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I asked Marvin Bethune, County Attorney, to answer two essential questions regarding the powers of the Historic Landmarks Commissions with regard to land acquisition and development.

They were:  

1.  Can the Historic Landmarks Commission use Land Bond money to purchase historic landmarks?  The answer is yes.

2.  Can the Historic Landmarks Commission construct new in-fill buildings on historic landmarks, e.g. Rozzell House or W. T. Alexander Plantation?  The answer is yes but only with money derived from the sale of historic landmarks.  To do so, however, the HLC will have to secure County Commission approval for an amendment to the Revolving Fund Capital Project Ordinance.

Here is Mr. Bethune's letter.

June 7, 2001

 

Dr. Dan L. Morrill

Consulting Director

Charlotte-Mecklenburg Historic Landmarks Commission

2100 Randolph Road

Charlotte, North Carolina 28207

Dear Dan:

I am writing in response to your letter of May 4, 2001 in which you posed the following question: "Can the HLC use monies derived from the Land Banking Bonds or its revolving fund to purchase historic landmarks, restore structures within the boundaries of historic landmarks, construct new, compatible buildings within the boundaries of historic landmarks and sell any or all of the above with restrictive covenants in the deeds to assure their preservation in perpetuity?"

Your question raises two primary issues. The first is whether it would be lawful under North Carolina law for the Historic Landmarks Commission to take the actions which you have described, assuming the legality of the source of funds, and the second is whether it would be lawful for the Historic Landmarks Commission to take such action using the funds that you have identified.

With respect to your first issue, it is possible to read the grant of powers to the Historic Landmarks Commission as contained in G.S. 160A-400.8(3) to authorize the Historic Landmarks Commission to take such actions as purchasing historic structures, restoring structures within the boundaries of historic landmarks, constructing new, compatible buildings within the boundaries of selling historic landmarks, and selling any or all of the above with restrictive covenants and the deeds to assure their preservation. This statute reads as follows:

"Acquire by any lawful means the fee or any lesser included interest, including options to purchase, to properties within established districts or to any such properties designated as landmarks, to hold, manage, preserve, restore and improve the same, and to exchange or dispose of the property by public or private sale, lease or otherwise, subject to covenants or other

legally binding restrictions which will secure appropriate rights of public access and promote the preservation of the property;" (emphasis added)

In order for the Historic Landmarks Commission to purchase a property, the entire property would need to be designated as a landmark. The above-quoted statute indicates that the Historic Landmarks Commission may "restore and improve" properties designated as landmarks. The word "improve", in some circumstances, can mean to construct a building or some other type of improvement on a property. It is not possible, however, to determine absolutely whether that was the interpretation that was intended by the General Assembly when it adopted this legislation, since there is no other language in Part 3C of Article 19 of 1 60A which would describe this type of activity by the Historic Landmarks Commission.

Webster's Ninth New Collegiate Dictionarv contains the following definitions of "improve":

intransitive "2: verb

verb "1 a: To enhance in value or quality: make better

b: to increase the value of (land or property) by betterment (as cultivation or the erection of buildings)" to make useful additions or amendments"

Definition l b of the transitive verb "improve" would support the conclusion that the Historic Landmarks Commission could build new buildings on historic landmarks which it has purchased since the verb improve in this statute is a transitive verb (a verb with an object) and not an intransitive verb, as it has "the same" as its object. (If the word "improve" had been used an intransitive verb, its meaning would not support such a conclusion.)

Other statutes which are relevant to this inquiry are found in G.S. 160A-400.9, which determines when a certificate of appropriateness would be required for alteration of a landmark. The pertinent part of the first sentence of this statute reads as follows:

"From and after the designation of a landmark . . . no exterior portion of any building or other structure (including masonry walls, fences, light fixtures, steps and pavement, or any other appurtenant features) . . . shall be erected . . . until after an application for a certificate of appropriateness as to exterior features has been submitted to and approved by the preservation commission." (emphasis added)

In addition, Subsection (c) of this same statute contains the following sentence:

"Prior to any action to enforce a landmark or historic district ordinance, the commission shall (i) prepare and adopt rules of procedure, and (ii) prepare and adopt principles and guidelines not inconsistent with this Part for new construction, alterations, additions, moving and demolition." (emphasis added)

It can be stated very conclusively that after a property has been designated as a landmark, the Historic Landmarks Commission could grant a certificate of appropriateness to allow new construction on the property designated as the historic landmark. And, as stated above, a very good argument can be made that the Historic Landmarks Commission itself has the authority to improve landmarks which it has purchased by constructing new buildings within the boundaries of historic landmarks, although I do believe that reasonable people might differ as to that interpretation if they were not aware of the technicalities of the verb usage.

