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LLC v. Zoning Board of Appeals of the City of Cincinnati

Court of Appeals of Ohio, First District, Hamilton

July 31, 2018

BANKER'S CHOICE, LLC, and STOUGH DEVELOPMENT CORPORATION, Plaintiffs-Appellees,
v.
ZONING BOARD OF APPEALS OF THE CITY OF CINCINNATI, Defendant, and CITY OF CINCINNATI, Defendant-Appellant.

          Civil Appeal From: Hamilton County Court of Common Pleas TRIAL NO. A-1501964

          Barrett & Weber, C. Francis Barrett and Joshua L. Goode, for Plaintiffs-Appellees.

          Paula Boggs Muething, City Solicitor, and Marion E. Haynes, III, Terrance A. Nestor and Kevin M. Todd, for Defendant-Appellant.

          Squire Patton Boggs LLP, Scott A. Kane and Larisa M. Vaysman, for Amicus Curiae Cincinnati Center City Development Corporation.

          OPINION

          CUNNINGHAM, JUDGE

         {¶1} Defendant-appellant the city of Cincinnati appeals the trial court's adoption of a magistrate's decision ordering the issuance of a certificate of appropriateness to plaintiffs-appellees Banker's Choice, LLC, and Stough Development Corporation ("Banker's Choice"), to demolish the Davis Furniture Building, a historic structure located at 1119-1123 Main Street. Because the trial court erred as a matter of law in its application of the historic-preservation provisions of the zoning code, we reverse, in part.

         {¶2} Banker's Choice, an experienced developer of urban properties in Cincinnati, had purchased and renovated properties on Main Street known as the Hanke Building. The Davis Furniture Building stood immediately across Main Street from the Hanke Building. For more than a decade the Davis Furniture Building had been permitted to deteriorate. As the trial court later found, Banker's Choice purchased the Davis Furniture Building at a sheriffs sale for $125, 000 "to alleviate the 'eyesore' * * * the building had become and to protect the economic well-being of their property across the street."

         {¶3} After purchasing the Davis Furniture Building, Banker's Choice sought a certificate of appropriateness for demolition from the Historic Conservation Board pursuant to the Cincinnati Zoning Code. See Cincinnati Municipal Code 1435-01-C and 1435-09-01. The historic-preservation provisions of the zoning code seek to "maintain and enhance the distinctive character of historic buildings and areas," to "safeguard the heritage of the city," and to "maintain the historic urban fabric of the city." Cincinnati Municipal Code 1435-03(f), 1435-03(g), and 1435-03(1).

         {¶4} To avoid the demolition of the Davis Furniture Building and to save it for renovation, three local entities with extensive urban redevelopment experience stepped forward to purchase the building. The Cincinnati Center City Development Corporation ("3CDC") offered to purchase the property for $125, 000 plus costs and expenses up to $200, 000. Grandin Properties offered $218, 240. And Tender Mercies offered $350, 000. Not only were these offers above the Banker's Choice purchase price, the latter two offers were well above the $155, 220 assessed value of the property.

         {¶5} On December 4, 2014, after holding three hearings and reviewing a voluminous record, the Historic Conservation Board adopted the recommendation of the city's Urban Conservator, and denied Banker's Choice's request. Banker's Choice appealed to the Zoning Board of Appeals of Cincinnati ("the Zoning Board"), which affirmed the Historical Conservation Board's determination. The Zoning Board reviewed the Historical Conservation Board's decision pursuant to Cincinnati Municipal Code 1435-09-2, which guides the determination of when a property owner is entitled to a certificate of appropriateness for demolition. The Zoning Board concluded that the preponderance of the substantial, reliable, and probative evidence confirmed that Banker's Choice had failed to demonstrate that it would be deprived of "all economically viable use[s] of the property * * * without approval" of the certificate of appropriateness for demolition.

         {¶6} Pursuant to R.C. 2506.01 and 2506.04, Banker's Choice appealed to the Hamilton County Common Pleas Court. The matter was referred to a magistrate. The parties presented additional evidence before the magistrate. The magistrate vacated the decision of the Zoning Board and the Historic Conservation Board. In reaching his decision, the magistrate found that the Historic Conservation Board's procedures were "deeply flawed and violated [Banker's Choice's] due process rights," that the Davis Furniture Building was not a "historical asset" or a "historic structure" as those terms are defined in the code, and that the three offers to purchase the building were "illusory" and "not bona fide offers." See Cincinnati Municipal Code 1435-01-H and 1435-01-H5. It also held as a matter of law that the standard, identified in Cincinnati Municipal Code 1435-09-2, for determining when the Historic Conservation Board may issue a certificate of appropriateness is "unconstitutional and contrary to Ohio law." The magistrate found that Banker's Choice had proven that it was not economically viable to rehabilitate the property. Accordingly, it ordered the Historical Conservation Board to issue a certificate of appropriateness for demolition to Banker's Choice. The city filed timely objections to the magistrate's decision on each of these matters.

         {¶7} The trial court took additional evidence and held extensive hearings on the city's objections before making its own finding that Banker's Choice was not denied due process in the administrative proceedings, that the Davis Furniture Building was "part of a group of buildings that may be deemed to be of an historically significant area and era," and that "at least one and perhaps all three" offers to purchase the property were made "in good faith." The trial court also did not "question or decide the constitutionality of the City ordinances that find the Davis Buildings to be historic assets." Without reaching an "[assessment of fault" for the failure to reach an agreement of sale, the trial court treated the "fact that no one purchased the building" as "substantial evidence that any real or perceived economic hardship * * * was not relieved" by the purchase offers. On this basis, the trial court overruled the objections, adopted the magistrate's decision, and ordered the issuance of a certificate of appropriateness for the building's demolition.

         {¶8} The trial court also granted, in part, the city's motion for a preliminary injunction directing Banker's Choice to provide the minimum repairs and maintenance to the building necessary for public safety. But in light of its ruling that the building was to be demolished, the court denied that portion of the city's motion, which would have required additional efforts to restore the building to compliance with other aspects of the city's building code.

         {¶9} The city appealed. We permitted 3CDC to appear ...


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