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) MISSOURI CIRCUIT COURT TWENTY-SECOND JUDICIAL CIRCUIT (City of st. louis)
BALLPARK LOFTS fII, LLC and MONTGOMERY BANK, NA, Petitioners, vs. CITY OF ST. LOUIS, et al., Respondents. ORDER AND JUDGMENT The Court has before it Petitioners Ballpark Lofts III, LLC and Montgomery Bank, NA's Petition for Review of Administrative Decision by the City of St. Louis Preservation Board and claim of Inverse Condemnation. Having considered the pleadings, the full ) ) ) ) ) ) ) ) )
Cause No. 1222-CC00490 Division No.1
record and transcript from the Board's proceedings, the arguments of the parties, and the applicable law, the Court now rules as follows. Background This case arises out of Petitioner Ballpark Lofts III, LLC's ("Ballpark") attempt to restore Cupples No.7, a warehouse building that is of architectural and historical significance located at 1014 Spruce Street in downtown St. Louis, Missouri ("Cupples No.7"). For a variety of reasons set forth more fully below, that effort failed, and over the years Cupples NO.7 has deteriorated to the point that, according to Petitioners, Cupples NO.7 has become a public safety hazard and it is no longer economically feasible to restore it.
Cupples NO.7 is located within the historic Cupples Warehouse
District and the
Preservation Review District. It is also listed on the National Register of Historic Places. Planned in the early 1890s, the Cupples Warehouse District offered unique efficiencies for inventory storage and transport. Underground rail lines connected the main rail station to the warehouses, which allowed for efficient shipping and receiving of goods. Thus, the Cupples Warehouse District, and specifically Cupples No.7, are historically significant representations of S1. Louis' commercial and economic history. Cupples NO.7 also has architectural significance. The prominent St. Louis architectural firm Eames & Young designed Cupples NO.7 in 1907. The building exhibits the preferred aesthetic for warehouse buildings of its era, and features an arcaded facade that now faces Spruce Street, on which a one-story base with a corbelled feature transitions into piers rising five stories and culminating in round arches. More closely set, smaller arches complete the facade on the attic level. The Cupples Warehouse District has historically been the focus of restoration efforts downtown. Cupples No.7, specifically, was included in two redevelopment plans. The depressed housing market and the economic slowdown, however, have made financing a restoration more difficult, and currently Ballpark has no plan to restore the building. The Department of Public Safety condemned Cupples NO.7 on December 30, 2008, and on September
2011, the City of S1. Louis closed Spruce and t
Streets adjacent to Cupples No. 7 due to a concern over public safety. The CRO and the Board exist in part to protect and perpetuate buildings that are architecturally and historically significant. Among other things, the CRO reviews applications for the demolition of structures located within a Historic District or which are 2
part of a Landmark Site, and decides whether to grant the permit; the Board is the forum for appeals of CRO decisions. The overriding goal of both agencies is to preserve architecturally and historically significant buildings whenever possible. On November 9,2011, Petitioners applied to the St. Louis Cultural Resources Office (the "CRO") for a permit to demolish Cupples No. 7. The application was denied. Petitioners timely appealed to the City of St. Louis Preservation Board (the "Board"). The Board conducted an evidentiary hearing on November 28, 2011 (the "Hearing'), and thereafter upheld the CRO's denial of a demolition permit. Petitioners now seek judicial review of that decision. Standard of Review Under Article V, section 18, of the Missouri Constitution, judicial review of administrative actions are to determine "whether [such agency actions] are authorized by law, and in cases in which a hearing is required by law, whether the same are supported by competent and substantial evidence upon the whole record." Mo. Const. art. V, Sec.18. Section 536.140.2, RSMo, limits this court's review of a decision of an administrative agency "to a determination of whether the action of the agency (1) is in violation of constitutional provisions; (2) is in excess of the statutory authority or jurisdiction of the agency; (3) is unsupported by competent and substantial evidence upon the whole record; (4) is, for any other reason, unauthorized by law; (5) is made upon unlawful procedure or without a fair trial; (6) is arbitrary, capricious or unreasonable; (7) involves an abuse of discretion." Petitioner argues chiefly that the Board's decision was not supported by competent and substantial evidence. Under this standard, the Court must look to the 3
whole record in reviewing the agency's decision, not merely at the evidence that supports its decision. Lagud v. Kansas City Board of Police Commissioners, 136
S.W.3d 786, 791 (Mo. banc 2004). The Court no longer is required to view the evidence in the light most favorable to the agency's decision.'
