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03/08/90 COMMITTEE 100 ON FEDERAL CITY v. DISTRICT

March 8, 1990

COMMITTEE OF 100 ON THE FEDERAL CITY, PETITIONER
v.
DISTRICT OF COLUMBIA DEPARTMENT OF CONSUMER AND REGULATORY AFFAIRS, ET AL., RESPONDENTS. S.J.G. PROPERTIES, INC., INTERVENOR



Petition for Review of an Order of the Mayor's Agent for D.C. Law No. 2-144

Before Rogers, Chief Judge, Ferren and Schwelb, Associate Judges.

The opinion of the court was delivered by: Rogers

ROGERS, Chief Judge: Petitioner, the Committee of 100 on the Federal City (the Committee of 100), seeks review of an order of the Mayor's Agent under the Historic Landmark and Historic District Protection Act of 1978 (Preservation Act), D.C. Code § § 5-1001 et seq. (1988 Repl.), granting the applicant-intervenor S.J.G. Properties, Inc. (S.J.G.) a permit to demolish the Woodward Building, located within the Fifteenth Street Financial Historic District. The Committee of 100 contends that the amenities, consisting of approximately 30,000 square feet of residential space supplemented by a day care center for at least 57 persons, offered by the replacement building proposed by S.J.G., do not support a finding of special merit under the Preservation Act, D.C. Code § 5-1002(11). The Committee also contends that the decision of the Mayor's Agent is not based on substantial evidence that the amenities are feasible, and that the Mayor's Agent erroneously factored into her special merit analysis the economic feasibility of the Woodward Building's renovation. Finally, the Committee of 100 contends that the Mayor's Agent may not use a covenant to bind a private owner on behalf of the District of Columbia. Even deferring to the Mayor's Agent's interpretation of the nature of the factors that would suffice for a project of special merit, and her Conclusion that the residential and day care amenities were sufficiently special under the Preservation Act for a project of special merit, we conclude that the Mayor's Agent's order fails to address material issues relating to the feasibility of the proposed amenities and leaves undefined the nature of the covenant which was a central element of the special merit finding.

I

On September 24, 1986, S.J.G. applied for a permit to raze the Woodward Building and construct a new office building with underground parking at the site. The Historic Preservation Review Board unanimously voted to deny the application on the ground that demolition would be inconsistent with the purposes of the Preservation Act. D.C. Code § 5-1003(c)(1). *fn1 Hearings were held before the Mayor's Agent at which the Committee of 100 and the Advisory Neighborhood Commission 2B joined as parties in opposition to the application for a demolition permit.

By order of February 19, 1988, the Mayor's Agent found that S.J.G.'s proposal to demolish the Woodward Building is necessary in the public interest because it is consistent with the purposes of the Preservation Act and because it constituted a project of special merit. The Mayor's Agent rejected S.J.G.'s claim that its project was of special merit by reason of exemplary architecture but accepted its claim of special merit based upon the special features of land planning that will promote the District's land planning objectives. In concluding that demolition of the Woodward building was necessary to construct a project of special merit, the Mayor's Agent "weighed the city's high priority for establishing a 'critical mass' of housing in the Downtown area" which market forces alone will not produce, the provision for day care services, and the absence of significant economic incentive for the owner of the building to renovate and maintain it.

The Mayor's Agent defined the special merit of the project in terms of the provisions of the new building for residential housing, day care, and parking. She therefore approved issuance of the demolition permit but made it subject to four conditions: (1) execution and recordation of a legally valid covenant between S.J.G. and the District of Columbia to run with the land and commit S.J.G. to use the top two floors of the proposed building for permanent residents, not transient business executives, and to use part of the building for a day care center capable of accommodating at least 57 children at a lease rate which will ensure its permanent operation (2) submission of a day care feasibility study setting a proposed lease rate for the day care center; (3) a certificate of occupancy restricting the use of the top two floors for use by permanent residents and a portion of the square footage for use as a day care center; and (4) simultaneous issuance of a permit for new construction and demonstration by S.J.G. of its ability to complete the project.

