Opinion ID: 1955145
Heading Depth: 2
Heading Rank: 1

Heading: Special Merit Project

Text: 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, [f]actors 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). [4] 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 § 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 attributed to the Committee of 100 by S.J.G., [5] the Preservation Act is not standardless. A project of special merit must have 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. D.C.Code § 5-1002(11). The Mayor's Agent noted S.J.G.'s claim that specific features of land planning would further the goals and objectives of the District of Columbia Comprehensive Plan and found the project to be one of special merit because of its provision of social or other benefits having a high priority for community service. S.J.G. maintained that its provision of residential housing on the top two floors will help promote the District government's established goal of creating a `Living Downtown' and will help to extend activity in the area into the evening hours. The owner further contended the day care services would meet a clearly identified need for day care that is located in close proximity to the work place and will enhance the area's appeal to prospective tenants. He also stated that S.J.G.'s participation in the D.C. Rideshare Program, and its provision of parking in the building, would help to attract major commercial tenants which would promote the economic vitality of the historic district, and noted the proposed improvements in use of the street and a pedestrian plaza. In our court, however, the District agrees with the Committee of 100 that only the housing and day care proposals are bases on which the special merit finding can properly rest. The housing and day care components of S.J.G.'s proposal appear only in very general outline, and even if they could be found in a general sense under some circumstances to meet the high standards required for a project of special merit, the Mayor's Agent failed to respond to material and relevant objections made at the hearing that such housing and day care amenities could be provided in a renovated Woodward Building and that the proposals were lacking any details to demonstrate their feasibility. To the extent that the Mayor's Agent relied on the District's Comprehensive Plan, the Committee of 100 argues persuasively that she relied on excerpts that were taken out of context. While she might properly reject objections about feasibility based on land costs, since S.J.G. owned the land, she avoided the other objections by deferring their resolution to the subsequent development of a covenant between S.J.G. and the District of Columbia. Consequently, consideration of whether there was any reasonable economic incentive for S.J.G. to provide the amenities in a renovated building was premature. In her findings, the Mayor's Agent devoted considerable attention to the proposals relating to parking. Since parking must be considered with every downtown project, see 11 D.C.M.R. 2101.1 (1987), it does not ordinarily qualify as an amenity of special merit. See MB Associates, supra, 456 A.2d at 386. By contrast, there is summary treatment of the proposals for residential and day care services on which S.J.G. and the Mayor's Agent place great emphasis in concluding that demolition of the Woodward Building was consistent with the public interest. S.J.G. proposed that approximately 30,000 square feet, or two of the twelve floors, of the new commercial building would be devoted to residential use. In its proposed findings of fact and conclusions of law, S.J.G. proposed that 2,000 square feet would be used for day care services. S.J.G. did not offer evidence on the nature and type of residential unit, and the Mayor's Agent did not explain how she arrived at day care services for at least 57 persons. [6] We think that these findings are insufficient. See Nat'l Black Child Development Institute v. District of Columbia Board of Zoning Adjustment, 483 A.2d 687, 692 (D.C.1984); Citizens Association of Georgetown v. District of Columbia Zoning Commission, 402 A.2d 36, 42 (D.C.1979). There also appears to be some confusion in the Mayor's Agent's reliance on the District's Comprehensive Plan as evidence of social policy. While day care is a priority for the greater District of Columbia community as a whole, the Comprehensive Plan focuses on indigent parents and does not direct that such programs be developed in the Downtown Area. [7] The Mayor's Agent's findings on the high cost of Franklin Square properties, moreover, disclose that residents in the neighborhood are unlikely to be indigent parents, and that the cost of day care is unlikely to be within the means of working parents whom the Plan targets for assistance in the context of promoting economic self-support. [8] The Mayor's Agent similarly misconstrues the Plan's concept for residential downtown housing in her reference to a critical mass of housing. The reference in the Plan to the city's high priority for establishing a `critical mass' in the Downtown area, is used in a very different context for a different purpose. [9] The Plan refers to a critical mass of key land uses and in view of the Plan's section targeting specific downtown areas for residential development, 10 D.C.M.R. § 903 (1987), which does not include the Financial District, it is more likely that the Plan envisions a mixture of commercial, cultural, retail and professional uses, rather than major housing development. Therefore, it is inappropriate in this case for the Mayor's Agent to factor in the Comprehensive Plan as though it supports S.J.G.'s proposal. The Mayor's Agent could properly consider factors associated with alternatives to demolition such as cost, delay and technical feasibility. Citizens Committee to Save Historic Rhodes Tavern, supra, 432 A.2d at 718; Don't Tear It Down, supra, 428 A.2d at 380. The reasonableness of the proposed project must be considered in the context of whether there are viable alternatives to demolition available, and the answer to this question determines necessity. Don't Tear It Down, supra, 428 A.2d at 380. Although the Mayor's Agent found that the renovation of the Woodward Building is not economically feasible, we conclude that her conclusion is not persuasively supported by her findings of fact. Moreover, economic feasibility is just one factor to be considered in determining whether to allow demolition. [10] The Mayor's Agent found that if S.J.G. were to renovate the Woodward, its return would be approximately 7.32 percent. The projected yield for typical downtown commercial-income producing properties is 7 to 9 percent. The Mayor's Agent found that in today's dollars, a renovated Woodward Building might command approximately $22.00-23.00 per square foot. Currently, S.J.G. receives approximately $15.00-16.00 per square foot. Necessary cannot be equated with least expensive. Id. Where the economic burden of maintaining and preserving a historic building is onerous, the Preservation Act provides an owner with the opportunity to seek demolition on the separate ground of unreasonable economic hardship. D.C.Code § 5-1004(e). Although S.J.G.'s general partner testified that he had no incentive to borrow $30 million at 9 percent interest to renovate the Woodward Building, he admitted that the partnership was receiving a modest return on the building. He rested his claim that he should be permitted to demolish the building on his assertion that the proposed new construction is a special merit project in the public interest. The weight accorded by the Mayor's Agent to her conclusion that renovation of the Woodward was not economically feasible is unclear. In her order she states that [t]he issue is not whether a renovation can be done, but whether a Class B building can command the level of rents necessary to justify the extraordinary expense of renovation, and concludes that renovation of the Woodward is not feasible. The issue is not whether a Class B building can command the level of rents necessary to justify the expense of renovation, but whether demolition of the Woodward Building and the historic values statutorily ascribed to buildings located within historic districts is justified by the cost of renovation and by the benefits which the new building would bring to the community. Although we agree with the Mayor's Agent that economic feasibility cannot reasonably be assessed in a vacuum, a petition based on the alleged special merits of the project cannot be granted on the basis of strikingly different consideration. Moreover, as the Committee of 100 contends, the balancing of the historic value of the Woodward Building against the special merits of the project could not proceed until the Mayor's Agent found that the amenities proposed by S.J.G. were sufficient to constitute a project of special merit. In making the special merit determination, the feasibility of the amenities was a legitimate consideration.