CPMCBA Minutes

CONSTRUCTION AND PROPERTY MAINTENANCE CODE BOARD OF APPEALS The Construction and Property Maintenance Code Board of Appeals meeting was held on July 10, 2017 at 10:01 p.m. with Chairman Anderson presiding. Members present were Mr. Neil, Mr. Martin, and Mr. Perza. Mr. Lewis was absent. Staff members present were Mr. Pepper, Mrs. Mitchell, Mr. Hugg, Mr. Taraila, Mr. Coburn, and Mrs. Stein. AGENDA ADDITIONS/DELETIONS Mr. Neil moved for approval of the agenda, seconded by Mr. Anderson and unanimously carried. Election of Chair Mr. Neil moved to nominate Mr. Anderson to serve as Chair, seconded by Mr. Martin. Mr. Anderson was unanimously elected to serve as Chair. Property Maintenance Code Citation (Vacant Building) - Appeal of Decision (Vacant Building Registration and Registration Fee) - 1194 Deats Drive, Unit #2 (Creekstone Construction, LLC) Mr. Ron Coburn, Code Enforcement Officer, stated that 1194 Deats Drive is a condo unit with upper and lower units and Unit #2 was being considered. He noted that the property was first registered as vacant on May 23, 2012; it was registered for the second year on May 11, 2013; for the third year on June 4, 2014; for the fourth year on June 7, 2015; and for the fifth year on June 15, 2016. Mr. Coburn indicated that Mr. Petrosky had been granted exemptions from the registration fee for five (5) years since the property was listed for sale, in accordance with Chapter 22 - Buildings and Building Regulations, Article XII - Vacant Buildings, Section 22-405 - Exemptions (b)(1) of the Dover Code. He explained that this section of Code indicates that a property can be exempted for five (5) years if it is actively being offered for sale or lease. Mr. Coburn advised that Mr. Petrosky was sent a notice this year and was no longer allowed the exemption, even though the property was still listed for sale. He noted that there was no water service to the dwelling, the dwelling was a separate parcel from Unit #1, with a separate tax parcel identification number, and the taxes had been reduced since the dwelling had never been given a Certificate of Occupancy. Mr. Anderson asked Mr. William Pepper, City Solicitor, when the clock started for the five (5) years of exemption. He noted that, as member of Council he had voted on this ordinance, and he questioned if the fee level should start at year one (1), rather than starting suddenly at year six (6). Mr. Anderson stated that this seemed contrary to what Council intended. In response to Mr. Pepper, Mr. Anderson clarified that Mr. Petrosky had been exempted from the fee and was then assessed at the sixth-year fee level of $5,000. Mr. Anderson stated his understanding that the assessment should have started at the year one (1) level. He questioned whether the fee was correct or if this was something that the Board would have to determine. In response, Mr. Pepper stated that a defensible argument could be made for either interpretation, although he thought that starting the clock for the purpose of determining the amount of the fee at year one (1) would be more equitable.

