Norwood v. Horney

• Decision Date: 20 May 2005
• Docket Number: No. C-040683.,No. C-040783.,C-040683.,C-040783.
• Citation: 161 Ohio App.3d 316,2005 Ohio 2448,830 N.E.2d 381
• Parties: CITY OF NORWOOD, Appellee, v. HORNEY et al., Appellants.
• Court: Ohio Supreme Court

830 N.E.2d 381

161 Ohio App.3d 316

2005-Ohio-2448

CITY OF NORWOOD, Appellee, v. HORNEY et al., Appellants.

No. C-040683.

No. C-040783.

Court of Appeals of Ohio, First District, Hamilton County.

Decided May 20, 2005.

COPYRIGHT MATERIAL OMITTED

Manley Burke, Timothy M. Burke, Gary E. Powell, Cincinnati, and Daniel J. McCarthy, and Rick G. Gibson, Norwood Law Director, and Theodore E. Kiser, for appellee.

Wood & Lamping, L.L.P., and Robert P. Malloy, Cincinnati; and Institute for Justice, Scott G. Bullock, Washington, DC, Dana Berliner, William H. Mellor, Robert W. Gall, and David Roland, for appellants.

MARK P. PAINTER, Judge.

{¶ 1} In this eminent-domain dispute, plaintiffs-appellants, Joseph P. Horney, Carol S. Gooch, and Carl and Joy Gamble (collectively, the "owners"), appeal the trial court's judgment allowing defendant-appellee, the city of Norwood, to take property through appropriation. The owners' property was taken to allow the Rookwood Partners, Ltd. ("Rookwood") to build the Rookwood Exchange ("the project").

{¶ 2} There's no place like home. And despite Rookwood's attempts to privately acquire the property, the owners consistently refused to sell. So Rookwood got Norwood involved, and Norwood exercised its right of eminent domain, taking the owners' property. In view of the rights and emotions involved in this dispute, it is no wonder that the owners have bitterly disputed Norwood's (and Rookwood's) actions or that this case is now before us on appeal. Unfortunately for the owners, the current status of the law permits this kind of appropriation. We affirm.

{¶ 3} Under R.C. Chapter 163, Norwood filed an appropriation action in November 2003 against the owners and three other groups of property owners. The appropriation action was initiated to carry out the Edwards Road Corridor Urban Renewal Plan ("the plan"). None of these residents wanted to lose their property, so the owners answered the suit by challenging Norwood's right to take the property.

{¶ 4} The trial court consolidated the appropriation actions and conducted a single trial to determine whether Norwood could take the owners' property. After a five-day hearing, the trial court found that the area in question was deteriorating. Given that finding, the court ruled against the owners and allowed Norwood to proceed with the appropriation. The court then separated the five actions and conducted jury trials to determine what compensation should be paid to the owners. The jury awarded $233,000 as compensation for the taking, and final judgment was entered accordingly. In October 2004, Norwood deposited the amount awarded and costs with the trial court, and Norwood received title to the owners' property.

{¶ 5} On appeal, the owners assign five errors — namely, that the trial court erred in holding that (1) the plan submitted by Kinzelman Kline Gossman complied with Norwood City Code 163.05, (2) Norwood did not abuse its discretion in determining under Norwood City Code 163.02 that the Edwards Road area was "deteriorating," (3) Norwood City Code 163.02(c) was constitutional as applied to this condemnation of the owners' property, (4) the urban renewal plan and the condemnations under that plan were not pretextual, and (5) Norwood did not improperly delegate its eminent-domain powers to Rookwood.

{¶ 6} We review those assignments of error that involve factual determinations under an abuse-of-discretion standard.¹ An abuse of discretion occurs when a city council's decision is unreasonable.² A trial court's decision is unreasonable if there is no sound reasoning process that would support that decision.³

I. Norwood Grows Up

{¶ 7} Norwood is a bustling municipality wholly encircled by the city of Cincinnati. Generally, Norwood has enjoyed a healthy industrial base. For example, both the General Motors Assembly Plant and LeBlond Machine Tool Company have called this charming little town home; but they are now gone. The property at issue is situated near the northwest corner of Madison and Edwards Road, just outside of what is now Edwards Road Corridor Urban Renewal Area ("the renewal area").

