## Facts

- A historic building at 901 F Street, N.W., Washington, D.C. (the Old Masonic Temple, later “Lansburgh’s”), built in 1867–69, was long recognized as historically significant and listed on both federal and District historic registers.
- By the time of the proceedings, the building was unoccupied, structurally sound, and in poor condition of maintenance and repair.
- 900 G Street Associates acquired the building and site in January 1979 as part of a land exchange and planned to close a public alley, demolish the historic structure, and construct a large commercial office building across the combined parcels.
- After the Historic Landmark and Historic District Protection Act of 1978 became effective, the owner applied for a demolition permit under the Act.
- At the owner’s request, the Mayor’s Agent limited the hearing to whether denying demolition would impose “unreasonable economic hardship”; the owner did not pursue other statutory grounds.
- After a two-day hearing, the Mayor’s Agent denied the permit, relying on evidence that the building could be rehabilitated for commercial use and that there were potential purchasers or users interested in preserving and using it.
- The owner sought judicial review, arguing that the denial amounted to an unconstitutional taking or, under the Act, “unreasonable economic hardship.”

## Issues

1. Whether denial of a demolition permit for a designated historic landmark imposed “unreasonable economic hardship” and therefore effected a regulatory taking without just compensation.
2. Whether the Mayor’s Agent’s findings on feasible alternative economic use and hardship were supported by the record under the applicable standard of administrative review.

## Decision

- The D.C. Court of Appeals affirmed the Mayor’s Agent’s denial of the demolition permit.
- The court held that the denial did not constitute a regulatory taking and did not amount to “unreasonable economic hardship” under the Act.
- The court concluded the record supported the finding that the property retained a reasonable alternative economic use through rehabilitation, sale, or adaptive reuse.
- Applying deferential review, the court found no basis to disturb the Mayor’s Agent’s factual determinations.

## Legal Principles

- “Unreasonable economic hardship” under the District’s historic preservation statute is evaluated by reference to the federal regulatory-takings standard articulated in *Penn Central*, including economic impact, interference with reasonable investment-backed expectations, and the character of the governmental action.
- In the absence of a statutory guarantee of any particular rate of return, zoning and land-use principles apply: the relevant question is whether any reasonable economic use remains, not whether the owner can pursue the most profitable use.
- If a reasonable alternative economic use exists after the restriction, there is no taking and no statutory hardship, even if market value is reduced or higher uses are barred.
- The applicant seeking demolition based on economic hardship bears the burden of proving that no reasonable alternative economic use exists.
- On judicial review, the Mayor’s Agent’s factual findings are upheld unless the record shows obvious and egregious error; the court’s role is to ensure the conclusion is grounded in a properly developed administrative record.

## Conclusion

The court upheld denial of demolition for a landmarked building because the owner failed to show that preservation left no reasonable alternative economic use, and the administrative record supported the Mayor’s Agent’s determination under deferential review.


900 G St. Assocs. v. Dep’t of Hous. & Cmty. Dev., 430 A.2d 1387 (D.C. 1981)