# Petition for Writ of Certiorari — BSW Development Group v. City of Dayton > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386005_1781%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1999 - **Citation:** 526 U.S. 1067 ## 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. 4 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. li 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 TT 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 vi 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). 10 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 11 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 © Although sometimes applying their own constitutions in 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). 12 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), 13 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 14 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 I 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 15 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 16 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 17 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”). 18 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 19 ‘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. 20 Il 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 21 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. 22 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. 23 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 24 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). 25 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 ————————— 26 their geographic location. That defies the basic concept of supremacy of coherent federal constitutional law. It should not be permitted to continue. Il 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 27 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 28 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, 29 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. Le 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 Register of Historic Places, no demolition permit shall be 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.” 5 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) pa (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 . V. 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 4 ; Re ee eee eek ko ee a er ee ; : ; | i 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] a 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. Nm 2 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 1] 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: ry 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. A. 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. B. 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 [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386005_1781%3A1. Public record. Not legal advice.