{¶ 8} In the late 1960s and early 1970s, land was assembled and Interstate 71 was constructed through the renewal area. The renewal area had previously been a residential community containing one- and two-family homes. After completion of I-71, the renewal area substantially changed. The I-71 construction generated multiple avenues of ingress and egress from the interstate, truncated residential streets, eliminated houses, and transformed the area into a conglomerate of residential and commercial properties. Today the surrounding areas have been substantially commercialized. For example, in the regions adjacent to the renewal area, Cincinnatians enjoy the Rookwood Pavilion shopping center and its many upscale chain stores.

II. The Making of a Taking — A Plan Emerges

{¶ 9} In 2002, Rookwood approached Norwood City Council's development committee, proposing a redevelopment project called the Rookwood Exchange. The project involved constructing a massive conglomerate of stores and offices in place of the owners' properties. The development committee, the city council as a whole, and the Norwood Planning Commission held numerous public meetings regarding the project. Moreover, both the project and the advisability of the development plan were discussed at several town meetings.

{¶ 10} Early on, Rookwood repeatedly pressed Norwood to invoke its eminent-domain powers, but each request was denied. Alternatively, Norwood urged Rookwood to privately acquire the renewal area without legislative intervention. Norwood was so adamant that the city required Rookwood to document its acquisition efforts. But the owners remained recalcitrant, rebuffing Rookwood's purchase offers.

{¶ 11} Rookwood eventually managed to privately acquire all but five of the parcels necessary for the project. The owners represented two of the five holdout parcels. After Rookwood had exhausted all its private options, and it was apparent that the remaining property could not be assembled, Norwood finally agreed to initiate the appropriation process. Under the Norwood City Code, the only way that Norwood could use its eminent-domain powers to obtain the owners' property was if the renewal area was found to be "slum, blighted, or deteriorated" or "deteriorating."⁴ So in 2003, the Norwood City Counsel hired the independent consulting firm of Kinzelman Kline Gossman ("KKG") to conduct an urban-renewal study. As far as the record demonstrates, other than providing KKG with information about the plans for the project, Rookwood did not control either KKG or the outcome of the survey.

{¶ 12} KKG's survey found that the construction of I-71 and the following commercialization of Norwood had had a negative effect on the renewal area as a residential neighborhood. The demographic analysis suggested that the best use of the renewal area was no longer for detached, single- and two-family residences. Further, the study found that development pressure, consumer demand, and the fact that a majority of other owners were willing to sell indicated that continuing piecemeal redevelopment would occur. According to the study, piecemeal development would have an adverse effect on the physical, aesthetic, and functional qualities of the area. The Norwood Planning Commission reviewed the KKG study and considered the existing-conditions survey that was included in it. Upon completion of this review, the commission recommended to Norwood City Council that the development plan proposed by Rookwood be adopted.

{¶ 13} The city council gave the required notice and held a public hearing to consider the plan. At that hearing, KKG representatives presented the results of their study to the public. Many residents and property owners within the renewal area gave testimony concerning the plan and the existing conditions in the plan area.

{¶ 14} In August 2003, the council unanimously passed Ordinance No. 55-2003, which adopted the plan. Ordinance No. 55-2003 was passed as an emergency ordinance "to eliminate deteriorating and deteriorated areas within the City of Norwood and improve safety and traffic conditions and other deteriorating conditions as set forth above and in the plan" by "encouraging their prompt redevelopment." Before passing Ordinance No. 55-2003, the city council considered the KKG study, the recommendation of the planning commission, the comments from the council's public hearing, and the knowledge and experience of the various council members. To comply with the Norwood City Code, Ordinance No. 55-2003 also incorporated by reference the conceptual plans for the project.⁵

{¶ 15} That same day, the council passed Ordinance No. 56-2003, authorizing the mayor to contract with Rookwood for the redevelopment of the area. The contract made Rookwood liable for all of Norwood's costs in exercising its eminent-domain powers. The contract also required Rookwood to demolish the existing structures in the renewal area, to improve street alignments, to eliminate a dead-end street and a limited-access street, and to eliminate other things that had led to the conclusion that the renewal area was deteriorating.

{¶ 16} In September 2003, the council passed a resolution declaring its intent to exercise its eminent-domain power over the owners' property. Two weeks later, the council approved the appropriation of the owners' properties. We now address the owners' assignments of error in order.

IV. The Plan's Requirements

{¶ 17} The owners' first assignment is that the trial court erred in finding that the plan submitted by KKG complied with the Norwood code. Thus, the owners argue that this basic statutory violation invalidated the plan and did not allow it to serve as the basis for a taking. But the information provided to the commission and the council was substantially the same as that required by the Norwood...