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Friends of McMillan Park v. District of Columbia Mayor's Agent For Historic Preservation

Court of Appeals of The District of Columbia

May 16, 2019

Friends of McMillan Park, Petitioner,
v.
District of Columbia Mayor's Agent for Historic Preservation, District of Columbia Office of Planning, Respondent, and Office of the Deputy Mayor for Planning and Economic Development, Intervenor, and Vision McMillan Partners, LLC, Intervenor.

          Argued October 17, 2018

          On Petition for Review of an Order of the District of Columbia Mayor's Agent for Historic Preservation, District of Columbia Office of Planning (HPA Nos. 14-393 and 15-133)

          Andrea C. Ferster for petitioner.

          Karl A. Racine, Attorney General for the District of Columbia, Loren L. AliKhan, Solicitor General, and Richard S. Love, Senior Assistant Attorney General, filed a statement in lieu of brief for respondent.

          Caroline S. Van Zile, Deputy Solicitor General, with whom Natalie O. Ludaway, Chief Deputy Attorney General, and James C. McKay, Jr., Senior Assistant Attorney General, were on the brief, for intervenor Office of the Deputy Mayor for Planning and Economic Development.

          Mary Carolyn Brown, with whom Philip T. Evans and Michael W. Cabrera were on the brief, for intervenor Vision McMillan Partners.

          Cornish Hitchcock was on the brief for amici curiae, Committee of 100 on the Federal City and D.C. Preservation League, in support of petitioner.

          Before Blackburne-Rigsby, Chief Judge, and Glickman and Fisher, Associate Judges.

          Glickman, Associate Judge

         This case involves the proposed development of a portion of the McMillan Reservoir and Filtration Complex located at 2501 First Street, N.W., in Ward 5 of the District of Columbia. We have seen the case once before, in Friends of McMillan Park v. District of Columbia Zoning Commission ("FOMP I").[1] There, we remanded decisions of the Mayor's Agent and the Zoning Commission which had approved aspects of the project. Friends of McMillan Park ("FOMP") now challenges the Mayor's Agent's approval on remand of subdividing the parcel and demolishing some of its historic structures.[2]

         FOMP argues that the Mayor's Agent erred in several ways, including failing to recuse himself from the case despite his close organizational relationship with the Office of the Deputy Mayor for Planning and Economic Development (the "DMPED"), a co-applicant; failing to properly assess the project's consistency with the purposes of the Historic Preservation Act, whether the project is of special merit, and the net historic-preservation losses the project would entail; improperly concluding that no reasonable alternatives could achieve the same benefits with less loss of historic features; and prematurely finding that the applicants possess the ability to complete the project.

         For the reasons discussed below, we affirm the Mayor's Agent's Order.

         I. Factual Background

         The 25-acre parcel of land at issue in this appeal occupies roughly one fourth of the McMillan Reservoir and Filtration Complex landmark recognized in the D.C. Inventory of Historic Sites. The parcel, known as the Filtration Complex, houses a water filtration system built at the turn of the twentieth century. The system has been defunct for over 30 years. It consists of a series of identical underground sand filtration cells and various above-ground components including regulator houses, sand washers, and sand bins.[3] The Filtration Complex is distinct from the adjacent components of the landmark such as the New City Reservoir and McMillan Park, which once included a fountain, walking paths, and recreational areas, but is now closed to the public.

         The Filtration Complex has always been industrial in nature and inaccessible to the public, except for a landscaped walk around its perimeter that the federal government closed in World War II and has never reopened. Since then, apart from a few tours conducted in recent years, the entire Filtration Complex has been closed to the public.

         In 1986, the federal government decommissioned the Filtration Complex after building a modernized filtration system in the adjacent area where McMillan Park once was. The following year, the District government purchased the Filtration Complex from the federal government for $9.3 million with the understanding that the District would develop it. The District determined that the majority of the Filtration Complex "cannot viably accommodate a District agency use or other public use without cost prohibitive new construction."[4] It therefore sought a private development partner for the project.