CONSTRUCTION AND PROPERTY MAINTENANCE CODE BOARD OF APPEALS MEETING OF JULY 10, 2017 PAGE 2 Responding to Mr. Neil, Mr. Coburn advised that property taxes based on the assessed value of the property had been paid. Mr. Coburn noted that Chapter 22 - Buildings and Building Regulations, Article XII - Vacant Buildings, Section 22-403 - Registration and registration fee (a)(2)b(i) of the Dover Code states that “The starting point for counting a building as being vacant will begin on the date of the enactment of this article [June 26, 2006].” He stated he was unsure if this applied to Mr. Anderson’s question. Mr. Joseph Petrosky, owner and developer, Creekstone Construction, LLC, stated that he had developed the property. He indicated that he thought that Mr. Anderson’s point was valid and that it was not clear in the ordinance when the fee structure should go into place. Mr. Petrosky noted that he had questions when the vacant building ordinance was proposed and adopted about situations like the one with his property regarding both the residential market and the commercial market. He stated his recollection that the intent of the ordinance was to try to handle neglected and abandoned properties; however, in this situation he was a new home builder in the City and was attempting to sell his product in the market. Mr. Petrosky noted that his project was proposed right before the recession and all of the units had been under contract. He explained that the units were intended for older people who were selling their larger homes to move into no-maintenance condominium living. Mr. Petrosky advised that when the recession hit, people were unable to sell their homes, Creekstone had already started construction of the new condos, and they lost an abundance of contracts. He indicated that the property at 1194 Deats Drive had been built during that process and had always been marketed. Mr. Petrosky explained that he first received a notice to register the building in 2012, and he sent an email and conversed with Mrs. Ann Marie Townshend, former Director of Planning and Community Development, expressing concern about the fees. He advised that the fees had grown since they were first adopted, stating that he thought the original fee was $2,000 and somewhere along the line it had been increased to $5,000. As a citizen and businessperson in the City, he stated that he thought this was an outrageous penalty for someone trying to sell projects in the City and, if this was the case, he would never build a house in the City of Dover again because he did not know if the market was going to improve. Mr. Petrosky reiterated his understanding that the intent of the ordinance was to take care of vacant, abandoned, dangerous buildings, and not new construction. Mr. Petrosky asked whether a property that is built today would have to be registered as vacant if it was not sold for three (3) months. Responding, Mr. Coburn stated that it would have to be registered, per the Code. Mr. Petrosky expressed his opinion that this requirement was ridiculous and questioned how it would incentivize a homebuilder to invest in the City. He noted that the home would be brand new, with no code violations or boarded up windows, and if grass was growing there it would be a violation of a different section of the code. Mr. Petrosky stated that the clock should not start ticking toward a penalty up to $5,000 if he cannot sell a home. He indicated that he was frustrated as a businessperson and investor in the City. Mr. Petrosky advised that he owns a lot of property in the City and had put these units on the market in an attempt to provide housing stock for what he thought was an unserved clientele. He stated that he now had the prospect of being billed

CONSTRUCTION AND PROPERTY MAINTENANCE CODE BOARD OF APPEALS MEETING OF JULY 10, 2017 PAGE 3 $5,000, noting that he would have sold the home 100 times over if he could have and noted that it had been for sale and was listed. Mr. Petrosky stated that his bigger argument was that he did not believe that the building was vacant because, although there were separate tax parcel bills, it is one (1) parcel of property under the Unit Property Act of the State of Delaware and is a condominium ownership. He asked if a building is required to be registered by ordinance as a vacant building in the City if one (1) unit is unoccupied in an otherwise occupied building in a multi-unit residential building. In response to Mr. Anderson, Mr. William Pepper, Deputy City Solicitor, stated that, as the ordinance was drafted, he thought that such a building must be registered. Mr. Anderson asked if an apartment building would have to be registered if it had 30 apartments and one (1) apartment was vacant. In response, Mr. Pepper advised that apartment buildings are treated differently. He noted that condos, duplexes, and townhouses have separate tax parcels, whereas each apartment in an apartment building is not a separate tax parcel. Responding to Mr. Anderson, Mr. Pepper stated that he did not think there was a conflict with the definition in State law. In response to Mr. Petrosky, Mr. Pepper stated that if one (1) condominium unit was vacant in a 10-unit condominium building, it would have to be registered as a vacant building if there were separate tax parcel numbers. Mr. Petrosky stated that the units do not have separate tax parcels and there is one (1) parcel of property; however, they have separate tax bills. Mr. Pepper stated his belief that the vacant unit would have to be registered. Mr. Hugg