Home Builders Assn. of Dayton and the Miami Valley v. City of Beavercreek

• Decision Date: 23 October 1998
• Docket Number: 98-LW-3839,C.A. 97-CA-113 & 97-CA-115
• Parties: HOME BUILDERS ASSN. OF DAYTON AND THE MIAMI VALLEY, et al., Plaintiffs-Appellants v. CITY OF BEAVERCREEK, Defendant-Appellee C.A. Case Nos. 97-CA-113 & 97-CA-115
• Court: Ohio Court of Appeals

HOME BUILDERS ASSN. OF DAYTON AND THE MIAMI VALLEY et al., Plaintiffs-Appellants v. CITY OF BEAVERCREEK, Defendant-Appellee

No. C.A. 97-CA-113 & 97-CA-115

98-LW-3839 (2nd)

Court of Appeals of Ohio, Second District Greene

October 23, 1998

Trial Court Nos. 94-CV-0012 and 94-CV-0062

MICHAEL P. McNAMEE, Atty. Reg. #0043861 and CYNTHIA P. McNAMEE, Atty Reg. #0056217, 360 National City Center, 6 North Main Street Dayton, Ohio 45402-1908, Attorneys for Plaintiff-Appellant, Home Builders Assn. Of Dayton, and the Miami Valley

THOMAS R. SCHUCK, Atty. Reg. #0005336 and ROBERT B. CRAIG, Atty. Reg. #0004990, 1800 Star Bank Center, 425 Walnut Street, Cincinnati, Ohio 45202, Attorneys for Plaintiffs-Appellants Barbara B. Weprin, Trustee, The Beerman Corporation, and Midwest Realty Management Company

MARK I. WALLACH, Atty. Reg. #0010948, 800 Superior Avenue, Suite 1800, Cleveland Ohio 44114-2688, and DAVID L. EUBANK, Atty. Reg. #0042121, 1400 Talbott Tower, 131 N. Ludlow Street, Dayton, Ohio 45402, Attorneys for Defendant-Appellee, City of Beavercreek

OPINION

BROGAN J.

In these consolidated cases, Appellants challenge an impact fee ordinance originally enacted by the City Council of Beavercreek, Ohio, in November, 1993. The Appellants are Home Builders Association of Dayton and the Miami Valley (HBA),The Beerman Corporation, Midwest Realty Management Company, and Barbara Weprin, Trustee (the latter three will be referred to collectively as Beerman). After a lengthy trial to the court, the trial judge rejected numerous facial and "as applied" challenges to the constitutionality of the ordinance as originally enacted and as amended in 1995. HBA and Beerman then appealed from the trial court's judgment, raising several assignments of error. Specifically, HBA's assignments of error are as follows:

I. The trial court erred as a matter of law when it concluded that the impact fee enacted by the City of Beavercreek does not violate the equal protection and due process guarantees of the Ohio and United States Constitutions.

II. The trial court erred as a matter of law when it did not adopt the "uniquely and specifically attributable test" for the purpose of analyzing the constitutionality of the impact fee enacted by Beavercreek, and consequently failed to find the impact fee unconstitutional under that test.

III. The trial court erred as a matter of law when it concluded that the impact fee adopted by the City of Beavercreek satisfies the requirements of the "dual rational nexus test."

Additionally, Beerman presents these assignments of error:

I. The trial court erred in ruling that the Beerman Appellants lacked standing to assert their "as applied" claims and that their claims were not ripe.

II. The trial court's decision to dismiss the Beerman Appellants' claims following trial is contrary to the manifest weight of the evidence.

III. The trial court's decision is contrary to law.

IV. The trial court incorrectly utilized the "dual rational nexus standard" in its takings analysis.

V. The trial court failed to evaluate the ordinance under applicable federal authority by which the ordinance is unconstitutional.

We will discuss each assignment of error and will refer to the trial court's decision, and the underlying facts, where appropriate. However, due to the extensive record in this case, our opinion will begin with a summary of the background leading to the appeal.

I. BACKGROUND

HBA is a non-profit association representing various home builders in Dayton, Ohio, and the Miami Valley. Beerman is the owner of three parcels of land in the City of Beavercreek. One of those parcels (the Beerman tract) is a tract of approximately twenty-one acres of primarily vacant land located on the south side of Colonel Glenn Highway. This tract was purchased by Beerman for future commercial development either by Beerman or by a potential purchaser.

