HPA No. 2000-462 (In re. Webster School)

HPA Number: 2000-462
Building Name: Webster School
Address(es): 940 H St. NW
Date of Order: 15-Feb-01

Summary:

Applicants sought permits for new construction and for total (or alternatively for partial) demolition of the Webster School, a historic landmark designated by the Historic Preservation Review Board shortly before the Applicants' acquisition of the property. The Mayor's Agent denied both requests, concluding that the request for the total demolition permit was not properly before him and that Applicants had not adequately demonstrated that partial demolition was consistent with the purposes of the Act. Applicants also asserted that failure to issue the permits would effect an impermissible regulatory taking, and that the building could not be used in any manner without the demolition permit, thus depriving them of all reasonably expected economic benefits. While conceding that Applicants had endured an economic inconvenience, the Mayor's Agent concluded that such inconvenience amounted to neither unreasonable economic hardship nor an impermissible regulatory taking as defined by the Act.

Consistent with the Purposes of the Act :

"The 'consistency' standard requires consideration of whether the demolition could be accomplished while maintaining the salient historic qualities of a building so that it may be readily understood by present and future generations."

To be consistent with the purposes of the Act, a proposed demolition of a historic landmark must meet three criteria: retention and enhancement of the landmark, its adaptation for current use, and encouragement of its restoration.

Deferring to the expertise of the Historic Preservation Review Board in its rejection of the Applicants' initial partial demolition permit request, the Mayor's Agent found that the Applicants failed to meet the burden of proof that partial demolition was consistent with the purposes of the Act.

Demolition - Partial:

"[O]nce the [Historic Preservation Review Board] has rendered its decision and granted landmark status, the burden then shifts to a property owner to demonstrate to the Mayor's Agent how, in the absence of unreasonable economic hardship or a special merit showing, a proposed demolition might potentially still be approved as 'consistent' with the preservation goals of the Act."

Demolition - Total :

Applicants sought a permit for total demolition of the landmark Webster School, claiming their project was one of special merit. By extension of D.C. building permit regulations (see 12 DCMR 107.1.2), the Mayor's Agent found that it is the owner's responsibility to apply for a permit. He concluded that the permit request was not properly before him since the initial request came from Applicant Culinary, who was never an owner or an official agent of an owner of the property. Moreover, the Mayor's Agent found that Applicant NTEU, the owner at the time of the hearing, could not have "inherited" the original permit application. For these reasons, the Mayor's Agent concluded that he lacked jurisdiction to consider both the total demolition permit (and by extension) Applicants' argument that the permit was necessary in the public interest in order to construct a project of special merit.

Economic Hardship :

The unreasonable economic hardship test, as defined by the Act, is whether an applicant can establish that "there are no reasonable economic uses for the building as it exists." This definition is also consistent with the constitutional regulatory takings standard.

Because Applicants were well aware of the historic nature and landmark status of the Webster School at the time of purchase and yet elected to go forward, the Mayor's Agent found that they "could not have had a reasonable expectation that they would obtain approval" to demolish the property, citing Good v. United States , 189 F.3d 1355, 1361 (Fed. Cir. 1995).

Since Applicants conceded that they had made no attempt to sell the property and since there had been several competing bids on the property prior to their purchase, the Mayor's Agent concluded that Applicants failed to prove the property had no economically viable use absent demolition, which he defined according to whether an owner can use the property for some economic purpose or can sell the property.

Historic Preservation Review Board :

The Historic Preservation Review Board has the exclusive authority to make landmark decisions and designations, using the statutory standard.

Historic landmark decisions are made final once designation letters signed by the Chairman of the Historic Preservation Review Board have been issued.

Although the Historic Preservation Review Board (HPRB) erred in its initial landmark designation of the Webster School, the D.C. Court of Appeals dismissed Applicants' challenge of the designation as moot after the HPRB agreed to continue the hearing under the contested case procedures. NTEU v. D.C. Historic Preservation Review Board , N0. 99-AA-1115 D.C. (February 1, 2000). The Mayor's Agent considered the subsequent HPRB hearing and designation decision final.

Alleged procedural errors committed by the Historic Preservation Review Board may be appealed as a matter of right to the D.C. Court of Appeals.