at 791. Instead, the Court must
decide whether, considering the whole record, there is sufficient competent and substantial evidence to support the agency's decision. This standard would not be met in the case where the agency's decision is contrary to the overwhelming weight of the evidence. This Court may affirm, reverse, or modify an agency's decision, and may remand for reconsideration in light of its opinion and judgment. Section 536.140.5, RSMo. Although a reviewing court generally defers to the administrative agency's findings of fact, when its decision is based upon an interpretation, application, or conclusion of law, the decision is subject to the reviewing court's independent judgment. Section 536.140.3, RSMo; Cmty. Bancshares, Inc. v. Sec'y of State, 43 S.W.3d 821,823 (Mo. banc 2001). The Record Below The CRG submitted seven (7) items (exhibits) to the record. Item 1 was the demolition permit application for Cupples No.7, received November 9,2011, and the denial letter, dated November 15, 2011. Item 2 was a letter from Jerry Altman, senior Vice President and in-house counsel for the owners of Cupples No.7, dated November 15, 2011, requesting appeal of the demolition permit denial and an accompanying
1 The Court notes, however, that Courts of Appeal, and even the Supreme Court, have on occasion erroneously continued to apply the old incorrect standard. See Tendai, MD. v. Mo. State Bd of Registration for the Healing Arts, 161 S.W.3d 358, 365 (Mo. 2005); Versatile Management Group v. Finke, 252 S.W.3d 227, 233 (Mo. App. E.D. 2008); Colyer v. State Bd. of Registration for the Healing Arts, 257 S.W.3d 139, 143 (Mo. App. W.D. 2008).
statement setting forth the specific reasons why the appeal should be granted. Item 3 was the agenda from the November 28, 2011 appeal which detailed the CRO's reasons for denying the permit. Item 4 was a multimedia presentation prepared by Betsy Bradley, the Cultural Resources Director for the CRO, that she presented at the November
Item 5 consisted of certified copies of St. Louis City Ordinances
#64689 and #66609. Letters and emails received from members of the public comprised Item 6, with five (5) in support of demolition and fifteen (15) in opposition. Item 7 was the transcript from the November 28th appeal. Mr. Altman, on behalf of the owners, submitted two (2) items to the record. Item 8, entitled "Cupples Station BLDG 7 Statement of Forecasted Sources and Use of Funds," contained two financial projections for cost of rehabilitation and estimated source of funds. Item 9 was a Condition Assessment Letter Report (the "Report"), dated November 14, 2011, prepared by James Taylor of ABS Consulting, a registered professional engineer at the request of Ballpark. Its purpose was to review the extent of deterioration in Cupples NO.7. Members of the public submitted two (2) items to the record: item 10 was a letter to the Preservation Board from the Rainen Company; item 11 was a statement prepared by Garrick Hamilton of the Koman Group. Both explained the reasons why they would like to see the issue of what to do with Cupples NO.7 resolved. The Board prepared a written statement detailing its Findings of Fact, Conclusions of Law, and Decision, which can be found in Item 12. The Board made the following findings of fact. Cupples NO.7 is a City Landmark, is listed in the National Register of Historic Places as part of the Cupples Warehouse 5
District, and is located in a Preservation Review District. Cupples No. 7 is included in two redevelopment plans approved by ordinance, specifically a Chapter 99 Blighting Study and Development Plan per Ordinance 63535 and a Tax Increment Financing (''TIF'') Redevelopment Plan per Ordinance 67312. Both plans proposed that Cupples No.7 be rehabilitated. Cupples NO.7 is of "High Merit" under the Ordinances due to its architectural and historical significance and, as part of a group of related resources, is a prominent component in the streetscape and neighborhood. With respect to the condition of Cupples No.7, the Board found that upon inspection from the street, the exterior brick walls appear to be in sound condition, as many of the signs of brick wall structural instability are not prevalent. The Board found that the exterior brick walls are the salvageable portion of the building. It also found that the neighborhood offers no deterrent to rehabilitation, and that the reuse potential for Cupples NO.7 is similar to that of other Cupples Warehouses. Regarding economic hardship, the Board found that the evidence presented by the owners' representative was general and vague, providing costs only for demolition and full building stabilization, and not for an interim solution. The Board found that with respect to urban design, Cupples NO.7 is integral to the existing block face and its demolition would have an undesired effect on the group of four warehouses where Cupples NO.7 is located. The Board also acknowledged the Conditions Assessment Review of Cupples NO.7 completed by Taylor that concluded that a significant portion of Cupples NO.7 should be considered unsound, and noted that Altman submitted evidence that rehabilitation of Cupples No.7 is financially unfeasible. 6