The second issue which you have raised is whether the funds which you identified could be used to construct these "new compatible buildings". The Land Bonds which have been issued by the County, as we have earlier determined, apparently can be used to purchase historic landmarks. They cannot be used, however, to restore structures within the boundaries of historic landmarks or to construct new buildings within the boundaries of historic landmarks since Land Bonds can be used only for acquisition expenses.

You also questioned whether your revolving funds could be used to build new structures within the boundaries of historic landmarks. As you know, you really have two sources of funds just for the use of the HLC: the proceeds from the sale of bonds which have been approved by the voters for the Historic Landmarks Commission; and the proceeds from the sale of historic landmarks, which proceeds are being held by the County in a capital project ordinance separate from the one in which proceeds from the sale of historic landmarks bonds have been placed.

The bond order with respect to the $7,500,000 historic landmarks bonds approved by the voters in the 1999 referendum reads as follows:

"Shall the order authorizing $7,500,000 of bonds secured by a pledge of the faith and credit of the County of Mecklenburg to pay capital costs of providing for preservation of historic properties, including the acquisition of historic property, the improvement and renovation of historic property and the acquisition and installation of furnishings and equipment and the acquisition of interests in real property required therefore, and a tax to be levied for the payment thereof, be approved?"

In my opinion, the proceeds from these bonds cannot be used to finance the construction of new buildings, even though the bond question does indicate that these funds can be used for the "improvement" and renovation of historic property. This is because the basic statement of what these funds can be used for is "to pay capital costs of providing for preservation of historic properties." Everything else following that statement is designed to provide details as to what that statement means. Within this context, the word "improvement", in my opinion, relates to construction activity in connection with the preservation of historic properties, and does not contemplate construction of new structures since such would not be a capital cost "of providing for preservation of historic properties." (emphasis added)

The other source of funds is the monies in the "Historic Preservation Revolving Fund Capital Project Ordinance" adopted by the Board of Commissioners on February 15, 2000. This Capital Project Ordinance holds funds from the sale of real estate and from contributions. This fund, which contained $747,779.57 when it was established, does not have the same constraints on its use as the proceeds from the sale of the 1999 bonds. The statement as to the way the funds could be used as contained in the Capital Project Ordinance itself, however, would have to be altered in order to use the funds from this Capital Project Ordinance to build new buildings within the boundaries of historic landmarks. This Ordinance as written says that the funds are to be used "for the purpose of providing funds, together with any other available funds, to provide for preservation of historic landmarks as well as properties located in locally established historic districts (which may, but are not required to be, historic landmarks), including the acquisition of lands or rights-in-land and the acquisition and restoration of buildings." (emphasis added) This Capital Project Ordinance would need to have the purpose portion amended to include, as one of the purposes for which the funds could be used, the construction of buildings within the boundaries of historic landmarks. Such a change could be adopted by the Board of County Commissioners without violating any State law.

The last element which we need to consider in determining the answer to your questions is the document creating the Historic Landmarks Commission. The Joint Resolution adopted by the City Council and the Board of County Commissioners in 1973 indicates that the "CharlotteMecklenburg Historic Properties Commission is hereby authorized to carry out the powers as set forth in Chapter 157A of the General Statutes of North Carolina." The General Statutes indicate that the provisions of Chapter 157A were transferred to G.S. 160A-399.1 through 160A-400 in 1973, which Section was replaced in 1989 by G.S. 160A-400.1 through 400.14, which statutes currently set forth the powers of what were previously referred to as historic properties

commissions in the statutes. Thus, it appears that the Historic Landmarks Commission has been authorized by the City Council and the Board of County Commissioners to exercise the full extent of its statutory powers.

In summary, it would be lawful for the Historic Landmarks Commission to purchase historic landmarks, restore structures within the boundaries of historic landmarks, construct new compatible buildings within the boundaries of historic landmarks, and sell any or all of the above with restrictive covenants and the deeds to assure their preservation. The acquisition of historic landmarks can be accomplished using Land Bonds, proceeds from the sale of bonds authorized in the 1999 bond referendum, and funds in the Historic Preservation Revolving Fund Capital Project Ordinance adopted by the Board on February 15, 2000. The restoration of structures within the boundaries of historic landmarks cannot be accomplished using Land Bonds, but can be accomplished by using proceeds from the sale of the 1999 bonds or funds in the Historic Preservation Revolving Fund Capital Project Ordinance. The construction of new compatible buildings within the boundaries of historic landmarks appears to be a statutory power of the Historic Landmarks Commission, but the only funds which would be available for that purpose would be the monies in the Historic Preservation Revolving Fund Capital Project Ordinance, and then only if the Ordinance were amended to include as one of the purposes for which the funds could be used, the construction of buildings within the boundaries of historic landmarks.

Should you have any additional questions with respect to this matter, please feel free to let me know.

Very truly yours,

 

Marvin A. Bethune

Mecklenburg County Attorney

cc: Mr. Jeff Bradsher

Historic Landmarks Commission Chairman