COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 67984 PARKRIDGE APARTMENTS LIMITED : PARTNERSHIP : : Plaintiff-appellee : : JOURNAL ENTRY vs. : and : OPINION CITY OF CLEVELAND : : Defendant-appellant : : : DATE OF ANNOUNCEMENT OF DECISION : JULY 17, 1995 CHARACTER OF PROCEEDING : Civil appeal from : Court of Common Pleas : Case No. 257,094 JUDGMENT : REVERSED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellee: KENNETH J. FISHER Attorney at Law 3500 Terminal Tower Cleveland, Ohio 44113 For defendant-appellant: SHARON SOBOL JORDAN Director of Law SOLOMON F. BALRAJ, Assistant Law Department Room 106 - City Hall 601 Lakeside Avenue Cleveland, Ohio 44114-1077 DONALD C. NUGENT, J.: This is an appeal by the defendant-appellant, City of Cleveland (hereinafter "Cleveland"), from the decision of the Cuyahoga County Court of Common Pleas granting the request for declaratory judgment of plaintiff-appellee Parkridge Apartments Limited Partnership (hereinafter "Parkridge") finding that Cleveland Ordinance No. 1776-A-90 applies to one and two-bedroom apartment complexes of at least twenty-five units and ordering the Commissioner of Building and Housing for the City of Cleveland to grant tax abatement for Parkridge's apartment complex pursuant to the ordinance and R.C. 3735.65, et seq. Parkridge is a limited partnership duly organized and existing under the laws of the State of Ohio. Parkridge brought this action challenging Cleveland's denial of tax abatement for its one- hundred-four-unit residential apartment complex located on West 194th Street and Puritas Avenue in the City of Cleveland. Appellee's basic contention is that its apartment complex is within 1 the designated Community Reinvestment Area and qualifies under the 1 R.C. 3735.65(B) defines "community reinvestment area" as follows: (B) "Community reinvestment area" means an area within a municipal corporation *** for which the legislative authority of the (continued...) - 3 - definition of "at least twenty-five (25) one (1) and two (2) family residential properties" pursuant to Cleveland Ordinance No. 1776- A-90. Cleveland contends that the Parkridge complex does not meet the requirements of the ordinance because it is a multi-unit residential income-producing apartment complex. For the following reasons, we reverse the decision of the trial court. I. The essential facts in this action are not in dispute and were submitted to the trial court upon stipulation of the parties. On or about April 22, 1991, Cleveland City Council passed Ordinance No. 1776-A-90, which designated the entire City of Cleveland, with the exception of certain downtown areas, as a Community Reinvestment Area pursuant to R.C. 3735.65, et seq. for the speci- fic purpose of encouraging residential property development in the City of Cleveland. Pursuant to Ordinance No. 1776-A-90, an eligible owner of real property located in the Community Reinvestment Area could file for an exemption from real property taxation of a period of fifteen years for one hundred percent (100%) of the assessed taxes for new 1 (...continued) municipal corporation *** has adopted a resolution under section 3735.66 of the Revised Code describing the boundaries of the area and included within the description is one in which housing facilities or structures of historical significance are located and new housing construction and repair of existing facilities or structures are discouraged. - 4 - construction consisting of at least twenty-five one- and two- family residential properties completed after April 30, 1991. The commissioner of redevelopment, as Cleveland's duly designated housing officer, determined whether applications for real property tax exemption met the requirements of Ordinance No. 1776-A-90 and R.C. 3735.65. The commissioner would certify those applicants who qualified under the ordinance to the Cuyahoga County Auditor for approval of the tax abatement. In March 1992, Parkridge filed its application with Commissioner Joseph F. Smith for exemption from real property taxation for a period of fifteen years for one hundred percent of the assessed taxes for eighty units of its apartment complex that were completed after the April 30, 1991 effective date of Ordinance No. 1776-A-90. Commissioner Smith rejected Parkridge's application on the grounds that a multi-residential apartment complex does not qualify under the Ordinance as "at least twenty-five (25) one (1) and two (2) family residential properties." On August 24, 1993, Parkridge filed a complaint with the trial court against Cleveland seeking a declaratory judgment that the Parkridge Apartments were eligible for real estate tax exemption within the purview of Ordinance No. 1776-A-90. On April 19, 1994, briefs