***In the present case, plaintiff failed to

fulfill this requirement by not rebutting with

proper evidence, the City’s motion for

summary judgment. Rather than eliciting

evidence that all use of the property was

denied by the zoning classification, plaintiff

argued in opposition to summary judgment

that only the construction of offices on the

property was unreasonable and impractical

given the present market condition for such

a project. This argument does not address

uses other than office buildings or apartment

complexes. At the very least, the owners of

the vacant property still retain the continued

use and possession of the real estate under

the same exact conditions which existed on

the date of their purchase.”

As in the foregoing cases, the evidence in the

present case does not demonstrate that the city’s 1989

denial of a demolition permit deprived BSW of “all use” of

its land. Although BSW temporarily may have been denied

some property rights related to economic development, as

in Shopco, supra, such a denial is not tantamount to

deprivation of all use. The evidence presented simply does

not fulfill First English’s stringent requirements for

temporary, regulatory taking.

To the contrary, the record reveals that BSW rented

out substantial space in the Wilcon Building in the months

prior to the city’s denial of its demolition permit. Without

question, BSW had a right to ask those tenants to leave as it

prepared to demolish the building. Their presence shortly

before October of 1989, demonstrates, however, that

portions of the building had been marketable for warehouse

or office space and could have been utilized again.

Although BSW would have been required to repair existing

“serious hazards” before a new tenant occupied the

building, the building would not have been required to meet

current code standards if a new tenant used space formerly

occupied by the Wilcon Corporation or Dayton Tire and

performed the same type of work. Consequently, the

permit denial did not render the property useless.

Moreover, even assuming arguendo that repairing the

Wilcon Building’s “serious hazards” would have proven

cost-prohibitive, the city’s denial of the demolition permit

did not cause the deterioration that existed in 1989. BSW’s

lack of maintenance, not the city’s permit denial, produced

the need for “serious hazards” to be repair (sic) prior to re-

occupancy. The need for repairs, at least at the time the

city denied the demolition permit, is attributable solely to

BSW's neglect.

Furthermore, BSW acknowledged using _ the

property to provide public parking and parking for United

Way employees who worked in an adjacent building owned

by BSW. Even accepting BSW’s argument that this use

was not “economically viable,” it nevertheless constituted

some use of the property. As the Shopco court recognized.

the issue In temporary, regulatory taking cases is whether

App. 26

the government's action deprives a landowner of “all use”

of his property, not whether the government’s action

interferes with investment-backed expectations or optimal

commercial development. Given the temporary nature of

the government's interference, a plaintiff seeking damages

for a temporary, regulatory taking must demonstrate

deprivation of all uses of the subject property before a

taking will be found. In the present case, the record reveals

that the city’s denial of a demolition permit did not deprive

BSW of all use of its property. Furthermore, despite denial

of the demolition permit, the land itself retained substantial

value. For the foregoing reasons, the record does not

support finding a temporary, regulatory taking of BSW’s

property from October 16, 1989 to May 7, 1993.

In opposition to this conclusion, BSW relies largely

upon State ex rel. OTR v. Columbus (1996), 76 Ohio St. 3d

203. BSW cited OTR for the proposition that a taking

occurs when the government substantially and

unreasonably interferes with a property right. OTR, supra,

at 206. Additionally, BSW relies upon language in the

court's opinion stating that the government's interference

“may involve the actual physical taking of property, or it

may include the deprivation of an intangible interest in

premises.” /d Furthermore, BSW notes the court's

observation that “[t]he value of property consists in the

owner's dominion, use, and disposition for every lawful

purpose.” Jd As the city of Dayton properly notes,

however, OTR involved a permanent, physical taking when

the government constructed an overpass bridge with

concrete retaining walls, thereby denying a landowner

access to Campus View Boulevard from its properties. The

present case, which involves an alleged temporary,

regulatory taking is distinguishable and subject to the

takings jurisprudence established by First English, supra,

and the Ohio appellate opinions discussed above. Based

App. 27

Kecommendation

Accordingly, it is the recommendation of the special

BS W's petition for a writ of mandamu

ation should be denied

: ecth I Ll lil

. n ©. Hollon, Special Mast

IN THE COURT OF APPEALS FOR MONTOMGERY

COUNTY, OHIO

BSW DEVELOPMENT GROUP*

Plaintiff-Relator . Case No. CA 15186

\ 7.

THE CITY OF DAYTON ° JOURNAL ENTRY

Defendant-Respondent*

~ti -

Rendered on the 15'' day of October, 199

PER CURIAM:

It appearing to the court that the special maste:

appointed to hear this matter has issued his Report and

Recommendation this date; and upon due consideration

thereof, IT IS HEREBY ORDERED that counsel shall! have

fourteen (14) days from the journalization of this Journa

Entry in which to file objections with the court o1

matter shall be approved as filed with the cvurt

IT IS SO ORDERED

s/s JAMES A. BROGAN. Judge

s/s WILLIAM H. WOLFF. JR.. Jude.

App 29

IN THE COURT OF APPEALS FOR

MONTGOMERY COUNTY, OHIO

BSW DEVELOPMENT GROUP

Plaintiff-Relator

VS. ;: C.A Case No. 15186

THE CITY OF DAYTON

Defendant-Respondent

DECISION AND ORDER

Rendered on the 27" day of March, 1996.

DWIGHT D. BRANNON, Atty. Reg. #0021657 and

RONALD J. MAURER, Atty. Reg. #0063391, 320

Regency Ridge Drive, Dayton, Ohio 45459-425]

Attorneys for Plaintiff-Relator

JANE LYNCH, Atty. Reg. #0012180 and NEIL |

FRENUND, Atty. Reg. #0012183, 1800 One Dayton

Centre, 1S. Main Street, Dayton, Ohio 45402

Attorneys for Defendant-Respondent

PER CURIAM:

This matter comes before us upon relator BSW

Development Group’s (BSW) summary judgment motion

seeking a writ of compelling to the city of Dayton to

commence appropriation proceedings. BSW also seeks a

declaration that a Dayton historical ordinance is

unconstitutional. Alternatively, BSW moves this court to

reconsider its prior decision in this matter or “remand” the

case to the trial court.

BSW’s mandamus action stems from its 1984

purchase of real estate located at 2-10 and 16-26 South

Patterson Boulevard in Dayton. BSW _ subsequently

demolished the structure located at 2-10 South Patterson

Boulevard and constructed a three-story office building in

1988. BSW then applied to the city on March 14, 1989, for

a permit to demolish the Wilcon building, which was

located at 16-26 South Patterson Boulevard.

The city denied the permit based upon jurisdictional

grounds, however, finding that the Wilcon building was

eligible for listing on the National Register of Historic

Places. The city noted that the Landmark Commission

possessed exclusive jurisdiction, pursuant to section 150.45

of Dayton’s Revised Code of General Ordinances, to grant

or deny demolition permits.

