Wednesday, August 5, 2009

Dohoney: Most OTRF preservation recommendations 'probably unfeasible'

While the City generally advocates some of the concepts offered by Over-the-Rhine Foundation (OTRF) executive director Mike Morgan, Cincinnati city manager Milton Dohoney Jr. says that most of the changes are "probably unfeasible given the current economic climate".

Dohoney's memo to Cincinnati city council is in response to a 29-page report submitted by Morgan and a group of concerned citizens last month, requesting over 30 changes to the Cincinnati Municipal Code (CMC) that they say would help spur economic development and preserve the City's historic building stock.

Dohoney says that City administration categorically opposes making any modifications to the CMC, due to the delays it would cause.

"Many of the amendments would necessitate a comprehensive, long-tem review process and could negatively impact emergency situations," he says. "In addition to requiring an extensive legal analysis by the Law Department, alterations would be subject to the review and approval of Council, the Historic Conservation Board and the City Planning Commission."

Dohoney does agree that many of the ideas have merit, but the money just isn't there.

"The institution of a receivership program and creation of more funding opportunities to assist owner-occupants with rehabilitation are both ideas that would require more City dollars than are available at this juncture," he says.

City administration also doesn't recommend diverting demolition money to repairs or reducing the scope of tax abatements, but Dohoney says that the City does have in place some of the systems recommended by the OTRF.

"For instance, there is a mechanism already in place that triggers interdepartmental coordinationin non-emergency cases involving a historic property," he says. "In addition, the City makes the best use of limited staffing resources by pursuing legal measures that will result in the maximum penalty for violating Building Codes."

Getting to owners sooner

The first suggestion was to refer significant code violations to administrative boards earlier in the process, which would allow building owners more of an opportunity to make needed repairs.

Changes would make the boards more outcome-oriented than reactionary, Morgan said.

Dohoney says that he doesn't want to see yet another layer of bureaucracy, but that changes could be made to the current system.

"Modification of the rules of the 'Public Nuisance Hearings' may be desirable to expand the Boards' ability to be able to make a decision to repair, in addition to rendering decisions to demolish, a nuisance property," he says.
Dohoney says that the change would be consistent with Ohio Revised Code Chapter 715.26, and that Property Maintenance Code Enforcement Division (PMCE) has used the statute to make repairs when demolition was deemed an inappropriate remedy.

"This Code currently empowers municipalities to abate nuisances and provides 'for the removal and repair of insecure, unsafe, or structurally defective buildings or other structures.'" he says.

He adds that City administration supports expanding the housing docket to a housing court.

"Threat of imprisonment is a far stronger motivation than the directive of a new administrative board," Dohoney says.

An effort being led by councilmember Jeff Berding and Hamilton County commissioner Greg Hartmann would establish, through the state level, a Housing or Environmental Division in the Hamilton County Municipal Court.

"Creation of a Housing or Environmental Court, once operating funds are identified, would enable civil actions including receivership, etc., as well as criminal property maintenance and environmental violations adversely impacting safety and quality of life to be brought under one Division with expertise and greater capacity in resolving interrelated, complex housing and environmental issues," Dohoney says.

Demolition funds for repair work

The diversion of some demolition funding to repair blighted buildings is not an option, Dohoney says, even though he says that the City generally supports alternatives to demolition of historic buildings.

He points out that the City only demolished two buildings in Over-the-Rhine in 2007, and only one in 2008.

"The cost to repair and stabilize buildings normally will far exceed the cost to demolish the same nuisance property," Dohoney says. "The need for demolition of hazardous buildings across the city is extreme. Significant diversion of demolition funding is not recommended if we are to maintain public safety."

Dohoney says that DCD recommends further research to determine how to leverage private funds or other resources.

"Contractual guarantees could be established by the Administration that, as a result of repairs, the nuisance or hazard would be abated," he says. "That would allow the Administration to recommend that the funds equal to the cost to raze the building be put toward the repairs."

Such an arrangement was made last year to save the Meiner Flats building at 1500 Vine Street, a building requiring nearly $200,000 to repair.

That building is now stabilized and preserved for future development.

VBML and other CMC changes

In his estimation, most of the suggestions offered by Morgan are already reflected in the current practices of PMCE and do not need to be written into the CMC.

"There is no objection to modifying the Vacated Building Maintenance License (VBML) provisions to encourage historic preservation," Dohoney says. "While DCD is in general agreement with the concepts related to repair over demolition of historically significant structures presented in the OTR presentation and report, additional legal review of the specific Municipal Code changes recommended will need to occur to determine whether the changes are necessary and appropriate."

A suggestion that demolition permit fees for historic buildings be raised to nearly 100 times the rate of $59 per 1,000 square feet for non-historic properties could be very contentious, Dohoney says.

"It is suggested that additional municipal legal and administrative review of the proposed regulations be completed prior to changing the CMC," he says.