Beginning in the late 1980's and early 1990's, the City of Beavercreek experienced intense development pressure in the northern part of the city due to a combination of factors, including the completion of Interstate 675, and the proximity of Interstate 70 and major traffic generators like Wright Patterson Air Force Base and Wright State University. Plans for a major regional mall were also in the works. As a result of the growth and development needs the City faced, Stephen Stapleton, the Beavercreek City Manager, felt an impact fee ordinance should be enacted to help finance road construction. An impact fee is a charge imposed on new development for purposes of shifting a proportionate share of the costs associated with the development. Typically, the fee is imposed for capital improvements. For example, additional roads may be required in order to accommodate increased traffic caused by development. The primary goal of an impact fee is to equitably distribute the cost of improvements, based on the theory that neither existing residents nor new development should have to bear the total burden, since each share in the benefit of capital improvements that are made.

Before adopting the impact fee ordinance, the City used a site-specific process, with the City and developers negotiating individually about improvements required for approval of a particular development. This process gave developers some control over the selection of improvements, but Stapleton felt it ineffectively dealt with overall system needs.

In order to study the impact fee issue, Stapleton formed an impact fee team consisting of Stapleton and the following other members: City Attorney, David Eubank; City Planning Director, David Lyon; City Engineer, David Beach; City Finance Director, Jon Stoops; Assistant City Manager, David Baker; and outside consultants, Jack Pflum of Pflum, Klausmeier & Gehrum (PK&G) and Michael Starke, of Project Market Decisions (PMD). PMD was hired to project the City's future growth and to estimate the rate of absorption of vacant land by development over various periods of time. Among other things, PK&G was to perform technical engineering work and to prepare a report projecting needed roadway improvements based on the growth assumptions.

Concentrated efforts on the impact fee ordinance started in the beginning of 1991. Although the goal was to eventually create impact fee districts for the entire city, this effort was considered too large to finish within a reasonable time. Instead, the impact fee team focused on the northern part of the city, where most of the development was occurring. This area was about one-third of the City or approximately 5,100 acres, and was called Transportation Improvement District No. 1 (the fee district). The fee district itself was further divided into 33 vacant planning areas (VPAs). A VPA is an area of land primarily described by number and boundaries that is usually, but not always, vacant land, and is expected to be developed in the future. The Beerman tract was located in VPA 3. Some development had already occurred in a number of the VPAs when the ordinance was passed in 1993. For example, approximately 850,000 square feet of the Mall at Fairfield Commons, (the Mall) which was in VPA 13, had been developed by the time the ordinance was passed. Likewise, a 93,000 square foot Meijer store opened in VPA 1 in 1992.

After receiving information on the VPAs and the Beavercreek land use plan, PMD projected what the land absorption rate in the total city would be by the year 2015. PMD also projected the proportion of development that should be allocated to the fee district. PK&G then used this information, along with data from model runs performed by the Ohio Department of Transportation (ODOT), to project future traffic and roadway needs for the fee district. The City Attorney's contribution was to draft the impact fee legislation, which was based on the American Planning Association model fee impact ordinance and some modifications (which will be addressed in more specific detail later in this opinion).

Ultimately, the impact fee ordinance was enacted on November 22, 1993. Fees were assessed based on the category within which a particular new development fit. Single family dwelling units and multi-family dwelling units were charged a flat rate per dwelling unit ($594 and $356, respectively), while commercial and office developments were charged a fixed rate per 1,000 square feet ($3,267 and $1,010, respectively). These rates were based on a formula in which the total cost of the proposed roadway system was reduced by certain credits. The remaining cost was then divided by the total number of trip ends generated by all new development. This resulted in a "fee per trip," which was multiplied by the number of trip ends associated with a particular type of development. As an example, the impact fee team estimated that a new single family dwelling would generate ten new daily trip ends. After multiplying this number by the fee per trip of $59.40, the team arrived at the $594 impact fee for each new single family dwelling unit.

Under the ordinance, fees for single family developments had to be paid before the City's release and approval of the plat for the development, unless the platting was done in more than one section. In such an event, the fee applicable to a particular section needed to be paid before approval and release of the plat for the section. For all other land development activity, the fee payment was due before the City issued a zoning permit or a certificate of zoning compliance for the development. The ordinance did not contain a provision allowing fee payers to submit alternate fee proposals, but did allow for some appeals, first to the City Manager, and then to an Impact Fee Appeal Board. These provisions, as well as others, will be discussed in more...