The US Supreme Court overturned today the air quality rule that was issued by the Environmental Protection Agency (EPA) under the Obama Administration, holding that the EPA did not properly consider the costs of the regulation.
Click here to read The Hill's article on the decision issued today.
Click here to read the Court's opinion.
Last week marked the 10th anniversary of the US
Supreme Court’s 5-4 decision known as Kelo
v. City of New London.In that
decision the Supreme Court ruled private economic development is a public use
under the 5th amendment to the US Constitution. This decision allows
governments at all levels to take people’s private property, including their
homes, businesses and farms, and hand that property over to another private
party to develop in a way more the that government’s liking with the expectation
it will raise more tax revenue or create jobs.
Public reaction against the decision was strong.I’m letting my own personal opinion show
through here, but this cavalier approach to eminent domain shows a tremendous disrespect
by governments for its citizens and their property and livelihood, combined
with a bit of economic elitism. This is exacerbated
by the need for governmental agencies to obtain a valuation of the property that
works within their limited tax dollars.All around it leads to private citizens losing their property for
objectionable reasons and receiving compensation that’s often on the low end of
its fair value. If a small business is involved, the compensation for moving
that business to a new location is frequently inadequate.
In the first 5 years after Kelo, approximately 43 states passed some level of reform to curb at
least the excesses of eminent domain unleashed by Supreme Court’s decision.Here in Ohio, the Ohio Supreme Court in 2006
issued its decision in City of Norwood v.
Horney (110 Ohio St.3d 353) which essentially reversed the application of Kelo in the state of Ohio, and held that
economic development, in and of itself, does not satisfy the public use requirement
of the Ohio Constitution.
In 2007, Ohio’s legislature passed S.B. 7, which amended
Ohio’s eminent domain law. S.B. 7 provided a comprehensive definition of ‘blight’
that narrowed its application and curbed some of the worst abuses of blight
studies employed by some local governments.
S.B. 7 also put into place new pre-appropriation requirements
and procedures for appropriation proceedings, and provided for additional
compensation to landowners, along with provides for their costs and potentially
attorney fee awards.
While many property rights groups and others feel that Ohio’s
amendments to its eminent domain law were insufficient, these changes, when
combined with the Norwood decision,
constitute progress in the right direction.
As for the property taken by the City of New London,
Connecticut as a result of the Kelo
decision, what happened to it? The
houses were torn down except for Ms. Kelo’s house, which was moved at private
expense. The land remains vacant and undeveloped, occupied only by some feral
cats. The original development plan that triggered the eminent domain action
and lawsuit was poorly planned and feel apart. After 10 years, there is finally
some development planned for the condemned property--a park is planned for the parcel
that was Ms. Kelo’s house.
Reprinted with permission from Kara A. Allison, APR, of Hull & Associates, Inc.
Have you applied for
federal brownfields funding lately? Perhaps you’ve noticed an increasing
emphasis on incorporating sustainable concepts, equitable development,
and other livability-focused activities into these funding proposals. It’s
a shift in approach designed to support growing stronger, more sustainable
communities nationwide, and if you want to secure federal funding for your future
brownfields projects it’s time to start paying attention to the details now.
The Partnership for
Sustainable Communities – an interagency
partnership formed in 2009 between the U.S. Department of Housing and Urban
Development (HUD), U.S. Department of Transportation (DOT), and the U.S.
Environmental Protection Agency (EPA) – works to coordinate federal housing,
transportation, water, and other infrastructure investments to make
neighborhoods more prosperous, allow people to live closer to jobs, save households
time and money, and reduce pollution. The partnership agencies incorporate six
principles of livability into federal funding programs, policies, and future
legislative proposals – which we’re now seeing with increased frequency in
federal brownfield funding applications.