Consequently, BSW applied to the Landmark Commission

on March 29, 1989, as directed by the city, for a certificate

of appropriateness to obtain a demolition permit. The

Wilcon building subsequently become National Register-

eligible in May 1989. Thus, contrary to the city’s belief, it

did possess jurisdiction to consider BSW’s initial March

14, 1989, request for a demolition permit. Moreover, when

BSW applied to the Landmark Commission on March 29,

jurisdiction to consider BSW’s application. Not until the

App. 32

Wilcon building actually became National Register-eligible

in May 1989 did the Landmark Commission acquire

jurisdiction over BSW’s request.

In any event, the Landmark Commission denied

BSW’'s application on July 6, 1989, concluding that

rehabilitation of the building was a viable option and.

therefore, that the building should not be demolished.

BSW appealed the Landmark Commission’s decision to the

Dayton Board of Zoning Appeals on July 30, 1989. The

appeals board affirmed the Landmark Commission’s

decision on October 16, 1989.

BSW then appealed the Board of Zoning Appeals’

ruling to the Montgomery County Common Pleas Court on

October 25, 1989, and the trial court declared R.C.G.O.

150.246 unconstitutional. That section outlines the method

for obtaining a certificate of appropriateness and a

demolition permit from the Landmark Commission. _ It

provides, in relevant part:

“CONDITIONS OF REMOVAL

A demolition permit shall not be issued unless

accompanied by an approved Certificate of

Appropriateness if:

(A) The applicant has given clear evidence that one

of the following conditions exist

** *

(4) The square foot cost of meeting the minimum

building code would exceed the square foot

market value of similarly used and improved

structures in the planning district.”

The Montgomery County Common Pleas Court

found, inter alia, that R.C.G.O. 150.246 constituted a

“confiscatory measure which takes its property without just

compensation.” Consequently, the trial court ruled in its

App. 33

December 4, 1991, judgment that the ordinance violated the

Fifth Amendment to the U. S. constitution.

The Board of Zoning Appeals then appealed the

common pleas court’s judgment to the this court. We

concluded in a May 7, 1993, decision that the trial court

need not have addressed the constitutionality of R.C.G.O.

150.246. Instead of considering the constitutional issue, we

held that BSW fulfilled the stringent requirements of

R.C.G.O. 150.246(A)(4) for obtaining a certificate of

appropriateness. Specifically, this court determined that

BSW had established: (1) the cost to bring the Wilcon

building up to minimum building code requirements was

$13.52 per square foot; and (2) the value of similarly used

and improved structures in the planning district was $5.00

to $12.74 per square foot. Given these figures, we held that

BSW met R.C.G.O. 150.246(A)(4)’s requirements and

should have been awarded a demolition permit.

As a result, the city contacted BSW on May 18,

1993, and explained that it would issue a certificate of

appropriateness and a demolition permit once BSW

complied with the requirements of R.C.G.O. 150.246(B)

and (C). Those provisions require an applicant (1) to

submit a reuse plan identifying how the property will be

used following demolition; (2) to post a performance bond;

and (3) to pay a mitigation fee. Pursuant to these

provisions, however, the city may waive the bond and

mitigation fee if a waiver is requested; and the city

expressed its willingness to grant BSW a waiver.

Nevertheless, BSW chose not to submit a reuse plan

and seek a waiver. Instead, BSW filed a complaint in the

Montgomery County Common Pleas Court on October 18,

1993. The complaint named the city of Dayton, the Board

of Zoning Appeals, the Landmark Commission, and a

Landmark Commission employee as defendants. On

November 16, 1993, however, the defendants removed

App 34

BSW’s supplemental verified complaint to the U.S. District

Court for the Southern District of Ohio, Western Division.

In the federal court litigation, BSW asserted, inter

alia, a claim under 42 U.S.C. § 1983 and an

unconstitutional taking of its property in violation of the

Fifth and Fourteenth Amendments to the U.S. Constitution.

Following a partial summary judgment motion by BSW

and a summary judgment motion by the defendants, the

district court declared BSW’s takings claim not ripe for

review. Specifically, Judge Walter Rice concluded that

before filing a claim under the Fifth Amendment’s Takings

Clause, a party must seek a writ of mandamus in state court

directing government officials to institute eminent domain

proceedings. Given that BSW had not taken advantage of

the procedure supplied by Ohio law for obtaining

compensation - - a writ of mandamus - - Judge Rice

dismissed the takings claim without prejudice.

As a result, BSW initiated the present mandamus

action on April 6, 1995, asking this court to direct the city

of Dayton to commence appropriation proceedings. BSW

subsequently filed a motion for summary judgment on

September 21, 1995, and the city filed a memorandum

Opposing summary judgment on November 2. 1995 |

' In addition to their summary judgment motions, the parties

have filed numerous other motions since this court’s August 21,

1995, decision outlining a schedule for the presentation of

evidence and the submission of briefs. In particular, BSW filed

a motion in limine on September 26, 1995, seeking to preclude

the city from presenting any expert or lay witness testimony

because the city failed to identify its witnesses by August 25,

1995, and failed to present any evidence by September 20, 1995,

in violation of this court’s August 21, 1995, scheduling order.

Additionally, the city filed a motion on October 4. 1995, for an

extension of time to respond to BSW’s summary judgment

motion. In response, BSW filed a memorandum opposing the

city’s motion for a time extension on October 10. 1995. The city

App. 35

Consequently, we turn now to the merits of BSW’s

summary judgment motion

BSW seeks summary judgment that: (1) the city of Dayton

is required under Ohio law to commence appropriation

proceedings; (2) collateral estoppel applies to an earlier

common pleas court decision finding the city liable for

taking BSW’s property without compensation; (3)

regardless of the common pleas court's ruling, the city

unlawfully took BSW’s property without compensai'on;

and (4) the Dayton historical ordinance described above is

unconstitutional

In its first argument, BSW contends that the city has

‘a mandatory duty to initiate appropriation proceedings to

determine the compensation that is due the Plaintiffs for the

wrongful taking of their property.” Consequently, BSW

urges this court to issue a write of mandamus compelling

the city to perform its duty. BSW acknowledges, however,

that we first must determine whether its property has been

taken without just compensation before issuing a writ

ordering appropriation. See State ex rel. Levin v. City of

Sheffield Lake (1994), 70 Ohio St. 3d 104, 109 (stating that

“appropriation proceedings may be compelled through

mandamus,” but “the court must initially determine that the

pertinent property has been appropriated for public use”)

also filed a motion on October 20, 1995, seeking to strike the

affidavit of Dwight Brannon, a partner of BSW, and seeking

leave to file a brief exceeding twenty-five pages. BSW then

filed a memorandum on November 13, 1995, opposing the city's

motion to strike Brannon’s affidavit. After careful consideration,

however, we overrule BSW’s motion in limine and the city’s

motion to strike Dwight Brannon's affidavit. In addition, our

decision today moots the city’s motion for an extension of time

to respond to BSW’s summary judgment motion and its motion

seeking leave to file a brief exceeding twenty-five pages

App 16

rivets eee le

\s the following analysis demonstrates. however v

annot accept BSW's claim that the cits appropriated

roperty without paying just compensation

’

‘

| lherefore. w

ject BSW’s request for a writ of mandamu comp

ippropriation proceedings

in its second argument, BSW a erts that collate

oppel applies to the Montgomery County Common Pl:

urt's December 4, 1991, judgment. As we noted supra

common pleas court's ruling declared the cit

torical ordinance a “confiscatory measure” that vio!