         In the early 2000s, after a lengthy search, the District selected Vision McMillan Partners ("VMP") to partner with the DMPED in developing the Filtration Complex site. In 2006, VMP began drafting development proposals. VMP held over 200 community meetings, during which it presented many of the proposals and discussed community priorities. It also repeatedly sought advice from the Historic Preservation Review Board (the "HPRB") on how best to preserve, retain, and enhance the Filtration Complex's historic features. VMP revised its development proposals over a span of eight years, in response to the feedback it received from the community and the HPRB.

         In 2014, VMP and the DMPED (the "applicants") applied for approval of the plan at issue in this appeal. They propose a mixed-use development on the site, to include medical office buildings, rental apartments, rowhouses, a grocery store, various retail stores, a public recreation center, park space, and a preserved and exposed sand filtration cell. The plan involves subdivision of the Filtration Complex site and the demolition of all but one and a half of the remaining underground filtration cells on the site.[5]

         The local Advisory Neighborhood Commission ("ANC"), ANC 5E, approved the final development plan as responsive to the community's requests. The HPRB opined that the applicants' proposed demolition of historic structures would not be consistent with the purposes of the Historic Preservation Act. The HPRB's staff report acknowledged, however, that the applicants had consistently made "significant improvement[s]" to the plan in response to the HPRB's suggestions. The staff report also noted with approval that the plan would "substantial[ly] rehabilitat[e] and meaningful[ly] incorporat[e]" most of the site's above-ground structures. The Board concluded that the plan would "retain important character-defining features of the site sufficient to convey its historic characteristics."

         II. Legal Background

         Under the D.C. Historic Landmark and Historic District Protection Act of 1978 (the "Historic Preservation Act"), parties seeking to engage in demolition on or subdivision of a landmark designated for historic preservation must obtain the approval of the Mayor or her agent.[6] The Mayor has appointed the Director of the Office of Planning as the Mayor's Agent for Historic Preservation.[7] The Mayor's Agent will not approve a permit for demolition or allow a subdivision to be recorded unless failure to do so "will result in unreasonable economic hardship to the owner" or doing so is "necessary in the public interest."[8]

         "Necessary in the public interest," the alternative relied upon in this case, is defined as being "consistent with the purposes of [the Historic Preservation Act] as set forth in § 6-1101 (b) or necessary to allow the construction of a project of special merit."[9] The purposes of the Historic Preservation Act with respect to historic landmarks are to promote their "ret[ention][, ] . . . enhance[ment][, ] . . . adaptation for current use[, ] and . . . restoration."[10] If the Mayor's Agent finds that a proposal is consistent with the purposes of the Historic Preservation Act, then he will approve it. If, on the other hand, the Mayor's Agent finds the project is not consistent with the purposes of the Historic Preservation Act, he must consider whether it is nevertheless of "special merit." A project is deemed to be of special merit when it provides "significant benefits to the District of Columbia or to the community by virtue of exemplary architecture, specific features of land planning, or social or other benefits having a high priority for community services."[11]

         If the Mayor's Agent finds a project is of special merit, he must conduct further analysis before approving it. First, the Mayor's Agent must weigh the special merit of the project against the project's effect on the "historical value of the particular landmark."[12] The historic value of a landmark can include consideration of the landmark's historic significance and its architectural integrity.[13] If the Mayor's Agent finds that the special merit of the project outweighs the "net historic-preservation loss[es]" it will cause, [14] he must determine whether the applicants have shown that they considered all reasonable alternatives and that none of the alternatives would achieve the same special merit benefits with less demolition or subdivision.[15] If the project satisfies all these requirements, it may be cleared for demolition or subdivision only where the "permit for new construction is issued simultaneously under § 6-1107 and the [applicant] demonstrates the ability to complete the project."[16]

         In 2014, the applicants filed two separate applications seeking the Mayor's Agent's approval for demolition on and subdivision of the Filtration Complex site. They also applied to the Zoning Commission for approval of the project as a Planned Unit Development ("PUD"). In 2015, the Mayor's Agent issued separate orders approving the proposed demolition and subdivision under the special merit prong of the Historic Preservation Act.[17] The same year, the Zoning Commission approved the PUD application.[18] FOMP petitioned for review of these decisions. In FOMP I, we vacated all three decisions. We remanded, instructing the Zoning Commission to provide more specificity regarding the reasons for its PUD approval and directing the Mayor's Agent to address the following issues.[19]

