SALT LAKE CITY HISTORIC LANDMARK COMMISSION Minutes of the Meeting
Held at 451 South State Street, Room 326
No field trip was scheduled.
Present from the Historic Landmark Commission were Dina Blaes, Wayne Gordon, Maren Jeppsen, William Littig, Elizabeth Mitchell, Orlan Owen, Oktai Parvaz, Amy Rowland, and Robert Young. Susan Deal, Billie Ann Devine, Rob McFarland, Sarah Miller, and Robert Payne were excused.
Present from the Planning Staff were William T. Wright, Planning Director, Joel Paterson, Preservation Planning Supervisor, Elizabeth Giraud, and Nelson Knight, Preservation Planners. Lynn Pace, representing the City Attorney's office, was also present.
The meeting was called to order at 4:05P.M. by Chairperson, Dina Blaes. Ms. Blaes announced that each item would be reviewed in the same order as listed on the agenda. She stated that after hearing comments from the Commission, the meeting would be opened to the audience for comment, after which the meeting would be closed to the public and the Commission would render a decision based on the information presented. So that there would be no disruption during the meeting, Ms. Blaes asked members of the audience to turn their cellular telephones off.
A roll is being kept with the minutes of all who attended the Historic Landmark Commission meeting. The minutes are presented in agenda order, not necessarily as items were presented at the Historic Landmark Commission meeting. Tapes of the meeting will be retained in the commission office for a period of one year, after which they will be erased.
OLD BUSINESS
Case No. 024-98. at 321 and 331 South 500 East (original address was 323-325 and 327-329 South 500 East. according to the Sanborn maps) by Jeff Jonas with Winthrop Court. L.C. requesting a review of the 'findings of fact and conclusions by the Economic Review Panel to consider an economic hardship for the demolition of two structures known as the Lunt Motel Annex. pursuant to Section 21A.34.020(K)(3) of the Salt Lake City Zoning Ordinance.
Mr. Knight presented the report of findings of fact by the Salt Lake City Economic Review Panel by outlining the major issues of the case, a copy of which was filed with the minutes of this meeting. He said that the Historic Landmark Commission first reviewed the demolition request by Mr. Jonas for the two buildings at 321 and 331 South 500 East on August 19, 1998 where the Commission tabled the action pending the outcome of the Economic Review Panel. Mr. Knight said that the Economic Review Panel convened on November 23 and 30, 1998, a copy of the minutes were also filed with the minutes of this meeting.
Mr. Knight stated that it was the responsibility of the Historic Landmark Commission to take final action on Case No. 024-98. He said that the Commission could accept the findings of fact made by the Economic Review Panel, determine that the Economic Review Panel acted in an arbitrary manner, or that the report was based on erroneous materials of fact. Mr. Knight said that the vote would have to be a three-fourths majority of the members present at this Historic Landmark Commission meeting.
A short discussion followed regarding the previous demolition requests that had been filed by Mr. Jonas in conjunction with the Winthrop Court project. It was determined that the Historic Landmark Commission reviewed that application in December of 1997. Ms. Blaes said that the current subject property was purchased after the original demolition requests were filed.
Mr. Jeff Jonas, the applicant, was present. He said that he had no further comments but was willing to answer any questions the Commission members may have.
The following questions, concerns, and comments were made by the Historic Landmark Commission
• Mr. Parvaz led the discussion by addressing Section 21A.34.02(K)(2)(b)(vi.), regarding the fair market value of the property immediately prior to its designation as a Landmark Commission site and the fair market value of the property as a Landmark Commission site at the time the application was filed. He said that he did not believe those records were furnished by the applicant.
Mr. Knight said that the panel members accepted the fair market value which had been determined at the time the applicant purchased the property. He said that it was resolved when Rob White, the Historic Landmark Commission's representative on the Economic Review Panel, supported the finding that the information was received on Subsection (b). Mr. Knight said that Mr. White did not support the findings for Subsection (c) because he did not believe that the applicant had made an honest effort to sell the property to someone who may be willing to rehabilitate the buildings.
Mr. Jonas stated that the fair market value was addressed by Mr. White and discussed by the panel at length. He said that every scenario was reviewed regarding the actual value of the property. He said that the panel made an assumption in the process that the fair market value was overstated, but it did not change the outcome of the panel. He said that a self-imposed hardship could be based on the value of the property if purchased at a high enough price, but that was not the situation in this case.