Mayor's Agent - Procedural :

The Mayor's Agent had no jurisdiction to decide whether Applicants were entitled to a permit for total demolition of the Webster School since the permit application was not properly before him. (The initial request had come from Applicant Culinary, who was never an owner or an official agent of an owner of the property. Moreover, the Mayor's Agent found that Applicant NTEU, the owner at the time of the hearing, could not have "inherited" the original permit application from the prior owner.)

The Mayor's Agent lacks authority to order demolition because of structural, health, or welfare issues, and only the D.C. Government may secure or demolish deteriorated buildings without review by the Mayor's Agent. Therefore demolition of the deteriorated portions of the property carried out by the owners would be inconsistent with the purposes of the Act. See D.C. Preservation League v. Department of Consumer & Regulatory Affairs , 646 A.2d 984, 991 (D.C. 1994).

"[T]he Mayor's Agent must consider an expert agency's recommendation in demolition cases." See Committee for Washington's Riverfront Parks v. Thompson , 451 A.2d 1177, 1194 (D.C. 1982).

The Mayor's Agent must give the formal recommendations of the Advisory Neighborhood Commission "great weight" in his deliberations.

The merits of the Mayor's Agent's decisions and any alleged procedural errors may be appealed as a matter of right to the D.C. Court of Appeals.

Special Merit - General :

Because the Mayor's Agent determined that the Applicants' request for a total demolition of the Webster School was not properly before him, he was also unable to consider Applicants' argument that total demolition was necessary in the public interest in order to construct a project of special merit.

"[T]he D.C. Council, weighing the gravity and finality of the situation, created the 'special merit' escape valve for a narrow category of situations in which the proposed construction or other amenities offered as some 'special benefits' to the overall community, could override the contributions made by any structure which the Historic Preservation Review Board has already determined should be preserved."

Applicants have the burden to present "substantial evidence" that the proposed amenities characterizing a project as one of special merit are feasible. See Committee of 100 on the Federal City v. District of Columbia Department of Consumer and Regulatory Affairs , 571 A.2d 195, 200, 203 (D.C. App. 1990).

Special Merit - Balance Test :

"[T]he Mayor's Agent must balance the merit of a project with the historic value of the contributing building, because only projects which offer significant benefits to the District of Columbia or to the community offset the Council's policy in favor of protecting, enhancing and perpetuating the use of properties with historical, cultural, and esthetic merit."

"The 'special merit' exception to the law's preservation mandate contemplates a trade-off between the value of the existing structure and the value of what would be constructed in its place if demolition is

allowed to proceed. That a balancing is required is clear from the case law." See Committee of 100 on the Federal City v. District of Columbia Department of Consumer and Regulatory Affairs , 571 A.2d 195, 200 (D.C. App. 1990).

Special Merit - Land Planning, Specific Features of :

The Mayor's Agent found that Applicants' proposed project, an office building for the headquarters of Applicant NTEU and educational and restaurant space for Applicant Culinary, did not promote specific features of land planning. Applicants' proposal did not exceed minimum zoning requirements, and restaurant and office uses are not "preferred uses" under the zoning code. Moreover the construction of an office building on a historic site is not unique and does not promote specific features of land planning.

Special Merit - Community Services Having a High Priority :

Applicants asserted that their proposal to demolish the Webster School and build an office building with restaurant and educational space in its place constituted a project of special merit for social or other benefits having a high priority for community services along three grounds: (1) the project would provide benefits to at risk youth in the form of culinary and hospitality training and job placement, (2) the retention of salvageable portions of the school would allow the building to be reused as originally intended (as a school), and (3) relocating Applicant NTEU's headquarters to the site would allow for the retention of 123 employees in the District of Columbia. The Mayor's Agent rejected these arguments, finding that Applicants failed to present "sufficiently definite and detailed plans," and that the construction of a new office building cannot "be viewed as adequate compensation for a historic building being taken away from the community as a whole." Citing Kalorama Heights Limited Partnership v. D.C. Department of Consumer and Regulatory Affairs , 655 A.2d 865, 870 n.6 (D.C. App. 1995).

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