         First, we asked the Mayor's Agent to explain "with sufficient clarity" which specific features of land planning he relied upon in finding that this was a project of special merit and why those features, taken together, supported that finding.[20]In doing so, we said, the Mayor's Agent should not include "[a] broad focus on the overall benefits flowing from [the] project," but rather should confine his inquiry to "determining whether one or more specific attributes of [the] project, considered in isolation or in combination, rise to the level of special merit."[21] We also instructed the Mayor's Agent to clarify how he viewed the medical offices included in the project as being relevant to whether the project is of special merit.[22]And we held that historic-preservation benefits of the project should not be relied on as contributing to its special merit, but may be considered in assessing whether a project is consistent with the purposes of the Historic Preservation Act due to its net historic-preservation benefits.[23]

         Second, we stated that if the Mayor's Agent made a finding of special merit in accordance with the foregoing requirements, he should balance the special merit of the project against the "net historic-preservation loss" that the project would cause.[24] In this regard, we directed the Mayor's Agent to establish exactly what historic structures would be preserved.[25]

         Third, we clarified the reasonable alternatives analysis that the Mayor's Agent must perform under the Historic Preservation Act. We agreed with FOMP that an applicant is required to demonstrate that the proposed demolition or subdivision of a historic site is reasonably necessary to obtain the project's special merit benefits, not merely that demolition or subdivision is necessary to construct the particular project proposed.[26] "If a reasonable alternative would achieve the same special-merit benefits of a project while avoiding or reducing the need for demolition or subdivision, thereby reducing the adverse impact on historic-preservation interests, then the Mayor's Agent cannot properly conclude that the proposed demolition or subdivision is 'necessary to allow the construction of a project of special merit.'"[27] We added that an applicant's burden of proof does not extend to "demonstrat[ing] that there are no other feasible alternatives, "[28] but rather to demonstrating that "all reasonable alternatives were considered."[29] And we clarified that factors relevant to determining the feasibility of an alternative include "cost, delay, and technical feasibility."[30]

         III. The Mayor's Agent's Order on Remand

         On remand, the Mayor's Agent again considered the applications for demolition of the majority of the underground sand filtration cells and for subdivision of the Filtration Complex site. He approved both applications under the Historic Preservation Act.

         In his Order, the Mayor's Agent made the following findings:[31]

1) The historic preservation benefits of the proposed project outweigh the preservation losses attributable to demolition of all but two of the underground sand filtration cells. Accordingly, such demolition is consistent with the purposes of the Act. D.C. Code § 6-1106(e).
2) The preservation losses of the proposed subdivision of the Site slightly outweigh the preservation benefits of the project, so the subdivision is not consistent with the purposes of the Act.
3) The applicant[s]'[] project is one of special merit in that it proposes specific, publicly beneficial elements of land planning and extensive social and economic benefits having a high priority for community services.
4) The special merit elements of the project substantially outweigh the preservation losses attributable to demolition and subdivision.
5) The proposed demolition and subdivision are necessary to construct a project of special merit.
6) The applicants have the ability to complete the proposed project.

         FOMP again petitions for review of the Mayor's Agent's Order.

         IV. Discussion

         As we set forth in FOMP I, "[o]ur review of a Mayor's Agent's decision is limited and narrow."[32] We review the Mayor's Agent's Order to determine whether he applied the law correctly and in accord with our instructions on remand. We will uphold his findings of fact if they "are supported by substantial evidence in the record considered as a whole" and his conclusions of law if they "flow rationally from these findings [of fact]"[33] and are consistent with our articulations of the law in FOMP I. Further, we uphold a Mayor's Agent's interpretation of the statutes and regulations he administers unless the interpretation is "shown to be unreasonable or in contravention of the language or legislative history of the statute."[34]

         FOMP challenges the Mayor's Agent's Order on several grounds. First, FOMP argues that the Mayor's Agent erred in failing to recuse himself from the case despite his position as head of a subagency of the DMPED. Second, FOMP contends that the Mayor's Agent erred in finding that the demolition of the underground filtration cells is consistent with the purposes of the Historic Preservation Act. Third, FOMP maintains that the Mayor's Agent erred in finding that the project is of special merit. Fourth, FOMP asserts that the Mayor's Agent improperly evaluated the net preservation effects of the project. Fifth, FOMP alleges that the Mayor's Agent failed to consider reasonable alternatives that would result in less harm to the site's historic features. Finally, FOMP argues that the Mayor's Agent erred in prematurely determining that the applicants had demonstrated the ability to complete the project.

