Karches v. City of Cincinnati

H. Brown, J.

The appellants have challenged the constitutionality of the zoning of their properties by the city of Cincinnati. We must decide, first, whether the challenge is ripe for determination. If the answer is in the affirmative, we may consider the merits of the constitutional attack.

I

The court of appeals held that the issue of the constitutionality of the RF-1 zoning as applied to the properties of appellants was not ripe for judicial review “* * * because the City had not reached a final decision regarding the application of the zoning regulations to the two tracts.” The court relied upon the two-step process of determining ripeness set forth in Williamson Cty. Regional Planning Comm. v. Hamilton Bank of Johnson City (1985), 473 U.S. 172, 193.

The first step is a requirement of finality. That is met when “* * * the initial decisionmaker has arrived at a definitive position on the issue that in*15flicts an actual, concrete injury.” The second step requires an injured party to exhaust any available administrative remedies prior to instituting a suit for judicial relief. The Williamson Cty. test for ripeness was approved in MacDonald, Sommer & Frates v. County of Yolo (1986), 477 U.S. 340. We accept the holdings in Williamson Cty. and County of Yolo, but disagree with the determination by the court of appeals that no definitive position had been taken by Cincinnati.

A

The court of appeals ruled that the city had not reached a final definitive position because appellants did not, on the basis of a specific proposed use, (1) petition for a zoning change, or (2) apply for a building permit. The appellate court reasoned that without a refusal by the city to allow a specific use, no final definitive position had been taken by the city.

We disagree. Denial by the city of a specific proposed use is not necessary to a finding that the city has taken a final definitive position sufficient to satisfy the test of ripeness. In making denial of a specific proposed use its focus, the court of appeals failed to recognize that, in Ohio, the constitutionality of a zoning ordinance may be attacked in two ways. An appeal from an administrative zoning decision can be taken pursuant to R.C. Chapter 2506. In addition, or in the alternative, a declaratory judgment action pursuant to R.C. Chapter 2721 can be pursued. A short examination of the two actions will reveal the differences between them, including the significant difference that denial of a specific proposed purpose is pivotal to the ripeness determination in an R.C. Chapter 2506 proceeding but not to the ripeness determination in a declaratory judgment action pursuant to R.C. Chapter 2721.

An appeal from a final administrative decision denying a property owner a variance is filed under R.C. Chapter 2506. Such an action is similar to the one in Williamson Cty., supra. In the past, the R.C. Chapter 2506 appeal appeared to be the exclusive method of challenging zoning restrictions in Ohio. See, generally, Mobil Oil Corp. v. Rocky River (1974), 38 Ohio St. 2d 23, 67 O.O. 2d 38, 309 N.E. 2d 900; State, ex rel. Sibarco Corp., v. Berea (1966), 7 Ohio St. 2d 85, 36 O.O. 2d 75, 218 N.E. 2d 428. A property owner who failed to seek legislative change of a zoning restriction seemed to be precluded from using declaratory judgment to contest the constitutionality of the restriction.

However, in Driscoll v. Austintown Associates (1975), 42 Ohio St. 2d 263, 71 O.O. 2d 247, 328 N.E. 2d 395, we dispelled any doubt that a declaratory judgment action could be used to challenge the constitutionality of a zoning ordinance. We held that in light of Civ. R. 57 (which provides in part that “[t]he existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate”), a declaratory judgment action, filed pursuant to R.C. Chapter 2721, is available as an alternative remedy for such attacks. Driscoll, supra, at 268-269, 71 O.O. 2d at 250, 328 N.E. 2d at 400. The complaint in the present case seeks a declaratory judgment pursuant to R.C. Chapter 2721 on the ground that the zoning as applied to appellants’ properties is unconstitutional.

Although both an R.C. Chapter 2506 action and an R.C. Chapter 2721 declaratory judgment action seek the same result — elimination of an existing zoning regulation which precludes a proposed use of the property — any similarity between the two actions ends *16there. Driscoll, supra, at 270, 71 O.O. 2d at 251, 328 N.E. 2d at 401.

The R.C. Chapter 2506 appeal is a judicial review of a final administrative decision denying a variance to a property owner. The challenge is that a prohibition against a specific proposed use is unconstitutional; and the task of the trial court is to determine whether the prohibition against the specific proposed use has any reasonable relationship to the legitimate exercise of police power by the municipality. Mobil Oil Co., supra. Thus, the determination turns on the specific proposed use of the property.