asked if there would be three (3) ownerships at that point, including the condominium ownership of the whole, and the two (2) individual units that would be considered individual assets. Responding, Mr. Pepper stated that this had always been his understanding. He stated that the vacant unit would be registered as a vacant building. Mr. Coburn noted that only the unit would be registered and not the whole building. Mr. Hugg stated that, by the ordinance, if the unit was vacant for more than three (3) consecutive months, it would have to be registered. Mr. Anderson stated that if an owner was renting the property out, they would not have to register it; however, they would if they were selling it. He indicated that there may be a flaw in the ordinance that should be looked at. Mr. Hugg explained that the issue was about whether or not the property was occupied, not whether it was being rented or sold. He stated that if the property has its own clear identity and receives a tax bill, then it is a standalone unit and, by the ordinance, would be considered a vacant building. Mr. Hugg stated that this is how staff interprets the ordinance; however, he noted that whether or not this interpretation was fair was a different story. Mr. Anderson reiterated that there may be a flaw in the way the ordinance is written. Mr. Hugg expressed his belief that the fee waiver provision was intended to allow someone who is actively trying to rent or sell a property to request a waiver and not have to pay the fees. Mr. Pepper

CONSTRUCTION AND PROPERTY MAINTENANCE CODE BOARD OF APPEALS MEETING OF JULY 10, 2017 PAGE 4 indicated that the City’s waiver provision was the most generous that he had seen, noting that most such provisions are capped at three (3) years. Mr. Anderson stated that Council had allowed for a five-year exemption in order to take into account economic downturns. Mr. Neil expressed his sympathy to Mr. Petrosky, stating that the greatest concern was buildings that were derelict, would be vandalized, or had people living in them and doing things there that they should not. He noted that he had questioned whether the taxes were paid because the City was still providing services, such as fire, police, etc. Mr. Neil advised that he disagreed with the statement that the recession started in 2012, stating that in 2012 the City remained in the recession but was coming out of it. He advised that the subject property looked like a very good building and a place where someone would appreciate living. Mr. Neil advised that he was very sympathetic about the owner’s inability to sell the property, which he stated was a market condition. He noted that the property may not appeal to someone, or the price may be too high based on the available market. Mr. Neil stated that perhaps there were many homes priced less than what Mr. Petrosky was asking. He indicated that he did not want to punish Mr. Petrosky as long as he was paying taxes on the property because the building was not derelict and was sound. He noted that he would have a totally different attitude if it became a dangerous building. Mr. Neil stated that he wanted to see more businesses and homes in the City and did not want apartments, because he would rather have people with a stake in the property and the City. He advised that those who buy a home are planting a tree whose roots and branches will grow and benefit the City in the long run. Mr. Neil indicated that he was inclined to support Mr. Petrosky as long as he was paying property tax. Responding to Mr. Martin, Mr. Coburn stated that he was not aware of any complaints or issues where the police were called to the property because someone was in the building. Mr. Martin advised that he is a real estate broker and had walked through the building earlier in the day. He stated that the property is well maintained and noted that condo fees were taking care of landscaping and lawn mowing. Mr. Martin indicated that he was conflicted because, by strict interpretation of the Code, fees would start being assessed if a property is vacant for five (5) years. He advised that, like Mr. Anderson, he thought that if fees were assessed they should probably start at the one-year level; however, he did not know if that was for the Board to decide. Mr. Martin stated that the intent of the ordinance was to address derelict buildings. He indicated the need to know what properties are vacant but also to avoid derelict buildings; however, he stated that this building was by no means derelict. Mr. Martin advised that Mr. Petrosky was a very patient builder/developer because the property had been listed with the same company for the entire time. Mr. Hugg stated that he agreed with Mr. Martin that it was desired to avoid derelict buildings in the City; however, he noted that the intent stated in the ordinance did not include words like blight, derelict, or deteriorated, and it simply stated that if a property is vacant for more than three (3) months it must be registered as a vacant building. He advised that staff has to follow the clearest interpretation of the ordinance and there was no provision for the City Planner to waive the requirements. Mr. Hugg noted that there are situations where brand new, unoccupied buildings sit