were submitted and a hearing was had before the trial court. In a decision entered September 8, 1994, the trial court found in favor of Parkridge, ruling that "Ordinance No. 1776-A-90 applies to one and two bedroom apartment complexes of at least 25 units." - 5 - On October 3, 1994, defendant City of Cleveland timely filed its notice of appeal, raising the following for our review: ASSIGNMENT OF ERROR THE TRIAL COURT'S ATTITUDE WAS UNREASONABLE AND ARBITRARY WHEN IT SUBSTITUTED ITS INTENT FOR THE CITY OF CLEVELAND COUNCIL'S LEGISLATIVE INTENT IN THE APPLICATION OF CITY OF CLEVELAND ORDINANCE NO. 1776-A-90 BY INTERPRETING "AT LEAST TWENTY-FIVE (25) ONE (1) AND TWO (2) FAMILY RESIDENTIAL PROPERTIES" TO INCLUDE A MULTI-FAMILY RESIDENTIAL PROPERTY LIKE AN APARTMENT BUILDING. STATEMENT OF THE ISSUES PRESENTED I. WHETHER THE TRIAL COURT ACTED ARBITRARILY AND UNREASONABLY WHEN THE PLAIN LANGUAGE OF CLEVELAND ORDINANCE NO. 1776-A-90 OF "AT LEAST TWENTY-FIVE (25) ONE (1) AND TWO (2) FAMILY RESIDENTIAL PROPERTIES", CLEVELAND CITY COUNSEL'S INTENT, THE ORDINANCE'S OBJECTIVE AND LEGISLATIVE HISTORY, AND THE CIRCUMSTANCES UNDER THE ENACTMENT OF THE ORDINANCE PRECLUDED MULTI-FAMILY RESIDENTIAL PROPERTIES LIKE APARTMENT BUILDINGS FROM THE SCOPE OF "ONE (1) AND TWO (2) FAMILY RESIDENTIAL PROPERTIES." II. WHETHER THE TRIAL COURT'S JUDGMENT ENTRY VIOLATED THE DOCTRINE OF SEPARATION OF POWERS SINCE THE TRIAL COURT'S FINDING IS CONTRARY TO THE ORDINANCE'S PLAIN MEANING AND CLEVELAND CITY COUNCIL'S LEGISLATIVE INTENT. II. Initially, we note that the parties in the present case have set forth different standards of review which this court should use in determining the present matter. Appellant proposes an "abuse of discretion" standard, stating that the trial court acted - 6 - "arbitrarily and unreasonably" in reaching its decision. See, Blakemore v. Blakemore (1983), 5 Ohio St.3d 217. On the other hand, appellee proposes that this court use a "sufficiency of the evidence" standard, stating that this court should affirm the decision of the trial court if there exists some evidence to support that decision. See, Meyers v. Garson (1993), 66 Ohio St.3d 60; Seasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77. We find both parties' proposed standards of review are misplaced. In the present case, we are asked to review the trial court's order involving an interpretation of a city ordinance. Where a trial court's order is based on a pure question of law, an appellate court may properly substitute its judgment for that of the trial court since an important function of appellate courts is to resolve disputed propositions of law. Castlebrook, Ltd. v. Dayton Properties Ltd. Partnership (1992), 78 Ohio App.3d 340, 347. The question of whether the ordinance in question applies to Parkridge and other similar apartment buildings is a matter of law and subject to plenary review before this court. Therefore, we will review the matter herein de novo, without deference to the determination of the trial court. III. In determining the legislative intent of an ordinance, a court must first look to the language of the ordinance itself. Provident Bank v. Wood (1973), 36 Ohio St.2d 101. It is the duty of the - 7 - court to give effect to the words used in the ordinance, not to delete words used or insert words not used. Cleveland Elec. Illum. Co. v. Cleveland (1988), 37 Ohio St.3d 50. If the words of the ordinance plainly convey a meaning which is clear, unequivocal and definite, the interpretive effort of the court ends, and the ordinance must be applied accordingly. Id.; R.C. 1.49. However, where an ordinance is found to be subject to various interpretations, a court called upon to interpret its provisions may invoke rules of construction in order to arrive at the council's intent. See, State, ex rel. Zonders v. Delaware Cty. Bd. of Elections (1994), 69 Ohio St.3d 5, 10. The ordinance in question states, in pertinent part, the following: Section 3. That the construction of new structures and the remodeling of existing structures in the Community Reinvestment Area is hereby declared to be a public purpose for which exemptions from real property taxation shall be granted in the following manner: (a) The owner of any such real property in the Community Reinvestment Area described hereinabove may file an exemption from real property taxation for a period of fifteen (15) years for one hundred percent (100%) of the assessed taxes for new construction and conversion projects consisting of at least twenty- five (25) one (1) and two (2) family residential properties. (b) The owner of any such real property in the Community Reinvestment Area described hereinabove may file an exemption from real property taxation for a period