▪ Land Use Trifecta: Historic Preservation, Religious Uses, and Regulatory Takings

An interesting decision from the Kansas federal district court, Mount St. Scholastica, Inc. v. City of Atchison, No. 06-2208-CM (Mar. 12, 2007), contains a land use trifecta: historic preservation, religious objections to a denial of a permit, and regulatory takings.  (No link yet to opinion, which currently is only available via Westlaw; email me if you want a copy.  Update: Becket Fund for Religious Liberty has posted a copy of the opinion on its web site.)

Mount St. Scholastica, a "monastic community," owns property that includes a building constructed in 1924 that has in the interim been used for classrooms, administration, and a community center.  By 1989, however, it had apparently outlived its usefulness to Mount St. Scholastica, which in 2005 sought a demolition permit from the city. 

The building itself apparently is not landmarked, but is near to historic properties, so under Kansas law, the owner needed a demolition permit from the state historic preservation officer.  The preservation officer denied the permit because the building is a "character-defining feature of the environs."  The officer suggested the owners sell the building or "mothball" it "until a new use can be found."  After unsucessfully exhausting administrative remedies, Mount St. Scholastica filed suit against the city in state court for violations of state and federal law, including an argument that denial of the demolition permit infringed upon its rights under the Free Exercise Clause of the First Amendment, and a federal takings claim under 42 USC § 1983.  The city removed the case to federal court.

Mount St. Scholastica asserted, without opposition, that its religious beliefs include the requirement of making prudent economic use of its property.  The court consequently applied strict scrutiny analysis and held that historic preservation is not a "compelling government interest" allowing the city to deny the demolition permit.  Professor Howard Friedman's Religion Clause blog details the court's First Amendment analysis.

The court also determined that the regulatory takings claim was ripe "because it is unlikely that plaintiff has an inverse condemnation procedure available" under Kansas law.  On the merits of the takings claims, however, the court held there was neither a per se nor a Penn Central regulatory taking, since the landowner's entire parcel had not been impacted.  While the plaintiff alleged that the city's actions rendered the entire building useless, the court held that because the building is part of the larger property, the "parcel as a whole" rule means that the plaintiff has some economically beneficial use for its entire property, and therefore has not suffered a taking.