02-004237 Capital City Hotels, Inc. vs. City Of Tallahassee And Atg Hotels, Llc Status: Closed Recommended Order on Wednesday, January 22, 2003.

Summary: Height deviation from zoning code approved where applicant submitted justification for deviating from code.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAPITAL CITY HOTELS, INC., )

)

Petitioner, )

)

vs. ) Case No. 02 - 4237

)

CITY OF TALLAHASSEE and AHG )

HOTELS, LLC, )

)

Respondents. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was he ld in this

case on December 10, 2002, in Tallahassee, Florida, before

Donald R. Alexander, the assigned Administrative Law Judge of

the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Charles R. Gardner, Esquire

Gardner, Wadsworth, Duggar,

Bist & Weiner, P.A.

1300 Thomaswood Drive

Tallahassee, Florida 32308 - 7914

For Respondent: Linda R. Hurst, Esquire

(City) City Hall, Second Floor

300 South Adams Street

Tallahassee, Florida 32301 - 1731

For Respondent: James Marshall Conrad, Esquire

(AHG) Ausley & McMullen

Post Office Box 391

Tallahassee, Flori da 32302 - 0391

STATEMENT OF THE ISSUE

The issue is whether AHG Hotels, LLC's application for a

Type B site plan and deviation should be approved.

PRELIMINARY STATEMENT

This matter began on September 11, 2002, when the

Development Review Committee of Res pondent, City of

Tallahassee, approved a site plan filed by Respondent, AHG

Hotels, LLC, which authorizes the construction of a 122 - room,

five - story hotel on a 2.23 - acre parcel located just southeast

of the intersection of Interstate 10 and Thomasville Roa d in

Tallahassee, Florida. The Development Review Committee also

approved a deviation from the development standards found in

the Zoning Code and allowed the applicant to exceed a four -

story height limitation.

On October 10, 2002, Petitioner, Capital City Hotels,

Inc., which owns a hotel near the site of the proposed

construction, filed its Petition for Formal Proceedings with

the Tallahassee - Leon County Planning Commission challenging

the deviation decision. Pursuant to that entity's By - Laws,

the matter was then referred to the Division of Administrative

Hearings on October 24, 2002, with a request that an

Administrative Law Judge be assigned to conduct a formal

hearing.

The matter was scheduled for a final hearing on

December 10, 2002, in Tallahasse e, Florida. At the final

hearing, Petitioner presented the testimony of Cochran A.

Scott, Jr., its managing partner. Respondent, AHG Hotels,

LLC, presented the testimony of Thomas C. O'Steen, a land

planning consultant; Timothy C. Metzner, owner of the

p roperty; and Royce J. Carter, a principal in AHG Hotels, LLC.

Also, it offered Applicant's Exhibits 1 - 10, which were

received in evidence. In addition, by agreement of counsel,

Applicant's Exhibit 11 was received in evidence after the

hearing had ended. Respondent, City of Tallahassee, presented

the testimony of Dwight R. Arnold, Jr., environmental services

administrator in the growth management department, and Wade L.

Pitts, III, land use administrator in the growth management

department. Also, it offe red City Exhibits 1 - 12, which were

received in evidence.

The Transcript of the hearing was filed on December 27,

2002. Proposed Findings of Fact and Conclusions of Law were

filed by Respondents and Petitioner on January 13 and 14,

2003, respectively, and they have been considered by the

undersigned in the preparation of this Recommended Order.

FINDINGS OF FACT

Based upon all of the evidence, including the stipulation

of counsel, the following findings of fact are determined:

a. Background

1. On Sept ember 11, 2002, the Development Review

Committee (DRC) of Respondent, City of Tallahassee (City),

approved a Type B site review application authorizing the

construction of a Hampton Inn & Suites by Respondent, AHG

Hotels, LLC (AHG). The DRC also granted A HG's request for a

deviation from development standards contained in Section

10.6RR of the City's Zoning Code by allowing AHG to exceed the

four - story height limitation and to add a fifth floor to the

structure. Two other deviation requests by AHG were

determined to be either inapplicable or exempt from Zoning

Code requirements because of vesting, and thus they are not at

issue here.

