Demolition not necessary to correct hazards posed by two historic Detroit structures

by Victoria Heldt

City of Grosse Pointe Park v. Detroit Historic District Commission
(Michigan Court of Appeals, April 19, 2012)

The City of Grosse Pointe Park (the City) wanted to demolish two buildings it owns on East Jefferson Street in Detroit – immediately adjacent to the City – to possibly construct a bus turnaround loop on the property.  One building was built in 1918 and the other in 1920.  In April 2007 the City applied to the Detroit Building Safety and Engineering Department (BS&E Department) for a permit to tear down the buildings, which it received.  Three days later, the BS&E Department issued a “stop work” order.  Since the properties are in a main street overlay area, the Detroit Planning and Development Department needed to sign off on the demolition and construction plans to ensure that it was “consistent with the design standards of the subdivision.”

In May 2007 the Jefferson Avenue Business Association asked the Detroit City council to establish the area as an interim historic district, which it agreed to.  The Historic Designation Advisory Board was ordered to study whether the property qualified for historic-designation status and the Detroit Historic District Commission (DHD commission) was to review the demolition and building permit applications within the scope of the Local Historic Districts Act (LHDA).

During April 2008 the City applied to the DHD commission for permission to demolish the buildings, noting that statue allows demolition where public safety is an issue.  It provided an affidavit from Ronald Supal, a building inspector, in which he stated the properties were “dangerous to human life and public welfare” and recommended they be demolished.  Jack Durbin, a professional engineer, also submitted a report recommending the buildings be razed.  Susan McBride, a staff member of the DHD commission, submitted a report noting that the City had never stated the cost of rehabilitating the building and argued the building should remain due to its historical and architectural value.  She claimed it is “one of the few remaining commercial districts that reflect commercial architecture and suburban development on the east side of Detroit during the 1920’s.”  At a public hearing, the DHD commission denied the application because it did not meet the United States Secretary of Interior’s standards for rehabilitation.

Soon after the hearing, the city council passed an ordinance that established the Jefferson-Chalmers Historic Business District, which included the buildings in question.  In July 2008 the City filed an appeal to the review board challenging the DHD commission’s denial.  It argued that the DHD commission’s decision was arbitrary and capricious since the buildings were only an interim historic district when the application was denied.

In July 2009 the review board affirmed the DHD commission’s denial to demolish.  It noted the level of expertise present in the DHD commission and its authority to decide these matters.  It also found that the opinions the City provided from Supal and Durbin failed to establish that the buildings were a public hazard.  The board took issue with Durbin’s report because it lacked specific facts to support the conclusion.  It further found that the City “failed to establish that demolition was necessary to improve or correct any problematic condition.”  The City appealed in circuit court, which affirmed the review board’s decision.

On appeal, the City claimed that the circuit court misapplied the substantial-evidence test.  The Court disagreed.  It noted that the evidence the City presented was unconvincing.  The pictures provided in Supal’s report showed the deterioration in the buildings was “far less severe than is seen in many buildings which are routinely rehabilitated in Detroit.”  The City argued that buildings needed to be demolished because they did not meet current safety codes.  This claim was not sufficient because code compliance is the most common reason for buildings to be rehabilitated.  It further noted that, even if the buildings were shown to be a hazard to public safety, the City would have needed to prove that the proposed work (demolition) was “necessary to substantially improve or correct” the situation.  The evidence did no such thing.  Rehabilitation, too, could substantially improve or correct the situation. The Court concluded that the review board’s decision to deny the demolition request was reasonable and supported by the evidence.

The City’s last argument was that, according to statute, it was not required to prove the buildings posed an immediate or imminent hazard to the public.  The Court admitted that the words “immediate” and “imminent” are not necessarily contained in the governing statute, but that the specific wording in this case is a minor issue.  The statute clearly provides that an applicant must prove a building is a hazard to the safety of the public.  Additionally, the circuit court did not rule that the building did not constitute an immediate or imminent hazard, but rather that the evidence failed to convince the review board that demolition was necessary.  The Court affirmed the circuit court’s decision.

Fire-damaged home “abandoned” despite owner’s intentions to contrary

by Gary Taylor

Council Bluffs v. Harder
(Iowa Court of Appeals, November 12, 2009)

Fire-damaged house deemed “abandoned” under Iowa Code, despite owner’s continued payment of mortgage, taxes and insurance.

Anita Harder owned a house in Council Bluffs that sustained serious fire damage in September 2004.  It has not been inhabited since.  She moved out and her insurer initially paid some living expenses, but has not paid anything else. She has continued to pay her mortgage, property taxes and insurance. As time passed, neighbors complained to the City about the deteriorating condition of the house. The City determined the home was uninhabitable, and the fire department shut off the utilities.  Approximately two years after the fire the City filed a petition requesting a transfer of title to the property to the City, alleging the property had been abandoned and was a public nuisance.  All the while Harder was continuing to negotiate with the insurance company for payment. The case was eventually tried in April 2008, with the district court finding that the house was an abandoned property within the meaning of section 657A.10A, and awarded title to the City.

The Court of Appeals characterized the question as “whether an unoccupied house may be deemed ‘abandoned’ under Iowa Code section 657A.10A where it was rendered uninhabitable by fire three and a half years ago, has been boarded up since then, has been broken into repeatedly, and is the subject of complaints from neighbors.”

The Court of Appeals focused on the definition of “abandoned” found in Iowa Code 657A.1(1), and the eleven factors enumerated by the legislature in Iowa Code 657A.10A(3)  for the court to consider when determining whether a property has been abandoned.  Harder admitted that the property met several of the listed factors (it was unoccupied for more than six months, it did not meet code, it was not habitable, it had no utility service), but contended her failure to correct the situation was due to an ongoing dispute with her insurance company, and did not reflect an intent to abandon the property.  She cited her payment of the mortgage, taxes and insurance as evidence of her intent.  While the Court of Appeals recognized that these factors weighed against abandonment, they were not sufficient to overcome the other factors.  The court pointed to the underlying purpose of the statute, which is to prevent the “serious adverse effects of unsafe, abandoned homes on neighborhoods and communities….It would undermine the purposes of section 657A.10A to allow a homeowner’s private dispute with her insurer, even if meritorious, to serve as a defense to an abandonment proceeding.  If the insurer never paid, could the house remain boarded up and deteriorating forever?”  In a footnote the court analogized the situation to a bank foreclosure where the bank pays its property tax obligations but allows the home to deteriorate.  “This is not an abstract hypothetical” the court reasoned, “given the current troubles in our economy.”  The Court of Appeals affirmed the district court’s ruling that Harder abandoned the house. 

Justice Vaitheswaran dissented, concluding that the important factors weighed against a finding of abandonment:  (1) Harder continued to pay real estate taxes, mortgage payments, and insurance; (2) Harder continued to maintain the property; (3) there was no evidence of the presence of vermin, accumulated debris, or uncut vegetation; (4) the deteriorating condition of the home was a factor beyond Harder’s control because she did not have the benefit of insurance proceeds; and (5) Harder had no intent to abandon the home.

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