City of Dayton, Ohio v. William Kuntz, Iii
| Decision Date | 03 March 1988 |
| Docket Number | 88-LW-0733,10513 |
| Parties | CITY OF DAYTON, Ohio, Plaintiff-Appellee, v. William KUNTZ, III, et al., Defendant-Appellant. |
| Court | Ohio Court of Appeals |
J Anthony Sawyer, Dayton, for plaintiff-appellee.
Robert E. Manley, Cincinnati, for defendant-appellants.
Defendant-appellant William Kuntz III appeals from a judgment of the Montgomery County Court of Common Pleas upholding the right of plaintiff-appellee City of Dayton (City) to appropriate his property as part of an urban renewal plan. After reviewing the record, we conclude that the City's decision to appropriate Kuntz's property was not arbitrary or unreasonable and was supported by the necessary findings of fact. We further conclude that Kuntz has no standing to assert his claim that the City had a statutory obligation to prepare a relocation plan for his tenant. Consequently, the judgment of the trial court will be affirmed.
On March 27, 1985, the Dayton City Commission passed Ordinance 27172 adopting an urban renewal plan prepared by the City Planning Department, known as Arcade Square II.®1¯ It appears from the record that while one purpose of this plan was to eliminate blighting conditions in the area, the main purpose of the plan was to support and to complement earlier attempts to renovate the Arcade by broadening the scope of renewal efforts to include the surrounding block. According to Michael Schierloh, Director of Urban Development and Development Manager for the City of Dayton, the City's goal was to turn the Arcade into a focal point for the downtown area. Richard Helwig, City Manager for the City of Dayton, testified that both of the Arcade Square renovation projects were intended to strengthen the downtown economy.
Under the plan, the block surrounding the Arcade was divided into six parcels, A through F. According to Dayton city officials who testified at the trial, it was the City's plan to clear the area from the Arcade to Main Street (Package F) and to use the land to build an office tower. The area from Metro Market to Ludlow Street (Package B) was to be cleared and used for a parking garage. According to the witnesses, buildings in the project area that were considered either architecturally significant (i.e., the Gibbons Annex) or essential to the downtown community (i.e., Metro Market) were to be retained.
Defendant-appellant William Kuntz III owned an undivided one-half interest in a portion of a building located in Package B. The other one-half interest in the property was held by Westminster Co., a corporation wholly owned by Kuntz.®2¯ Kuntz's property was located at 44 West Third Street and was designated Lot 6 in the Arcade Square II plan. A commercial establishment known as the Alladin Cleaners occupied the Kuntz property.
The Arcade Square II Urban Renewal Plan included an architect's evaluation of the buildings in the project area. The subject buildings were classified as either "standard" or "substandard" under three categories of criteria. Criteria 1a related to structural integrity; Criteria 1b related to fire resistance; Criteria 1c related to building components such as plumbing, heating and lighting systems. According to John M. Becher, Deputy Director of the City's Planning Department, 75% of the buildings in the Arcade Square II project area were considered "substandard."
The Kuntz property was rated substandard under Criteria 1c, meaning that six of the described components were inadequate to such a degree that taken in combination, rehabilitation of the property was prohibitively expensive. According to the architect's report, the building in which the Kuntz property was located was deficient in the following respects:
Plumbing: Abandoned and/or inoperable fixtures exist at all levels of both occupied and nonoccupied areas. The number and locations of existing fixtures is inadequate to comply with current code requirements.
Heating: Inoperable (not currently used).
Electrical: Electrical systems are inoperable and inadequate for nonoccupied areas.
Light & Ventilation: Inoperable windows and mechanical ventilation systems (some areas lack mechanical ventilation) lighting is inoperable and inadequate.
Fire Safety: Ingress and egress from mezzanine and second floor is inadequate. There are no enclosed internal stairs leading to the exterior. Two such stairs would be required by current codes.
Windows and Doors: Exit access corridors are nonexistent and doors for such are nonexistent. Exterior walls with limited fire separation are questionable as to the fire ratings and doors. Windows in these walls are not currently rated for even minimum opening requirements.