2. On October 10, 2002, Petitioner, Capital City Hotels,

Inc. (Petitioner), which owns and operates a Hilton Garden Inn

nea r the proposed construction, timely filed a Petition for

Formal Proceedings to contest the approval of the deviation

request. On October 15, 2002, a determination of standing as

to Petitioner was issued by the Tallahassee - Leon County

Planning Commission ( Commission), which will issue a final

order in this matter.

3. As stipulated by the parties at hearing, the only

issue is whether AHG failed to satisfy three of the seven

criteria that must be met in order for the DRC to grant a

deviation. Those dispute d criteria are found in paragraphs

(iii) - (v) of Section 23.3 of the City's Code of Ordinances

(Code) and provide as follows:

(iii) The deviation requested is the

minimum deviation that will make possible

the reasonable use of the land, building,

or struct ure; and

(iv) The strict application of the

requirements of this chapter will

constitute a substantial hardship to the

applicant, which hardship is not self -

created or imposed; and

(v) There are exceptional topographic,

soil, or other environmental condi tions

unique to the property;

The parties agree that all other criteria for the site plan

and deviation have been satisfied by AHG. In addition, a

related request by AHG for a technical amendment to the

boundaries of the parcel will be granted by the DRC , assuming

that AHG obtains a favorable ruling in this case.

b. History of the Property

4. The property which is the subject of this case is

identified as lot of record 454 and fronts on the west side of

Lonnbladh Road, lies south of Raymond Diehl Road a nd several

hundred feet east of Thomasville Road, and is just southeast

of the major intersection of Interstate 10 and Thomasville

Road in Tallahassee. The zoning for the property is

Commercial Parkway (CP), a mixed - use zoning district which

applies to ar eas exhibiting an existing development pattern of

office, general commercial, community facilities, and

intensive automotive commercial development abutting urban

area arterial roadways with high traffic volumes. Among the

numerous permitted uses in that land use category are hotels

and motels.

5. The property is part of a 7.1 - acre site originally

owned by Kingswood Land Partners, Ltd. (Kingswood). In

January 1990, Kingswood obtained from the City a minor

subdivision approval, dividing the 7.1 acres in to three lots

of record, including lot of record 454. The three lots

consisted of a 2.44 - acre lot running along most of the western

portion of the property with the exception of a small area on

the southern end, a 1.68 - acre lot on the northeast portion of

the property, and a 2.98 - acre lot on the southeast portion of

the property (lot of record 454).

6. In November 1990, Kingswood received from the City a

verification of vested status (vested rights certificate) for

the 7.1 - acre site. The vested rights c ertificate provided

that the 7.1 - acre site was exempt from the consistency and

concurrency provisions of the Tallahassee - Leon County

Comprehensive Plan (Plan) and was vested for an 89,887 gross

square foot commercial non - medical office building and a 135 -

unit hotel/motel.

7. In 1991, Kingswood utilized the vesting for a 135 -

unit, five - story hotel and constructed what is now known as

the Cabot Lodge on the 2.44 - acre lot. It also constructed on

part of the southeastern 2.98 - acre lot a paved area with

park ing places.

8. In 1992, Kingswood conveyed to Twin Action Hotels,

Inc. (Twin Action) the 2.44 - acre lot which included the Cabot

Lodge Hotel, but not the paved parking area on the 2.98 - acre

lot. The same year, Kingswood also conveyed to New Horizons

Unl imited, Ltd. (New Horizons) the remaining two lots, which

two lots were vested for a commercial non - medical office six -

story building of 89,887 gross square feet.

9. At the time of the conveyances of the New Horizons

property and the Cabot Lodge propert y to New Horizons and Twin

Action, respectively, these parties entered into a Grants of

Reciprocal Easements dated June 23, 1992, recorded in Official

Records Book 1570, at page 1072 of the Public Records of Leon

County, Florida.

10. Around 1994, the Flor ida Department of

Transportation acquired .333 acres of the northernmost lot

owned by New Horizons for a project which included realigning

and four - laning Raymond Diehl Road and relocating the

eastbound entrance ramp to Interstate 10, immediately in front

of the Cabot Lodge lot. This acquisition reduced the New

Horizons 1.68 - acre lot to 1.347 acres.

