## Facts

- Embassy Real Estate Holdings, LLC owned the former Italian Embassy property in Washington, D.C. and planned to convert it into condominium residences through partial demolition and new construction.
- Embassy applied to the District’s permitting agency for pre-construction and construction permits for the project.
- While the permit applications were pending, the Historic Preservation Office sought designation of the property as a historic landmark under the District’s historic preservation statute.
- The permitting agency issued certain construction-related permits before the landmark designation process concluded.
- The Historic Preservation Review Board later designated the property as a historic landmark and concluded the issued permits were “issued in error” because the proposed work conflicted with the statute’s preservation purposes.
- On administrative appeal, the Mayor’s Agent for Historic Preservation affirmed the landmark designation, voided the construction and excavation permits, and rejected claims that the project was necessary in the public interest or that denial imposed unreasonable economic hardship.
- Embassy petitioned for judicial review in the District of Columbia Court of Appeals.

## Issues

1. Whether the historic preservation statute applied to permit applications that were filed before, but remained pending when, a landmark designation application was initiated, such that preservation authorities could review and void permits issued during that process.
2. Whether equitable estoppel or laches barred the District from enforcing the statute against Embassy based on its reliance on permits issued by the permitting agency.
3. Whether substantial evidence supported the determination that the proposed demolition and new construction were not “necessary in the public interest” under the statute.
4. Whether the permit denials caused “unreasonable economic hardship” amounting to an unconstitutional taking, and whether the Mayor’s Agent applied the correct standard.

## Decision

- The court affirmed the Mayor’s Agent’s final administrative decision and denied Embassy’s petition for review.
- The court held the statute applied to the pending permit applications once the landmark designation process began, and the preservation authorities had authority to treat the permits as improperly issued and void them.
- The court held equitable estoppel and laches did not prevent enforcement of the statute.
- The court held the “not necessary in the public interest” determination was supported by substantial evidence and was not arbitrary or capricious.
- The court held denial of the permits did not impose unreasonable economic hardship or constitute a taking because the property retained reasonable beneficial use and economic value.

## Legal Principles

- When a landmark designation application triggers the statutory review process, historic preservation authorities may apply the preservation statute to related permit applications that remain pending and may invalidate permits issued during that process if inconsistent with the statute’s purposes.
- Estoppel against the government requires affirmative misconduct; negligence, administrative error, or ordinary delay is insufficient.
- Laches generally requires undue delay and prejudice; notice of ongoing landmark proceedings and a limited time frame weigh against the defense.
- On judicial review of preservation decisions, the court defers to the agency’s fact-finding and upholds determinations supported by substantial evidence.
- “Unreasonable economic hardship” and takings-based claims fail where the owner retains reasonable beneficial use and viable, economically feasible options consistent with landmark restrictions.

## Conclusion

The court upheld the preservation authorities’ power to apply the historic preservation statute to pending permit matters once landmark proceedings begin, to void permits issued contrary to that process, and to reject both reliance-based equitable defenses and claims of public-need justification or compensable economic hardship where the property remains capable of reasonable use.


Embassy Real Est. Holdings, LLC v. D.C. Mayor’s Agent for Hist. Pres., 944 A.2d 1036 (D.C. 2008)