CONSTRUCTION AND PROPERTY MAINTENANCE CODE BOARD OF APPEALS MEETING OF JULY 10, 2017 PAGE 5 for a long period of time and are detrimental to the community, even if they don't appear to be. He noted that there is an impact when one drives through a development where no one is living in the houses, even though they are relatively new. Mr. Hugg advised that staff had no alternative, and this was why Mr. Petrosky was present to appeal. Mr. Hugg asked Mr. Pepper if the Board had the authority to deviate from the ordinance on a case-by-case basis or if Council needed to take a more thorough look at it. Responding, Mr. Pepper stated that he thought Council needed to take a thorough look at it. He stated that the Board was set up to determine whether the ordinance applies and whether the code enforcement official correctly interpreted the ordinance. Mrs. Donna Mitchell, Acting City Manager, asked who waived the fees for the subject property during the first years. Responding, Mr. Coburn advised that the Department waived them because the property was actively listed for sale and the paperwork complied. He indicated that the Department had the authority to waive the fees under the current code for up to five (5) years, and fees at the first through fifth-year levels were waived each year. Mr. Neil stated that staff had done exactly what they were supposed to do and he did not fault them but applauded them, noting that the Board was present to hear such appeals. He stated that the code was applied properly and there was a defect in the law. Mr. Neil indicated that a property such as Mr. Petrosky’s that is well maintained and is not in the dangerous areas that exist in the City and should not have been included. He stated that he did not know what to do for Mr. Petrosky, reiterating that Mr. Petrosky should not be penalized as long as he was paying the taxes. He was unsure whether or not the Board could make this decision on a legal basis, stating that City Council may have to develop a new ordinance to meet this type of need. Mr. Anderson stated that the decision of the Construction and Property Maintenance Code Board of Appeals is final for the City. He stated that possible motions could be to accept or reject the appeal. Mr. Anderson advised that, as had been stated by legal counsel, there was another alternative. He stated that a more equitable solution would be to start the fees at the first-year level, noting that this would be an important precedent to set. Mr. Anderson expressed his belief that it was the intent of Council, when they voted on this ordinance, that the exemption would waive not only the first-year fees but the application of vacant building. He stated that this is what he voted upon. Mr. Perza advised that the facts, as presented by the City and the owner, indicated that the property had been vacant since 2012 and, on that basis, it qualified as a property that should have been registered. He noted that it had been registered for the past five (5) years; therefore, the question of vacancy was not an issue. Mr. Perza stated that City code allows builders, homeowners, or anyone else to apply for an exemption of the fee for up to five (5) years, noting that the intent was that the five-year exemption allows sufficient time for property owners to move their properties. He indicated that the City has no interest in determining property and market values, which is up to the property owner. Mr. Perza stated that, since the exemption had expired, it no longer applied, the property must be registered as vacant, and the fee cycle would go into effect. He suggested that the fee cycle start at year one (1), not year five (5). Mr. Perza stated that the incentive to move the property would be

CONSTRUCTION AND PROPERTY MAINTENANCE CODE BOARD OF APPEALS MEETING OF JULY 10, 2017 PAGE 6 built up over time. He advised that the City and its residents do not have an interest in letting property sit vacant. Mr. Perza noted that someone could hold property for 100 years, build an entire new subdivision, and hold out for a price of $1M per house, while mowing the grass and taking care of the property, but this would not benefit the City. He stated that there was an interest in getting vacant properties moved. Mr. Perza suggested, after listening to the facts and circumstances, that the property be registered as vacant and the first-year fine of $375.00 be applied. Mr. Perza noted that members had discussed working on an ordinance, which he stated was a red flag to him. He indicated that members must apply the law the way it is written, noting that if they did not do so, they would be changing what is written. Mr. Perza advised that the City could go back and change the law if this was desired; however, he stated it would not be an easy question to answer. He reiterated that the City’s residents have an interest in properties being occupied, even if the grass is mowed and they are taken care of. Mr. Perza indicated that it would not be easy to go back and fix the ordinance. Mr. Perza moved to reject the appeal and affirm the actions taken by City Code Enforcement staff but to apply the first-year fine in the amount of $375.00, in accordance with Appendix F - Fees and Fines, Chapter 22 - Buildings and Building Regulations, Article XII - Vacant Buildings, Section 22-403 - Registration and Registration Fees, Subsection (a)(2)b(ii) - Registration Fee of the Dover Code for buildings that are vacant for one (1) year or less. The motion was seconded by Mr. Neil and unanimously carried. Mr. Neil moved for adjournment, seconded by Mr. Martin and unanimously carried. Meeting adjourned at 10:29 p.m. David L. Anderson Chairman DLA/JS/mr S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Misc-Minutes\CONSTRUCTION AND PROPERTY MAINTENANCE CODE BOARD OF APPEALS\07-10-2017 CPMCBO Minutes - MR.wpd