*Decision Summary for Civil Action No. 96-569-LFO
*Title: District Intown Props. v. D.C. Dep't of Consumer & Regulatory Affairs
*Citation: 23 F. Supp. 2d 30, 680 A.2d 13 (D.D.C. 1998)
*Decided Date: 25-Sep-98
In 1961, the plaintiffs purchased Cathedral Mansions, a three-building apartment complex with a large lawn facing the National Zoo. In 1978, plaintiffs filed an application to subdivide the property into nine lots of record. The new configuration consisted of one large lot underneath the existing structures and eight smaller lots carved out of the lawn. In December 1988, plaintiffs filed an application to construct one new townhouse on each of the eight vacant lots. While the construction permit application was pending, an application to designate the Cathedral Mansions property—including the eight vacant lots—as an historic landmark was filed with the D.C. Historic Preservation Review Board (HPRB). The HPRB voted to designate Cathedral Mansions as an historic landmark in May 1989. In July 1989, the HPRB denied plaintiffs' new construction application, noting that the proposed construction would be incompatible with the property's historic landmark status. In January 1992, plaintiffs once again applied for permits to build townhouses on the eight vacant lots, and the HPRB again recommended denial of the permits. The Mayor's Agent adopted the Board's recommendation and further observed that the plaintiffs had failed to carry their burden on the issues of unreasonable economic hardship and special merit. On March 22, plaintiffs filed this 42 U.S.C. § 1983 action in federal district court, arguing that the permit denial had rendered the eight vacant lots economically valueless and thus worked a "total taking" under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). On cross-motions for summary judgment, the Court held that: (1) the plaintiffs' takings claim was ripe for judicial review; (2) the relevant parcel of property for takings purposes was the entire Cathedral Mansions property, including the eight vacant lots; (3) because the permit denial did not eliminate all economically viable use of the entire parcel, the Lucas per se rule did not apply; and (4) the permit denial did not effect a taking under the three-part test articulated in Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978).
*Economic Hardship—Unconstitutional Takings:*
*Ripeness: A takings claim is not ripe for judicial review in federal court until: (1) the responsible state agency has made a final decision as to the application of the challenged regulation; and (2) the claimant has sought compensation through state inverse condemnation procedures. Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 194 (1985). The district court held that the plaintiffs had cleared both of these procedural hurdles in this case. First, the Court noted that when "the Mayor's Agent issued his final order denying their permits, plaintiffs [had] exhausted their administrative remedies under § 5-1007." Second, "District law does not provide a procedure to compensate plaintiffs for denial of their building permit applications."
*Relevant Parcel: The Court held that the entire Cathedral Mansions property—including the eight vacant lots—was the relevant parcel of property for takings purposes, noting that the Supreme Court's takings jurisprudence "does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated." (Quoting Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 130 (1978)). Citing the approach of the United States Court of Federal Claims, the district court noted that "in determining what constitutes the relevant parcel, factors such as the degree of continuity, the dates of acquisition, the extent to which the parcel has been treated as a single unit, the extent to which the protected lands enhance the value of remaining lands, and no doubt many others would enter the calculus." Each of these factors, according to the district court, militated in favor of defining the relevant parcel as the entire property: "First, there is contiguity among all the subdivided lots of the formerly unified property. Second, plaintiffs bought all of [the property] ... at one time, and have owned it in its entirety since the date of acquisition. Third, the District of Columbia tax authorities assessed the land, including the site of the building, as a single parcel."
*Categorical Takings: Because the plaintiffs failed to demonstrate that the permit denial had rendered the entire Cathedral Mansions property economically valueless, the district court held that the per se rule of Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), did not apply in this case. The proper framework for analysis, according to the district court, was the Penn Central three-part test.
Penn Central _and Partial Regulatory Takings:_ Because the "denial of plaintiffs' applications arguably effected a partial, yet compensable [regulatory] taking, plaintiffs' claim must ... be assessed through the case-specific framework fashioned by the Supreme Court in Penn Central," which considers "1) the economic impact of the regulation on the claimant; 2) the regulation's interference with the owner's investment-backed expectations; and 3) the character of the governmental action." The Court held that the denial of the new construction permit in this case did not effect a taking under this standard. Addressing the character of the governmental action, the district court noted that "the denial of plaintiffs' permit applications was non-physically intrusive, was part of a more general ‘public program,' and was aimed specifically at promoting the congressionally recognized public interest in preserving the open space opposite the National Zoo." (internal citations omitted) The district court also believed that "denial of the permit applications [did] ... not interfere unnecessarily with plaintiffs' investment-backed expectations," because such expectations did not exist during much of the plaintiffs' ownership of the property. Moreover, "plaintiffs were on notice that their property was subject to designation as an historic landmark, and to the restricted uses that accompany such designation." Finally, the district court noted that "while denial of the permits may prevent plaintiffs from maximizing the value of their property, it does not as a matter of law work such a significant diminution as to effect a compensable taking." The plaintiffs have merely alleged that "the lawn has no economic value when divorced from the rest of the property." However, "since it has been established that the proper denominator in the takings calculus is the entirety" of the Cathedral Mansions property, "a valuation of a hypothetically detached lawn is irrelevant."
The Court held that a successful demonstration of unreasonable economic hardship merely authorizes, but does not require, the Mayor's Agent to issue permits over the objections of the Historic Preservation Review Board.
Decision and Order of the Mayor's Agent, HPA Nos. 92-213 through 92-220 (March 18, 1992).
District Intown Properties Ltd. v. DCRA, 680 A.2d 1373 (D.C. 1996).
District Intown Properties Ltd. Partnership v. District of Columbia, 198 F.3d 874 (D.C. Cir. 1999).