Dohoney also says that PMCE works closely with the City's Historic Conservation Office to identify locally- or nationally-historic buildings subject to upcoming public nuisance hearings.

"This interdepartmental coordination allows the historic status of a building to be taken into account," he says.


Morgan and his team also recommended a receivership program, allowing a court to appoint a non-profit to bring a blighted building up to code.

The building would then be offered back to the owner for the cost of the repairs, or the court could order the property sold to a third-party.

Dohoney says that City administration supports a strong receivership program, citing OTRF presentations showing that the ability of a receiver to enter one's property – and a court to take it – serves a strong motivator to owners who continually evade normal enforcement methods.

"Of all the recommendations, receivership has the greatest likelihood of advancing historic preservation of endangered buildings," he says. "However, receivership will also be the most expensive to implement."

Dohoney cautions that candidates for receivership sometimes can be impediments to comprehensive community development because of a tendency for partially-repaired vacant receivership buildings to return to nuisance status.
This can drag down property values and lower neighborhood morale, he says.

"Therefore, it is recommended that receiverships be undertaken as full renovations in strategic areas undergoing revitalization with the greatest likelihood of the market supporting re-occupancy," Dohoney says.

He suggests partnering a legal resource team with a non-profit community development corporation that has shown the capacity to complete full-building rehabilitations and to responsibly tenant its buildings.


The OTRF proposal suggested providing additional incentives for the redevelopment of historic, vacant buildings, providing for the grassroots, sweat-equity type of development that builds neighborhoods.

But Dohoney says that the City lacks money for such a program.

"In most OTR historic rehabilitation cases, it is often a subsidy to fill a gap in rehabilitation cost-to-value that is required to secure financing," he says. "Until funds are identified, other incentives to encourage development of vacant property need to be explored."

Historic preservation

Changes the Chapter 1435 of the CMC are necessary for clarity and consistency for both developers and preservationists, the OTRF report said.

Since the beginning of 2007, PMCE has cited 84 owners of over 280 Over-the-Rhine historic structures with orders to criminal court under Chapter 1101 of the CMC, a first-degree misdemeanor punishable by six months imprisonment and/or a $1,000 fine.

Violation of Chapter 1435, a zoning code provision, is a third-degree misdemeanor punishable by 60 days imprisonment and/or a $500 fine, Dohoney says.

"The PMCE Division does not expend limited resources filing complaints for third degree misdemeanors when remedies under the building code carry penalties of first degree misdemeanor with higher fines and penalties," he says.

Dohoney says that the Chapter 1435 conservation guidelines for the City's 22 historic districts and 30 local landmarks were designed to protect and maintain the character of properties and collections of buildings in historic districts.

"In each instance, the guidelines were developed after multiple public meetings and were endorsed by the community and property owners," he says.

Any further historic conservation proposals would require "extensive research and planning efforts" to assess their scope, impact, and merit.

"The Law Department should review the changes to the Municipal Code and the historic enabling Ordinances outlined in the proposal," Dohoney says. "Also, any amendments of the 52 individual Ordinances adopted for the City’s designated historic resources must be addressed by the Historic Conservation Board, the City Planning Commission, and City Council under Section 1435-05 and Section 1439-09 and are subject to the procedures outlined in Chapter 1435 of the Municipal Code."

Tax abatements

The OTRF recommendations said that the City's tax abatement policy favors new construction over rehabilitation.

Morgan said that this is unfair because the maximum valuation for an abatement is the same for rehabilitation and new construction, but the valuation on a rehabilitation project starts with the existing value of the land and structure – new construction counts only the value of the land.

In his example, if a $60,000 building is rehabilitated and infill is built on a $10,000 vacant lot – and both produce end products worth $275,000 – the owners of the new construction infill would pay significantly less in property taxes.

Morgan also took issue with the 15-year tax abatement given to new construction, compared to 10-years for rehabilitation projects.

"The abatements are considered long-term investments to retain residents and encourage investment," Dohoney says. "The abatement period is actually 10 years for new construction and 10 years for rehabilitation. Fifteen-year abatements apply to LEED certified construction whether new or rehabilitation."

Dohoney says that limiting incentives for new construction and rehabilitation is not recommended, as only 628 building projects out of approximately 150,000 City structures applied for the tax abatements in 2008.

Commitment to historic preservation

Finally, Morgan suggested that the City needs to leverage its historic assets to promote economic development.

"The Administration is committed to enhancing and preserving the historic character and culture of the city," Dohoney says. "The assembly of historic buildings in Cincinnati is a resource that can only be found in older urban cities, and if lost can never be reclaimed."

This resource can be packaged and promoted to promote new citizens and tourism, he says.

"We will continue to look for ways to prioritize, preserve, enhance, spotlight and market this resource," Dohoney says.

Previous reading on BC:
Morgan, OTR group propose changes to City code enforcement (7/21/09)
Group petitioning council to stop Over-the-Rhine demolitions (6/10/09)