City of Birmingham v. Tutwiler Drug Co., Inc.

• Decision Date: 07 June 1985
• Docket Number: Nos. 82-1007,82-1287,s. 82-1007
• Citation: 475 So.2d 458
• Parties: CITY OF BIRMINGHAM, a municipal corporation v. TUTWILER DRUG COMPANY, INC., and Streetlife, Inc. CITY OF BIRMINGHAM, a municipal corporation v. TUTWILER DRUG COMPANY, INC., et al.
• Court: Alabama Supreme Court

Page 458

475 So.2d 458

CITY OF BIRMINGHAM, a municipal corporation v. TUTWILER DRUG COMPANY, INC., and Streetlife, Inc.

CITY OF BIRMINGHAM, a municipal corporation v. TUTWILER DRUG COMPANY, INC., et al.

Nos. 82-1007, 82-1287.

Supreme Court of Alabama.

June 7, 1985.

Rehearing Denied Aug. 23, 1985.

Alton B. Parker, Jr. and J. Stuart Wallace, of Spain, Gillon, Riley, Tate & Etheredge, Birmingham, for appellant.

W. Eugene Rutledge and Kay S. Kelly of Rutledge, Fay and Kelly, Birmingham, for appellees.

FAULKNER, Justice.

Tutwiler Drug Company filed an action for a declaratory judgment against the City of Birmingham, its mayor, and its city council members to determine the validity of a resolution adopted by the Birmingham City Council for the redevelopment of Block 60 in downtown Birmingham. Tutwiler's complaint alleged that the City and its agents deprived it of rights and privileges secured by the Fourth, Fifth, and Fourteenth Amendments to the United States Constitution in adopting the resolution. It sought to have the resolution declared invalid and to recover damages under 42 U.S.C. § 1983 and attorney's fees under 42 U.S.C. § 1988. The trial court dismissed the action against the mayor and the city council members individually. Following the entry of a Rule 54(b), A.R.Civ.P., order, an appeal was taken to this Court, which affirmed the trial court's order. Tutwiler Drug Co. v. City of Birmingham, 418 So.2d 102 (Ala.1982). After remand to the trial court, a hearing was conducted on the merits. The trial court ruled that the resolution in question was invalid and awarded Tutwiler $40,000.00 in damages and $105,798.50 in attorney's fees. The City of Birmingham appeals.

The Facts

In 1979 the City of Birmingham undertook studies of land-use surveys and census data pertaining to downtown Birmingham, which culminated in the adoption of a Community Renewal Plan on September 11, 1979. The Community Renewal Plan was a generalized plan identifying areas in Birmingham which needed revitalization. Block 60, which lies between 4th and 5th Avenues North and 19th and 20th Streets, was within an area identified by the Community Renewal Plan as needing revitalization.

The City selected the joint venture of Costa and Demetriou to act as urban planning consultants in developing a Master Plan for the redevelopment of downtown Birmingham, an area circumscribed by the Red Mountain Expressway, Highland Avenue, Interstate Highway 65, and 11th Avenue North. Costa and Demetriou prepared a land-use map of the downtown area and made a survey of the physical characteristics of the buildings within the survey area and the uses to which the buildings were being put. Each building was classified as either sound, deteriorating, or dilapidated. Data regarding the uses of the various buildings, the capacity of existing traffic arteries and parking facilities, the existing market for goods and services, and demographic trends were collected.

In February of 1980 the consultants submitted an "Early Program of Action" to the city. Among other things, the plan provided for the construction of multi-use structures containing retail and residential units along 19th Street North, including the west half of Block 60. It also called for the construction of a major hotel adjacent to the First National-Southern Natural Building on the north half of Block 47 (the block immediately to the north of Block 60). A public presentation of the Early Program was made and the City Council adopted the plan. During the following June the city requested proposals from developers for implementing the plan.

During the early part of August 1980, First National Bank, which owned the site of the proposed hotel on Block 47, vehemently objected to the construction of a hotel on the parcel. On August 19, 1980, Costa and Demetriou advised the city that they had changed their recommendation with regard to the location of the hotel, and they recommended that it be placed on Block 60. The city's planners and its consultants took the position that locating the hotel on Block 60 in a major mixed-use development would have a greater impact on downtown than locating the hotel on Block 47. The relative advantages of placing the hotel on Block 60 and the belief that First National would eventually redevelop the north half of Block 47 even if it was not included in the redevelopment project led the city to decide to alter the plan with regard to location of the hotel. On August 26, 1980, the City Council passed a resolution designating Metropolitan Properties, Inc., as a developer with which the city would attempt to reach an agreement to redevelop Block 60. Development of the project had to await completion and adoption of the Master Plan, however.