So just the very nature
of even implementing a brownfields project puts a community on the right path
to incorporating the “livability principles” identified by the Partnership for
Sustainable Communities, right? Not quite. But here are a few ways to start
thinking about how to encompass every aspect of the Livability
Principles in planning your next
brownfield redevelopment project:
More Transportation Choices – Set your local brownfields task force loose on researching
information for an infrastructure assessment study to help make
recommendations for improved and additional community transportation
alternatives, including ways to increase walkability in target corridors
Equitable, Affordable Housing – Include recommendations in remedial action plans about whether
assessed sites could be used to improve and grow the community’s stock of
affordable, energy-efficient housing, particularly for sites assessed
within any neighborhood improvement areas.
Economic Competitiveness – Focus on and conduct assessments at key sites, which will
increase opportunities for economic competitiveness by identifying
brownfields for future cleanup. Market restored properties to new and
expanding businesses which will in turn create both construction and
permanent jobs in the community.
Existing Communities – Use outreach activities and public meetings in the targeted
community to leverage information and gather input into the brownfield
redevelopment process. Include local organizations, residents, and
businesses from the impacted neighborhoods to support your grassroots,
early brownfields planning initiatives.
and Leverage Federal Policies and Investments – Apply for and leverage multiple sources of
federal, state, and local grant funding for brownfields. Use logical steps
in layering the available sources of public funding (planning, assessment,
cleanup, and reinvestment) to help secure and attract private funding to keep
growing investments in your local brownfields initiative.
Value Communities and
Neighborhoods – Begin assessing brownfield sites in the most
impacted core of your community. It not only provides the ability to
restore a sense of community pride in the targeted corridor, but within the
community as a whole. An added bonus: you’ll see a ripple impact on the greater
regional area and the opportunity to leverage broader support for your
local community brownfield initiative.
HULL & Associates, Inc.
is aproject development and consulting firm specializing in the
Alternative Energy, Brownfields, Environmental, Shale Oil & Gas, and Waste
Management markets, with seven offices strategically located in Ohio,
Pennsylvania, and Indiana. Re:
Brownfields, Hull’s more than 25 years of experience includes successfully
securing and leveraging funding, assessment, remediation and redevelopment
projects.Kara A. Allison, APR, is HULL’s
Brownfields Market Leader.
Want to know more? Contact
Kara at 614.793.8777 or firstname.lastname@example.org.
As I’ve noted in prior
posts, the State of Ohio has an incredible amount of information available
online.Today’s article covers the Ohio Board of Building
Standards (the “BBS"), which is under the purview of the Department of
Commerce.The BBS is comprised of 15
members appointed by the Governor and confirmed by the Ohio Senate.
As stated on its web site,
the BBS has three main functions:
The formulation, adoption
and amendment of building, mechanical, plumbing, elevator, boiler and pressure
The certification of
municipal, county and township building departments to exercise enforcement
authority and to accept and approve plans and specifications, and make inspections
and to inspect power, refrigerating, hydraulic, heating, oxygen and other
gaseous piping, and liquefied petroleum gas piping systems; and
Conducting hearings and
investigations as deemed necessary or desirable in the discharge of its duties.
The BBS web site contains
numerous resources, including the following:
Certifications, such as links to apply for various
certifications, renewing certifications submitting assessment reports,
obtaining continuing education and accessing certification rules. Also includes
a link to Ohio’s current list of certified county, city and township building
There is a tremendous
amount of information available on the BBS web site that would be useful for
building departments, others working in the construction industry and anyone conducting
research in this area.
