4.506 Unreasonable economic hardship

  1. Declaration of unreasonable economic hardship. The Historic and Cultural Landmarks Commission may declare that an unreasonable economic hardship exists as a basis for:
    1. Recommending removal of the highly significant endangered, historic and cultural landmark, historic and cultural landmarks district or demolition delay designation; or
    2. Issuing a certificate of appropriateness approving the demolition or relocation of property designated or pending designation as highly significant endangered or historic and cultural landmark or located in an area designated or pending designation as an historic and cultural landmarks district.
  2. Burden of proof. When a claim of unreasonable economic hardship is made, the owner must prove by a preponderance of the evidence that:
    1. The owner cannot make reasonable beneficial use of or realize a reasonable rate of return on a structure or site, regardless of whether that return represents the most profitable return possible, unless the highly significant endangered, historic and cultural landmark, historic and cultural landmarks district or demolition delay designation, as applicable, is removed or the proposed demolition or relocation is allowed;
    2. The structure or property cannot be reasonably adapted for any other feasible use, whether by the current owner or by a purchaser, which would result in a reasonable rate of return; and
    3. The owner has failed to find a purchaser or tenant for the property during the previous two years, despite having made substantial ongoing efforts during that period to do so. The evidence of unreasonable economic hardship introduced by the owner may, where applicable, include proof that the owner's affirmative obligations to maintain the structure or property make it impossible for the owner to realize a reasonable rate of return on the structure or property.
  3. Claim for historic and cultural landmarks districts. Owners of individual structures or sites located in an historic and cultural landmarks district are entitled to a certificate of appropriateness for demolition or relocation upon proof of unreasonable economic hardship; however, an historic and cultural landmarks district designation shall be removed only from the entire district, upon proof that the designation results in an unreasonable economic hardship to the district as a whole. Individual structures or sites shall not be removed from an historic and cultural landmarks district.
  4. Consultation and search for alternatives. The owner, persons or entities who have executed a sales contract or option contract for purchase of the property, or their representatives, the Historic and Cultural Landmarks Commission, local preservation groups and interested parties shall consult in good faith, as outlined in Section 4.504 (D) in a diligent effort to seek alternatives that will eliminate the unreasonable economic hardship and preserve the structure or property.
  5.  Affidavit of hardship. As evidence that an unreasonable economic hardship exists, the owner may submit the following information to the Historic and Cultural Landmarks Commission by affidavit:
    1. For all structures and property:
      1. The past and current use of the structures and property;
      2. The name and legal status (e.g., partnership, corporation) of the owners;
      3. The original purchase price of the structures and property;
      4. The assessed value of the structures and property according to the two most recent tax assessments;
      5. The amount of real estate taxes on the structures and property for the previous two years;
      6. The date of purchase or other acquisition of the structures and property;
      7. Principal balance and interest rate on current mortgage and the annual debt service on the structures and property, if any, for the previous two years;
      8. All appraisals obtained by the owner or applicant within the previous two years in connection with the owner's purchase, financing or ownership of the structures and property;
      9. Any listing of the structures and property for sale or rent, price asked and offers received;
      10. Any consideration given by the owner to profitable adaptive uses for the structures and property;
      11. Any replacement construction plans for proposed improvements on the site;
      12. Financial proof of the owner's ability to complete any replacement project on the site, which may include but not be limited to a performance bond, a letter of credit, a trust for completion of improvements, or a letter of commitment from a financial institution; and
      13. The current fair market value of the structure and property as determined by a qualified appraiser.
    2. For income producing structures and property:
      1. Annual gross income from the structure and property for the previous two years;
      2. Itemized operating and maintenance expenses for the previous two years; and
      3. Annual cash flow, if any, for the previous two years.
    3. In the event that the Historic and Cultural Landmarks Commission determines that any additional information described above is necessary in order to evaluate whether an unreasonable economic hardship exists, the Historic and Cultural Landmarks Commission shall notify the owner. Failure by the owner to submit such information to the Historic and Cultural Landmarks Commission within 15 days after receipt of such notice, which time may be extended by the Historic and Cultural Landmarks Commission, will be grounds for denial of the owner's claim of unreasonable economic hardship.