In contrast, a declaratory judgment action challenges the constitutionality of an existing zoning ordinance. The action does not call into issue the denial of a variance, even though, as discussed subsequently, exhaustion of the administrative variance procedure is usually required prior to initiating a declaratory judgment action. Driscoll, supra, at paragraph four of the syllabus. The overall constitutionality of a zoning ordinance as applied to a particular parcel of property is the central question. It may, but need not, involve a question as to the constitutionality of a prohibition against a specific proposed use. The declaratory judgment action is independent from the administrative proceedings and it is not a review of a final administrative order.

The distinction between the two actions is important because in an R.C. Chapter 2506 appeal, the trial court need not make an objective determination of the overall constitutionality of a zoning ordinance. It will view the constitutional issue only in light of the proposed specific use. If the court finds the restriction against the proposed use valid, its inquiry ends. In making such a limited determination, it is possible that the existing zoning could be unconstitutional, but the zoning would not be declared unconstitutional because the prohibition against the specific proposed use is valid. See, generally, Central Motors Corp. v. Pepper Pike (1979), 63 Ohio App. 2d 34, 13 O.O. 3d 347, 409 N.E. 2d 258; Flair Corp. v. Brecksville (1976), 49 Ohio App. 2d 77, 3 O.O. 3d 146, 359 N.E. 2d 459.

A declaratory judgment action lies when a party challenges a zoning ordinance as it applies to a specific parcel of property to proscribe the owner’s proposed use of the property. Driscoll, supra; see, also, Superior Uptown v. Cleveland (1974), 39 Ohio St. 2d 36, 68 O.O. 2d 21, 313 N.E. 2d 820; Kaufman v. Newburgh Heights (1971), 26 Ohio St. 2d 217, 55 O.O. 2d 462, 271 N.E. 2d 280; Burt Realty Corp. v. Columbus (1970), 21 Ohio St. 2d 265, 50 O.O. 2d 491, 257 N.E. 2d 355; and Willott v. Beachwood (1964), 175 Ohio St. 557, 26 O.O. 2d 249, 197 N.E. 2d 201. An actual controversy exists when persons aver that their rights, status or other legal relations have been affected by an allegedly invalid ordinance. See Pack v. Cleveland (1982), 1 Ohio St. 3d 129, 1 OBR 166, 438 N.E. 2d 434; Schaefer v. First Natl. Bank of Findlay (1938), 134 Ohio St. 511, 13 O.O. 129, 18 N.E. 2d 263.

Accordingly, we hold that a prerequisite to a determination that an actual controversy exists in a declaratory judgment action is a final decision concerning the application of the zoning regulation to the specific property in question. Once a controversy is established, jurisdiction is successfully invoked and the issue of constitutionality becomes ripe for determination.

In the present case, appellants alleged that their properties could not be developed in a reasonably beneficial manner within the confines of the RF-1 ordinance. They petitioned the city for *17a change in use, which the city denied. The record and the findings by the trial court support this allegation. Appellants have shown that the city has taken a definitive position on the zoning issue — a position which inflicts a concrete injury.

B

Prior to instituting a declaratory judgment action to determine the validity of a zoning ordinance as applied to a specific parcel of property, a party ordinarily must exhaust administrative remedies. Driscoll, supra, at paragraph four of the syllabus; see, also, Cook-Johnson Realty Co. v. Bertolini (1968), 15 Ohio St. 2d 195, 44 O.O. 2d 160, 239 N.E. 2d 80, and Williamson Cty., supra. In the case at bar, the city asserted failure to exhaust administrative or other remedies as its second defense in its answer to the amended complaint. Gannon v. Perk (1976), 46 Ohio St. 2d 301, 75 O.O. 2d 358, 348 N.E. 2d 342; Driscoll, supra. This issue, under our analysis, becomes the critical one in making a determination of ripeness.

Two exceptions to the general rule exist. First, if there is no administrative remedy available which can provide the relief sought, Kaufman, supra, or if resort to administrative remedies would be wholly futile, exhaustion is not required. Glover v. St. Louis-San Francisco Ry. Co. (1969), 393 U.S. 324; County of Yolo, supra, at 352, fn. 8, and 358-359 (White, J., dissenting). Second, exhaustion of remedies is unnecessary when the available remedy is onerous or unusually expensive. Gates Mills Investment Co. v. Pepper Pike (1975), 44 Ohio St. 2d 73, 73 O.O. 2d 321, 337 N.E. 2d 777; Burt Realty Corp., supra.