Mr. Parvaz expressed his concerns that the cost estimates seemed very high. He said that after reviewing the issues raised by the Economic Review Panel, there possibly would be no ceiling for renovation costs. Mr. Parvaz said that the way the ordinance is written, "this would be a very good incentive that any project of this nature would definitely have a hardship and the building would be demolished." He stated that he did not have any objection that the applicant wanted to add seismic retrofit; he believed that would be the right thing to do. Mr. Parvaz added that the right thing was expensive and it would always be the same argument because that was the way the process worked.
Mr. Knight said there were questions raised by staff and by the panel regarding whether or not these construction estimates were reasonable. He said that it was debated and the panel concluded that they were reasonable.
• Ms. Blaes stated that at the first meeting of the Economic Review Panel on November 23, 1998, Mr. White raised the question of a possible conflict of interest on the part of Rich Hall, who was the applicant's representative on the Economic Review Panel. She said that she was expecting a written legal opinion 'from the City Attorney 's office to respond to the issue. She said that Mr. White raised the question because a portion of the information submitted to the Economic Review Panel was provided by Mr. Hall. She said that Mr. Jonas had hired Mr. Hall, as a consultant, to provide estimates and Mr. White believed that should have disqualified Mr. Hall from also serving as a panel member. She said that the legal opinion was not presented on the November 30, 1998 meeting of the Economic Review Panel. She said that she believed that legal opinion was an important document which should be entered into the minutes of these proceedings. She wanted to know if the economic hardship process had been tainted in any way because of a possible conflict of interest.
Mr. Pace stated that Ms. Giraud asked him that question about a week ago and he said that he needed to have some additional information. He said that Ms. Giraud provided him with some preliminary facts, but did not conclude until this day what the relevant facts might be. He said that he apologized and that he intended to present a written legal opinion, but could not at this time without further knowledge of the fact of the situation. Mr. Pace said that the decision of this Commission hinges on that legal opinion, all he could ask was that the decision be postponed until he was able to write one. He said that if the decision did not hinge on that, then that the Commission could go forward.
Ms. Blaes said, "that was unfortunate because the issue should have been resolved before the Economic Review Panel continued." She said that she believed that Mr. White's concern was a valid one. She said that she was not comfortable with the continuation of these proceedings because if a conflict of interest was found then it would bring the material facts into question.
Mr. Pace said that it was uncertain, at this time, what standards apply to the members appointed to the Economic Review Panel. He said that it was not known what criteria existed in the selection of the panel members. Mr. Pace apologized again and believed that it would have been in everyone's interest to have been able to answer that inquiry at this meeting.
Mr. Young addressed the concept of "self-imposed" economic hardship and said that would be a "stumbling block" in future cases. He said that he would like to see a resolution in the future that amendments be made to the City's ordinance, or some mechanism built into the process so that the self-imposed hardship would become a more quantifiable and larger aspect of the process. Mr. Young said that the market value of the land in the east downtown section of the City had quadrupled in the last few years. He said that part of the economic hardship process was the existing overlay district, and the concept of the highest and best use for the property would begin to overplay the land value and the historic nature of an area. Mr. Young stated that he believed this trend would continue for the next several years, particularly in the east downtown area.
• Ms. Rowland inquired if the language of the ordinance needed to changed to prevent "self-imposed" hardship cases in the future. Mr. Paterson said that Ms. Giraud had been researching to find out what other communities were doing regarding this issue. He said that she was starting to pull some information together to look at options which might be pursued.
Ms. Rowland directed her comments to an additional federal resource, which was low-income housing tax credits. She pointed out that in Mr. Jonas' case, the land cost was high enough and the amount of proposed units was low enough that it would not "tip the scale". Ms. Rowland said that she has seen many apartment complexes in Salt Lake City where combined tax credits came close to covering the renovation costs. Ms. Blaes said that the low-income housing tax credits was not pursued because she believed the applicant only saw the higher marketability of a new structure.
Ms. Blaes stated that during the economic hardship review, Mr. White raised the question that the square foot cost of building the new structure would be about the same as renovating the Lunt Motel Annex buildings, but the applicant claimed that would not be economically feasible. Ms. Blaes said that she believed Mr. White raised the point effectively about alternative uses and how much could the economic hardship process dictate what the applicant chose to do with the land. She said that no one seemed to have an answer. Ms. Blaes said Mr. White made the comment that "are these really too expensive or are they just inconvenient for the overall development plan."
