First National Bank at Mountain and College (Image from the CSU Archive –  UHCP 2593.)

In 1968, the Fort Collins City Council passed a preservation ordinance which marked the first local governmental action intended to protect historic resources during a time when older buildings were being razed at an alarming rate. The demolition of the First National Bank building on the southeast corner of College and Mountain in 1961 and the razing of  the Hottel house just one block to the south in 1962 hit the community particularly hard. Though both buildings were privately owned, their loss was still deeply felt by the community.

Residents called upon the City Council to do something to protect the historic buildings that were meeting the “wrecking ball of progress.” It was through the 1968 ordinance passed by City Council that the Historic Preservation department was created and the volunteer run Landmark Preservation Commission was set up to give residents a say in the future of their community.

Since that time, three locally designated historic districts have been formed and over 250 individual properties have been landmarked. Most of these designations were at the request of the property owner(s), but not all. The old post office at 201 S. College Ave. is one such example.

The old post office, also known as the Federal Building, was landmarked in 1985 against the wishes of the property owner who wanted to demolish the aging structure. But the City Council determined that the old post office was of such importance to the community, that it couldn’t be lost. The building still stands today and is a beloved anchor to the Oak Street Plaza. The Museum of Art, Blue Agave Grill, and many small offices are located in the stately structure. The county assessor values the building, which once was considered only worthy of being torn down, at well over a million dollars. Not only has the building appreciated in value, but the current owners have access to substantial tax credits, grants, and interest free loans in order to maintain the integrity and value of the building.

When a historic district is formed, there are sometimes residents within the district’s boundaries that are not in favor of being a part of the district. The City Council has made past decisions regarding historic districts based on the will of a majority of the property owners. Essentially the City Council weighs community enhancement and protection vs. individual advantage. This approach does have legal precedent in the courts.

Distinguishing between a “taking” and regulation

The Fifth Amendment to the Constitution states that “No person shall be … deprived of … property, without due process of law; nor shall private property be taken for public use, without just compensation.” Because of this amendment, the government is able to invoke eminent domain to take private property and use it for a greater public good (such as the building of interstate highways, or the placement of large water or sewer mains, etc.) as long as compensation is made to the property owner. Lawyers now often refer to this part of the Fifth Amendment as the “takings clause.”

Though initially only used to refer cases of eminent domain when property was taken by the government for some greater purpose, the Fifth Amendment has been brought to bear on a variety of cases involving the regulation of private property. If the government institutes a law or takes an action that essentially renders a property owner’s land useless, then that is also considered a taking — sometimes referred to as a regulatory taking.

But not all regulation constitutes a taking. In fact, most does not. Zoning is an example of the type of restriction that a government can place on private property. In Fort Collins there are some areas of the city that are restricted to residential buildings only (with churches, schools, and household sized care facilities being the only exceptions). Other parts of town are zoned for commercial use. And some places are slated for “mixed use.” The government isn’t required to pay any type of compensation to property owners because the use of their land has been restricted in some way. The regulation was passed by the government with the community’s best interests in mind. No one wants an industrial site out their back door. Instead, compatible uses were grouped together into “zones.”

“Historically, a corollary of the right to hold property has been a duty to refrain from using it in a manner that would cause harm or injury to neighboring landowners or the general public. Because the use of land invariably affects neighbors and the community health and welfare, absolute use has never been considered a protected property right.” (Christopher J. Duerksen, land use lawyer)

So is an ordinance to create a historic district a taking or a piece of protective legislation? The Supreme Court has leaned toward seeing such ordinances as regulation that protects the greater good.

The only historic preservation court case to ever make it to the United States Supreme Court was Penn Central Transportation Co. v. New York City. The Supreme Court identified three tests for determining whether a governmental regulation resulted in an unconstitutional taking.

  1. Does the regulation merely restrict development or does it constitute a physical invasion of the property?
  2. Is the property owner left with a reasonable use of or return on the property?
  3. Does the regulation negate the owner’s reasonable investment-backed expectations? (In other words, “Governments cannot be required to compensate property owners for speculative investments gone sour.” (Takings Law in Plain English))

In 1980, the Court established a two-part alternative test to determine whether a regulation resulted in a taking. According to Garvey Schubert Barer in his essay History of the Takings Clause, “The first part was whether or not the regulation ‘substantially advanced a legitimate state interest,’ and the second was whether the regulation ‘denied an owner economically viable use of land.'”