         A. Disqualification

         The Mayor's Agent has delegated the task of holding hearings and writing orders for applications subject to the Historic Preservation Act to a law professor whom he designated to serve as Hearing Officer.[35] The Mayor's Agent "remains free to . . . reject" the Hearing Officer's draft orders, but in this case he "[c]onfirmed" the Hearing Officer's Order by signing it. The Order states that the Hearing Officer "does not take direction on the proposed outcome of cases from any official."

         Just two days before the hearing on remand after FOMP I, FOMP for the first time argued that the Mayor's Agent should recuse himself from the case due to his position as the head of the Office of Planning, which is a sub-agency of the DMPED, a co-applicant for this project. FOMP pointed out that the Mayor's Agent "serves at the pleasure of the Mayor" and under the umbrella of the DMPED, and that the District has strong financial interests at stake due to the anticipated tax revenues from the project. These circumstances, FOMP asserted, compromised the Mayor's Agent's actual and perceived impartiality. The Mayor's Agent declined to recuse himself because the Order was drafted by the neutral Hearing Officer and, contrary to FOMP's assertion, neither the Hearing Officer nor the Mayor's Agent had a "personal financial interest in the outcome" of the case. FOMP now argues that the Mayor's Agent erred in failing to recuse himself.

         There is no support for FOMP's claim that the Mayor's Agent's impartiality was actually compromised, and even if we assume that the public's perception of the Mayor's Agent's impartiality was compromised, FOMP waived this claim by failing to timely raise it.[36] FOMP's claim is waivable because it goes to the appearance of partiality rather than to personal bias or prejudice.[37] Absent a reason to believe a party was intimidated into silence, [38] a party waives its disqualification claim where it knew of the grounds for a waivable disqualification motion but failed to bring that motion in a timely manner in the proceedings.[39]

         The disqualifying circumstance FOMP now alleges-that the Mayor's Agent has a close organizational relationship with the Mayor and the DMPED- was clear to all parties at the outset and no material facts changed during the proceeding. Yet FOMP did not raise its motion until two days before the Mayor's Agent's hearing on remand. By this point, the Mayor's Agent had invested an enormous amount of time and effort in this case, and his recusal (without any showing of actual bias on his part) would have resulted in inordinate delay. Because there is no indication that FOMP's failure to seek recusal earlier was caused by intimidation, FOMP's eventual motion was untimely and its disqualification claim is waived.

         B. Consistency with the Purposes of the Historic Preservation Act

         i. Clarification in FOMP I

         In FOMP I, this court clarified that net historic-preservation benefits are relevant to the assessment of whether an application for demolition or subdivision is consistent with the purposes of the Historic Preservation Act.[40] Thus, "if a project on balance benefits historical-preservation interests more than it harms those interests, the Mayor's Agent need not make a special-merit finding before approving demolition or subdivision."[41]

         Based on this clarification of the law in FOMP I, the applicants amended their filings on remand to include the argument that the historic-preservation benefits of the project outweighed the historic-preservation losses and that the proposed demolition and subdivision were therefore consistent with the purposes of the Historic Preservation Act.

