A developer of minidorms near the University of Arizona has threatened a $12.6 million lawsuit against the city — which his lawyer hopes will turn into the first test case for a new law protecting private property rights.
Clint Bolick, of Rose Law Group, sent a letter to the city asserting new city restrictions on demolishing houses have hurt developer Michael Goodman's property values.
At issue is a regulation passed by the City Council in June that requires a historic study be done on any 45-year-old or older building in Tucson's historic core — identified as the area inside the city limits on Oct. 6, 1953 — before it can be torn down.
Following the study, the city could delay demolition for up to six months while it decides if it wants to buy the property or find a private buyer.
Bolick called for the city to either change the regulations, give Goodman a waiver or compensate him for his lost value. Otherwise he said he would file the $12.6 million suit under Proposition 207, a ballot initiative passed last year requiring governments to compensate landowners if land-use rules lower their property values.
"This is by far the most sweeping increase in property regulation that I have seen in the state since Prop. 207 passed," said Bolick, who previously was a senior fellow at the Goldwater Institute. "It substantially restricts existing rights of a number of homeowners to demolish their homes."
In addition to the suit, Bolick hopes to trigger a flood of Proposition 207 claims from other property owners by printing easy to use fill-in-the-blank claim forms.
If all the homeowners affected by the new rules filed a claim, the cost to the city could be $500 million, said Richard Studwell, a minidorm developer opposed to the new rules.
City Attorney Mike Rankin said he hadn't seen the letter, addressed to Mayor Bob Walkup, who referred calls to Rankin. Rankin didn't seem concerned about it.
"If they believe they have a Prop. 207 claim … they should sue," Rankin said.
As part of the study, the applicant must survey buildings within 300 feet of the proposed demolition to determine historical context, and if any historic events occurred there. The report would have to go through a historic committee, which would decide whether to allow the demolition.
Although developers are concerned about the time delay, they are most disturbed about the provision allowing the city to buy the property or try to find a buyer.
"You don't know whether the city will let you tear it down," Studwell said. "People will be less inclined to buy property in the city center area."
Because the the wording is so vague, Studwell said, that uncertainty will discourage buyers who might be interested in older homes if they want to do a partial or complete demolition, which would depress property values.
"It's very subjective to what's historically important," he said. "They haven't spelled out the answer."
If a Proposition 207 lawsuit is filed, Rankin said the city will argue that the law does not apply to the city's building and fire codes, and the demolition rules were put into the city's building codes. "That would be our defense."
Bolick said Proposition 207 does not provide a blanket exception for building codes, only for health and safety regulations. "They did not hide the fact this is about restricting development," Bolick said.
Studwell also criticized the way the rules were approved. He said they were added to the recommendations of a Building Code Review Committee after it had finished its work, so the committee never saw them. The city admits this is the case.
Studwell said the regulations were pushed through at the last minute by City Councilwomen Nina Trasoff and Karin Uhlich.
Trasoff called Studwell's comments "ridiculous," but defended the demolition rules as a way to protect against the destruction of historically significant buildings. She said that's important, given the fact the city is rebuilding the historic Presidio Wall Downtown and the San Agustín Mission on the West Side.
Uhlich said the appropriate procedures were followed, and the minidorm developers assume everything is connected in a grand conspiracy against them.
"We do our job with more than them in mind," Uhlich said. "We do our job with the whole community in mind."
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