According to both Mr. Becher and Mr. Schierloh, Kuntz's property was situated in such a way that construction of the proposed parking garage would have been impossible or nearly impossible without the property. On May 14, 1986, the City Commission adopted a resolution declaring its intention to appropriate the fee simple interest in Kuntz's property. By Ordinance 27407, the City Commission declared that it was necessary immediately to appropriate the land and authorized the city attorney to make application to the Montgomery County Court of Common Pleas for a determination of compensation. On August 14, 1986, the city attorney filed a complaint for appropriation pursuant to R.C. Chapter 163. Kuntz filed his answer on September 9, 1986. A hearing on the City's right to appropriate the property was held before Visiting Judge Nichols on February 2, 3, and 4, 1987. In a Decision and Entry filed February 23, Judge Nichols held that Kuntz had failed to carry his burden under R.C. 163.09 to show that the City had abused its discretion in determining that it was necessary to appropriate his property.®3¯ According to Judge Nichols, the area in question was in a deteriorated and blighted condition and there was a reasonable relationship between the remedy of urban renewal and the problem. Judge Nichols concluded that the City had the right to appropriate Kuntz's property.
A separate hearing was later held to assess the amount of compensation Kuntz was entitled to receive. A jury set the amount of compensation at $235,000. On June 2, 1987, Judge Kessler filed a judgment entry holding that, upon deposit of the compensation and costs, the City could take possession and use the property. From this decision, Kuntz appeals.
Kuntz's First Assignment of Error is as follows:
THE TRIAL COURT ERRED TO THE PREJUDICE OF THE DEFENDANTS-APPELLANTS BY FINDING THAT THE APPROPRIATION OF DEFENDANTS-APPELLANTS' PROPERTY WAS PRIMARILY MOTIVATED BY THE CITY'S DECISION TO ENGAGE IN AN URBAN RENEWAL PLAN FOR THE REMOVAL OF SLUMS AND THE CLEARANCE OF BLIGHTED BUILDINGS.
Kuntz does not dispute the amount of compensation he was awarded. Rather, Kuntz contends that the City's decision to appropriate his property violates the United States Constitution, the Ohio Constitution, and the Dayton Revised Code of General Ordinances. Since the building in which the Kuntz property was located has already been demolished, Kuntz maintains that his remedy is to recover his property plus damages for the demolition of the building.
In his First Assignment of Error, Kuntz contends that under Article I, Section 19 of the Ohio Constitution, as interpreted by the Ohio Supreme Court in State, ex rel. Bruestle, v Rich (1953), 159 Ohio St. 13, land may be appropriated and conveyed to a private owner for redevelopment only when the purpose of the redevelopment project is to eliminate slum or blight.®4¯ Kuntz argues that in the present case, the only determination made by the City was that a majority of the buildings in the project area were "substandard." According to Kuntz, since this is not the equivalent of a determination that the area surrounding the Arcade was a "slum, blighted, or deteriorated area" as defined in Section 40.09(L) of the Dayton Revised Code of General Ordinances, the City's appropriation of his property violates the rule set forth in Bruestle, supra. ®5¯ Kuntz also cites a decision from the Court of Appeals for Hamilton County, Eighth & Walnut Corp. v. Public Library (1977), 57 Ohio App.2d 137, for the proposition that as a condition precedent to a city's exercise of the eminent domain power for the purpose of urban renewal, the city must determine that slum or blight exists. According to Kuntz, since there has been no determination by the City that the area surrounding the Arcade was a slum, appropriation of his property for an urban renewal project was improper.
Kuntz contends that the City's sole purpose in adopting the Arcade Square II project was to bolster a previous attempt to renovate the Arcade Square, which had proven to be a financial failure. According to Kuntz, this decision contravenes Article I, Section 19 of the Ohio Constitution, since urban renewal for the purpose of economic redevelopment does not constitute a valid "public use" under Ohio law.
We disagree with Kuntz's reading of the two cases cited above. In State, ex rel. Bruestle, supra, the Ohio Supreme Court held that urban redevelopment is a purpose for which public funds can be expended and the power of eminent domain can be exercised. 159 Ohio St. at 23. According to the Court, an urban renewal plan is not rendered unconstitutional simply because there may be an incidental nonpublic use of the property or benefit from its taking. 159 Ohio St. at 27. The Court also held that the phrase "public use" found in the second sentence of Article I, Section 19 was not intended as a limitation on the phrase "public welfare" found in the first sentence. 159 Ohio St. at 23-25. In Eighth & Walnut Corp. v. Public Library supra, the...
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