300 N.E.2d 452 | Ohio Ct. App. | 1973
The plaintiff-appellant, United States Constructors and Consultants, Inc., hereinafter referred to as Constructors, filed a complaint in the Common Pleas Court of Cuyahoga County alleging that the defendant-appellee, Cleveland Metropolitan Housing Authority, hereinafter referred to as CMHA, illegally accepted a proposal for low-income housing to be constructed in the City of Cleveland Heights.
Constructors alleges that unless CMHA is restrained it will enter into a contract for the construction of 204 dwelling units for the elderly in the City of Cleveland Heights under the "Turnkey" method, which is illegal under R. C.
In the alternative, Constructors asks the Court to either award it the contract as the lowest and best bidder or declare the use of the "Turnkey" method by CMHA illegal under Ohio law.
References to local housing agencies and metropolitan housing agencies will hereinafter be by the abbreviations LHA and MHA respectively.
CMHA did not file an answer but filed a motion for *161 summary judgment pursuant to Civil Rule 56, stating that there was no genuine issue as to any material fact, and that it was entitled to judgment as a matter of law.
In support of its motion, CMHA argues that the "Turnkey" method is legal and can be used by it for the following reasons.
1. §
2. §
3. Congress pre-empted the field of low-income housing and in the event of a conflict between federal rules and state law, the federal rules will prevail. Marino v. Town of Ramapo, supra.
Constructors also filed a cross motion for summary judgment.
The parties stipulated the material facts and the trial court granted CMHA's motion for summary judgment and held that R. C.
Constructors filed this appeal and assigns as error the trial court's granting CMHA's motion for summary judgment and denial of its cross-motion for summary judgment.
The principal issue in this case is whether Ohio law permits CMHA to use the federal "Turnkey" method of acquiring property.
It is noted that the only CMHA program under attack is the "Turnkey" program, and the results of this case will not affect any other federal housing program available to CMHA.
In order to resolve the issues raised in this case, we must briefly review Ohio law relating to MHAs.
In 1933 the Ohio Legislature enacted G. C. 1078-29 through 1078-41, now R. C.
In substance these code sections provide that if the State Board of Housing finds unsanitary or unsafe inhabited housing conditions, or a shortage of safe and sanitary housing conditions available to persons who lack the amount of income necessary to live in a safe, decent and sanitary dwelling without financial assistance, it may create Metropolitan Housing Authorities. R. C.
The powers of MHAs are enumerated in R. C.
R. C.
R. C.
The cornerstone of R. C.
Traditionally, MHAs in Ohio provided low-cost housing by complying with federal law and Department of Housing and Urban Development regulations and §
In 1966 the United States Congress decided it was in the best interests of the country to have "Turnkey" housing in which an owner of land would make a proposal to a LHA agreeing to construct a building designed by him on his land and according to his plans and specifications, which would be prepared by his architect, and upon completion the building would be turned over to the LHA ready for occupancy and at that time it would be paid for by the LHA. In other words, when the building was completed *164 and ready for occupancy, the developer would give a key to the LHA, thus, the name "Turnkey." This has been recognized by HUD as a contract for sale of property in contrast to a construction contract.
Congress decided to adopt this program as a method of quickly producing a greater volume of low-cost housing with flexibility in design.
In summary, the sequence of the principal steps of a "Turnkey" project are as follows: (Low-rent Housing Turnkey Handbook RHA 7420.1:)
1. advertisement by the LHA for Turnkey proposals;
2. the evaluation of proposals by the LHA and the Regional Housing Assistance Office (HAO);
3. appraisal of the proposed site;
4. feasibility conference during which agreement is reached on the project design and the price of the land;
5. The developer's preparation of preliminary drawings and outline specifications;
6. independent cost estimates;
7. the negotiation conference during which a price is agreed upon;
8. the preparation of the LHA Development Program;
9. letter of intent by LHA;
10. the developer's preparation of working drawings and specifications and their review and approval by the LHA and the HAO;
11. the submittal of such working drawings and specifications for updated cost estimates;
12. the execution and approval of the contract of sale between the developer and the LHA;
13. start of construction.
The thrust of the "Turnkey" development is that the owner or developer makes a proposal to sell to the LHA a completed property consisting of the designated number of dwelling units and related appurtenances upon the site owned by the developer. The developer uses his own architect, his own land; has his own design and his own plans and specifications prepared by his architect, but approved by the LHA and HUD. *165
HUD considers "Turnkey" agreements as a proposal by a developer to sell a completed building to the LHA with the approval of HUD. It does not consider such agreements to be construction contracts.
We must first determine whether the powers of CMHA enumerated in R. C.
It is obvious that when the Ohio Legislature enacted Chapter 3735, it did not contemplate "Turnkey" housing. However, the powers enumerated under R. C.
R. C.
Ohio law thus provides MHAs alternative methods of acquiring property. They may use either R. C.
One of Constructors' arguments is that competitive bidding eliminates collusion and that the "Turnkey" method permits collusion. This argument is not well founded. There are many safeguards in the "Turnkey" method, such as the independent appraisals of the land value and review of cost estimates by both LHA and HUD. These are sufficient to prevent collusion.
It is noted that the appellant also asked the trial court to award it the contract as the lowest and best bidder. In order to have competitive bidding in awarding a contract to the lowest and best bidder, all of the elements must be common to the bidding procedure. In bidding a construction contract, there is usually one parcel of land and one set of plans and specifications that is given to all of the *166 prospective bidders. But it is impossible to use competitive bidding procedures under the "Turnkey" method because there is more than one parcel of land involved and each site is unique and has different characteristics. Further, each developer prepares a set of plans and specifications and has a different design.
Constructors' assignment of error that the "Turnkey" method is illegal under Ohio law is not well taken.
CMHA's two other arguments noted above are not valid and do not affect the decision in this case but require some brief discussion.
CMHA contends that R. C.
R. C.
Further, R. C.
CMHA's third argument is that the federal government pre-empted the field of housing, and that in the event of a conflict between the federal and state law the federal law will prevail.
It is well recognized that in instances where Congress has exercised exclusive jurisdiction over a subject, and there is a conflict between federal and state law, federal law prevails.
However, in matters that are purely local in nature, or where the federal government has not enacted legislation exercising jurisdiction over a subject, state laws and regulations on that subject are valid. *167
In the present case, Congress did not enact legislation exercising exclusive jurisdiction in regard to housing. The federal legislation merely sets forth a national housing policy, to promote the general welfare of the nation by employing its funds and credit to assist the states and their political subdivisions in eliminating unsafe and unsanitary housing conditions and the acute shortage of decent, safe and sanitary dwellings for families of low-income in urban areas. 42 U.S.C.A., § 1401. The legislation permits the federal government to offer and provide financial assistance, in the form of grants and/or loans to state or local housing agencies to develop low-rent housing. 42 U.S.C.A., §§ 1409 and 1411. It is clear from reading 42 U.S.C.A., §§ 1401 to 1436 that Congress did not intend to limit or exclude state action or to exercise supremacy in this area. There is no conflict between the federal law and regulations and Ohio law in regard to housing. CMHA's third argument is therefore not valid.
Because R. C.
The trial court did not err in granting CMHA's motion for summary judgment and denying Constructors' motion for summary judgment.
Judgment affirmed.
SILBERT, P. J., and COOK, J., concur.
COOK, J., of the Eleventh Appellate District, sitting by designation in the Eighth Appellate District. *168