• Mr. Gordon referred to the minutes of the Economic Review Panel meeting of November 30, 1998, and read the following: "Mr. Hall said that the Lunt Motet property had to be evaluated on its own, and not within the context of the entire development." Mr. Gordon inquired what determined the panel members to evaluate the Lunt Motel property on its own. Ms. Blaes said that the discussions went back and forth on the merits of evaluating it on its own or as part of the larger development and said that she was not certain on what the panel based the decision. She said that the concern of the Economic Review Panel was that the issue was not clearly defined in the ordinance. Ms. Blaes pointed out that the applicant purchased the entire property in one lump sum; the parcels were not purchased separately. The discussion continued.
Mr. Gordon noted that the costs to renovate the Lunt Motel Annex buildings seemed high when considered as a small project, but when costs were looked at within the context of the overall proposed project, they seemed much lower. Mr. Knight said that he thought the panel members approached the issue from both sides. Mr. Gordon wanted to make sure that it was looked at both ways. Mr. Gordon also asked if alternate uses such as retail had been considered, and also questioned the necessity of certain items included in the cost estimate, such as seismic upgrades and lead paint abatement. Mr. Knight said that the Economic Review Panel had questioned the same items, but that the members of the panel concluded that the costs supplied by the applicant were reasonable, and that the cost of renovating the buildings would still be excessive enough to constitute a hardship even if none of
the questioned work was done.
Ms. Blaes pointed out that she did not believe anyone was questioning that a developer should rehabilitate historic structures to make them safe, but a question arises if a developer proposes to use expensive finishes which would increase the costs in such a way that it would become an economic hardship. She said that this was also a concern raised by some of the panel members.
• Ms. Mitchell commented that the renovation costs would also be increased because all the work would be done at the same time. She said in an individual home, there would be smaller amounts of money being spent over a longer period of time by the homeowner doing some of the work.
Ms. Blaes opened the hearing to the public and asked if anyone wished to address the Commission. Upon hearing no requests, Ms. Blaes closed the hearing to the public, and the Historic Landmark Commission proceeded into the executive session portion of the meeting.
Executive Session
Ms. Blaes reminded the Commission that there were findings of fact which were made by the Economic Review Panel.
Ms. Blaes again reiterated that she was uncomfortable about making a decision regarding this case without that legal opinion from the City Attorney's office regarding the conflict of interest issue, but said that she realized that the other members of the Commission may feel otherwise.
The Commission discussed the options the members faced, such as approving the findings of fact made by the Economic Review Panel, which would be nullified if the legal opinion turned out to be that a conflict of interest existed, or tabling the action until the legal opinion was obtained.
Ms. Blaes inquired if the action was tabled, would that give Mr. Pace enough time to draft a legal opinion and present it at the next regularly scheduled Historic Landmark Commission meeting, which would be on January 6, 1999. Mr. Pace indicated that he could provide a legal opinion for that meeting.
Mr. Young said that one aspect he noticed but did not question in the analysis was the pro forma they put together only went out two years. Most proformas are three to five years and so they really did not give a substantial time to recover income. He noted that future analyses should have a three or five-year pro forma with proceeds from sale at the end of the period.
Ms. Rowland also noted that the applicant did not include the proceeds from sale in the pro forma. Ms. Rowland said that she has looked at many apartment projects in a variety markets, and she had never seen one with $20,000 per unit in land costs work.
Mr. Young moved that Case No. 024-98 be continued until the receipt of the legal opinion from the City Attorney's office regarding the conflict of interest issue. It was seconded by Ms. Mitchell.
There was some discussion whether the meeting should be reopened to give the applicant an opportunity to respond. It was determined that the meeting did not need to be reopened because it was not believed that an additional three weeks to wait for a legal opinion would be a hardship for the applicant.
Mr. Young moved that Case No. 024-98 be continued until the receipt of the legal opinion from the City Attorney's office regarding the conflict of interest issue. It was seconded by Ms. Mitchell. Mr. Gordon, Ms. Jeppsen, Mr. Littig, Ms. Mitchell, Mr. Owen, Mr. Parvaz, Ms. Rowland, and Mr. Young unanimously voted "Aye".
Ms. Blaes, as Chairperson, did not vote. Ms. Deal, Ms. Devine, Mr. McFarland, Mr. Miller, and Mr. Payne were not present for the vote. The motion passed.
OTHER BUSINESS
Continuation of the discussion on an amendment to the zoning ordinance regarding
administrative approvals.
The subject of administrative approvals was discussed. Ms. Blaes said that she believed that the staff was supposed to obtain an opinion from the City Attorney's office on "routine and uncontested matters" which would fall under administrative approvals.
