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The Old House gets New Life: LUBA Says Only the Initial Objector May Remove an Historic Property Designation

carrie_richterLast week in the case Lake Oswego Preservation Society v. City of Lake Oswego, LUBA gave a huge boost to the historic preservation community and the protection of local historic resources.  ORS 197.772 is one of the few statutes regulating how local governments designate and protect historic resources.  ORS 197.772(1) provides that where a property owner objects to any form of historic property designation, the local government must remove the designation.  Subsection (3) of the same statute requires that the local government “allow a property owner” to remove a historic designation that was previously “imposed by the local government.”  LUBA was asked to decide whether the term “property owner” is limited to the owner at the time that the designation was imposed or whether a person who becomes an owner after the designation was imposed, where the original owner objected to the designation, could also seek removal.

In 1990, the City of Lake Oswego designated the Carmen House, a historic farmhouse and barn, along with a number of other properties within the City’s historic landmark inventory.  The property owners at the time, Wilmot and Gregg filed an objection to the designation.  While the City’s decision was pending review before LUBA, a fire on the property destroyed the barn.  The City’s decision was withdrawn for reconsideration and as a result, the Carmen House was designated without the additional acreage and without further objection.  The Mary Caldwell Wilmot Trust, the current owner of the property, sought to remove the Carman House’s historic designation under ORS 197.772(3).  The City Council granted the request to remove the historic designation concluding that the term “property owner” is not limited to the owner at the time the property was designated.  The neighbors appealed that decision to LUBA.

LUBA began its analysis by focusing on the text and context of ORS 197.772(3).  LUBA found the text of the provision not terribly helpful because adding a phrase to limit qualifying property owners to those who made the initial objection would insert language into the provision just as including post-designation subsequent purchasers would also insert language, contrary to a law governing statutory construction.  Moving to the context, LUBA found the use of the same phrase, “a property owner” in both subsection (1) and (3) of the statute suggests that the two phrases have the same meaning and refer to the initial objecting property owner.  However, LUBA also noted that these two provisions have “different, non-overlapping circumstances that occur at different times,” suggesting an intent to describe different owners because the two categories are “mutually exclusive.”

What tipped the scales for LUBA was legislative history indicating that the purpose of subsection (3) was to allow property owners who “have been coerced into the historic property designation” to petition for removal.  When one of the legislators was asked whether a person who bought a piece of property that had a historic designation could seek to remove it, the response was “[w]e haven’t thought about that situation.”  A proposed amendment was offered that in cases where a local government designation occurs with concurrence from the local government, the obligation “runs with the land.”  LUBA found that “taken together,” subsection (3) and the proposed amendment would treat subsequent owners the same as the original owner.  If the designation was imposed over an objection, then a subsequent owner could request removal and conversely, if the initial owner consented, the subsequent property owner could not request removal.   This “run with the land” amendment was removed before final adoption.  Without any discussion explaining why the amendment was deleted, LUBA concluded that elimination of the additional language that would have put “subsequent owners on the same footing as the property owner” provides the “strongest inference” that the legislature did not intend this result.  From this analysis, LUBA concluded that, although it is “a close question,” the legislature did not intend for the term “property owner” to include person who become owners of property after it is designated and the City erred in removing the designation based on ORS 197.772(3).

LUBA’s decision went on to find that a property owner’s failure to continually raise the objection through later stages of a proceeding does not mean that the owner withdrew the objection or implicitly consented to the designation.  LUBA found that although Wilmot did not object to the subsequent designation of just the Carman House, Wilmot did not withdraw his previous objections.

LUBA’s decision makes sense from a policy perspective.  Once a historic inventory designation is in place, subsequent buyers, who are presumably aware of the designation, should be assumed to have bought the designation along with all of the obligations that come with it.  Removal of the designation is still possible through Goal 5 and its implementing rules, but not through an end-run, relying on the limited objection of a previous owner who subsequently elected not to pursue such a course.  After all, the value of a historic resource and its overall contribution to a community does not lessen when contemporary development pressures create incentives to develop that may have not existed when a resource is designated.

In a land use scheme that many argue is overly complicated and convoluted, it is interesting to note that historic preservation has very little, arguably a single relatively clear statutory standard, governing the protection has resulted in this case that will have a demonstrable impact on preservation efforts throughout the state.  The first of these cases, Demlow v. City of Hillsboro, LUBA narrowed the removal exception to those cases where the historic designation was “imposed on the property”.  Now, LUBA has narrowed the exception further to the current owners that object.  This is a narrow exception indeed.  Now we will wait to see if the Court of Appeals is asked to review or if the legislature decides to enlarge or alter the standard.

Note:  This firm represents the City of Lake Oswego in some limited matters unrelated to this case.

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