HARRISBURG – A state appeals court has overruled a Philadelphia court that had sided with a developer in its gripe over an as-yet-undeveloped property.
On July 30, the Commonwealth Court of Pennsylvania reversed a 2014 decision of the Philadelphia County Court of Common Pleas in a case involving Doylestown developer Parker Avenue and the City.
The Commonwealth Court, which reversed the trial court’s overruling of a motion for preliminary objections from the City of Philadelphia and the City Council, also vacated the trial court’s order granting Parker Avenue L.P.’s petition for the Appointment of a Board of Viewers.
The matter came before judges Dan Pellegrini, Renée Cohn Jubelirer, Robert Simpson, Mary Hannah Leavitt, P. Kevin Brobson, Patricia A. McCullough and Anne E. Covey, with Covey authoring the decision.
On March 31, 2005, Doylestown-based Parker Avenue purchased a 7.62 acre property in Philadelphia for purposes of residential development.
Shortly thereafter, Parker Avenue initiated efforts to build 48 single-family, semi-detached homes upon the property along Cinnaminson Street, which bisects the property. A portion of Cinnaminson Street is legally open and sits on Philadelphia-owned land.
Parker Avenue submitted two proposed ordinances to Philadelphia’s Streets Department, the first of which would have permitted the paving of the Philadelphia-owned portion of Cinnaminson Street, and the second which would have updated Cinnaminson Street’s lines and grades so that it would be capped by a cul-de-sac, rather than extending beyond the property’s boundaries.
Though the bills were introduced by the City Council in November 2007, opposition from residents in the city’s Roxborough neighborhood regarding the possibility of creating “hazardous conditions” resulting from the development ensured the bills were tabled until January 2008.
By that time, Councilwoman Carol Campbell (then the councilperson for Philadelphia’s Fourth District, where the property is located) had left office, and was replaced by newly elected councilperson Curtis Jones.
Jones encouraged Parker Avenue to meet with the affected residents, in the hopes of arriving at a compromise or alternate form of development – which Parker Avenue did for two years, but couldn’t gain the residents’ approval.
In 2013, Parker Avenue filed a complaint in federal court, seeking for the City to pave Cinnaminson Street, but the claim was dismissed due to lack of cause.
On May 17 of that year, Parker Avenue filed its Petition for the Appointment of a Board of Viewers in order to determine its compensation for being deprived of the property’s “beneficial use and enjoyment.”
The City filed preliminary objections on July 19, 2013, but was eventually overruled by the trial court on May 27, 2014. The Philadelphia County Court of Common Pleas felt the City’s action in suppressing the use of the property “constituted an exercise of its eminent domain power” and a “de facto taking."
The City appealed, arguing that was not the case. It held Parker Avenue was “not been deprived of all lawful use of its property," and it was able to build a single dwelling then, as it was on the date of purchase.
Also, the City noted even if it authorized Cinnaminson Street’s paving and the City Plan changes, Parker Avenue would still need the Board of Surveyors’ endorsement for the changes and the Planning Commission’s final plat approval.
Covey explained there were three issues before the Court for its determination:
-Whether the trial court erred in holding that City Council’s inherently discretionary inaction in not enacting legislation gave rise to a de facto taking;
-Whether the trial court erred in finding Parker Avenue was substantially deprived of the beneficial use and enjoyment of its property; and
-Whether the trial court erred in finding a de facto taking occurred on Nov. 29, 2007, two weeks after the proposed legislation was introduced by a City Council member.
“Because the Code requires legislative authorization to pave Cinnaminson Street across the adjacent Philadelphia-owned property and to make changes to the City Plan, Parker Avenue was aware before the Property’s purchase that it needed City Council’s support to proceed with the proposed development,” Covey said.
The Commonwealth Court pointed to the comparatively lower price Parker Avenue paid for the property as “not substantial” and one that fully incorporated the risk that the 7.62 acres may never be developed – and thus couldn’t qualify as a “de facto taking” by the City.
“Further, although, Parker Avenue bought the property with the intent of developing a residential subdivision, it was aware that it was a risky venture given the necessary approvals needed and the community resistance before, during and after the purchase,” Covey said.
“Moreover, even if the ordinances had passed, Parker Avenue still needed the Board of Surveyors’ endorsement for the City Plan changes, which required a publicly-advertised hearing at which public testimony is taken, and the Planning Commission’s final plat approval. Given the community’s resistance, the Board of Surveyors’ endorsement is speculative at best.”
In speaking for her fellow judges, Covey declared the trial court’s overruling of the City’s objections as reversed, and vacated the petition for the Appointment of a Board of Viewers.
The appellants are represented by Robert D. Aversa and Kelly Diffily of the City of Philadelphia Law Department.
The appellee is represented by Gary A. DeVito and Anthony R. Twardowski of Zarwin Baum DeVito Kaplan Schaer & Toddy, also in Philadelphia.
The Commonwealth Court of Pennsylvania case 1162 C.D. 2014
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at email@example.com