(“Say what you mean, precisely, or a judge will decide what
you meant” #9)
As established in other “Watch Your
Language” articles for this Blog, as a general rule, courts will uphold language
in commercial agreements (including leases), unless it is contrary to statutory
law or public policy. Because of this judicial deference to “commercial
language”, you mustsay what you mean, precisely, or a judge will decide
what you meant. Failure to follow
this axiom left the tenant in Rite Aid of
Ohio, Inc. v. Monroe/Laskey Ltd. Partnership, 2009-Ohio 519 (6th
Dist. Ct. of App., Lucas Cty.) without a right to terminate its lease after
the City of Toledo took a potion of the real property owned by the Landlord, by
In this case,
the appellant-tenant, Rite Aid of Ohio, Inc., entered into a commercial lease
with appellee-landlord, Monroe/Laskey Limited Partnership ("Monroe/Laskey"),
for lease of real property located at 3466 West Sylvania Avenue in Toledo,
Ohio. A number of years later, a portion
of the property under the lease was taken by the City of Toledo under eminent
domain for use in a road improvement project. Specifically, the City of Toledo
took .0861 acres of land from the real property set forth in the legal
description exhibit to the lease. This land was a 3,200 square foot strip fronting
Sylvania Avenue that resulted in a loss of 5 of 107 parking spaces and a change
to a nearby roadway resulting in a limitation of available egress from the
In 2007, Rite
Aid brought a declaratory judgment action in the Lucas County Court of Common
Pleas to declare its right to terminate the lease. The trial court ruled that
the terms of the lease did not provide Rite Aid with a right to terminate the
At issue was
construction of Article 23 of the Lease, establishing when termination after a
condemnation is permitted, and Article 1, establishing the definitions of
“Premises” and “Property”.
provides, in pertinent part: “In the event that the entire Premises
shall at any time after execution of this Lease be taken in public or
quasi-public use or condemned under eminent domain, then this Lease shall
terminate and expire effective the date of such taking… Tenant shall [also]
have the right of termination of this Lease …… if , as a result of such eminent
domain proceeding or other governmental or quasi-public action: (i) Any
portion of the Premises shall be taken and the remaining portion shall be
unsuitable for Tenant's continued business operations, determined in Tenant’s
sole business judgments; (ii) The total number of parking spaces
established for the Premises shall be reduced by twenty percent (20%) or
more, or Tenant, its customers, agents, employees and visitors are for more
than thirty (30) days denied reasonable access to the Premises or parking
"Premises" is defined
in Article 1 of the lease as "[a] certain free-standing, one story
storeroom (hereinafter known as 'Premises') to be constructed at 3450-3466
Sylvania Avenue." Article 1 defines "Property" as the "real
property upon which the Premises are located" as described in the legal
description attached to the lease and marked Exhibit "A."
The trial court basically held
that there was no right to terminate pursuant to Article 23(i), of the lease because
such provision expressly provides that the tenant may only elect to terminate
the lease based upon a taking of any portion of the "premises,"
and since no part of the Rite Aid building itself, was taken, no portion of the
premises was taken (recall that Article I defines the premises to be the
building only). The trial court further held that there was no right to
terminate pursuant to Article 23(ii), because the five parking spaces taken
represented 5%, not the 20% of parking taken which was required to trigger the
Article 23 (ii) termination right.
At the court of appeals, Rite Aid
argued that the term "premises" should be interpreted as including
the land upon which the building is located. It claimed that limiting the term
"premises" to the building was ridiculous and that Rite Aid had a
leasehold interest not only in the building but also the surrounding land. It
argued that a premises is a “building along with its grounds, as provided in a
definition from Black's Law Dictionary.”
The landlord countered that the
lease was clear and unambiguous in treating the terms "premises" and
"property" differently and that the trial court was correct as to the
meaning of the terms. The landlord further argued that the lease consistently distinguished
between the word “premises” and “property”, and that if they were intended to
mean the same thing, there would have been no reason for an Article 23 (ii)
regarding parking spaces and access.
The court of appeals had no
problem affirming the trial court’s holding in favor of the appellee-landlord.
It cited numerous decisions of established contract law, basically providing that
while contracts need to be construed to ascertain and give effect to the intent
of the parties to a contract, such intent must be presumed within the language
used in the written instrument. In other words, "[w]hen the language of a
written contract is clear, a court may look no further than the writing itself
to find the intent of the parties.”