hifth amendment to the U.S. Constitutior In part

mmon pleas court reasoned

‘BSW is required to meet the

building code and make repairs to meet ti

ordinance. The [Board of Zoning Appeal

lid not

consider any economic return {

nese repairs to the owners of the buildi:

he ordinance takes the Dullding = ar

lepriy es the owner! Of any real use for

structure Ihe {

ourt finds, under

; , ; J

/ MNVilsi / Vaiive icdi Lutheran ( Aili? ,

(yi€ndale \ ( ounty of Los

2 US 304 |

ingels f ie

that the Ordinanc:

measure whic! Violat

v. Dayton Board of Zoning Appeals (May 7, 1993),

Montgomery App. No. 13218, unreported (concluding that

BSW fulfilled the stringent requirements of R.C.G.O

150.246(A)(4) for obtaining a certificate of appropriateness

and therefore should have been granted the demolition

permit’ )

Despite our ruling that the trial court need not have

addressed the takings tssue, BSW claims collateral estoppel

attached to the trial court's judgment. In support of its

argument, BSW cites State ex rel. Squire v. City of

Cleveland (1937), 135 Ohio App. 395. In Squire, the court

explained

[he appellant's attempt to avoid the effect

of the decision of the District Court is based

solely upon the statement in the opinion of

the Circuit Court of Appeals that it did not

find it necessary to decide whether the

collateral for the city’s active and inactive

accounts also secured the deposits of the

Sinking Fund Commission. However, it is

universally held that a court speaks by its

record or journal and not by its opinions.

and nothing contained in the opinion the

Circuit Court of Appeals can affect the

adjudication of the District Court, unless

carried into the judgment of the reviewing

court. The judgment of the Circuit Court of

\ppeals was an affirmance of the judgment

of the district Court leaving that judgment in

its entirety as a final and _ binding

adjudication of the issues presented.”

it 401-00

Similarly, although we did not address the takings

in our May 7, 1993, judgment, BSW contends

\pp. 38

a —

collateral estoppel flows from trial court’s ruling in that

case. Given that we affirmed the trial court's decision

without modifying it, BSW claims the trial court’s takings

holding remains in effect.

Although we cannot dispute BSW’s interpretation

of Squire, we decline to follow it. Instead, we find

persuasive Judge Rice’s reasoning in the related federal

court litigation involving BSW and the city Addressing

our review of the trial court's takings ruling, Judge Rice

concluded:

“Although the Court of Appeals expressly

held that resolution of constitutional issues

was not necessary, the Court of Appeals did

not vacate that portion of the Common Pleas

Court's decision in which it had concluded

that there had been a taking without just

compensation and a denial of property;

without due process. Technically, the Court

of Appeals’ failure to vacate the decision of

the Common Pleas Court on_ the

constitutional issues may mean that said

decision remains ‘on the books.’ However.

that fact is of no import, because the

appellate court expressly concluded that it

was not necessary for the Common Pleas

Court to have reached those constitutional

issues; therefore, issue preclusion does not

prevent the relitigation of those issues.”

BSW Development Group v. City of Dayton (March 23.

1995), S.D. Ohio, No. C-3-93-438,

We believe Judge Rice’s reasoning is consistent

with Ohio case law concerning the doctrine of collateral

estoppel. In Goodson v. McDonough Power Equipment

Inc. (1983), 2 Ohio St. 3d 193, for example, the Ohio

App 39

Supreme Court noted that collateral estoppel precludes “the

relitigation in a second action of an issue or issues that have

been actually and necessarily litigated and determined in a

prior action.” /d at 195, citing Whitehead v. Gen. Tel. Co.

(1969), 20 Ohio St. 2d 108. Likewise, in Bench Billboard

Co. v. City of Dayton (April 10, 1992), Montgomery App.

No. 80772, unreported, this court also recognized the rule

that “collateral estoppel bars only those issues actually and

necessarily determined in the prior litigation.”

As we stated in our May 7, 1993, decision.

however, the Montgomery County Common Pleas Court

need not have addressed the constitutionality of the city’s

historical ordinance in its December 4, 1991. ruling. In

fact, this court expressly stated that consideration of the

constitutional issue was not necessary for resolution of the

parties’ dispute. Therefore, we agree with Judge Rice that

collateral estoppel does not prevent relitigation of the

takings question, and we overrule BSW’s motion for

summary judgment on the issue.

lil.

Regardless of collateral estoppel’s applicability,

BSW claims in its third argument that the city took its

property without paying just compensation. Specifically,

BSW argues that through its historical ordinance, R.C.G.O.

150.246, the city has exercised complete dominion and

control over the Wilcon building. Consequently, BSW

contends the ordinance operates as a permanent taking, a

temporary taking, or a physical taking.

In support of its “permanent taking” argument,

BSW claims improving the Wilcon building to comply with

the historical ordinance would cost hundreds of thousands

of dollars and would exceed the building’s value. In

essence, BSW asserts that requiring it to make substantial

App. 40

eee Po

investments in repairs and renovation, over its objections,

constitutes a permanent taking.

In light of this court’s May 7, 1993, judgment,

however, we find BSW’s argument unpersuasive. Contrary

to BSW’s assertions, the partnership no longer is compelled

to invest in renovating the Wilcon building. Indeed, as we

noted supra, BSW now may obtain a demolition permit and

demolish the structure. Therefore, we need not consider

whether the forced renovation of a commercially useless

building constitutes a taking. Such a scenario does not

exist in the present case. Instead, BSW’s current inability

to develop its property flows from its failure to seek a

demolition permit following our May 7, 1993, ruling. As

the city properly notes, BSW’s inaction cannot support an

argument that the government has taken its property.

In opposition to this determination, BSW argues

that it cannot simply obtain a demolition permit. Indeed,

BSW claims it first must “leap a number of hurdles,”

including (1) presenting evidence of the need for

demolition, (2) presenting a reuse plan, and (3) paying the

city a mitigation fee. As we noted supra, however, the city

has agreed to waive any fees, and the only obstacle to

BSW’s obtaining a permit is its submission of a reuse plan.

Furthermore, the city has presented the affidavit of Brian

Inderiedden, a Dayton historical preservation officer, who

avers that a reuse plan is a ministerial, insubstantial

impediment, and that BSW need only identify some

potential use for the property, which may include grading

and seeding. Consequently, we cannot agree that the city’s

on-going actions operate as a permanent taking of BSW’s

property without compensation. BSW is not compelled to

undertake costly renovation, and the Wilcon building may

be demolished once a reuse plan is submitted.

Alternatively, BSW argues that a temporary taking

occurred beginning when the city initially denied its

App. 4]

demolition permit in March 1989 and continuing until the

city either grants the permit or permanently takes the

Wilcon property.

In support of its argument, BSW cites this court’s

May 7, 1993, decision in which we concluded that the

landmark Commission should have awarded BSW a

certificate of appropriateness to obtain a demolition permit.