11. On October 14, 1998, the City approved a vested

rights transfer request submitted by New Horizons, which

provided that the New Horizons property could b e used for a

107 - room, four - story business hotel and 59,162 gross square

feet of commercial non - medical offices, instead of the vested

89,887 gross square feet of commercial non - medical offices.

12. Since the acquisition by New Horizons of the two

remaini ng lots, that property has remained vacant and

unimproved with the exception of the westernmost portion

immediately south of the Cabot Lodge building, on which is

located pavement and parking spaces. The parking spaces are

not legally available to Cabot L odge for use.

13. The property located immediately west of the Cabot

Lodge 2.44 - acre lot is property which is referred to as the

Thomasville Road Executive Park (Executive Park) property. On

an undisclosed date, this property was divided into three

separ ate lots by a minor subdivision approval consisting of

Parcel A on which was constructed the Unisys Building and

parking spaces, Parcel B which is now improved with a Hilton

Garden Inn owed by Petitioner, and Parcel C which remains

undeveloped.

14. In 199 6, Petitioner filed its site plan application

to develop Parcel B. Included in the site plan application

was a request for a technical amendment to adjust the boundary

lines between Parcels A and B of the Executive Park property.

Like AHG has done here, Petitioner also requested a deviation

to the then height limitation of 45 feet, requesting that the

City allow it to build the building 50 feet high, rather than

the required 45 feet. Although the property on which the

Hilton Garden Inn is now located was vested for a three - story

commercial office building, subject to CP zoning, the City

agreed that the vesting could also be used for a hotel use

consisting of four stories rather than three stories.

15. The City granted Petitioner's request to allow it to

build a four - story hotel on Parcel B. It also granted

Petitioner a height deviation so that the midpoint or peak of

the roof would be not higher than 50 feet. However, the top

of the roof is 59 feet, 6 inches. The facility has 99 rooms.

16. No objecti on was made by Cabot Lodge, Unisys, or New

Horizons to Petitioner's application for approval of its site

plan, the technical amendment adjustment to boundary parcels,

the use of the property for a four - story hotel instead of a

three - story office building, or the granting of a height

deviation.

17. In April 2002, AHG entered into a contract with New

Horizons for the purchase of 2.23 acres of the southeastern

property owned by New Horizons for approximately $1.5 million.

The 2.23 acres is part of the 2.98 - acre lot of record known as

lot 454.

c. The application

18. On July 5, 2002, AHG filed with the DRC its site

plan application to construct a 122 - room, five - story hotel on

the 2.98 - acre lot. On the same day, it filed a Deviation from

Development Standard Request asking that it be allowed to

construct a five - story hotel on the parcel rather than being

limited to a four - story hotel, as required by the development

standards for the CP zoning district in which the property is

located.

19. New Horizons has al so requested a technical

amendment to the boundaries of the 1.68 - acre lot and the 2.98 -

acre lot that would result in the 2.98 - acre lot on which the

hotel will be built being reduced to 2.23 acres. The DRC

intends to approve that request, assuming that AHG prevails in

this proceeding.

20. AHG's site plan uses the largest footprint for

construction of the hotel building that is allowed under

current applicable Code restrictions relating to the amount of

impervious surface allowed to be constructed on a 2.23 - acre

lot, as well as the required amount of green space which must

be maintained.

21. If current zoning rules and regulations are strictly

applied, AHG would be unable to have more than approximately

107 rooms in the hotel, utilizing the maximum foot print and

only four stories on the 2.23 acres. The only way to

accommodate the construction of 122 rooms is to obtain a

deviation from the current restriction of four floors and

allow a fifth floor to be built.

22. The proposed height of construction of the five -

story hotel will be 53 feet, 10 inches, except for several

small areas of parapet walls which will be no higher than 58

feet, 4 inches.

23. The subject site is relatively flat, with no

excessive slopes, and it has no remarkable features from an

environmental standpoint. It is unique in the sense that it

is flat, barren land. It does not have wetlands, pristine

water bodies, or other protected conditions. Also, it has no

endangered plant species requiring special protection, no

patriarch trees , no protected trees, and no native forests.

d. Should the Deviation be Approved ?