The trial court found that appellants were not required to exhaust administrative or other remedies prior to seeking a declaratory judgment action under the first exception to this principle. The record substantiates the finding. Appellants’ unsuccessfully sought a change in zoning from the city over an extended period of time. The most significant of these efforts is the 1977 Karches petition to the city to change the zoning from RF-1 to RF-2 and Flerlage’s reliance upon that petition.3 The city ultimately denied the request.

Any regulatory taking determination is closely bound to the facts of the particular case. Frequently, an ongoing process is the way in which the decision is made. The purpose of the “final decision” requirement is to ensure that the court will know the nature and extent of permitted development before adjudicating the validity of the regulation that purports to limit it. First English Evangelical Lutheran Church v. Cty. of Los Angeles (1987), 482 U.S ___, 96 L. Ed. 2d 250, 107A S. Ct. 2378; County of Yolo, supra; Williamson Cty., supra; San Diego Gas & Elec. Co. v. San Diego (1981), 450 U.S. 621; Agins v. Tiburon (1980), 447 U.S. 255. The necessity is to pinpoint the final position of the decision-maker. Neither repeated applications and denials nor patently fruitless measures to obtain relief are required.

Furthermore, appellants were not required to seek a variance to allow them to operate river terminals because that is a nonconforming use under the RF-1 classification. The director of buildings and inspections is without authority to grant a variance for “a use contrary to the use regulations of the applicable zoning dis*18trict.”4 An appeal to the zoning board of appeals would have been equally futile since the board must act in conformity with the zoning code and, consequently, is not empowered to grant a variance permitting a nonconforming use.5

The conclusion (that no remedy was available which could have provided appellants with the relief requested) is supported by testimony of counsel for the city at trial. In response to questioning from the bench, counsel confirmed that the city would not grant appellants a variance or a change in use.6 A municipality is not necessarily bound by on-the-record assertions made by its counsel. However, in this instance, it is clear from the transcript that counsel was reiterating the long-held position of the city concerning the zoning of the properties in question.

We hold that the challenge to the constitutionality of the zoning regulation is ripe for judicial determination and reverse the ruling of the court of appeals as to the ripeness issue.

II

We turn to the issue of whether the trial court erred in finding the ordinance unconstitutional. The city urges us to remand the case to the court of appeals for a decision on this issue. In the interest of judicial economy, since the case is before us accompanied by a comprehensive record, and since the trial court made detailed findings of fact, we have decided to ex*19ercise our discretion and make the determination of constitutionality. See Elio v. Akron Transp. Co. (1947), 147 Ohio St. 363, 34 O.O. 301, 71 N.E. 2d 707.

To strike a zoning ordinance on constitutional grounds appellants must demonstrate, beyond fair debate,7 that the zoning classification is unreasonable and not necessary to the health, safety and welfare of the municipality. Mayfield-Dorsh, Inc. v. South Euclid (1981), 68 Ohio St. 2d 156, 22 O.O. 3d 388, 429 N.E. 2d 159. See, also, Euclid v. Ambler Realty Co. (1926), 272 U.S. 365, 395; Goldblatt v. Hempstead (1962), 369 U.S. 590. Appellants must demonstrate that the ordinance denies to them the economically viable use of their land without substantially advancing a legitimate government interest. Superior Uptown, supra; Agins, supra; Penn Central Transp. Co. v. New York City (1978), 438 U.S. 104. See, also, Ruckelshaus v. Monsanto Co. (1984), 467 U.S. 986.

The trial court found it beyond the reach of fair debate that the existing RF-1 zoning as applied to appellants’ properties was unreasonable, arbitrary and confiscatory; had no substantial relation to the public health, safety or general welfare; and substantially interfered with appellants’ right to use their property in an economically feasible manner. In reviewing the court’s judgment, we are guided by the principle that judgments supported by competent, credible evidence going to all the material elements of the case must not be reversed, as being against the manifest weight of the evidence, C. E. Morris Co. v. Foley Constr. Co. (1978), 54 Ohio St. 2d 279, 8 O.O. 3d 261, 376 N.E. 2d 578. Every reasonable presumption must be made in favor of the judgment and the findings of facts. Seasons Coal Co. v. Cleveland (1984), 10 Ohio St. 3d 77, 10 OBR 408, 461 N. E. 2d 1273. Finally, if the evidence is susceptible of more than one construction, we must give it that interpretation which is consistent with the verdict and judgment, most favorable to sustaining the trial court’s verdict and judgment. Seasons Coal Co., supra; Gates v. Bd. of Edn. of River Local School Dist. (1967), 11 Ohio St. 2d 83, 40 O.O. 2d 91, 228 N.E. 2d 298; Ross v. Ross (1980), 64 Ohio St. 2d 203, 204, 18 O. O. 3d 414, 415, 414 N.E. 2d 426, 428.