As explained supra, we held that BSW had fulfilled the

requirements of R.C.G.O. 150.246 by demonstrating that

the square foot value of similarly used and improved

structures in the planning district was less than the

anticipated cost of improving the Wilcon building to meet

minimum building codes.

Consequently, by futfilling the requirements of

R.C.G.O. 150.246, BSW _ contends it established

conclusively that renovating the Wilcon building was not

an economically feasible option. Furthermore, BSW

claims demolishing the building was not an option after the

city denied its requested demolition permit in 1989. Given

these two circumstances, BSW asserts that the city denied it

all economically viable use of the Wilcon property in 1989

and, as a result, “took” its property. In addition, BSW

argues that a taking will continue until the city ultimately

awards it a demolition permit.

As we explained above, however, BSW’s current

lack of a demolition permits stems from its failure to

submit a reuse plan. Following this court’s May 7, 1993,

decision, no other impediment prevented BSW from

obtaining a permit, demolishing the building, and

undertaking any use it desired. Consequently, we cannot

agree that a taking of BSW’s property continues to the

present day. Instead, we believe the issues is whether a

temporary regulatory taking occurred from October 16,

1989, when the Dayton Board of Zoning Appeals affirmed

the Landmark Commission’s decision denying a demolition

App. 42

permit, until May 7, 1993, when this court ruled that BSW

should receive a permit.

We find the former date proper because at that time

“the government entity charged with implementing the

regulations [had] reached a final decision regarding the

application of the regulations to the property at issue.”

Williamson County Regional Planning Commission v.

Hamilton Bank (1985), 13 Cl. Ct. 555, 558, aff'd, 859 F.2d

893 (Fed. Cir. 1988), citing United States v. Riverside

Bayview Homes, Inc. (1985), 474 U.S. 121 126-27: Conant

v. United States (1987), 12 Cl. Ct. 689, 691. Therefore, in

the present case we conclude that a taking could not have

occurred until October 16, 1989, when the Dayton Board of

Zoning appeals refused to grant a demolition permit. At

that time, the city’s decision became final, forcing BSW to

seek judicial review.

Of course, the mere denial of a building permit or a

demolition permit does not constitute a taking of property.

The U.S. Supreme Court addressed this issue in Riverside

Bayview Homes, supra, at 126-27 (emphasis added),

stating:

“Moreover, we have made it quite clear that

the mere assertion of regulatory jurisdiction

by a government body does not constitute a

regulatory taking. See Hodel vy. Virginia

Surface Mining & Reclamation Assn., 452

U.S. 264, 293-297 (1981). The reasons are

obvious. A requirement that a person obtain

a permit before engaging in a certain use of

his or her property does not itself ‘take’ the

property in any sense: after all, the very

existence of a permit system implies that the

permission may be granted, leaving the

landowner free to use the property as

desired. Moreover, even if the permit is

Basses.

App. 43

denied, there may be other viable uses

available to the owner, Only when a permit

is denied and the effect of the denial is to

prevent ‘economically viable’ use of the

land in question can it be said that a taking

has occurred.”

In the present case, the denial of BSW’s demolition

permit from October 16, 1989, until our decision on May 7,

1993, is undisputed. Therefore, the true question is whether

this denial precluded BSW’s “economically viable” use of

the Wilcon Property. In Riverside Bayview Homes, the

U.S. Supreme Court noted that Whether a permit denial

constitutes a taking depends upon the owner’s ability to put

the property to productive use. /d at 127 n 4.

Furthermore, in First English Evangelical Lutheran C hurch

of Glendale, supra, at 321-22, the Court stated that an

ordinance must eliminate all use of property before a

temporary taking may be found. In cases, however, “where

the government's activities have already worked a taking of

all use of property, no subsequent action by the government

can relieve it of the duty to provide compensation for the

period during which the taking was effective.” /d at 32]

(emphasis added).

As noted supra, BSW contends the city precluded

all economically viable use of its Property by denying a

demolition permit. Specifically, BSW claims this court’s

May 7, 1993, decision establishes conclusively that

renovation of the Wiicon building was not an economically

viable choice when the Landmark Commission and the

Dayton Board of Zoning Appeals denied BSW’s permit

request in 1989. Properly applied, BSW contends, the

city’s own ordinance demonstrates that the square-foot cost

of renovating the Property exceeded the square-foot value

of similar structures in the area. In addition, once the City

denied the demolition permit, razing the building no longer

App. 44

represented a viable option. Consequently, BSW claims

from 1989 until our ruling 1993, the city’s actions forced it

to chose (sic) between renovating the property and

enduring a sure financial loss or letting the property remain

unoccupied. In BSW’s view, neither option represented an

“economically viable” choice. Therefore. it contends the

city effectively prevented all use of the Wilcon building

and rendered the property worthless.” In its motion for

summary judgment, BSW contends:

“The Wilcon building ‘as is’ is valueless, as

it has been during the entire administrative

and legal process culminating in the decision

by the Court of Appeals. It cannot house

people without extensive renovation and the

building is in violation of building code

standards. The expenditures required by the

City and its Historic Ordinance make the

Wilcon building property valueless as is,

and make use of it economically

unfeasible.”

BSW Summary Judgment Motion at 8.

In addressing BSW’s claim. we are mindful that a

regulatory taking does not arise simply because an

ordinance denies a landowner of the most profitable use of

his property or causes a decline in the property’s market

value. State ex rel. Pitz y City of Columbus ( 1988). 56

Ohio App. 3d 37, 41. Clearly, demonstrating a mere

; Although BSW retained the Wilcon property following the

permit denial in essentially the same condition as when

purchased, BSW claims the city’s determination that the

Landmark Commission possessed jurisdiction over the parcel,

and the commission’s subsequent permit denial, eviscerated the

property's value, rendering the plot nearly worthless.

App. 45

reduction in profits will not sustain a takings claim.

Monfort Supply Co. v. City of Cheviot (Sept. 27, 1995),

Hlamilton App. No. C-940898, unreported.

After reviewing the evidence presented and relevant

case law, we cannot agree, as a matter of law, that the

temporary denial of a demolition permit deprived BSW of

all use of its land in the interim. BSW has not

demonstrated that the denial resulted in its property losing

all rental value or resale potential. Consequently, the

evidence presented does not establish that the permit denial

rendered BSW’s property valueless.

In fact, the testimony from the Landmark

Commission's hearing on BSW’s demolition request

reveals that the Wilcon property..had been used a

commercial warehouse prior to BSW’s application permit.

Moreover, at the time of the Landmark Commission's July

6, 1989, hearing, the Wilcon building retained an “as is”

value of two-hundred and twenty thousand dollars.

Nevertheless, BSW asserts in an affidavit that when it

initially sought a demolition permit, it had devised a

development plan for the property and secured a four-

hundred and fifty thousand dollar offer for part of the land.

As a result of the substantial delays in securing a

demolition permit, however, and the uncertainty

surrounding the property’s historical status, BSW claims its

property is now unmarketable. Additionally, BSW

contends demolition costs for the property have doubled

since 1989.