Ms. Giraud said that if the Commission only wanted to look into routine and uncontested matters, we could probably include the discussion on the agenda for the January 6th meeting, but if the Commission members were interested in looking at the issue on a broader prospective, she would contact other cities and come up with some options. She said that she would rather postpone it until the third week in January. It was the consensus of the Commission members to schedule a meeting for the third week in January.
Mr. Pace asked to have clarified what legal opinion the Commission wanted. Ms. Blaes said that the goal was not to reverse the 1995 adopted ordinance which gave the staff more opportunities for administrative approvals, but to improve the public notice process.
A continuation of the discussion of the Boyer Petition No. 410-329 and whether or not the interior of the Union Pacific Depot. and other designated buildings, would fall under the jurisdiction of the Historic Landmark Commission. based on the way the designation was written.
Ms. Blaes briefly discussed this issue. Ms. Giraud said that she spoke with Lynn Pace, but that he did not have enough information so he could give a definitive opinion. When Ms. Blaes inquired, Mr. Paterson said that he was not able to give a time frame for the petition process.
Discussion of the goals for the Planning Division/Preservation Planners.
Ms. Blaes said that she believed that it would help the Historic Landmark Commission members to know the goals for the Planning Division and how the preservation goals would be integrated. Ms. Giraud said that the Preservation Planners already had a list of goals that they would like to accomplish in 1999, which could be reviewed independently from the Planning Division or in conjunction.
Ms. Giraud said that she would be applying for another Certified Local Government (CLG) grant in April and would like to coordinate those goals with the grant process. She said that this subject could be discussed at the first meeting in February.
The City's budget process was discussed. Mr. Wright said that the process had moved up, making January a very important month. Ms. Blaes said that Mr. Wright had made a gracious and generous offer to recommend $300,000 in the budget earmarked for preservation issues. Mr. Wright would keep the Commission informed and if lobbying by members of the Commission would be needed to get that money.
Miscellaneous discussions.
Ms. Blaes reminded the Commission members that the election for Chair and Vice
Chair would take place at the February 3, 1999 meeting. She encouraged the members to find out more about those positions. Ms. Blaes said that she would not run again as the Chairperson. Mr. Young said that he would be interested in running for the Chairperson. Ms. Blaes suggested that anyone interested in these positions, converse with staff. She said that there should be a good and positive relationship between the Chair and the staff.
Ms. Mitchell said that she would like to have some training to help read through the economic hardship analysis information. She pointed out that her background had not prepared her to understand all the data that was provided to the Commission members. Ms. Giraud said that she thought that would be an excellent training meeting. Ms. Blaes said that with the expertise and specialized skills that the members of the Commission have, it might be an opportunity to pull the resources together and have volunteers from the Commission focus on these key issues with the staff.
Mr. Wright said that the economic hardship process had left a question on everyone's mind. He explained why the process was placed in the 1995 adopted ordinance. Mr. Wright said that with the change, it allowed the Historic Landmark Commission to deny a demolition request. He said that the way the ordinance was before, it allowed an applicant to have a five-month waiting period, then the building could be destroyed. Mr. Wright said that the standards were included that made the demolition process tougher for an applicant. He said that there was concern, however, that giving the Historic Landmark Commission the power to deny a demolition request without any further recourse for a property owner, might constitute a "taking" of that owner's property rights. Mr. Wright added that the Economic Hardship section of the ordinance was included in order to address this concern. Mr. Wright noted that in practice the economic hardship process was confusing and that refinements were needed. He said that the Commission's expertise would be a valuable addition to this process.
Mr. Wright pointed out that some members of the Commission went to a conference held in Denver and this specific issue was discussed during the conference. Mr. Gordon talked about a book on "takings" that he received from the conference.
Ms. Blaes referred to a National Trust Information Series booklet entitled, "The Economics of Rehabilitation". She said that the article was about commissions throughout the country which had taken a pro-active approach to defining an appropriate development in each of the historic districts. She said that she would provide a copy to the staff. It was decided that a subcommittee be formed consisting of Willie Littig, Amy Rowland, and Bob Young to make a presentation regarding the economics of real estate.
A short discussion continued regarding the issues addressed earlier in this meeting, as well as other matters of interest to the Commission. A schedule of workshops would be determined.
Adjournment of the meeting.
As there was no other business, Ms. Blaes asked for a motion to adjourn.
Mr. Young so moved to adjourn the meeting. It was a unanimous vote of approval by the Commission members and the meeting adjourned at 5:45P.M.