         FOMP argues that demolition of a contributing aspect of a historic landmark can never be consistent with the purposes of the Historic Preservation Act, but this argument is inconsistent with FOMP I and with the language of the statute itself. By using the phrase "necessary in the public interest"-which is defined as "consistent with the purposes of [the] subchapter as set forth in § 6-1101(b) or necessary to allow the construction of a project of special merit"[42]-in the sections on applications for subdivision and demolition, the statute contemplates that a project involving demolition or subdivision may be found to be consistent with the purposes of the Historic Preservation Act if it provides sufficient historic-preservation benefits.[43] If the legislature intended to prevent approval of demolitions and subdivisions on the basis of consistency, it could have narrowed the scope of approvable demolitions and subdivisions to only those that supported a project of "special merit."

         ii. The Mayor's Agent's findings

         The Mayor's Agent organized his review of the project's consistency with the Historic Preservation Act into two categories of historic-preservation impact (benefits and losses)-the loss, preservation, or rehabilitation of the site's structures, and the changes to the open-space character of the site. He analyzed the former impact in discussing the application for demolition, while he analyzed the latter impact in discussing the application for subdivision.

         The Mayor's Agent first assessed the net historic-preservation loss associated with the site's structures, including the underground filtration cells and the above-ground structures. As discussed earlier, the project calls for the demolition of all but one and a half of the underground sand filtration cells on the site. The Mayor's Agent weighed this loss against the following facts: the public currently has no access to the underground filtration cells; the cells are "dangerously unstable" with "many [of them] in danger of imminent collapse"; the public cannot safely enter the cells without renovations that would undermine their historic integrity; and there is "no reasonable scheme" for re-use of the cells. He also considered that the project would preserve and make available for public viewing, along with tours and explanatory signs, one and a half of the cells. He further found that the project would "retain[] and restore[] or rehabilitate[] virtually all the above ground structures," including reconstructing Olmsted Walk.

         The Mayor's Agent concluded that the proposed demolition was consistent with the purposes of the Act because, despite the historic-preservation losses the demolition would cause, the overall historic-preservation benefits for the site's structures were "extensive and impressive." He found that "the Plan plainly retains, enhances, and restores the most significant elements of the landmark and adapts them for current use." The gain from the rehabilitation of the above-ground structures and the retained underground cells, the Mayor's Agent found, outweighed the loss from demolition of some of the underground cells. Thus, he found the project would create a net historic-preservation gain with respect to the site's historic structures.[44]

         The Mayor's Agent next considered the net historic-preservation loss associated with the site's open-space character and its vistas. He acknowledged that subdivision would allow for the construction of buildings that would "decisively transform the appearance of the Site," alter "[m]uch of its open space character," and reduce its "[c]haracteristic ground-level views." He took into account, however, that the applicants had made "a thoughtful effort to convey the historic significance of the Site to contemporary observers" in the way it proposed to use the above-ground space, including "preserv[ing] the tripartite division of the Site by the service courts."

         Ultimately, the Mayor's Agent concluded that subdivision of the site was not consistent with the purposes of the Historic Preservation Act, because it would "facilitate[] the loss of [the site's] significant open space character." He clarified, however, that the net preservation loss from subdivision was slight, because the proposed subdivisions would "retain[] important elements of the organization of the space" and foster beneficial adaptation of the site for current use, both of which are key purposes of the Historic Preservation Act.

         iii. Scope of the consistency analysis

         FOMP argues that the Mayor's Agent erred in finding demolition to be consistent with the purposes of the Historic Preservation Act based on the facts that the public currently lacks access to the cells and that the structural reinforcements necessary to allow the public to enter the cells would undermine the cells' historic integrity. Public accessibility, public safety concerns, and the re-usability of historic features, FOMP contends, are all improper considerations for analysis of consistency with the purposes of the Historic Preservation Act. FOMP cites to statements in this court's decisions in District of Columbia Preservation League v. District of Columbia Department of Consumer & Regulatory Affairs ("D.C. Preservation League")[45] and FOMP I[46] for support.

         On the contrary, the level of deterioration that a historic structure has experienced and the feasibility of restoring the structure while preserving its historic integrity bear on how available for historic preservation purposes a structure is and thus on how weighty the loss of that structure would be on the net preservation effects of a project. The degree to which the public can safely access and appreciate a historic structure without any intervention is also relevant to calculating the value of preserving that structure. Here, without the project, the underground sand filtration cells will continue to deteriorate and remain unseen and of scant benefit to anyone. In contrast, the Mayor's Agent noted, the project's restoration and opening for public viewing of one and a half cells and ...


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