24. A deviation under Section 23.3 is an amendment to a

"set requirement" in the Code, such as a setback or height

restriction. Between 60 and 75 percent of all applicat ions

filed with the DRC for a site plan approval are accompanied by

a request for a deviation from a development standard, which

are standards prescribed for each zoning district in the Code.

One such development standard for the CP District is a four -

sto ry height limitation on structures found in Section 10.6RR

of the Zoning Code.

25. The DRC is a four - person committee comprised of

representatives from the City's Utility Department, Public

Works Department, Growth Management Department, and Planning

De partment; it is charged with the responsibility of deciding

whether to grant or deny a deviation request. For at least

the last six years, and probably much longer, the DRC has

consistently applied and interpreted the deviation standards

in Section 23.3 i n the same manner.

26. Although Section 23.3 provides that "the granting of

deviations from the development standards in this chapter is

not favored," they are not discouraged since more than half of

all applicants cannot meet development standards due to site

characteristics or other factors. Rather, the intent of the

provision is to prevent wholesale deviations being submitted,

project after project. Requests for a deviation are always

approved, when justified, in order to give both the City and

the applicant more flexibility in the development process.

Here, AHG's application was treated the same as any other

applicant. This case represents the first occasion that an

approval of a deviation has been appealed.

27. After an application for a deviati on is filed, it is

forwarded to all appropriate City departments as well as

members of the DRC. Each reviewing agency is requested to

provide information to the DRC members on whether or not the

request should be recommended for approval. In this case, n o

adverse comments or recommendations were made by any City

Department. After reviewing the Department comments, and the

justification submitted by AHG, the DRC approved the

deviation.

28. Under Section 5.1 of the Code, the City's land use

administrato r, Mr. Pitts, has the specific responsibility to

interpret all zoning and development approval regulations,

including Section 23.3, which provides the criteria for

granting a deviation. That provision has an apparent

inconsistency between the first two se ntences: the first

sentence includes a phrase that all criteria set forth

thereafter must be met to approve a deviation while the second

sentence appears to provide that only the conditions necessary

to granting a particular deviation must be met.

29. In resolving this apparent inconsistency, Mr. Pitts

does not construe the Section as requiring that all seven

criteria must be met in every case. Instead, even though all

criteria are reviewed by the DRC, only those that are

applicable must be satisfied. If this were not true, the DRC

"would grant very few deviations as part of [its] site plan or

subdivision regulation [process]," and the intent of the

Section would be undermined. For example, in order to justify

a deviation, the DRC does not require tha t an applicant show

that there are exceptional topographical soil features if, as

here, there are no exceptional environmental features on the

property. This interpretation has been consistently followed

over the years, is a reasonable and logical constr uction of

the language, and is hereby accepted.

30. As a part of its application, AHG submitted a

narrative justifying the granting of a deviation under each of

the seven criteria. To satisfy the first disputed criterion,

AHG indicated in its application that "[t]his deviation is the

minimum allowed to make reasonable use of the property and to

compete with adjacent hotels who enjoy the same height

opportunity."

31. AHG's use of the property is consistent with

adjoining developments, including the neig hboring Cabot Lodge,

which is five stories high and has 135 rooms, and the Hilton

Garden Inn, which was originally vested for an office

building, but was allowed by the DRC to construct a four - story

hotel.

32. There is no other property available to AHG at this

site on which to construct a hotel. The evidence shows that

New Horizons initially offered to sell AHG only 2.05 acres;

when AHG advised that anything less than 2.23 acres would

render the project financially unfeasible, New Horizons "very

reluct antly" agreed to sell an additional .18 acres. Because

New Horizons intends to build a restaurant on its remaining

2.097 acres, any further reduction in the acreage would reduce

its highest and best use of the property. Thus, AHG does not

have the option of purchasing more property to expand its

hotel laterally, as Petitioner suggests, rather than by adding

a fifth floor.