Despite these unfortunate economic circumstances,

we cannot agree that the city’s conduct constituted a taking

of BSW’s property. Prior to its application for a demolition

permit, BSW utilized the Wilcon building as a warehouse,

and presumably it could have continued doing so after the

city denied its permit. At the time of BSW’s permit

application, the Wilcon building allegedly retained an “as

is’ value of two-hundred and twenty thousand dollars.

App. 46

sail iil

eS ae ee es

Cia *Kiths 0

ont TES ee. er

Consequently, BSW has not demonstrated that the city’s

permit denial precluded “all use” of the property.

Therefore, pursuant to First English, supra, BSW has not

established a temporary regulatory taking of its property.

Finally, BSW asserts that the city physically has

taken its property. In support of this argument, BSW

claims the city has secured the Wilcon property, ordered

BSW and others not to trespass on the property, and

threatened civil and criminal sanctions based upon the

building's hazardous condition. BSW then argues that any

such physical occupation, no matter how small or

insignificant, constitutes a taking of private property

requiring just compensation.

We reject BSW’s argument, however, because

BSW has presented no evidence supporting its claim that

the city has denied it access to the building. Conversely,

the city has presented the affidavit of Stephen Baker, a city

conservation supervisor, who states that the city secured the

building based upon public safety concerns. Furthermore.

Baker explains in his affidavit that BSW’s partners were

not prevented from entering the building. In fact, he claims

the partners were provided keys to the padlocks securing

the Wilcon building. Based upon these facts, we find

meritless BSW’s argument that the city’s actions constitute

a physical taking.

IV.

In its final argument, BSW claims this court should

issue a declaratory judgment that the city’s historic

ordinance is unconstitutional, in whole or in part, either on

its face or as applied in the present case. In support of its

argument, BSW contends this court “has the inherent

power to grant a declaratory judgment where it is necessary

to the determination of the mandamus action or to provide

complete and timely relief.”

App. 47

However, we decline BSW’s invitation to issue a

declaratory judgment on the constitutionality of the city’s

historical ordinance. In so doing, we note the BSW never

sought declaratory relief in its April 6, 1995, complaint in

mandamus. Instead, BSW prayed only for a writ of

mandamus to compel the city’s initiation of appropriation

proceedings. Therefore, BSW cannot now seek summary

declaratory judgment.

Furthermore, this court lacks the authority to issue a

true declaratory judgment in a mandamus action. In State

ex rel. Neer v. Industrial Commission of Ohio (1978), 53

Ohio St. 2d 22, the court found declaratory judgment

improper in a mandamus action brought before the court of

appeals. Specifically, the Neer court explained that

appellate courts lack original jurisdiction to render

declaratory judgment. The Neer court reasoned:

“Although R.C. 2721.02 gives all ‘courts of

record’ the power to render declaratory

judgments, the 1968 Modern Courts

amendment gives the Court of Appeals

original jurisdiction only in quo warranto,

mandamus, habeas corpus, prohibition,

procedendo, and in any cause on review as

may be necessary to its complete

determination. Section 3(B)(1)(a)-(f),

Article IV of the Ohio Constitution.

Permitting a Court of Appeals to give what

is basically a declaratory judgment is to

expand its constitutionally declared

jurisdiction.”

Id. at 23-24. See also State ex rel Coyne v. Todia (1989),

45 Ohio St. 3d 232, 237 (noting that “courts of appeals

have no jurisdiction to hear declaratory judgment actions

App. 48

;

because that would extend their constitutionally declared

jurisdiction over original actions”). Thus, where an action

is in the form of mandamus, but the relator’s true objective

is a declaratory judgment, an appeals court lacks original

jurisdiction. State ex rel. Governor v. Taft (1994), 71 Ohio

St. 3d 1,3 (stating that the relator’s request for relief “has

no merit in mandamus or prohibition and is also a thinly

disguised request for a declaratory judgment, which we are

without jurisdiction to grant”).

At the same time, however, we recognize that

mandamus remains an appropriate vehicle to challenge the

constitutionality of a legislative act. State ex rel Zupancic

v. Limbach (1991), 58 Ohio St. 3d 130, 133; State ex rel

Michaels v. Morse (1956), 165 Ohio St. 599, 608 (stating

that “[t]he right of relator to question, by mandamus, the

constitutionality of the statute is recognized in Ohio”).

The critical inquiry is whether consideration of the

constitutional issue is necessary for resolution of the

mandamus action. Where a mandamus action necessarily

implicates an underlying constitutional issue, an appellate

court may resolve the constitutional question. Thus. a

relator may question the constitutionality of a statute upon

which the respondent relies to justify its refusal to act. In

State ex rel. Brown v. Summit County Bd. of Elections

(1989), 46 Ohio St. 3d 166, for example, the court allowed

a mandamus challenge to the constitutionality of a city

durational residency requirement for city council

candidates. In so doing, the court explained:

“The board of elections in this case was

merely following the residency requirement

of the Stow Charter and, at the time of its

ruling, had no clear duty to place the name

of the relator on the ballot because it could

not declare a city charter section

unconstitutional. However, if we determine

App. 49

that the charter section in question is

unconstitutional, then the duty of the board

of elections to place the name of the relator

on the ballot will relate back *** and a writ

of mandamus will properly issue.”

ld. at 168.

Similarly, in Zupancic, supra, the court explained

the rationale behind allowing constitutional issues to be

addressed in mandamus. The court reasoned:

“In the present case relators would have a

clear right to have respondent proceed under

the former apportionment formula if we

found R.C. 5727.15(C), in its present form,

unconstitutional. Although relators could

seek a declaratory judgment coupled with a

mandatory injunction in order to achieve

nearly the same result we find that the

alternative remedy would not be as complete

as a writ of mandamus. Ultimately, if any

court would declare R.C. 5727.15(C)

unconstitutional, the relators could still be

forced to request a writ of mandamus in

order to have respondent follow _ the

apportionment formula requested in their

complaint and/or a prohibitory injunction to

enjoin respondent from exercising her

statutory duties under the challenged statute.

Accordingly, we hold that relators have

properly brought this mandamus action

before the court since all alternative

remedies at law are wholly inadequate.”

Id. at 133-34; See also Michaels, supra, at 608; State ex rel

McKell v. Robins (1905), 71 Ohio St. 273; Young Israel

App. 50

a Ct

a a |

nat barat or ee ee et ore

ae ee ee eS Cee

Organization of Cleveland v. Dworking (1956), 105 Ohio

App. 89, 95 (recognizing that “the constitutionality or

validity of the zoning enactment relied upon as ground for

refusing a permit may be raised in a proceeding in

mandamus to compel the issuance of a permit”).

In the present case, however, the constitutionality of

the city’s historical ordinance is not vital to our disposition

of BSW’s mandamus action. In essence, BSW claims the

historical ordinance operates to take its property.

Therefore, it seeks a writ of mandamus compelling the city

to initiate appropriation proceedings. Conversely, the city

contends its ordinance does not take BSW’s property.

Significantly, our resolution of this dispute does not depend

upon a preliminary assessment of the historical ordinance’s

constitutionality. Indeed, any perceived constitutional

infirmity is irrelevant to whether an uncompensated taking

occurred.