of ten (10) years for one hundred - 8 - percent (100%) of the assessed taxes on the following improvements: (i) New construction and conversion projects consisting of less than twenty-five (25) one (1) and two (2) family residential properties; and (ii) Improvements on one (1) and two (2) family residential properties which cost greater than $2,500 and, but for the tax exemption granted pursuant to this ordinance, would increase the assessed value of the real estate seeking exemption. Appellee contends that the above ordinance does not clearly define what the term "residential properties" means. In their briefs before this court, each party has submitted substantially different interpretations of this term. Appellant contends that the language of the ordinance clearly refers to single- and double- family homes or condominiums. Moreover, appellant argues that the threshold requirement within the ordinance of "at least twenty- five residential properties" should be arrived at by counting each parcel of land as one individual property. Therefore, the ordinance should only apply to homes and condominiums which have separate parcels and tax liabilities. Appellant argues that under this interpretation, it is clear that apartment complexes do not satisfy the requirements of the ordinance because apartment complexes such as appellee's only hold one permanent parcel number. Appellee argues that, on the contrary, the express intent of the ordinance is to attract large scale residential projects in - 9 - Cleveland. It is appellee's contention that since the ordinance does not expressly exclude multi-unit apartment complexes from its scope, the Parkridge apartment building falls within the scope of the ordinance. The view of this court is that the meaning of the ordinance is plain and unequivocal; a residential property is a separate and individual parcel of land with separate and individual deeds, ownership and tax liabilities. Read within the structure of Ordinance No. 1776-A-90, the phrase "at least twenty-five (25) residential properties" means just that: twenty-five separate and individual properties zoned for one- and two-family use. While we do not perceive any ambiguity within the words of the ordinance, we find that a review of the circumstances, objectives and history of Ordinance No. 1776-A-90 allows for a clearer understanding of our decision. Therefore, for the following reasons, we agree with the argument posed by appellant and find that the intent of Ordinance No. 1776-A-90 was to define "residential properties" as separate and individual parcels of land with separate and individual tax liabilities. IV. - 10 - The rules of construction which this court will follow in construing the ordinance are defined in Cleveland Codified 2 Ordinance 101.07(c), which states as follows : (c) If an ordinance is ambiguous, the court, in determining the intention of Council, may consider among other matters: (1) the object sought to be attained; (2) the circumstances under which the ordinance was enacted; (3) the legislative history; (4) the common law or former legislative provisions, including laws upon the same or similar subjects; (5) the consequences of a particular construction; (6) the administrative construction of the ordinance. Therefore, in order to properly demonstrate the intent of the Cleveland Council, we will consider the above six criteria as they relate to Ordinance No. 1776-A-90. A. The circumstances under which the present ordinance was passed can be derived from a review of the record. The ordinance was originally created by the City of Cleveland Planning Commission and then put before the entire Cleveland City Council for approval. The record shows that in its "Findings with Respect to Ordinance 2 Cleveland Codified Ordinance 101.07(c) mirrors the language of the statutory rules of construction in R.C. 1.49. - 11 - No. 1776-A-90," the planning commission was greatly influenced by two separate studies. The first of these studies was undertaken by the planning commission during the years 1984-1985. In this study, the planning commission carried out an exterior condition survey of one hundred percent of the one- to four-unit residential structures in the City of Cleveland. The second study, undertaken in 1987 by the Urban Center of Cleveland State University, focused upon the trends affecting Cleveland's housing market. At the conclusion of its research, the Urban Center concluded that "tax abatement for all residential new construction and rehabilitation projects is needed as a temporary tool." As a result of these studies, the council concluded the entire City of Cleveland had been affected by urban blight. In response, Ordinance No. 1776-A-90 was enacted. The ordinance