33. In addition, AHG does not have the ability to reduce

the size of its hotel rooms in order to squeeze more rooms out

of a four - st ory structure. This is because Hampton Inn (the

franchisor) will not grant a franchise for a new hotel unless

the franchisee agrees to build a hotel with prototypical room

sizes. The present design of the hotel meets the minimum size

required.

34. The re is no evidence that there is any other minimum

deviation that could be granted which would make possible the

use of the property for construction of 122 rooms under the

standards set forth by Hampton Inn, the franchisor. Thus, the

only practical adjust ment that can be made is to obtain a

height deviation. Accordingly, the criterion has been

satisfied.

35. To satisfy the second disputed criterion, AHG stated

in its narrative that "[t]he strict application of this

requirement would place this property a nd proposed hotel at a

competitive disadvantage by a lower number of available

rooms."

36. Through testimony of an AHG principal, it was

established that in order for AHG to make reasonable use of

its property, the addition of a fifth floor is necessary . The

evidence shows that as a general rule, a developer can only

afford to pay approximately $10,000.00 per room for land cost.

In this case, based on the 2.23 acres, at a purchase price of

$1,500,000.00 and a hotel with 122 rooms, the projected land

co st is $12,000.00 per room. This is the maximum that can be

paid for land and still make AHG's project economically

feasible. The strict application of the Zoning Code will make

the project financially unfeasible, which will create a

substantial hardship to AHG. The hardship is not self - created

or imposed.

37. At hearing, Petitioner's representative contended

that "there are some companies who would find it financially

feasible" to construct a four - story hotel with fewer rooms on

the same site. Howeve r, the more persuasive evidence on this

issue was presented by the AHG principal and shows the

contrary to be true.

38. The evidence further shows that the granting of the

deviation will result in an almost equal efficiency factor of

the total square fo otage of building versus the total square

footage of the site when comparing AHG's proposed project to

the neighboring Cabot Lodge. On the other hand, strict

application of the Zoning Code could result in a substantially

less and disproportionate efficien cy factor of AHG's property

as compared to the adjoining Cabot Lodge. This is because the

highest point of the proposed Hampton Inn and Suites is 58

feet, 6 inches, with the majority of the hotel being 51 feet

high. The adjoining five - story, 135 - room Cab ot Lodge has its

highest point at 55 feet, 6 inches, with the majority of the

building at 46 feet high. The Hilton Garden Inn has the

highest roof with its maximum height at 59 feet, 6 inches,

which runs across the entire peak of the roofline.

40. To s atisfy the final disputed criterion, AHG

indicated in its application that "[t]he absence of any

environmental features on this property, or any adjacent

environmental features that might be impacted[,] help support

the deviation."

42. As noted above, t he property in question is unique

in the sense that it is flat, treeless, and has no remarkable

environmental features. If a site is devoid of environmental

features, as it is here, the DRC has consistently interpreted

this provision as having no applicat ion in the deviation

process. This is the same interpretation used by the DRC when

it approved Petitioner's application for a height deviation in

1996 to construct the Hilton Garden Inn. Like AHG's property,

Petitioner's property was also devoid of envir onmental

features. Therefore, this criterion does not apply.

43. Even assuming arguendo that this provision applies,

the addition of a fifth story to a four - story building has no

impact whatsoever on the environmental characteristics of the

site.

44. Finally, there is no evidence that the deviation

request is inconsistent with the Plan, or that the deviation

will have any adverse impact to the general health, safety,

and welfare of the public. Indeed, as to any Plan

implications that might arise throu gh the construction of a

hotel, the evidence shows that the project is wholly

consistent with the purpose and intent of the CP land use

category, which is to promote higher intensity and density in

CP - zoned land and to discourage urban sprawl.

CONCLUSIONS OF LAW

45. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties hereto

pursuant to Article XXIV, Sections 24.1 et. seq. , Tallahassee

Code of Ordinances.

46. Section 24.3.C. provides in part that a decision of

t he DRC

become[s] final fifteen (15) calendar days

after [it is] rendered unless a party files

a notice of intent to file a petition for

formal proceedings in accordance with the

bylaws and completes the application by

filing a petition for formal proceedi ngs

within thirty (30) calendar days after the

decision is rendered.