Consequently, we cannot accept BSW’s argument

that declaratory judgment on _ the ordinance’s

constitutionality is necessary to resolution of its mandamus

action. Therefore, we hold that BSW’s request has no

merit in mandamus because it is a pure request for

declaratory judgment, which this court is without

jurisdiction to grant in an original action. See C oyne,

supra, at 237; State ex rel. Governor v. Taft, supra, at 3.

Alternatively, BSW asks this court to reconsider its

May 7, 1993, judgment and review the Montgomery

County Common Pleas Court’s December 4, 1991].

determination that the city’s historical ordinance is

unconstitutional.

As the city properly notes, however, if BSW

planned to seek reconsideration of our 1993 ruling, it

should have filed an application for reconsideration.

pursuant to App. R. 26, within ten days of our decision.

BSW never made such a request, and it cannot seek

App. 5]

reconsideration now. Accordingly, we reject BSW’s

request for reconsideration of our prior ruling.

Finally, BSW claims we should “remand” this cause

to the common pleas court for resolution of all issues.

including the complaint in mandamus. However, BSW

fails to explain how this court can “remand” its complaint

in mandamus, which is an original action filed in this court.

Given that the action originated in this court, “remand” is

an impossibility. Therefore, we reject BSW’s request for a

remand.

Based upon our threshold determination that BSW

has not established a permanent, temporary, or physical

taking of its property, we overrule the relator’s summary

judgment motion seeking a writ of mandamus to compel

appropriation proceedings. Additionally, we decline the

relator’s invitation to declare the city’s historical ordinance

unconstitutional, reconsider our prior decision in this

matter, or “remand” this case to the common pleas court.

In light of the evidence presented, however. we are

unprepared to declare that the city has not taken BSW’s

property. Instead, we hold only that BSW has failed to

demonstrate, as a matter of law, that the city’s permit denial

constituled a taking of its property. As we noted supra,

testimony before the Landmark Commission suggests that

the Wilcon building retained a two-hundred and twenty

thousand dollar “as is” value when BSW applied for a

demolition permit. Furthermore, the record suggests that

BSW utilized the property as a commercial warehouse in

the months before it sought a demolition permit.

Nevertheless, BSW contends in an affidavit filed by

Dwight Brannon that the permit denial rendered the

property unmarketable and valueless. See Affidavit of

Dwight Brannon, July 5, 1995.

Consequently, it is hereby ordered that an

evidentiary hearing shall be held before a designated

special master, Steven C. Hollon, Administrator of the

Second District Court of Appeals, at a time to be set by the

administrator. It is further ordered that the hearing will

address only the following issue: whether the city’s 1989

denial of a demolition permit deprived BSW of all use of

its property.

s/s JAMES A. BROGAN. Presiding Judge

s/s WILLIAM H. WOLFF, JR.. Judge

s/s THOMAS J. GRADY. Judge

Copies mailed to:

Dwight D. Brannon

Ronald J. Maurer

Jane Lynch

Neil F. Freund

App. 53

Ree ee eee

IN THE COURT OF APPEALS FOR MONTGOMERY

COUNTY, OHIO

BSW DEVELOPMENT GROUP, :

et al.

Plaintiffs-Appellants °C.A. Case No. 13218

VS. ‘T.C. Case No. 89-3717

DAYTON BOARD OF ZONING :

APPEALS :

Defendant-Appellant

a. he eh a Oe ee oe oe a a ee ee

OPINION

Rendered on the 7" day of May, 1993

ee ee ee ee ee ae ee oF a a oe a ee ae

DWIGHT D. BRANNON, Six South Patterson Blvd., Suite

300, Dayton, Ohio 45402, Atty Reg. No. 0021657

Attorney for Plaintiffs-Appelles

J. ANTHONY SAWYER, Director of Law, City Attorney’s

Office, 101 West Third Street, Room 609, Dayton, Ohio

45402, Atty. Reg. No. 0022232

and

NEIL F. FREUND, Atty. Reg. No. 00121830, JANE M.

LYNCH, Atty. Reg. No. 0012180 and LISA A. HESSE,

Atty. Reg. No. 0042120, One Dayton Centre, 1 South Main

Street, Dayton, Ohio 45402-2017

Attorney for Defendant-Appellant

App. 54

DENNIS J. TURNER, Supervising Attorney for Amici

Curia,

CAMILLE L. POHLMAN, and FRANK D. RODRIGUEZ.

University ¢f Dayton School of Law, 300 College Park,

Dayton, Ohio 45469

Attorney for Amicus Curiae, University of Dayton

School of Law

PAUL W. EDMONDSON, ELIZABETH S. MERRITT.

ANDREA C. FERSTER, and CLAIRE PRECHTEL-

KLUSKENS, 1785 Massachusetts Avenue, NW.

Washington, DC 20036

Attorney for Amicus Curiae, National Trust of

Historic Preservation in the United States and Preservation

Dayton, Inc.

BROGAN, J.

The Dayton Board of Zoning Appeals appeals from

the judgment of the Montgomery County Court of

Common Pleas finding Section 150.245(A)(4) of the

Revised Code of General Ordinances unconstitutional.

The facts of this case are as follows. The Wilcon

Building, located at 16-26 South Patterson Boulevard. is a

warehouse dating from the late nineteenth century. It is

one of the last remaining structures standing along the route

of what used to be the Miami-Erie Canal.

In late 1984, BSW Development Group (BSW), a

general partnership consisting of Dwight Brannon, William

Schoenfeld, and Dennis Williams, purchased the real estate

located at 2-10 and 16-26 South Patterson Boulevard for

development purposes. BSW demolished the structure

located at 2-10 South Patterson Boulevard and constructed

a three story office building in 1988.

App. 55

On March 14, 1989, BSW applied to the City of

Dayton, Department of Urban Development, Division of

Inspectional Services for a permit to demolish the Wilcon

Building. However, the permit was denied on jurisdictional

grounds. Specifically, the department found that because

the Wilcon Building was eligible for listing on the National

Landmark Commission had exclusive jurisdiction to grant

or deny demolition permits pursuant to Section 150.45 of

the Revised Code of General ordinances (R.C.G.O.). See,

also, R.C.G.O. 44.55.

The National Register is a listing of structures,

districts, sites, buildings and objects worthy of preservation

maintained by the National Park Service, U.S. Department

of Interior. Properties are added to the National Register in

several ways, including nominations prepared under

approved state historic preservation programs. See Section

60.1, Title 36, C.F.R.

The Wilcon Building became National Register

eligible in May, 1989. At all times during the process for

eligibility, BSW objected to the potential listing of the

Wilcon Building on the National Register.

On March 29, 1989, BSW applied to the Landmark

Commission for a certificate of appropriateness to obtain

the required demolition permit pursuant to R.C.G.O.

150.246. The Commission denied BSW’s application on

July 6, 1989, concluding that rehabilitation of the building

was a viable project and that therefore the building should

not be demolished. BSW appealed the Landmark

Commission’s decision to the Dayton Board of Zoning

Appeals (Board) on July 20, 1989. The Board affirmed the

Landmark Commission’s decision on October 16, 1989.

