Mirv Holdings, LLC v. U.S. Gen. Servs. Admin.

454 F.Supp.3d 33

MIRV HOLDINGS, LLC, Plaintiff,

v.UNITED STATES GENERAL SERVICES ADMINISTRATION, et al., Defendants.

Civil Action No. 18-1722 (RBW)

United States District Court, District of Columbia.

Signed April 15, 2020

Thomas Tobias Locke, James Robert Billings-Kang, Seyfarth Shaw, LLP, Washington, DC, for Plaintiff.

Brian J. Field, U.S. Attorney's Office for the District of Columbia, Washington, DC, for Defendants United States General Services Administration, Emily W. Murphy.

Conrad Z. Risher, Gregory Martin Cumming, Matthew Robert Blecher, Office of the Attorney General for the District of Columbia, Washington, DC, for Defendant District of Columbia.

MEMORANDUM OPINION

REGGIE B. WALTON, United States District Judge The plaintiff, Mirv Holdings, LLC, brings this civil action against the United States General Services Administration ("GSA"); Emily Murphy, in her official capacity as the Administrator of the GSA (collectively, the "federal defendants"); and the District of Columbia (the "District") (collectively, the "defendants"), pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 – 706 (2018), and the Declaratory Judgment Act, 28 U.S.C. §§ 2201 – 2202 (2018). See First Amended Complaint for Declaratory Judgment ("Am. Compl." or the "Amended Complaint") ¶ 1. Currently pending before the Court are the Federal Defendants’ Motion to Dismiss ("Fed. Defs.’ Mot.") and the Plaintiff's Motion for Summary Judgment ("Pl.’s Mot."). Upon careful consideration of the parties’ submissions,¹ the Court concludes for the following reasons that it must grant in part and deny as moot in part the federal defendants’ motion to dismiss and deny as moot the plaintiff's motion for summary judgment.

I. BACKGROUND

In January 1959, the "GSA transferred the jurisdiction of a parcel of land located at the intersection of Michigan Avenue, N[ortheast], and Irving Street, N[ortheast], ... in [the] [District of Columbia] (the ‘[p]roperty’) to the District," but "retained fee simple title to the [p]roperty." Am. Compl. ¶¶ 3, 31. Allegedly, the agreement that memorialized the transfer of the property "included no development restrictions on the [p]roperty." Id. ¶ 5; see also id. ¶ 33 ("The plat, which memorialized the exchange of the [p]roperty for the [r]elinquished [p]roperty, did not include any restrictive language[.]"). "By the mid-1980s, the District[ ] ... designated the [p]roperty for mixed-use development of medium density residential and moderate-density commercial uses." Id. ¶ 9; see also id. ¶ 40 (identifying the development goals of the property as, inter alia, establishing "mixed-use, medium density residential/institutional development" and generating "for the District ... the most favorable economic and community benefits").

In 1989, the District and the plaintiff's predecessor, Conference Center Associates I, LLC ("Conference Center Associates") entered into an agreement pursuant to which Conference Center Associates had exclusive rights to develop the property. See id. ¶ 43. Thereafter, on March 7, 1990, "[t]o quash [the Conference Center Associates’] concerns about proceeding with the development and to estop [the] GSA from stalling or otherwise obstructing the development and construction proposal," the District entered into a Statement of Non-Disturbance agreement with the GSA (the "1990 agreement"), which provides that "as long as the [p]roperty was used for uses approved by the District as compatible with the identified uses, [the] GSA would not seek to revoke the transfer of jurisdiction or take any other action to prohibit development and construction on the [p]roperty." Id. ¶ 44; see also id. ¶ 10 ("In 1990, to quell the [Conference Center Associates’] concerns regarding the District's legal authority over the [p]roperty and to estop [the] GSA from revoking the transfer of jurisdiction, the District entered into a Statement of Non-Disturbance agreement ... with [the] GSA that set forth the contemplated uses for the [p]roperty and permitted any compatible uses consented to by the District."). Specifically, the 1990 agreement states that

as long as the [ ] [property] is used as a conference, training and/or exhibit center, overnight accommodations facility and ancillary uses, such as a restaurant, recreational facilities and/or gift shop, and/or compatible use and such use is consented to by the District, [the] GSA will not seek to revoke the transfer of jurisdiction of this [property] to the District, nor will it take other action to prohibit construction, development, maintenance, operation, restoration and/or repair of the facility.

Id., Exhibit ("Ex.") H (Statement of Non-Disturbance) at 1. According to the plaintiff, "[t]he District has interpreted the last clause of the uses [of the subject property] ...—‘and/or compatible use and such use is consented to by the District’—to confirm the District's authority to determine the appropriate use of the [p]roperty." Id. ¶ 47.