47. Here, a Petition for Formal Proceedings was timely

filed by Petitioner. Once a standing determination is made,

as it was here, Section 24.3.C. provides that the Commission

shall "conduct [ de novo ] quasi - judicial proceedings in

accordance with section 24.6 below." Therefore, a decision on

whether the application should be approved should not be based

solely on the evidence considered by the DRC on September 11,

2002, as Petitioner implicitly suggests, but rather it must be

based on all evidence presented at the de novo hearing.

48. Among other things, Section 24.6.B. authorizes the

Commission to "contract with the Division of Administrative

Hearings for [administrative law judge s] to conduct hearings

on petitions for formal proceedings filed pursuant to

subsection 24.3.C. above." In this case, the Commission has

opted to refer the matter to the Division of Administrative

Hearings.

49. While Section 24.6. fails to address the bu rden of

proof in a Commission site plan proceeding, Section 23.3 does

provide that the "applicant shall have the burden of

demonstrating through a preponderance of the evidence that all

conditions necessary to granting the deviation have been met."

This i s consistent with the general rule that the party

seeking the affirmative of the issue should logically bear the

burden of proving by a preponderance of the evidence that it

is entitled to the requested relief. See , e.g. , Durward

Neighborhood Assoc., Inc. et al. v. City of Tallahassee et

al. , DOAH Case No. 98 - 4234 (City of Tall. - Leon Cty Plan.

Comm., October 5, 1999). Thus, AHG is required to present a

prima facie case of entitlement to a deviation, taking into

account the objections raised by Petitioner.

50. Article XXIII of the Code (Sections 23.1, 23.2, and

23.3) governs the process for obtaining a deviation to

development standards. Relevant to this controversy are the

following provisions of Section 23.3 of the Code:

The granting of deviations from the

development standards in this chapter is

not favored and such requests may only be

granted upon a showing that all criteria

set forth below have been met. The

applicant shall have the burden of

demonstrating through a preponderance of

the evidence tha t all conditions necessary

to granting the deviation have been met.

The entity with the authority to approve,

approve with conditions, or deny a

subdivision or site plan shall grant a

deviation under this section only upon

demonstration that:

* * *

(iii) The deviation requested is the

minimum deviation that will make possible

the reasonable use of the land, building,

or structure; and

(iv) The strict application of the

requirements of this chapter will

constitute a substantial hardship to the

ap plicant, which hardship is not self -

created or imposed, and

(v) There are exceptional topographic,

soil, or other environmental conditions

unique to the property;

* * *

51. In addition, Section 23.1 provides in part that a

deviation "shall be g ranted only upon demonstration and a

finding of consistency with the Comprehensive Plan and no

adverse impact to the general health, safety, and welfare of

the public."

52. The preponderance of the evidence supports a

conclusion that AHG has satisfied all criteria for a

deviation, and that the deviation is consistent with the

Comprehensive Plan and will not adversely impact the general

health, safety, and welfare of the public. This being so,

AHG's applications for a Type B site plan and a height

deviation should be approved.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that the Tallahassee - Leon County Planning

Commission enter a final order granting AHG's Type B site plan

review application and its application for a deviation from

the height restriction for the CP land use category.

DONE AND ENTERED this 22nd day of January, 2003, in

Tallahassee, Leon County, Florida.

___________________________________

DONALD R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of January, 2003.

COPIES FURNISHED:

Charles R. Gardner, Esquire

Gardner, Wadsworth, Shelfer,

Duggar & Bist, P.A.

1300 Thomaswood Drive

Tallaha ssee, Florida 32308 - 7914

Linda R. Hurst, Esquire

City Hall, Second Floor

300 South Adams Street

Tallahassee, Florida 32301 - 1731

John Marshall Conrad, Esquire

Ausley & McMullen

Post Office Box 391

Tallahassee, Florida 32302 - 0391

Jean Gregory, Clerk

Tallahassee - Leon County Planning Commission

City Hall

300 South Adams Street

Tallahassee, Florida 32301 - 1731

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

10 days from the date of this Recommended Order. Any

exceptions to this Recommended Order should be filed with the

agency that will issue the final order in this matter.