allows for the designation of the entire city, except for the Downtown Plan Area, as a Community Reinvestment Area per R.C. 3735.65. Once an area is designated as a Community Reinvestment Area, the legislative authority is permitted to offer tax abatements for the development of that area. The underlying objective of a tax abatement is to encourage long-term development by offering short-term tax relief. The objective which Council hoped to accomplish with the present designation is clearly stated in the preamble of Ordinance No. 1776-A-90: Whereas, the City desires to encourage new housing construction and the repair of existing - 12 - housing facilities to eliminate blight and prevent the recurrence of blight by granting tax exemptions for residential projects; and Whereas, this ordinance constitutes an emergency measure providing for the immediate preservation of public property, health, and safety, in that creating a Community Reinvestment Area (the "Area") will encourage housing development and will eliminate blight and prevent the recurrence thereof in the Area *** The legislative history of Ordinance No. 1776-A-90 is present in the record before this court as the "minutes" of the City Planning Commission meeting. These minutes show a great concern by the members of the commission regarding the breadth of the proposed ordinance. Throughout the minutes, numerous references are made to the need to rehabilitate and develop "houses." Of utmost importance are the following comments of members of the planning commission: Mr. Resseger: said that this ordinance would make tax abatement available for single and two-unit houses on a citywide basis for new construction or repairs of $2,500.00 or more, with the exception of such housing in the Downtown Plan Area. * * * Mr. Smith: said that proposals for multi- family projects (three or more units) and commercial buildings were not covered under this ordinance, but would be reviewed on a case-by-case basis for possible tax abatement. * * * Mr. Smith: said that the ordinance was intended to provide tax breaks to nonprofit groups who buy inexpensive, substandard houses - 13 - and put out a substantial outlay to rehabilitate them. (Emphasis added.) A review of these statements makes it clear that the intent of the commission was to provide incentive for developers to build or renovate "houses" within the Community Reinvestment Area. The statements of Messrs. Resseger and Smith clearly show that the council considered single and two-unit "houses" and multi-family projects to be entirely different types of residences. To further explain this differentiation in residences, it is necessary to look at the overall purpose the ordinance was meant to accomplish. Ordinance No. 1776-A-90 was passed by Cleveland City Council as part of the overall citywide plan called Cleveland Civic Vision 2000. A review of this plan also supports our finding that the planning commission meant to distinguish houses and apartment buildings as separate forms of residences. The Vision 2000 plan clearly distinguishes between the land-use categories of "one- and two-family residential" and "multi-family residential." The Vision 2000 plan states as follows: ONE- AND TWO-FAMILY RESIDENTIAL: low-density areas characterized by single-family and two- family houses. MULTI-FAMILY RESIDENTIAL: medium- to light- density residential areas characterized by townhouses, low-rise apartments or high-rise apartments. (Emphasis added.) Furthermore, in addition to the distinctions within the Vision 2000 plan, previous distinctions between residences can be found within other Cleveland ordinances; particularly the Cleveland - 14 - Zoning Code. "Apartment house" is defined in Cleveland Zoning Code 325.06 as the following: "Apartment house" means a Class A multiple dwelling [325.50] containing three or more dwelling units. (Emphasis Added) On the other hand, Cleveland Zoning Code 325.49 defines "multiple dwelling" as the following: "Multiple dwelling" means a building other than a dwelling house, row house or institution occupied in whole or in part as a residence. It includes apartment houses, rooming houses and other buildings classified as Class A or Class B multiple dwellings. (Emphasis added). It is clear from these ordinances that previous Cleveland ordinances have distinguished one- and two-family "houses" as forms of residences separate and apart from apartment buildings. In addition to the distinctions present in past ordinances, the intent of the council can be inferred from the method in which the present ordinance has been employed. See, In Re Packard (1963), 174 Ohio St. 349; Biechele v. Sandusky (1974), 46 Ohio App.2d 4, 7. The record in the present case clearly shows