The Board found that Ms. Bradley's testimony concerning the following factors was credible: a. Two Redevelopment Plans in place for this property as contemplated by ordinances propose Cupples No.7 to be rehabilitated for new uses; b. That Cupples NO.7 has architectural merit and historical value, and is a High Merit structure under the ordinances; c. That the condition of Cupples No.7 presents unusual circumstances in that the exterior brick walls appear to be sound while the interior has suffered partial collapse and that the brick walls are the salvageable portion of the structure; d. As regards neighborhood potential and reuse potential under the ordinances, the evidence supports preservation of Cupples No.7; e. That there has been insufficient evidence as to any economic hardship of the owner under the ordinance; f. As regards to urban design under the ordinances, the evidence supports preservation of Cupples No.7; g. As there is no proposed subsequent construction, the loss of Cupples NO.7 through demolition would not be mitigated through any new construction; h. That commonly controlled property issues are not involved and Cupples NO.7 is not an accessory structure. With respect to the soundness of Cupples No.7, the Board concluded that, although the interior framing system and roof have suffered damage, doubts remain about the merits of Petitioners' assertion that Cupples No. 7 is unsound. The Board specifically noted that the means to salvage the brick walls of Cupples No. 7 have not been adequately explored by Ballpark. The Board also observed that stabilizing and mothballing Cupples No. 7 would enable it to be saved through the current economic climate with a view to its long-term rehabilitation. The Board upheld the CRO's denial of the demolition permit based on the effect of the demolition on the characteristics of the
landmark site, the intent of the enabling ordinance, and the criteria as prescribed by ordinance. Discussion Section 61 of St. Louis City Ordinance 64689 describes the relevant criteria the Board is to consider when reviewing the denial of applications for demolition.' The criteria, reprinted verbatim below, are accompanied by a discussion of the evidence presented to the Board. A. Redevelopment Plans. Demolitions which would comply with a redevelopment plan previously approved by ordinance shall be approved except in unusual circumstances which shall be expressly noted. This instructs the Board to approve demolitions which would comply with a redevelopment plan previously approved by ordinance, except in unusual circumstances. The Board noted that two redevelopment plans for Cupples No. 7 are in place as contemplated by ordinance that propose Cupples NO.7 be rehabilitated for new uses. The agenda from the Hearing describes, and Bradley testified to the existence of, two redevelopment plans that included Cupples NO.7. They are the Chapter 99 Blighting Study and Development Plan and the TIF Redevelopment Plan, although the plans were never executed. The Court finds that the Board's conclusion regarding redevelopment plans was supported by sufficient competent and substantial evidence.
st. Louis City Ordinance 64689, section 61, Demolition Permit - Preservation Board Decision: "All demolition permit application reviews pursuant to Sections Fifty-Eight to Sixty-Three shall be made by the Preservation Board, which shall either approve or disapprove of all such applications. The Preservation Board may by a duly adopted order or regulation consistent with this chapter, authorize the Cultural Resources Office to make reviews of demolition permit applications. Decisions of the Preservation Board or Cultural Resources Office shall be in writing, shall be mailed to the Applicant immediately upon completion and shall indicate the application by the Preservation Board or Cultural Resources Office of the following criteria, which are listed in order of importance, as the basis for the decision" (emphasis added).
