Come on, you can admit it: reading judicial opinions about grammar rules and legislative history is about as exciting as watching paint dry. Or maybe it is more appropriate in this case to talk about old paint peeling. Because the Oregon Supreme Court's opinion in Lake Oswego Preservation Society v. City of Lake Oswego, No. S063048 (Aug. 4, 2016) is about historic preservation, and we get grammar lessons and lege history in spades.
The issue in the case was "If a local historic designation is imposed on a property and that property is then conveyed to another owner, may the successor remove that designation under ORS 197.772(3)?" Slip op. at 117. Short answer: no.
The property in question was a "rare and valuable example of a territorial Oregon residence" and the surrounding parcel, and in the 1980's the property caught the eye of the local preservationists. The city concluded it was an historic farm complex, and designated it as a landmark, which subjected "it to special land use requirements, without the owner's consent." The owners at the time objected, and after some back and forth (and the barn burning down), the city walked back the landmark designation for the parcel, but retained the designation on the house itself. The owner apparently didn't mind this, and didn't raise a challenge. The Oregon Legislature later adopted a statute which allowed "a property owner" to remove a property from the landmark list. The owner didn't do so, and later conveyed the property to a family trust.
The use of "a property owner" versus "the property owner" in the statute became the source of the dispute. The Trust, unlike the prior owner, did object to the designation because it wanted to develop the site. It asserted that it was "a" property owner, and thus possessed the right under the statute to remove. The City, naturally, disagreed, and the Land Use Board of Appeals concluded that only the owner at the time of designation -- and not successors-in-interest -- have the ability to remove because "a property owner" meant the property owner at the time of designation. The Court of Appeals reversed, concluding that "a property owner" in the statute means that the legislature didn't intend to preclude transferees from removing landmark designations.
The Oregon Supreme Court agreed with LUBA and the City: it rejected the owner's argument that "a" property owner "means any property owner at any point in time, including those who acquired the property after the designation was imposed." Slip op. at 126. The court went into excruciating detail about the grammatical use of "a," "any," and "the" (with toe-curling analysis of indefinite articles, singular nouns, and subsequent restrictive clauses and other modifiers), ultimately holding that "a property owner" plausibly was restricted only to the owner who possessed the property at the time of designation. Read pages 127-129 of the slip opinion if you really must. Same goes for the court's legislative history analysis, beginning on page 130. We took one for the team and actually read this portion of the opinion, and trust us: if you aren't an Oregon lawyer who specializes in such things, spare yourself. All you need to know is where the court ended up:
[W]e agree with LUBA that the right to remove an historic designation under ORS 197.772(3) applies only to those owners who held title when a local historic designation was first imposed and not to those whose property was already designated at the time they acquired it. Because the Trust acquired the Carman House property after it was designated, it does not qualify as “a property owner” within the meaning of ORS 197.772(3). As a result, the Trust cannot use ORS 197.772(3) to remove the historic designation from the Carman House now.
Slip op. at 154.
Where the opinion gets more interesting is the court's handling of the buried takings issue.
Citing Penn Central, the court concluded that subsequent owners do not have investment-backed expectations of using their property free of the landmark designation, and to allow them to remove it would result in a "windfall." Slip op. at 141 ("Under those circumstances, the ability to remove a previously imposed designation at will would constitute a windfall for the successor."). The court acknowledged the historic designation "may have a significant, and sometimes negative, impact on the value of the property," slip op. at 140 (you don't say!), but concluded that those impacts are only suffered by the owner at the time. Subsequent owners buy the property cheaper because of the landmark designation:
As a result, whatever harm an owner may suffer as a result of the imposition of an historic designation, that harm does not flow to its successor-in-interest, who acquires the property with notice of the designation and, most likely, at a price or valuation that reflects that designation.
Slip op. at 141.
The court concluded that this means that "the legislature intended the term "a property owner" in ORS 197.772(3) to mean the property owner at the time a property was designated, rather than an owner who acquired the property later." Slip op. at 141.
We can't agree. What the court is really saying is the the owner at the time of a designation may have a takings claim if the stars align and the Penn Central factors are there. But this claim cannot transfer to a new owner. The economic impact is borne by the present owner, and only the present owner, and upon transfer, she eats that loss because she did not object to the designation.
If there is any lesson for property owners to be gleaned from this decision, it is this: object like heck if your property is designated. Yeah you may agree it is a landmark and should be preserved, but as the court concluded, the designation will depress the value of your property and you, not the subsequent owner(s) will be deemed have acquiesced to the loss. That should work wonders for historic preservation efforts, no?
If the picture at the top of this post is of the house at the turn of the 20th Century, what does this historic property look like now? Check it out.
Lake Oswego Preservation Society v. City of Lake Oswego, No. S063048 (Or. Aug. 4, 2016)