There are many court cases that help to ferret out the difference between a taking and regulation. If you’d like to dig deeper into this topic, please see the documents listed in the “Sources and Additional Reading” section below.

General principles to help make sense of the legality of historic districts

…the United States …. embraces both individual liberty and the right of the majority to govern.
(Gerald Friedman)

There is an inherent tension between protecting the rights of individuals and safeguarding the community as a whole. It is human nature to want unrestricted freedom for ourselves while expecting clear regulations to be in place to keep others from negatively impacting us. The role of the lawmaker, therefore, is a precarious one in which a balance is sought between the individual rights of each resident vs. the regulations needed to create a safe and livable community.

Historic preservation provides a variety of protections at a neighborhood and community level.

The preserved building speaks to the history of the community and helps to tell its story. It is important to capture the narratives of the movers and shakers in a city, but there is a growing understanding that retaining a wider sense of history has tremendous value as well. For example, the story of Henry Ford can tell us a lot about the beginning of the automobile industry, but so can the stories of the many middle class workers that filled his factories and upon whose labor the Ford family grew in wealth and prominence. So the preservation of a variety of buildings, from various time periods, with diverse styles of architecture that tell the stories of a wide range of socio-economic classes can best capture and retell the full history of a community.

But preservation stands as more than just the protector of history. Tom Mayes, a speaker at the 2017 PastForward Conference, believes that older places can have a positive impact upon mental and emotional health as well as physical health. Sarah Williams Goldhagen, in her book Welcome to Your World: How the Built Environment Shapes Our Lives, speaks to how architecture shapes our lives. She draws upon multiple examples of older buildings that are made at a human scale of natural materials and which have a powerful ability to positively shape the lives of those who inhabit them. Jane Turville’s documentary, The Greenest Building, explains how reusing older structures can have a huge positive impact upon the natural environment, which provides the benefit of sustainability to the community at large.

Four houses in the Whitcomb Street Historic District.

Historic districts can also confer two additional benefits to those who own property within them. They help a neighborhood retain the character and sense of place that drew people to move there in the first place. And they stabilize property values such that properties within historic districts tend to retain value during a recession and often see increased value (as compared to surrounding properties) during times of growth. (Preservation for a Changing Colorado looks specifically at the economic effects of historic preservation within our own state.)

The regulations that accompany a historic district provide greater protection for residents who can be assured that only non-contributing houses are at risk of demolition and new houses that are constructed, as well as additions to older homes, will be required to retain the overall character of the neighborhood. The regulations give a level of predictability and assurance that as the neighborhood changes over time the essential character will remain the same.

Because of these overall benefits to the property owners within a historic district as well as those to the community at large, the regulations that come with a historic designation are advantageous to the community and the action is therefore very unlikely to be considered a taking in a court of law.

Sources and Additional Reading

Byrne, J. Peter, “Regulatory Takings Challenges to Historic Preservation Laws After Penn Central” (2004). Georgetown Law Faculty Publications and Other Works. 503. https://scholarship.law.georgetown.edu/facpub/503

Arlyck, Kevin P., ” What Commonwealth v. Alger Cannot Tell Us About Regulatory Takings” (2007). New York University School of Law, New York University. http://www.nyulawreview.org/sites/default/files/pdf/NYULawReview-82-6-Arlyck.pdf

Duerksen, Christopher J. and Roddewig, Richard J., “Takings Law in Plain English” (2011). National Trust for Historic Preservation. https://forum.savingplaces.org/learn/fundamentals/preservation-law/constitutional-issues/takings (Find link at upper right.)

Environmental Law Reporter, “Historic Preservation and the Takings Issue: Supreme Court Upholds New York City’s Landmarks Law” (1978). 8 ELR 10149.

Barer, Garvey Schubert, “A Brief History of the Takings Clause” (2013). http://www.gsblaw.com/newsroom-publications-A_Brief_History_of_the_Takings_Clause

Friedman, Gerald, “The Sanctity of Property Rights in American History” (2001). Political Economy Research Institute (PERI). https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1008&context=peri_workingpapers

Preservaation Leadership Forum, “Takings Clause” on the National Trust for Historic Preservation  website.

Echeverria, John D., “Is the Penn Central Three-Factor Test Ready for History’s Dustbin?” (2000).