The trial court found that none of the RF-1 uses was economically feasible,8 and that the RF-1 classification, as applied to appellants’ properties, did not substantially advance a legiti*20mate government interest. To test this finding, we will examine (1) the evidence of record regarding the three uses for appellants’ properties which the city claims to be economically viable (residential, commercial, recreational vehicle park), (2) the trial court’s finding that the zoning significantly decreased the value of the properties, and (3) the government interest claimed by the city in behalf of the zoning.

Residential

Any permanent structure erected on floodplain property must be waterproofed or elevated to the sixty-five foot flood stage level. No living area is permitted within the floodplain level. Compliance with floodplain requirements dramatically increases the cost of construction. The trial court’s finding that such costs preclude residential development of appellants’ properties is supported by the record.

Commercial

The city argues that marinas, restaurants and motels are commercially feasible uses for appellants’ properties.

Both Karches and Flerlage tried to operate bank boat marinas on their properties but were forced to suspend operations because of costs. The current board of health regulations require a sanitary sewer hook-up at any marina which rents slips to seven or more boats. The cost of the hook-up for the Karches’ property was $195,590 in 1977.

It is the general opinion of marina operators in the California area that private development of a basin marina is economically unfeasible today because costs for excavation, labor and construction materials preclude development of an income-producing operation. No evidence of record rebuts this opinion.

Restaurants and motels are not feasible because compliance with federal floodplain requirements is a prerequisite to this type of construction. Further, the area lacks a viable consumer base and no restaurants, hotel or motel chains are interested in development in the California area.

Recreational Vehicle Park

When Karches petitioned for a zone change in 1977, the city opposed the change because it believed that a recreational vehicle (“RV”) park was a feasible use. Karches secured a construction cost estimate for building such a park. The cost estimate was approximately $1,050,000 in 1977.

Karches submitted the estimate to the city planning commission. The commission was skeptical and contracted with QUEST Research Corporation to perform an independent cost analysis. QUEST found that an RV park was economically feasible at a total cost of approximately $399,950.

The QUEST analysis was grossly deficient. It violated the city’s board of health regulations, failed to account for necessary repairs to a bridge on the property and underpriced various items. Had the report fairly considered these omissions its cost estimate would have been significantly higher.

The QUEST project director *21stated that the intent of the RV park estimate was not to show absolute development costs or operating expenses, but was intended to refute the appellants’ report. The record supports the trial court’s finding that use of appellants’ properties as a recreational vehicle park is economically unfeasible.

Impact of Zoning on Property Values

The parties presented evidence establishing the fair market value of the properties as zoned RF-1, to be between $5,000 and $14,000 an acre, and if zoned RF-2, to be between $19,000 and $35,000 an acre. From this the trial court concluded that the rezoning caused a significant decrease in the value of the properties.

The City’s Interests

The trial court found that the city’s stated goals of increasing new riverfront business development and foreign trade were not achieved by its RF-1 zoning scheme. To the contrary, the court found that the city increased the land available for park and public recreation use by one hundred forty-three percent as opposed to an eighty-five percent increase of acreage available for industry. In addition, the California Land Development Use Plan indicates that a publicly supported park, located on appellants’ properties, was considered a high priority use. The city, nevertheless, has made no financial commitment to this proposed usé or to any other of the plan’s proposed recreational uses of the California area.

The city argued that it was protecting the health, safety and welfare of the California area by refusing to rezone the properties to allow river terminal operations. The trial court reached the opposite conclusion, finding substantial evidence that the city’s potable water quality would not be adversely affected in the unlikely event of a barge spill or by the storage of aggregate material. The court noted that if appellants are permitted to operate terminals, their operation is subject to the control and regulations of numerous governmental agencies such as the Army Corps of Engineers and federal and state environmental protection agencies.

Nor does the city make a persuasive argument that use of the properties as river terminals will adversely affect the gas transmission line of Cincinnati Gas & Electric, the traffic situation or the noise level in the area or pleasure boat traffic on the river. Rather, the evidence demonstrates that, the properties are ideally situated for the river terminal use.

We measure the constitutionality of the RF-1 zoning “not by what * * * [the city] says, or by what it intends, but by what it does.” San Diego Gas & Elec. Co., supra (450 U.S.), at 653 (Brennan, J., dissenting). Here, the record supports the trial court’s finding that the RF-1 zoning as applied to appellants’ properties is unreasonable and does not substantially advance legitimate government interests. By refusing to rezone, the city has denied the appellants the beneficial use of their property. We affirm the trial court’s holding that the RF-1 zoning as applied to appellants’ properties is unconstitutional.