On October 25, 1989, BSW appealed the decision

of the Board to the Montgomery County Court of Common

Pleas.

App. 56

8 ARES Gs Bi

it Alas Be ABBE RCS Sop

The trial court’s judgment, issued on December 4,

1991, found the ordinance to be unconstitutional, stating

that (1) the Landmark Commission did not make a finding

as to whether BSW would realize a reasonable return on its

investment for repairs, and (2) the ordinance did not

provide notice to a landowner of the unilateral filing of his

property on the Ohio Historic Inventory nor does it provide

a means of informing the public that a building is subject to

the Landmark Commission’s control. The Board filed its

notice of appeal on January 2. 1992.

The Board advances one assignment of error,

asserting that the trial court abused its discretion in finding

the ordinance unconstitutional. The National Trust for

Historic Preservation in the United States and Preservation

Dayton, Inc. were permitted to enter as amici and file a

brief in support of the appellee. The University of Dayton

School of Law filed an amicus brief in support of the

appellant.

It is well established that a court is not permitted to

pass upon the constitutionality of a statute unless such a

determination is necessary to its decision. State v. Collins

(1977), 60 Ohio App. 2d 116, 120.

In State v. Deskins (April 16, 1992), Champaign

App. No. 92 CA 23, unreported, we reiterated the role of

appellate courts when confronted with constitutional issues:

***It is a general rule of appellate review

that constitutional issues should not be

decided unless absolutely necessary. See In

re Boggs (1990), 50 Ohio St. 3d 217, 221; In

re Miller (1992), 63 Ohio St. 3d 99. 110.

Although both parties in the instant Case present their

respective arguments within a constitutional framework, we

find that this case can be disposed of without engaging in

App. 57

any consideration of constitutional questions. See 16 Ohio

Jurisprudence 3d, Constitutional Law Section, 122, 254.

In affirming the Landmark Commission’s denial of

BSW’s application for the certificate of appropriateness,

the trial court apparently found that BSW had fulfilled the

requirements of R.C.G.O. 150.246. R.C.G.0. 150.246

provides, in part, that:

The Landmark Commission may only

approve a Certificate of Appropriateness if:

(A) The applicant has given clear evidence

that one of the following conditions exist:

**“* *

(4) The square foot cost of meeting the

minimum building code would exceed

the square foot market value of similarly

used and improved structures in the

planning district.

According to the unchallenged appraisal ordered by the

Landmarks Commission and prepared by the J.R. Remick

Company, the Wilcon Building encompasses 33,808 Square

feet

BSW submitted uncontroverted evidence that the

cost to bring the Wilcon Building up to minimum building

code requirements would be $457,000, and to bring it into

leaseable condition would be $1,214,660.

Applying these figures, the cost to meet minimum

building code requirements for the Wilcon Building would

be $13.52 per square foot. ($457,000 divided by 33,808).

Thus, in order to obtain a certificate of appropriateness

pursuant to the provisions of R.C.G.O. 152.146(A)(4),

BSW would need to establish the Square foot value of

similarly used and improved structures in the planning

district is less than $13.52 per square foot.

App. 58

at ee

Labs Pope Toh

PORT aa HDS ds gen iene

J.R. Remick utilized three different approaches to

render an appraisal of the Wilcon Building, two of which

address market value and are therefore directly relevant to

the determination of whether the requirements of R.C.G.O.

152.246(A)(4) have been met. In both those approaches,

J.R. Remick investigated similar properties situated near

the Wilcon Building. The Square foot price of these

buildings ranged from $5.00 to $12.74 per square foot.

Thus, the evidence set forth in J.R. Remick’s report

reveals that the square foot cost of similarly used and

improved structures in the area is well below the $13.52 per

Square foot improvement cost of the Wilcon Building.

Therefore, the requirements of R.C.G.O. 152.246(A)(4)

have been met and BSW should have been granted the

certificate of appropriateness and a demolition permit.

Nevertheless, the Board maintains that the denial of

the certificate of appropriateness was proper because the

trial court should have included the adjacent parcel in its

application of R.C.G.O. 152.246(A)(4) pursuant to the

“parcel as a whole” theory set forth in Penn Central Transp.

Co. v. City of New York (1978), 438 U.S. 104. We find

find (sic) this contention to be without merit for several

reasons.

First, we find that the language of R.C.G.O.

150.230 et_seq, does not expressly require including

adjacent property or other property owned by the

landowner in determining whether the square foot market

value of similarly used and improved structures in the

planning district.

Second, the facts and issues in Penn Central, supra,

are distinguishable from this case. In Penn Central, the

Supreme Court was not construing R.C.G.O. 150.230 et

seq, but was determining whether the application of the

Landmarks Preservation Law restricting the development

of the Grand Central Terminal constituted a taking in

violation of the Fourteenth Amendment.

App. 59

In Penn Central, the entire city tax block was

designated as a landmark site. Id. at 131. Moreover, the

Grand Central Terminal was a participant in the

transferable development-rights program, which afforded

Penn Central additional valuable rights with respect to the

adjacent property.

In the instant case, the adjacent property purchased

by BSW has not been designated as a landmark site. Nor

was any evidence presented that the Wilcon Building added

to the value or drew customers to the adjacent property as it

did in Penn Central, Additionally, the Wilcon Building

does not afford BSW transferable development rights.

Therefore, the trial court correctly focused only on the

Wilcon Building and did not evaluate the adjacent parcel.

For the aforementioned reasons, the appellant’s

assignment of error is overruled.

We further note that the state and federal laws are

less restrictive than is the Revised Code of General

Ordinances with respect to a landowners’ rights vis-a-vis

property which has been declared eligible as an historical

landmark. Specifically, R.C. 149.55 states that:

***The [Ohio historical] society shall not

place any land on the registry without first

obtaining a written agreement with the

landowner that subjects the land to the

provisions of this section***.

Thus, unless a landowner agrees in writing to place

his land on the state registry, the historical preservation

laws are not applicable to his property and may not restrict

the use of his land.

With respect to the National Register, Section

470(a), Title 16, U.S. Code states that:

If the owner***of any privately owned

property***objects to such inclusion or

designation, such property shall not be

included on the National Register or

App. 60

designated as a National Historic Landmark

until such objection is withdrawn.

Furthermore, listing of private property on the

National Register “does not prohibit under Federal Law or

regulations any actions which may otherwise be taken by

the property owner with respect to the property.” Section

65, Title 36, C.F.R.

In conclusion, BSW fulfilled the stringent

requirements of R.C.G.O. 150.246(A)(4) for obtaining a

certificate of appropriateness and therefore should have

been granted the demolition permit.

The judgment of the Montgomery County Court of

Common Pleas will be affirmed.

GRADY, P.J. and FAIN. J.. concur.

Copies mailed to:

Dwight D. Brannon

J. Anthony Sawyer

Neil F. Freund

Lisa A. Hesse

Dennis J. Turner

Camille L. Pohlkman

Frank D. Rodriguez

Paul W. Edmondson

Elizabeth S. Merritt

Andrea C. Ferster

Claire Prechtel-Kluskens

Hon. Lee A. Bixler

App. 61

IN THE COMMON PLEAS COURT OF

MONTGOMERY COUNTY, OHIO CIVIL DIVISION

BSW DEVELOPMENT GROUP, CASE NO.89-3717

et al.

