State ex rel. BSW Development Group v. City of Dayton, 98-473

• Decision Date: 14 October 1998
• Docket Number: No. 98-473,98-473
• Citation: 699 N.E.2d 1271,83 Ohio St.3d 338
• Parties: BSW DEVELOPMENT GROUP, Appellant, v. CITY OF DAYTON et al., Appellees.
• Court: Ohio Supreme Court

Page 338

83 Ohio St.3d 338

699 N.E.2d 1271

[The STATE ex rel.] BSW DEVELOPMENT GROUP, Appellant, v. CITY OF DAYTON et al., Appellees.

No. 98-473.

Supreme Court of Ohio.

Submitted Aug. 19, 1998.

Decided Oct. 14, 1998.

In the late nineteenth century, a building now known as the Wilcon Building was constructed along the Miami-Erie Canal in Dayton. The building was originally used for various enterprises, including linseed oil manufacturing, flour milling, and wheat and tobacco storage. By the 1980s, Wilcon Corporation ("Wilcon"), Dayton Tire Sales, and Wat-kem Mechanical, Inc. ("Wat-kem") each occupied one-third of the building. Wilcon Corporation, a construction company owned and operated by Dennis Williams, had its office as well as a millwork shop and storage area in the building. Dayton Tire used its portion of the building for tire sales and installation in addition to other automotive services. Wat-kem, a mechanical contracting company, had an office and storage space in the building.

In 1984, BSW Development Group ("BSW"), a partnership composed of attorney Dwight D. Brannon, accountant William I. Schoenfeld, and Williams, purchased the Wilcon Building and adjoining property for $315,000. BSW subsequently sold a portion of the property that did not include the Wilcon Building for $250,000. BSW decided to develop an office park consisting of two new buildings on the remaining land. Pursuant to its development plan, BSW demolished the existing building on the property adjacent to the Wilcon Building and constructed a new building called Canal North, which BSW made available for lease. BSW planned then to tear down the Wilcon Building and construct a new building to be known as Canal South on the property.

In anticipation of the demolition of the Wilcon Building, Wilcon moved to the Canal North building in January 1989, and Dayton Tire vacated the Wilcon Building after BSW brought an eviction action. Wat-kem had previously vacated the Wilcon Building. At the time that Wilcon and Dayton Tire vacated the Wilcon Building, Wilcon and Dayton Tire were paying approximately $18,000 and $23,000 in annual rent, respectively. Before moving out of the building, Wilcon renovated its space by constructing new offices, including a computer room and a kitchenette, leveling and carpeting the floors, and reworking the electrical and sanitary systems to bring that portion of the building into compliance with the Dayton Building Code.

In March 1989, BSW applied to appellee city of Dayton for a permit to demolish the Wilcon Building. Dayton refused BSW's application because BSW had not complied with Section 150.45 of the Dayton Revised Code of General Ordinances, which provides that "[w]henever an application is made for a demolition permit for any structure or site listed on or eligible for the National Register of Historic Places, no demolition permit shall be issued until the applicant has complied with the provisions of Section 150.246 of the R.C.G.O. irrespective of any other provisions of this subchapter." BSW then applied under Section 150.246 of the city code for a certificate of appropriateness from appellee Dayton Landmark Commission. In July 1989, the commission denied BSW's application because BSW failed to introduce clear evidence that the square foot cost of meeting the minimum building code would exceed the square foot market value of similarly used and improved structures in the planning district. ¹ In October 1989, appellee Dayton Board of Zoning Appeals affirmed the decision of the Landmark Commission. The "as is" value of the Wilcon Building and property at that time was $220,000.

BSW appealed the board's decision to the Montgomery County Court of Common Pleas. In 1991, the common pleas court reversed the board's decision. The common pleas court concluded that the Landmark Commission and the board of zoning appeals had denied BSW due process and equal protection and that Dayton's historic preservation ordinances were unconstitutional as applied to BSW's property. Upon further appeal by the board in May 1993, the Court of Appeals for Montgomery County affirmed the common pleas court's decision. In so holding, however, the court of appeals determined that it was unnecessary to pass upon the constitutionality of the ordinances because "BSW fulfilled the stringent requirements of R.C.G.O. 150.246(A)(4) for obtaining the certificate of appropriateness and therefore should have been granted the demolition permit."