The Committee of 100 seeks reversal of the February 19, 1988 order of the Mayor's Agent on three principal grounds: that the proposed project's amenities do not support a finding of special merit, that the Mayor's Agent's finding of special merit is not supported by substantial evidence of the feasibility of the amenities, and that her special merit analysis erroneously included consideration of the economic feasibility of renovation of the Woodward Building. Alternatively, the Committee seeks a remand for further proceedings relating to the feasibility requirements of the amenities and the covenant.

II

The Preservation Act provides that no permit shall issue to demolish a historic building or structure in a historic district "unless the Mayor finds that issuance of the permit is necessary in the public interest, or that failure to issue a permit will result in unreasonable economic hardship." D.C. Code § 5-1004(e). *fn2 The Act defines "necessary in the public interest" as "consistent with the purposes of this as set forth in § 5-1001(b) *fn3 or necessary to allow the construction of a project of special merit." D.C. Code § 5-1002(10). A project of "special merit" is "a plan or building having significant benefits to the District of Columbia or to the community by virtue of exemplary architecture, special features of land planning, or social or other benefits having a high priority for community services." D.C. Code § 5-1002(11).

The Committee of 100 contends that because the amenities relied on by the Mayor's Agent were not within the "special merit" project exception to preservation, the Mayor's Agent erred in applying a balancing test between the value of the historic structure and the merits of the proposed project. The Committee of 100 maintains that the Mayor's Agent may only engage in such a balancing test if the proposed amenities are sufficiently "special" to warrant inclusion on the special merit side of the equation.

This court "must uphold the Mayor's Agent's decision if her findings of fact are supported by substantial evidence in the record considered as a whole and the Conclusions of law flow rationally from those findings." MB Associates v. D.C. Dep't of Licenses, Investigation and Inspection, 456 A.2d 344, 345 (D.C. 1982), and cases cited; D.C. Code § 1-1510(a)(3)(E) (1987 Repl.). The findings of fact must be based on substantial evidence on each material contested issue, and the Mayor's Agent must reach rational Conclusions based on these findings. Committee for Washington's Riverfront Parks v. Thompson, 451 A.2d 1177, 1193 (D.C. 1982). See Don't Tear It Down, Inc. v. District of Columbia Dep't of Housing and Community Development, 428 A.2d 369, 378 (D.C. 1981); D.C. Code § 1-1509(e). In a demolition case, a determination by the Mayor's Agent that a project is of special merit implicitly includes the finding that issuance of a demolition permit is necessary in order for the proposed project to proceed. Citizens Committee to Save Rhodes Historic Tavern v. District of Columbia Dep't of Housing and Community Development, 432 A.2d 710, 716 (D.C. 1981). Consequently, this court has held that the Mayor's Agent must balance the value of the community of the historic structure against the special merit of the proposed project. Id.

A. Special Merit Project

The Preservation Act requires that a proposed amenity meet a high standard in order to qualify as a "special merit" project, the construction of which would warrant demolition of a building of historical significance. The social benefits to be included in a special merit project must have a "high priority" for community services. D.C. Code § 5-1002(11). Thus, "factors which are common to all projects are not considered as special merits." REPORT OF THE COUNCIL OF THE DISTRICT OF COLUMBIA COMMITTEE ON HOUSING AND URBAN DEVELOPMENT ON BILL 2-367, "THE HISTORIC LANDMARK AND HISTORIC DISTRICT PROTECTION ACT OF 1978," at 6 (October 5, 1978). See MB Associates, supra, 456 A.2d at 346 (affirming denial of demolition permit for Bond Building on ground proposed office building was not a project of special merit since proposed contribution was common to all downtown development). *fn4 The designation of a landmark structure or historic district constitutes a formal determination that the designated properties are worthy of "protection, enhancement and perpetuation" as "distinctive elements of the city's cultural, social, economic, political and architectural history." D.C. Code ยง 5-1001(a)(1). In order to justify the permanent loss and demolition of such a valuable structure, therefore, the Preservation Act demands it be replaced with something sufficiently "special." While the Preservation Act does not require that a project of special merit be of epic proportions, the position ...


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