Applying the law to the facts, the
court of appeals established that the lease (contract) clearly provided that a partial
taking of the building (defined as the “premises” under the lease) was
necessary under Article 23(i) for the tenant to have a right to terminate the
lease, and since the eminent domain did not take any part of the Rite Aid store
building (and the requisite 20% of parking spaces was not taken under Article
23(ii), the tenant had no right to terminate pursuant to the lease.
In a second assignment of error,
Rite Aid argued that a constructive taking occurred in terms of a non-physical,
substantial interference with the leasehold interest. The court of appeals
disagreed, stating that considering damage to business operations generally to
prove a constructive taking of the building as a basis for a right to terminate
under the lease would be inconsistent with the plain meaning of the lease
contract, and that where a contract is plain and unambiguous between
sophisticated business entities, it does not become ambiguous by reason of the
fact that in its operation it may work a hardship upon one of the parties.
What are the morals of this story?Presumably, the tenant intended a greater right of
termination in the lease than that interpreted by the Court. Perhaps there
would have been a different outcome had the non-discussed termination language
in Article 23 (ii) of the lease (i.e. “…denied reasonable access to the
Premises or parking areas for more than thirty (30) days”) read “…denied reasonable access to and egress from the Premises”. In
other words, “Say what you mean, precisely, or a judge will tell you want
you meant.” Ohio commercial lease and contract cases are replete with
these warnings to “watch your language.”
Another moral of this story is “do
sweat the (seemingly) small stuff”. Have your entire lease reviewed by a legal
professional. While condemnations/eminent domain proceedings may not occur often,
if they do, your only protection (or non-protection) will be the applicable lease
language that is often ignored at the outset.
First, clearly spell out when the condemnation
provision applies. The “condemnation clause” should apply: to the acquisition
of property for any public or quasi public purpose or use under any statute; to
the right of eminent domain under any statute; or to the purchase by any
governmental authority or public authority in lieu of the exercise of the right
of eminent domain.
Second, clearly delineate the
circumstances under which the lease can be terminated if only part of the
property or premises is taken. Usual standards or termination triggers include
determinations of: (i) whether the remaining property not taken is tenantable
or still usable for the reasonable operation of tenant’s business, (ii) whether
a specific percentage of the leased premises or property (building and/or land
area) is taken, (iii) whether ingress/egress has been impaired, and (iv) whether
a certain amount of parking has been taken. The condemnation clause should also
specify who decides whether the
partial taking is sufficient to terminate the lease – landlord, tenant or an independent
Finally, the condemnation clause should
(1) specify when the termination becomes effective and the date through which
rent must be paid; and (2) address the respective rights of the landlord and
tenant in the event the taking of part of the property does not result in the
termination of the lease (e.g., apportionment of rent, restoration of premises,
apportionment of the condemnation award).
Many disgruntled tenants having
to live with lower sales volume due to partial takings, and many disgruntled
landlords abating rent and restoring tenant improvements have one thing in
common; they forgot to watch their
language with condemnation clauses in commercial leases.
The facts in each of these cases are essentially the same.
The debtors, respondents David Caulkett and Edelmiro Toledo-Cardona, each had 2
mortgages on their respective homes. The petitioner, Bank of America, holds the
junior mortgage lien on each of the homes. The junior mortgage liens are
completely underwater as the amount outstanding on the senior mortgage liens
exceeds the current value of the homes. The debtors moved to have the junior
mortgage liens voided, i.e., ‘stripped off”, under §506(d) of the
506(d) states that “[t]o the extent that a lien secures a claim against the
debtor that is not an allowed secured claim, such lien is void.” Therefore, the
secured claim can be stripped off only if its right to repayment from the
debtors is not an allowed secured claim. With minor exceptions that do not
apply in these cases, a claim filed by a creditor is deemed “allowed” under Section 502 of the
Bankruptcy Code if no interested party objects or, if an interested party
objects, the bankruptcy court makes the determination that secured claim should
be allowed. The parties in these cases had agreed that Bank of America’s claims
were “allowed” claims. Their disagreement was over whether Bank of America’s
claims were “secured” claims as defined under §506(d) of the
A straight reading of §506(d) of the
Bankruptcy Code would tend to support the debtors’ construction of a secured
claim. However, back in 1992, in Dewsnup v. Timm
(502 U.S. 410), the Court came to a different interpretation that defined the
term “secured claim” under §506(d) to mean a
claim supported by a security interest in property, regardless of whether the
value of that property would be sufficient to cover the claim. This
interpretation essentially limited §506(d)’s application
to voiding only those liens where the claim it secures has not been allowed.