Following the court of appeals' May 1993 judgment, the Dayton Historic Preservation Officer notified BSW that the Landmark Commission would issue a certificate of appropriateness for the requested demolition permit when BSW complied with the remaining requirements of Section 150.246 by submitting a reuse plan and requesting a waiver of the fee and bond requirements. The reuse plan requirement is not burdensome, and Dayton was willing to waive the fee and bond requirements.

Instead of submitting a reuse plan and requesting a waiver of the fee and bond requirements, BSW filed an action in the common pleas court alleging, among other things, that appellees, Dayton, the Landmark Commission, and the board of zoning appeals, had taken BSW's Wilcon Building property, thereby entitling BSW to compensation for the taking. In 1995, following removal of the action to a federal district court, the district court granted summary judgment against BSW on its Fifth Amendment takings claim because BSW had not exhausted its state remedies by seeking a writ of mandamus to compel Dayton to commence appropriation proceedings.

BSW then filed a complaint in the Court of Appeals for Montgomery County for a writ of mandamus to compel appellees to commence appropriation proceedings on the Wilcon Building property. BSW claimed that it was entitled to be compensated for the city's unconstitutional taking of its property, which resulted from appellees' denial of BSW's demolition permit. BSW did not assert any claim that it was entitled to extraordinary relief because the Dayton ordinances relied upon by the Landmark Commission and the board of zoning appeals were unconstitutional or that the city officials fraudulently and intentionally misrepresented the landmark status of the Wilcon Building.

The parties submitted evidence and BSW filed a motion for summary judgment. In its summary judgment motion, BSW raised the claim that the Dayton historic preservation ordinances were unconstitutional. The evidence established that after the city's 1989 denial of the demolition permit, BSW abandoned the Wilcon Building property, resulting in hazards to the public, including to homeless persons trespassing on the property. BSW had the heat and electricity to the building disconnected. Despite several requests by city officials for BSW to secure the property for the safety of the public, BSW failed to act. Dayton then secured the entrance to the Wilcon Building to prevent the general public from accessing the property in order to keep the premises safe. BSW, however, was provided keys to all of the padlocks and was never prevented from accessing the property after the demolition permit was denied. Following the court of appeals' 1993 judgment, Dayton did not restrict BSW's right and ability to use the property or to demolish the Wilcon Building.

In March 1996, the court of appeals issued a decision denying BSW's motion for summary judgment because BSW had not established a permanent, temporary, or physical taking of its property. The court of appeals declined to address BSW's contention that the Dayton historical preservation ordinances were unconstitutional. The court of appeals referred the case to a special master in order to determine the sole issue of whether the city's 1989 denial of the demolition permit deprived BSW of all economically viable use of its Wilcon Building property.

The special master then conducted hearings on the foregoing issue. At the hearings, the evidence established that following the 1989 denial of the demolition permit, BSW used the property surrounding the Wilcon Building for parking, including spaces for one of its Canal North tenants and monthly rental spaces for the general public. BSW also stored a boat and two wrecked cars in the building.

In addition, Michael Cromartie, the city's chief building official, testified that the building was structurally sound and that the city did not require a prospective building tenant to obtain a new certificate of occupancy before leasing the property even if code violations existed in other parts of the building, as long as the use of that portion of the building remained the same as it had been for the previous tenant. Cromartie admitted, however, that BSW had to remedy a few serious hazards, i.e., lack of fire-wall enclosures for the elevator and parts of stairways, and repair of the building's electrical system, before any tenant could move back into the building. These hazards existed at the time that appellees denied BSW's demolition permit.

In 1997, the special master issued a report recommending that the court of appeals deny the writ of mandamus because appellees' denial of a demolition permit did not deprive BSW of all economically viable use of its property. In 1998, the court of appeals overruled BSW's objections to the special master's report, adopted the special master's findings of fact and conclusions of law, and denied the writ.

This cause is now before the court upon an appeal as of right.

Dwight D. Brannon & Associates, Dwight D. Brannon and Walter J. Krygowski, Dayton, for appellant.

Freund, Freeze & Arnold, Neil F. Freund and Shawn M. Blatt, Dayton, for appellees.

PER CURIAM.

BSW asserts that the court of appeals erred by denying a writ of mandamus to compel appellees to commence appropriation proceedings. Mandamus is the appropriate vehicle for compelling appropriation proceedings by public authorities where an involuntary...