that the administrative construction of the ordinance has been to deny tax abatement to apartment buildings. Since the enactment of the ordinance, the commissioner of redevelopment has granted and certified for tax exemption seven hundred thirty-three single one- and two-family houses and one condominium unit. In other words, the commissioner has systematically refused tax abatement to apartment buildings. - 15 - By way of affidavit, Commissioner Joseph Smith stated that Cleveland's policy is "to encourage home ownership within the city by automatically subsidizing the costs of a qualified house through real property tax abatement." Further, Commissioner Smith stated that Cleveland views apartment building ownership as a vehicle for financial investment and reviews tax abatement for apartment buildings on a case-by-case basis outside the purview of Ordinance No. 1776-A-90. Appellee argues extensively about the one condominium that was granted tax abatement under the ordinance. The records of the Cuyahoga County Auditor supplied by appellee show that this condominium unit was granted a ten-year tax exemption under section (c) of the ordinance, which deals with the Federal Low Income Housing Tax Credit Program. While we cannot think of how one condominium could be given an abatement under Ordinance No. 1776- A-90, since the ordinance has "at least 25 Properties" as a threshold requirement, we find this question insignificant for the determination of the matter herein. Even assuming arguendo that the granting of the abatement for the condominium was inappropriately done, this does not estop the City of Cleveland from properly administering the ordinance in all remaining situations. While it does not bode well for the city or the planning commission, the abatement of a lone condominium should not act to frustrate the intended result of the Cleveland City Council; rather, the intention of the Cleveland City Council must be - 16 - determined and definitively stated in order to give full effect to the ordinance. Finally, we note that the ordinance does not make any mention of "multi-family" dwellings; rather, the ordinance expressly states "one- and two-family residential properties." A maxim of statutory construction, expressio unius est exclusio alterius, states that the specific mention of one thing implies the exclusion of another. Vincent v. Zanesville Civil Serv. Comm. (1990), 54 Ohio St.3d 30, 33. As previously mentioned, "one- and two-family" and "multiple family" residences have been consistently distinguished in other Cleveland ordinances. Therefore, we find that the failure of the present ordinance to include the term "multiple-family" within its confines, while specifically mentioning "one and two family," acts to exclude such multiple-family properties from its authority. Therefore, after a thorough review of the record and applying the method of construction set forth in Ordinance No. 101.07(c), supra, we hold that the Cleveland City Council intended to exclude multiple-family residential dwellings from the confines of Ordinance No. 1776-A-90. The object, history and circumstances under which the ordinance was enacted show the council's desire to encourage home or condominium ownership and investment within the City of Cleveland. It is clear that the objective of this ordinance was to facilitate the revitalization of the City of Cleveland by insuring the growth and permanency of home ownership within the City of Cleveland. The consequences sought to be - 17 - attained by the ordinance were to insure that the City of Cleveland would not be emptied of its population and tax-base either in the short-term or long-term future. To this end, the council offered tax abatements to large scale projects consisting of "at least twenty-five (25) one- and two- family residential houses." The record shows that council hoped that these abatements would have the effect of encouraging residential development and neighborhood stabilization. We find nothing within the record to support appellee's claim that the council intended these tax abatements to apply to apartment buildings or other multiple-family dwellings. Accordingly, appellant's first assignment of error is well taken. The declaratory judgment of the Cuyahoga County Court of Common Pleas is overruled. - 18 - It is ordered that appellant recover of appellee its costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Cuyahoga County Court of Common Pleas to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. SARA J. HARPER, P.J. TERRENCE O'DONNELL, J. CONCUR JUDGE DONALD C. NUGENT (This case was conferenced and decided prior to Judge Nugent's resignation from this bench.) N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, .