Opinion ID: 2630594
Heading Depth: 3
Heading Rank: 2

Heading: Holding's Claim of a Grandfather Right To Advertise

Text: Holding argues that enforcing AMC 10.40.050(B)(5) against him reduces the value of businesses that existed before passage of the code subsection. He asserts that he has a vested right in the advertising he provides to the five businesses operating on his properties, and that his practice of advertising is protected against enforcement because it is a nonconforming use. He argues that the value of his property interest would be diminished if he is unable to provide his tenants with the valuable business attributes of continuity in established business names, telephone numbers, and advertising. The code subsection's restriction on his ability to offer continuous advertisingwhich he asserts is available only if he contracts and pays for itthus allegedly violates Holding's grandfather rights. We perceive no right to pursue a preexisting nonconforming use in this case. The municipality's code provision expressly addressing the issue protects only nonconforming uses of land. [7] It does not apply to off-site advertising of business names and telephone numbers. And, as the municipality argues, AMC 10.40.050 granted no grandfather rights. The municipality notes the seeming tension between Holding's contentions that he does not own, operate, or control the businesses and his claim of vested property rights in the telephone numbers and in advertising the businesses. Holding's assertion that he does not own or operate the businesses is fatal to his claim that he has a vested interest in being able to advertise them personally. Holding's valid interest in maximizing the rental value and profitability of his properties does not mean that he has a protectable property right that frees him from any governmental regulation whatsoever. The cases Holding relies on do not justify reversal. Holding quotes Bidwell v. Scheele [8] to support his argument that vested rights are protected against state action by the Fourteenth Amendment of the United States Constitution and article I, section 7 of the Alaska Constitution. But Holding has no vested rights here. Holding also relies on Frontier Saloon, Inc. v. Alcoholic Beverage Control Board. [9] We there recognized that due process protects an interest in a lawful business. The business in that case was a bar whose alcohol distribution was regulated by the Alcoholic Beverage Control Board. We held that due process protected the license to sell alcohol, in part because of the economic loss that would result from suspending the license. [10] Bidwell and Frontier Saloon do not stand for the proposition that enforcing AMC 10.40.050(B)(5) against Holding deprives him of a vested interest in advertising businesses that he is not licensed to operate or maintain. Holding seems to suggest that enforcement of the advertising prohibition by the municipality would result in a compensable governmental taking of his property. In Balough v. Fairbanks North Star Borough, [11] we held that the borough's rezoning and subsequent denial of grandfather rights to a landowner who used her property as a junkyard did not constitute an unconstitutional taking. First, we held that there was no per se taking [12] because [w]hile the ... decision to deny Balough grandfather rights would terminate her right to use her property as a junkyard, the decision did leave her with economically feasible use[s] of her property. [13] Second, we held that the government's action did not amount to a taking because it was a legitimate response to residents' concerns about safety and aesthetics, because the rezoning did not create the costs Balough incurred, and because the rezoning did not interfere with reasonable investment-backed expectations. [14] In this case, there was no per se taking because the subsection does not interfere with Holding's ability to lease his properties. The enforcement of the subsection also does not constitute a taking under the three-step analysis. The government's interest in regulating adult-oriented businesses by knowing who owns and operates them is legitimate. The subsection has no legally significant economic impact on Holding because he may continue to lease his property, even though it may be on somewhat less valuable terms. There is no unavoidable economic loss to the businesses: if Holding is not allowed to advertise without a license, he can either obtain a license to operate and then continue to advertise, or the tenant can take on the advertising expenses. Lastly, it does not interfere with reasonable investment-backed expectations. We conclude that there is no merit to Holding's claim that enforcing the prohibition violated his grandfather rights. Holding's interest in preserving continuity of telephone numbers and advertising accounts did not vest rights in him that rendered the subsection unenforceable as to him.