Appellants (Judge Bixler-

by assignment)

VS.

DAYTON BOARD OF ZONING

APPEALS

Appellees JUDGMENT ENTRY

(Filed 12/04/91)

Case No. 89-3717 is an administrative appeal from

the decision of the Dayton Board of Zoning appeals which

affirmed the order of the Landmark Commission denying a

demolition permit to BSW. This case was submitted upon

the record of the proceedings before the Landmark

Commission and the Board of Zoning Appeals, as

supplemented, pursuant to the earlier order of this Court.

In the administrative appeal, BSW challenges the

constitutionality of the revised Historic District Ordinances

of the General Ordinances of the City of Dayton, Ohio.

The facts giving rise to this appeal are relatively simple.

In 1984, a general partnership consisting of Dwight

Brannon, Dennis Williams and William Schoenfeld (BSW)

purchased real estate located at 16-26 S. Patterson Blvd.

and real estate located at 2-10 S. Patterson Blvd. for

development purposes. Both parcels contained older

buildings which BSW intended to demolish. The City of

Dayton granted BSW a demolition permit for the building

App. 62

Fa SE Aig BI NE hy

located at 2-10 S. Patterson Blvd. and that building was

removed. A new office building was constructed on the

site in 1988 and is occupied, in part, by Brannon’s law

office.

On March 14, 1989, BSW applied to the City’s

Division of Inspectional Services for a demolition permit

for the building located at 16-26 S. Patterson. The permit

was refused because the request was required to be

presented to the Dayton Landmark Commission. The

building was eligible for listing on the National Register of

Historic Places and fell within the Landmark Commission’s

jurisdiction. The Landmark Commission attained the

jurisdiction by means of an Ordinance, 150.45, enacted in

1988. The Ordinance provides that no demolition permit

shall issue for a qualified building until the applicant has

complied with the provisions of 150.45 R.C.G.O., the

Historic District Ordinance, which was also amended in

1988. Under the Ordinance, the Landmark commission has

jurisdiction to grant or deny a demolition permit if the

building was landmark eligible or listed on the Ohio

historical inventory (OHI) as eligible. The OHI form

listing the building was originally filled by the City in 1985

and revised in 1989 and 1990, while the permit application

was pending. The Ordinance does not require that the

owner of the property be notified of the filing and BSW

had no knowledge that the OHI form had been filed.

Nevertheless, BSW filed for a certificate of

appropriateness under RCGO 150.246(A)(4). That Section

permits demolition of the building if the square foot cost of

meeting the minimum building code would exceed the

square foot market value of similarly used and improved

structures in the planning district. The Landmark

Commission held several hearings on the application and

the transcripts, although almost impossible to read in

places, have been filed. The Commission accepted BSW’s

cost figures for rehabilitation and concluded that the

App. 63

rehabilitation of the building was a viable project.

Consequently, it denied BSW’s application for demolition

of the building.

On July 20, 1989, BSW filed an appeal from the

decision of the Landmark Commission to the Dayton Board

of Zoning Appeals (BZA). Under the terms of the Historic

District Ordinance, the decision of the Landmark

Commission denying the demolition permit was final. The

BZA only had jurisdiction over procedural errors which

might have occurred before the Landmark Commission.

The transcript reveals that BSW tried to reargue the merits

of their case before the BZA which refused to hear that

argument. On November 6, 1989, the BZA found that the

Landmark Commission had not committed any procedural

errors which substantially impaired the rights of BSW. The

order of the Landmark Commission denying the certificate

of appropriateness was affirmed. On October 25, 1989.

BSW appealed to the Montgomery County Court of

Common Pleas, pursuant to ORC 2506.03.

In an ORC administrative appeal, the Court must

apply the law to the evidence presented to the

administrative agency, consider the additional evidence

admitted pursuant to ORC 2506.03 and determine whether

the decision of the agency is supported by reliable,

substantive and probative evidence. The Court may find

the administrative order to be unconstitutional, illegal,

arbitrary, capricious, unreasonable, or not supported by the

evidence. 2506.04. BSW contends that the BZA erred in

affirming the decision of the Landmark Commission

because there did not exist a preponderance of reliable,

probative and substantive evidence to support the decision.

BSW first argues that it sustained proof that BSW

was entitled to a demolition permit. §150.245(a)(4) of the

App. 64

Se al Sener Se eh NDS AOITELRLA etin* s

RaLT OS

SAE Sah Mitte a el sti cathe i i

‘|

Ordinance was the section BSW relied upon for the

granting of the demolition permit

“CONDITION OF REMOVAL

A demolition permit shall not be issued unless

accompanied by an approved Certificate of

Appropriateness. The Landmark Commission may

only approve a Certificate of Appropriateness if:

(A) The applicant has given clear evidence that one

of the following conditions exist:

(4) The square foot cost of meeting the minimum

building code would exceed the square foot market

value of similarly used and improved structures in

the planning district.”

This section provides the method whereby an

applicant may obtain a Certificate of Appropriateness and

demolition permit. The Applicant must prove that the

square foot cost of meeting the minimum building code

would exceed the square foot market value of similar

buildings. This requirement ignores the right of the land

owner to realize a “reasonable return” on its investment for

repairs. Penn Central Transp. Co. v. New York City 438

U.S. 104 (1978). In that case, the Court found that New

York City’s Landmark Preservation Law was constitutional

because it did not interfere with Penn Central’s right to

realize a reasonable return. on its investment.

Consequently, the Landmark law did not constitute a taking

of Penn Central’s property without compensation.

The transcript indicates that the Landmark

Commission had an appraisal of the building as it presently

Stands. The BSW building was appraised at $220.000.00.

BSW estimated the costs of bringing the building to meet

minimum building code standards was $457,000.00. BSW

App. 65

further estimated that to bring the building into a leaseable

condition would require an investment of $1,214,660.00.

There was no finding by the Landmark Commission that

BSW would realize any reasonable return on its investment

for repairs. The Court finds this to be a defect in the

ordinance, as it is presently drafted.

BSW contends that the Landmark Commission and

the BZA denied it due process under the ordinance. The

ordinance permits a building to be listed on the Ohio

Historical Inventory without the consent of the owner. The

ordinance does not require any notice to the owner. It is

not necessary that the structure be located within a

historical district. The ordinance provides no means of

informing the public that the building is subject to the

Landmark Commission’s control. Other ordinances

provide for treating the historical designation as a

mortgage, so that the public is aware that the building has

historic signifigance (sic) and is subject to the City’s

control. (See BSW’s exhibits 51 152).

On March 14, 1989, when the application for the

demolition permit was made, there was no record in the

real estate records that the property was designated as a

historical landmark or was eligible for historic designation.

The supplemental evidence indicates that the City applied

for historical status for the building in May, 1989, after

application for the permit was filed. BSW’s Exhibit 5

indicates that the City applied for registration of the

property with the U.S. Department of the Interior on July

17, 1989. It is apparent that the Ci

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.