B. Architectural Quality. A Structure's architectural Merit, uniqueness, and/or historic value shall be evaluated and the Structure classified as High Merit, Merit, Qualifying, or non-Contributing based upon: Overall style, era, building type, materials, ornamentation, craftsmanship, site planning, and whether it is the work of a significant architect, engineer, or craftsman; and contribution to the streetscape and neighborhood. Demo/ition of Sound High Merit Structures shall not be approved by the Office. Demolition of Merit or Qualifying Structures shall not be approved except in unusual circumstances which shall be expressly noted. The second criterion directs the Board to classify Cupples No. 7 in terms of architectural quality. The Board classified Cupples NO.7 as "High Merit." Under the ordinance, High Merit "means contributing as a major structure to an existing ... City or national historic district." The agenda from the Hearing and Bradley's testimony explain the architectural merit and historical significance of Cupples No.7, specifically noting the arcaded facade on the north wall, the history of Cupples Station, the era in which Cupples NO.7 was constructed and operated, the significance of the architectural firm, and the engineering involved. Petitioners did not dispute the architectural and historical significance of Cupples No.7, and agreed it has High Merit. The Court finds that the Board's decision to classify Cupples NO.7 as High Merit was supported by sufficient competent and substantial evidence. C. Condition. The Office shall make exterior inspection to determine whether a Structure is Sound. If a structure or portion thereof proposed to be demolished is obviously not Sound, the application for demolition shall be approved except in unusual circumstances which shall be expressly noted. The remaining or salvageable porlion(s) of the Structure shall be evaluated to determine the extent of reconstruction, rehabilitation or restoration required to obtain a viable structure. 1. Sound structures with apparent potential for adaptive reuse, reuse and or resale shall generally not be approved for demolition unless application of criteria A,D, F, or G of this section indicates demolition is appropriate. 9
Under this section the Board is to assess the condition of the structure to determine if it is sound. City Ordinance 64689, Section 3 defines "sound" as having "visible portions of exterior walls and roofs appear capable of continuing to support their current loads for six months or more." The Board found "the condition of Cupples No.7 presents unusual circumstances in that the exterior brick wall appears to be sound while the interior has suffered partial collapse and that the brick walls are the salvageable portion of the structure." The Board stated that "serious doubts remain about the merits of the [Petitioners'] assertion that Cupples No.7 is unsound," and that stabilization of the exterior walls had not been adequately explored by Petitioner. This is really the crux of this case, and presents the Court with its most difficult assessment of the evidence. The evidence presented to the Board included the Report by ABS Consulting that spoke to the deterioration of the internal framing system, which supports the building's five unreinforced masonry walls". The Report describes areas of total or partial collapse in the timber framing bays on the east and west side of the central wall and an imminent collapse hazard due to the compromise of a column supporting the framing north of the stair shaft. The Report noted that the strength of floor and roof decks in areas that have not collapsed is "moderately to severely compromised for resisting both gravity and lateral wind and earthquake loads." The Report further described a fungal attack on the wood in Cupples No.7, which continues to worsen due to exposure to the elements caused by partial collapse of the roof. The Report also noted various cracking patterns in the east, west, and south walls,
The central fifth wall divides the building.
specifically describing an outward rotation of the south wall near the top of Cupples No.
Both the CRO and the Board acknowledge the compromise of the internal framing system in Cupples NO.7. They do not, however, accept Petitioners' assertion that the entire Building is unsound. Instead, the Board concluded that the external walls are salvageable. And importantly, the Board concluded that Petitioner did not sufficiently explore the possibility of providing temporary support for the walls until economic circumstances improve and rehabilitation can take place. It is true that taken in its entirety, the ABS Report, which was sought and paid for to support Ballpark's petition to demolish the building, describes a seriously compromised structure. While it is a close question, Court finds that the Board's decision that the exterior walls of Cupples No.7 are sound is supported by competent and substantial evidence-that is, the Court cannot say that the Board's ruling is
contrary to the overwhelming weight of the evidence.