In 1991, the Conference Center Associates submitted a planned unit development application for the construction of a hotel and conference center on the subject property (the "original development plan"). See id. ¶ 49. The National Capital Planning Commission, "the federal government's central planning agency ... [that] determines whether a development plan has a negative impact on the interests or functions of the federal establishment in the [n]ational [c]apital," reviewed the original development plan and "determined that the specific uses set forth [there]in ... would not adversely affect the [f]ederal [e]stablishment or other [f]ederal interests in the [n]ational [c]apital." Id. ¶¶ 28, 50 (internal quotation marks omitted). Thereafter, on March 11, 1991, "the District ... approved [the] original [development plan]." Id. ¶¶ 49, 53. However, "[a]fter six approval extensions over nine years, the [o]riginal [development plan] expired in 2000." Id. ¶ 54.

In December 2008, the Conference Center Associates "applied for a [c]onsolidated [planned unit development]" on the subject property, which "proposed a first phase ..., consisting of a 233-[ ]room hotel/conference center with approximately [5000] square feet dedicated to a restaurant use and approximately 20,000 square feet for retail use," and a second phase that consisted of "residential units or additional hotel/meeting space, as well as parking space" (the "consolidated development plan"). Id. ¶¶ 55–57. "The District referred [the consolidated development plan] to the [National Capital Planning Commission] for its review." Id. ¶ 59. The National Capital Planning Commission advised the District that the first phase would not "adversely affect any [ ] identified federal interests," but that the second phase "would have an adverse effect on an identified federal interest because the proposed inclusion of dwelling units is inconsistent with the acceptable uses stipulated in the [1990 agreement]." Id., Ex. J (Commission Action); see also id., Ex. J (Staff Recommendation) at 7 ("[The] GSA ... is not prepared to state that the [consolidated] development [plan] ... is compatible with the [1990] agreement ..., nor is it prepared to conclude that the [consolidated development plan] would have no adverse [e]ffect on this particular federally owned site, or those located nearby. Specifically, [the] GSA is of the opinion that the inclusion of dwelling units ... is inconsistent with the language of the [1990 agreement], and that such a use was not contemplated at the time the [1990] agreement was established."). Nevertheless, on September 3, 2009, the National Capital Planning Commission approved the consolidated development plan. See id., Ex. J. (Letter from Marcel Acosta, Executive Director, National Capital Planning Commission, to the Zoning Commission of the District of Columbia (Sept. 9, 2009)). Thereafter, the Zoning Commission of the District of Columbia (the "Zoning Commission") approved the consolidated development plan, but noted that it "takes no position as to whether the inclusion of the dwelling units is inconsistent with the acceptable uses stipulated in the [1990 agreement]," and that the Conference Center Associates "proceeds at its own risk with respect to the [1990 agreement]." Id., Ex. L (Zoning Commission Order No. 08-33) at 2–3.

In 2015, the plaintiff entered into a lease with the District for the plaintiff's use of the property. See id. ¶ 26. The lease "envisions the unobstructed mixed-use development of the [p]roperty" and "require[es] [such] development of the [p]roperty [to be] consistent with the terms of the 1990 [agreement]." Id. ¶¶ 11, 26.

On August 29, 2017, the District "requested that [the] GSA formally affirm its position as to [whether] ... residential [use] is a compatible and allowed use [of the property]." Id. ¶ 72; see also id., Ex. N (Letter from Brian T. Kenner, Deputy Mayor, to Houston Taylor, Regional Administrator, Federal Acquisition Service, United States General Services Administration (Aug. 29, 2017) ("August 29, 2017 Letter")) at 2. The District also indicated that it disagreed with the GSA's "informal position that residential use is inconsistent with the 1990 [agreement]," stating that "[t]he 1990 [agreement] clearly states ... that a ‘compatible use’ [that] is ‘consented to [ ] by the District’ would not be disturbed by the GSA," and that "the Zoning Commission has determined residential use is a compatible use by approval of the [consolidated development plan] and the District has consented to—and is in support of—the proposed use of the [p]roperty." Id., Ex. N (August 29, 2017 Letter) at 1–2. In response, the GSA stated that it "disagree[d] with the District's ... interpretation of the [1990 agreement]," explaining that "[t]he phrase ‘and/or compatible use’ cannot be read in isolation and instead must be read in conjunction with allowable ‘ancillary use,’ " and that "[a]ncillary uses are those subordinate or subsidiary to the primary use for...