HPA No. 2000-332, 2000-333, 2000-334 (In re. Booth's Alley)

HPA Number: 2000-332, 2000-333, 2000-334
Case Name: In Re JBG Real Estate Associates XXIII, Inc.
Location of Property: 915, 917 and 919 E Street, N.W.
Date of Decision: 9/12/00, effective 15 days from date of service (9/13/00)
Type of Permit Sought: Partial Demolition and Subdivision
Disposition: Approved

Summary of Decision:

JBG Real Estate Associates XXIII, Inc. (the " Applicant ") sought a permit for partial demolition of three buildings located at 915, 917 and 919 E Street (the " Buildings "), except for the first 20 feet of each building (including the facades) that front on E Street. The three buildings were listed as contributing structures to the Pennsylvania Avenue National Historic Site. In addition, Applicant sought a permit to subdivide the property on which the Buildings were located with property located at 911 and 913 E Street. Both the application for a permit for partial demolition and for subdivision were a part of Applicant's planned mixed use project including residential units, retail space, underground parking and space for artist studios. The Mayor's Agent granted Applicant's permits for partial demolition and subdivision finding that issuance of such permits was necessary to allow Applicant to construct a project of special merit and, as such, would be consistent with the purposes of the Historic Landmark and Historic District Protection Act of 1978, as amended, D.C. Law 2-144, D.C. Code, Sec. 5-1001 et seq. (1999) (the " Act ").

Mayor's Agent - Procedural:

The District of Columbia Preservation League sent letters of opposition to the Mayor's Agent, one of which, dated August 14, 2000, the Mayor's Agent considered to be a formal motion to reopen Applicant's case following the June 26, 2000 administrative hearing before the Mayor's Agent. In an Order issued on August 25, 2000, the Mayor's Agent denied such motion to reopen. No specific grounds for the denial were stated in this decision, however, the Mayor's Agent did comment that one of the opposition letters "offered no factual or other evidence to support its assertions."

The Mayor's Agent stated that Applicant "has the burden of proving entitlement to a demolition permit (and, by circumstances here, a subdivision permit)...," citing The Kalorama Heights Limited Partnership v. District of Columbia Department of Consumer and Regulatory Affairs , 655 A.2d 865, 869 (D.C. 1995).

The Mayor's Agent declared that the Applicant must prove "by substantial evidence" that the project will provide specific features of land planning or social or other benefits having a high priority for community services for it to be considered a project of special merit, citing Kalorama Heights , supra at 869.

The Applicant cited two court cases ( Kalorama Heights , supra; Committee of 100, see below) and two prior Mayor's Agent decisions ( In Re: The Archdiocese of Washington, HPA Nos. 1999-219 - 1999-222, 1999-224 - 1999-226 & 1999-285, November 9, 1999; In Re: Square 456, Old Hecht Company Department Store Complex , HPA Nos. 1995-440 - 1995-448, 1996) as "legal precedent," either pointing out similarities or distinguishing factual differences in these cases and decisions to support its claim that the project is one of special merit. The Mayor's Agent specifically listed the similarities and distinguishing factors, and concluded that they supported a finding of special merit by the Mayor's Agent "based upon the application of the appropriate legal standards to the evidence." The Mayor's Agent did not state whether prior cases actually have any precedential value for purposes of Mayor's Agent proceedings, nor did he state whether or how much weight he is to afford such prior decisions.

Consistent with the Purposes of the Act:

The Applicant specifically requested that the Mayor's Agent deem the project as one of "special merit," and that the Mayor's Agent not consider "consistency with the purposes of the Act" as a separate legal ground of "special merit." The Mayor's Agent granted these requests without elaboration.

Necessary in the Public Interest:

The Mayor's Agent concluded that the project must be "necessary" to allow construction of a project of special merit, citing D.C. Code 5-1002(11).