To remain consistent with its prior decision, the Court
reversed the lower court decisions and refused to void Bank of America’s junior
mortgage liens. The Court noted that it was not being asked to overrule its
decision in Dewsnupand noted to decide as requested by
the debtors, it would in the same term having more than one definition and
would leave an “odd statutory framework in its place.” One has to wonder what
the Court’s decision would have been if it was in fact asked to overrule Dewsnup.
The end result is Bank of America’s junior liens remain in
place on the homes. Bank of America won
the battle in protecting its future interest as a junior lien holder. However,
if the bankruptcy courts were to grant a motion for the senior lenders to
proceed with foreclosure actions, Bank of America’s junior liens could still be
stripped if the winning bids at sheriff’s auction are not high enough to cover both
the senior and junior liens.
A recent Ohio Supreme Court decision reminds local goverments that their zoning laws cannot be used to unconstitutionally deprive property owners of their property rights. In State ex rel. Sunset Estate Properties, L.L.C. v. Lodi (Slip Opinion No. 2015-Ohio-790), the village of Lodi, Ohio learned this the hard way.
When zoning codes are updated over time, as happens frequently, current uses may not conform to the new zoning code, but are grandfathered in and classified as "legal nonconforming." Local governments know that over time these nonconforming uses will cease and the property can be redeveloped into a conforming use. It is critical for property owners to be aware of what will constitute an abandonment or discontinuance of the current property use, as at that time the "grandfathered" status is lost and future use of the property must conform to the current zoning code.
In the above cited case, Lodi had passed a zoning law that steps could be taken when the nonconforming use stops for 6 months or more, and the nonconforming use cannot be reestablished. The last sentence of that ordinance was specific to mobile homes and stated that the absence or removal of an individual mobile home from its lot means the use have has been discontinued from the time of its removal.
This created an issue for mobile home parks that were grandfathered in as legal nonconfirming uses, where the owners of the property might have lots or mobile-homes on the lots are are not leased for 6 months or more. When a tenant was found for the lot, Lodi would refuse to reconnect water and electrical services to the new tenant's mobile home, citing the last sentence to its zoning code.
R.C. 713.15 contains a general provision regarding nonconforming uses, providing 2 years as the default time frame in which a nonconforming use would be considered discontinued or abandoned and therefore no subject to reestablishment. The Revised Code however, allows for municipalities to establish a short time frame of anywhere from 6 months up to 2 years. Zoning ordinances contemplate a gradual elimination of the nonconforming use within the zoned area and generally, this will be found to be constitutional so long as it accomplishes this result without depriving a property owner of a vested property right.
The Ohio Supreme Court, in striking the last sentence from Lodi's zoning code as being unconstitutional, held that "The plain language of the last sentence of the [Lodi] ordinance imputes a tenant's abandonment of a lot with a mobile-home park on the park's owner. In so doing, the provision impermissibly deprives the owner of the park of the right to continue the use of its entire property in a manner that was lawful prior to the establishment of the zoning ordinance."
This decision reminds us that municipalities must take care to balance their desires to improve property values and encourage development with the vested property rights of property owners. While zoning codes will typically be upheld, there is a limit as Lodi learned the hard way.