Ill

An additional question has been introduced by the recent decision of the United States Supreme Court in First English Evangelical Lutheran Church, supra: Whether the city owes damages to the appellants for the taking that occurred before the ordinance was invalidated.

In their complaint, appellants requested damages for the alleged taking *22of their properties by the city. The trial court made no finding concerning damages and appellants failed to appeal the issue. Thus, we will not consider this claimed error. Foran v. Fisher Foods, Inc. (1985), 17 Ohio St. 3d 193, 17 OBR 430, 478 N.E. 2d 998; Hoffman v. Staley (1915), 92 Ohio St. 505, 112 N.E. 1084.

Accordingly, the judgment of the court of appeals is reversed and the decision by the trial court is reinstated.

Judgment reversed.

Moyer, C.J., Sweeney, Douglas and Wright, JJ., concur. Locher and Holmes, JJ., dissent.

Richard Flerlage testified at the 1977 hearing concerning the Karches petition that if the petition were granted, he would request a zoning change for his property.

Cincinnati Municipal Code Section 402.4 states in part:

“(a) The director of buildings and inspections shall have the power, upon application, to authorize variances from the provisions and requirements of this zoning code which will not be contrary to the public interest or the intent and purpose of this zoning code, but only where, owing to special conditions pertaining to a specific piece of property, the strict application of the provisions or requirements of this zoning code would cause undue or unnecessary hardship. The director of buildings and inspections shall not have the power to grant a variance which would permit a use contrary to the use regulations of the applicable zoning district.”

Cincinnati Municipal Code Section 405.2 grants a right of appeal to the zoning board of appeals from the denial of a request for a variance; the board is empowered to reverse, affirm or modify such a denial only in conformity with the provisions of the zoning code.

The city’s counsel’s statements were part of the following colloquies:

“MR. CHESLEY [counsel for plaintiffs]: This court is sitting in equity. The Court sitting in equity is given broad powers. And no reasonable mind could conclude that the City would give a variance. One: We have the absolute turndown by Karches.
“THE COURT: Let’s address - let’s put the donkey in front of the cart.
“MR. RYDER [counsel for defendant]: The City I believe would not grant a variance on the request.
* 4c
“THE COURT: You made it clear that there won’t be any variance.
“MR. RYDER: In my professional judgment they don’t have any chance.
“THE COURT: I think what we have got here is an issue you have already indicated there is no way the City of Cincinnati would change its zoning to a[n] RF-1, correct?
“MR. RYDER: That we would not grant a variance.
“THE COURT: That zone period it is going to be there.
“MR. RYDER: The zoning is RF-1 and there is —
“THE COURT: And it is going to stay RF-1 no matter how many applications for variance or change of zones the property put[s] in. You have already indicated that.
“MR. RYDER: That’s correct.”

The court of appeals, by way of obiter dictum, opined that appellants’ burden of proof is to show, beyond a reasonable doubt, that the ordinance at issue is invalid. Although we have characterized the burden of proof both ways in zoning eases, see Hilton v. Toledo (1980), 62 Ohio St. 2d 394, 16 O.O. 3d 430, 405 N.E. 2d 1047 (“beyond a reasonable doubt”), our most recent pronouncement is that the ordinance must be proven invalid “beyond fair debate.” Regardless of this inconsistency, we discern little difference in meaning between the two characterizations. (“Reasonable” is defined in Webster’s New Collegiate Dictionary [1980], as “moderate, fair.”)

Principal uses now permitted under the RF-1 designation are set forth in Division 2901 of the Zoning Code and include: residential, uses permitted by Chapter 12 in the R-3 two-family district; agricultural uses; institutional uses such as churches, cultural displays and public administration buildings; recreational uses such as golf courses, fishing lakes, parks, playfields, swimming pools, tennis courts, recreation centers, bicycle courses and other similar recreational facilities; public utility uses; commercial uses including marinas, restaurants and motels directly associated with a marina and ferry or excursion boat terminals; and railroad uses.

Division 2902 lists the principal conditional uses permitted under RF-1 upon authorization by the Director of Buildings and Inspections and includes certain multifamily dwellings, recreational vehicle parks (with certain restrictions) and amusement parks. Cincinnati Municipal Code Chapter 29, RF-1 Riverfront (Recreational-Residential-Commercial).