According to the Mayor's Agent, whether demolition is reasonably "necessary" to construct such project of special merit must be assessed in the "context of whether there are 'viable alternatives to demolition available,'" citing Committee of 100 v. District of Columbia Department of Consumer and Regulatory Affairs , 571 A.2d 195, 202 (D.C. 1990) ( citing, Don't Tear it Down, Inc. v. D.C. Department of Housing and Community Development , 428 A.2d 369, 373 (D.C. 1981)). The Mayor's Agent found that Applicant followed a rigorous design and program review process which revealed that no economically viable alternative existed to its partial demolition plan devised to achieve Applicant's mixed-use goals. (The process involved Applicant's submission of 15 different design studies, ranging from complete demolition to complete preservation of the 3 contributing buildings, and consultation with various stakeholders for over a year.) Not only did Mayor's Agent find that was there no economically viable alternative to partial demolition, but he also found that Applicant had demonstrated commitment to preservation by increasing the setback from 10 to 20 feet at a cost of nearly half a million dollars in lost value due to diminished rent potential from such increase.

Project of Special Merit - Balancing Test:

The Mayor's Agent concluded that in a special merit proceeding, he must "balance the historical value of the particular landmark against the special merit of the proposed project," citing Citizens Committee to Save Historic Rhodes Tavern v. D.C. Department of Housing and Community Development , 432 A.2d 710, 716 (D.C. 1981), cert. denied 454 U.S. 1054 (1981). The first part of this balancing test requires a determination by the Mayor's Agent that the project is one of special merit based on whether it involves a "plan having significant benefits to the District or to the community by virtue of exemplary architecture, specific features of land planning, or social or other benefits having a high priority for community services," citing D.C. Code, Sec. 5-1002(11). The second part of this balancing test requires that the Mayor's Agent consider the historical and architectural characteristics of the building/project against the special merit of the project. Here, the Mayor's Agent found that the Buildings were background and not primary resources in the Pennsylvania Avenue National Historic Site. Furthermore, the Mayor's Agent determined that Applicant had demonstrated its "best efforts to maximize the preservation of the structures, while maintaining an economically viable development program." Finally, the Mayor's Agent gave great weight, as required under the law, to the recommendation of the affected Advisory Neighborhood Commission, which supported the project.

Project of Special Merit - Specific Features of Land Planning:

The Mayor's Agent concluded that Applicant's proposed mixed use development of the Buildings evidenced a number of specific features of land planning, including that: 1) the mixed-use project was not required by the zoning regulations and Applicant could have used the Buildings for more profitable commercial use; 2) each of the proposed uses of the project has a high priority in the city's land use policies aimed at achieving a "Living Downtown;" 3) the project embodied a number of the general and specific policies of D.C.'s Comprehensive Plan; 4) the project will be the first privately financed residential project constructed in downtown D.C. since the Downtown Plan was adopted in 1984-1985; and 5) the development would stimulate the economic growth of the E street corridor and the downtown area, more generally.

The Mayor's Agent noted (and seemed to be pleased) that Applicant did not argue that the additional off-street parking contemplated by project was of "special merit." The Mayor's Agent stated that off-street parking is mandated by applicable zoning regulations (citing Committee of 100 on the Federal City v. DCRA , 571 A.2d 195, 201 (D.C. 1990)), implying that parking may not constitute a separate ground for special merit (even though this project would have provided more parking than is required under applicable zoning regulations).

Project of Special Merit - Social or Other Benefits Having a High Priority for Community Services:

Finding that the project would afford a host of residential, retail, arts-related and preservation-benefits to the area, the Mayor's Agent concluded that such benefits constituted social or other benefits having a high priority for community service and did, therefore, qualify the project as one of special merit. Certain such benefits included: 1) bringing more housing to the E Street area, thereby contributing to the achievement of the residential goals of the "living downtown," 2) helping to maintain retail continuity in the E Street corridor (by virtue of the project's ground floor retail space), 3) keeping working artists present in an area in which they have, historically, contributed and thrived, 4) promoting and enlivening the historically important Booth's Alley and preserving and restoring a significant portion of the original structure of the Buildings including the facades and building fabric. The Mayor's Agent was persuaded that Applicant was not relying solely on broad policies of the Comprehensive Plan to justify its "special merit," and that it would provide "direct residential, retail, arts and preservation-based contributions to its residents, neighborhood, the Downtown and the community generally."

-----