D. Neighborhood Effect and Reuse Potential. 1. Neighborhood Potential: Vacant and vandalized buildings on the
block face, the present condition of surrounding buifdings, and the current level of repair and maintenance of neighboring buildings shall be considered. The first part of the fourth criterion instructs the Board to determine if the surrounding neighborhood offers a deterrent to rehabilitation. The Board found the neighborhood offers no deterrent to rehabilitation. The record reflects that the neighborhood offers no deterrent to rehabilitation because the immediate vicinity is undergoing rehabilitation. The Court finds that the Board's decision with regard to the
neighborhood effect was supported by sufficient competent and substantial evidence. 2. Reuse Potential; The potential of the Structure for renovation and reuse, based on similar cases within the city, and the cost and extent of possible renovation shall be evaluated. Structures located within currently well-maintained blocks or blocks undergoing upgrading renovation will generally not be approved for demolition. The second part of the fourth criterion instructs the Board to consider the reuse potential of Cupples NO.7. The Board found the reuse potential to be similar to that of other Cupples warehouses. Mr. Altman, in a statement accompanying his appeal letter
as well as through testimony, estimated it would $8-10 million to stabilize the internal framing system. He submitted two spreadsheets that roughly estimated the cost of total rehabilitation at approximately $52 million. The Court notes that Petitioner has not submitted any independent evidence of the cost of stabilization or rehabilitation, such as a contractor's estimate. The Court thus finds that the Board's decision regarding the reuse potential of Cupples No. 7 was supported by sufficient competent and substantial evidence upon review of the whole record. 3. Economic Hardship; The Office shall consider the economic hardship which may be experienced by the present Owner if the application is denied. Such consideration may include, among other things, the estimated cost of demolition, the estimated cost of rehabilitation or reuse, the feasibility of public or private financing, the effect of tax abatement, if applicable, and the potential for economic growth and development in the area. The Board is to consider the economic hardship on the owners if the application for demolition is denied. The Board found the evidence of economic hardship insufficient. That evidence was as follows: Altman testified that the estimated cost of demolition is $675,000 and the estimated cost of rehabilitation or reuse is approximately $52 million. As for the
feasibility of public or private financing, Altman testified that Craig Heller, a St. Louisbased historical renovator, signed a contract to purchase Cupples No. 7 for approximately $1.6 million, but was unsuccessful in obtaining the necessary public subsidies to complete the project, and the agreement was never executed. Altman also testified that the individual owners of Cupples No. 7 would face a total loss of approximately "a couple million dollars" and the bank would take a loss equal to any sale price less the current mortgage on the property (which, according to Altman is approximately $1.4 million). However, this testimony was not supported by any independent evidence. The Court therefore finds that the Board's decision that the evidence of economic hardship was insufficient was supported by sufficient competent and substantial evidence. E. Urban Design. The Office shall evaluate the following urban design factors: 1. The effect of a proposed parlial demolition on attached or row buildings. 2. The integrity of the existing block face and whether the proposed demolition will significantly impact the continuity and rhythm of Structures within the block. 3. Proposed demolition of buildings with unique or significant character important to a district, street, block, intersection or district 4. The elimination at out-ot-scale or out-at-character or nonconforming land uses will be considered; however, the fact that a present and original or historic use of a site does not conform to present zoning or land use requirements in no way shall require that such a noncontorming use will be eliminated. Under this criterion the Board must assess the impact of demolition on the urban design. The Board found that demolition of Cupples No. 7 would have a negative character effect on the urban design in the area. Demolition of the building was described at the hearing as having an undesired character-altering effect on the urban design of the area by eliminating the one instance where two Cupples warehouses are 13
located across the street from each other, and by eliminating a "gateway" to the Cupples Station near an interstate off-ramp. The Court finds that the Board's decision that demolition of Cupples No. 7 would have a negative effect on the urban design was supported by sufficient competent and substantial evidence. Petitioners urge this Court to place more emphasis on the public safety and general welfare implications of the Board's decision. The Board's conclusion that the exterior walls of Cupples No. 7 appear to be sound implies that they believe the walls "appear capable of continuing to support their current loads for six months or more." The Board made its decision pursuant to the proper criteria as required by law, and implicitly took the safety of the public into consideration when making it. It is true, as argued by Petitioners, that the intent of the ordinance is to promote the general public welfare, and Petitioners are right to point out that public safety is one component of the general welfare. However, the ordinances are clear that the overriding goal is to preserve these buildings whenever possible, and that demolishing a building that has significant architectural and historical value should be an act of last resort. The CRO and the Board do not believe Cupples NO.7 has reached that point. This Court cannot say that that decision is without support in the record. The petition to reverse that decision is therefore denied. Count II of the Petition is a claim for inverse condemnation against Respondent City of St. Louis. Petitioners presented no evidence with respect to this claim. The Court therefore finds in favor of Respondent and against Petitioner on this count.
THEREFORE, it is Ordered and Decreed that Count I of Petitioners Ballpark Lofts III, LLC and Montgomery Bank, NA's Petition for Review of Administrative Decision by the City of S1. Louis Preservation Board is hereby denied, With respect to
Petitioners claim for inverse condemnation in Count II, the Court hereby enters judgment in favor of Respondent and against Petitioners,
Steven R Ohmer, Presiding Judge
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