Nations Restaurant

The Gary Housing Authority failed to follow statutory requirements when it acquired through condemnation a since-demolished restaurant building at 624 Broadway, according to a recent ruling by the Indiana Court of Appeals. Content Exchange

GARY — The Gary Housing Authority failed to follow statutory requirements when it acquired through condemnation a since-demolished restaurant building at 624 Broadway, according to a recent ruling by the Indiana Court of Appeals.

In a 3-0 decision, the appeals court said the housing authority was required by Indiana law to mail notice of the proposed acquisition to the property owner, and twice publish notice in a local newspaper, at least 30 days prior to the public meeting where the authority intended to take the property.

The appeals court said the housing authority also was obligated to follow the same procedure and 30-day notice period ahead of a second meeting where it decided the price to be paid for the condemned property.

In both instances, the Gary Housing Authority failed to mail notices to John Allen, the registered agent for 624 Broadway LLC, and did not wait 30 days after newspaper publication before it acted on its eminent domain claim, the appeals court said.

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While the appeals court noted Allen managed to learn about the hearings and attend them anyway, it said state law requires actions concerning property taking by strictly construed — "both as to the extent of the power and as to the manner of its exercise."

In this case, the appeals court said it cannot say with confidence the Gary Housing Authority only would have paid $75,000 for the restaurant had the proper procedure been followed, since Allen did not have an opportunity to present an appraiser's valuation of $325,000 for the property.

As a result, the appeals court said it was vacating the Gary Housing Authority's administrative taking of the property because it violated 624 Broadway's procedural rights, and it ordered the Lake Superior Court to conduct further proceedings consistent with the ruling.

However, that decision is likely to be appealed to the Indiana Supreme Court, or set for rehearing by the Indiana Court of Appeals, because it appears the appellate judges relied on an inapplicable law when it concluded there was a procedural violation.

Specifically, the appeals court seems to have applied the 2021 version of the eminent domain statute instead of the statute in effect when the case commenced in 2019, which does not mandate mailed notices to the property owner and requires only 10 days between newspaper publication and public hearings.

Tramel Raggs, attorney for the Gary Housing Authority, declined to comment on what steps the housing authority may take next.

By rule, it has until late December to ask the Indiana Supreme Court to intervene in the case, which would set aside the Court of Appeals ruling. Or, it can seek rehearing by filing a petition at the appellate court by mid-December.

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But if a petition for rehearing or appeal isn't filed, or the Supreme Court denies transfer, it likely would fall to the trial court to determine an appropriate remedy for the unlawful taking.

Robert Welsh and Connor Nolan, attorneys for 624 Broadway, did not respond to a request for comment on the appeals court ruling or possible remedies they might seek.

Records show Allen was in the midst of renovating the building into the Nations Restaurant and Bar when the property was acquired by the Gary Housing Authority.

The housing authority last year tore down the building, as well as the other structures in the 600 block of Broadway, as a prelude to constructing a new, mixed-use housing development on the block.

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