On March 24, 1981, the completed Master Plan was presented by the consultants to the Birmingham Planning Commission. The proposal to redevelop all of Block 60 was included in the plan which was presented to the commission. The Planning Commission approved the Master Plan and recommended it to the City Council for its approval. On May 5, 1981, the City Council held a public meeting to consider the Master Plan, and at that meeting it passed a resolution adopting the Master Plan as a comprehensive urban renewal and redevelopment plan for downtown Birmingham pursuant to Title 24, Chapters 2 and 3 (§§ 24-2-1 through 24-3-9), Code of Alabama. ¹

The consensus of the city's consultants participating in the master planning process was that the entire downtown area contained elements of blight. After adoption of the Master Plan, the city set out to find specific evidence of blight on Block 60. Inspectors from various city agencies, such as the Department of Inspection Services and the Fire Department, were instructed to conduct inspections of the buildings on Block 60 and to make reports of all defects found in the buildings. The Crime Analysis Section of the Birmingham Police Department made a report on crime statistics for Block 60. Data were compiled regarding the number and nature of businesses on the block, the physical lay-out of the improvements on the block, and the number of parking places. The data were given to a city planner, Larry Watts, who was charged with compiling and analyzing them. The city's legal staff used the data compiled by Mr. Watts in drafting a resolution to be presented to the City Council. The mayor and his aides reviewed the information compiled by the consultants and by the city's employees pertaining to Block 60 and recommended that the City Council adopt the resolution prepared by the city's legal staff providing for the redevelopment of the block.

On August 25, 1981, the City Council held a public hearing on the proposed resolution. Tutwiler's president attended the meeting and its attorney made a statement on its behalf. On September 8, 1981, the Council adopted Resolution #1119-81, which became the Redevelopment Plan for Block 60. The resolution set out specific elements of blight existing on Block 60. It pointed out that the block is divided into 20 separate lots owned by 22 people, that it had three vacant buildings, and that sixteen businesses had moved away from the block during the preceding six years. It stated that most of the buildings occupied 100% of their lots and that there was an underutilization of the upper floors on the block. The resolution detailed numerous violations of the fire, electrical, plumbing, building, and housing codes. It also stated that serious policing problems existed on the block, and it set out a list of the types of crimes committed there during the preceding four years. It stated that the blight on the block had developed over a number of years and that the blight was increasing at an accelerated rate. The resolution concluded that, because of the block's location and its deteriorating condition, the redevelopment of Block 60 was pivotal to the revitalization of downtown Birmingham as proposed by the Master Plan; that the redevelopment of the block would eliminate blight on Block 60 and would reduce blight, blighting factors, and the causes of blight in other parts of the downtown area as well. The resolution concluded that it was necessary and in the public interest for the city to redevelop Block 60.

Tutwiler then brought this action to determine the validity of Resolution 1119-81. Tutwiler accused the city of using the determination of blight as a "subterfuge" to unlawfully and illegally acquire its property interests. At the trial of the case Tutwiler painted a picture of Block 60 which was very different than the one evoked by the description contained in the resolution. Tutwiler pointed out that some of the city's oldest and most respected merchants, such as Smith & Hardwick Bookstore, Action's Camera Shop, and Forbes Piano Co., to name only a few, were located on Block 60. The Goodyear Shoe Hospital had been in the same location on Block 60 for over sixty years, and several other merchants had been there over forty years. At the time the resolution was passed, over 95% of the available space on the block was occupied. Tutwiler argued that the buildings themselves were in excellent condition considering their age, and that they would be considered undesirable only in comparison with the very newest buildings in the downtown area. In support of its contention that the buildings on Block 60 were not deteriorated, Tutwiler introduced copies of the original reports made by the city's inspectors. The reports contained favorable comments about the condition of the buildings on the block.

The Trial Court's Decree

The trial court issued a 17-page opinion containing detailed findings of fact. Much of the opinion deals with the city's use of the inspectors' reports. Several reports contained qualifying remarks about the conditions of the buildings. The building inspector and the housing inspector referred to the substandard conditions on Block 60 as "minor"...