Blachman v. ERIEVIEW CORPORATION, C 62-364.

• Decision Date: 31 May 1962
• Docket Number: No. C 62-364.,C 62-364.
• Citation: 205 F. Supp. 797
• Parties: Harry A. BLACHMAN, as a Taxpayer, Plaintiff, v. ERIEVIEW CORPORATION et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

205 F. Supp. 797

Harry A. BLACHMAN, as a Taxpayer, Plaintiff, v. ERIEVIEW CORPORATION et al., Defendants.

No. C 62-364.

United States District Court N. D. Ohio, E. D.

May 31, 1962.

Harry A. Blachman, Cleveland, Ohio, for plaintiff Harry A. Blachman.

Richard C. Pickett, Columbus, Ohio, Ralph S. Locher, Daniel J. O'Loughlin, Joseph H. Crowley, Cleveland, Ohio, for defendants Erieview Corp. and City of Cleveland.

Merle M. McCurdy, Dist. Atty., Cleveland, Ohio, for Housing and Home Finance Co., Public Housing Administration, and United States.

GREEN, District Judge.

Plaintiff, as a taxpayer of the City of Cleveland, Ohio, filed his complaint in the United States District Court for the purpose of enjoining further proceedings in the Erieview project in the City of Cleveland (a downtown urban renewal project known as Erieview I Urban Project No. Ohio R 36) and for an order cancelling agreements entered into between the City of Cleveland and the United States of America, wherein the federal government committed itself to lend to the City of Cleveland funds for the development of Erieview and to cancel the agreement between the City of Cleveland and Erieview Corporation covering the redevelopment of lands in the Erieview area.

Plaintiff's amended complaint alleges that he is a taxpayer of the City of Cleveland, Ohio, and brings this action on behalf of himself and all of the taxpayers of Cleveland. Jurisdiction is predicated on 42 U.S.C.A. § 1404a and Article III, § 2 of the United States Constitution.

The defendants are the Erieview Corporation, the City of Cleveland, the Housing and Home Finance Agency and Public Housing Administration, agencies of the United States, and Robert C. Weaver, the director thereof.

Plaintiff alleges that City of Cleveland and the United States of America entered into an agreement on March 3, 1961, wherein the federal authorities are committed to lend to the City $33,875,784 and to make a capital grant of approximately $10,000,000. These funds are intended for use in a downtown redevelopment project commonly known as Erieview.

Plaintiff further alleges that the City of Cleveland has agreed to sell to the Erieview Corporation a substantial part of land within Erieview, for redevelopment by the private corporation according to plans and standards agreeable to, and agreed upon by, the United States of America and the City of Cleveland.

Plaintiff alleges in his complaint that the agreements entered into by the City of Cleveland with the United States and the Erieview Corporation are illegal and contrary to the laws of the United States in that the Erieview area is not a blighted predominantly residential area, but in fact is a commercial or industrial area, and that the federal government is forbidden by law from giving financial assistance to such an area.

Plaintiff stated in his complaint that:

The consideration for both of the aforesaid agreements, relating to the same and adjacent lands, consist of mutual promises partly illegal, in that the federal government is forbidden by Public Law 86-372, 86th Congress, S. 2654, September 23, 1959, 42 U.S.C. § 1460, Title IV, from giving:

Financial assistance to any urban renewal area, which is not predominantly residential in character and which, under urban renewal plan therefor, is not to be redeveloped for predominantly residential uses.

Based thereon plaintiff seeks an order that the agreements be declared null and void and that the defendants, generally, be enjoined from any further proceedings related to the Erieview program.

Plaintiff bases his complaint on the fact that he is a taxpayer and will suffer irreparable loss for which he has no adequate remedy at law.

Defendant City of Cleveland initially filed a motion to dismiss the complaint. Thereafter, the Erieview Corporation and the government agencies, being the remaining parties defendant, joined in that motion. This matter is taken under consideration by the Court on the motions to dismiss, the briefs of the defendant City of Cleveland and plaintiff's briefs opposing the motions to dismiss.

The City of Cleveland in its motion to dismiss alleges

1. The plaintiff lacks standing to invoke the jurisdiction of this court because the complaint does not disclose that he will suffer injury to any legal right.

2. The court lacks jurisdiction because the amount actually in controversy is less than $10,000, exclusive of interest and taxes.

3. The court lacks jurisdiction because there is no diversity of citizenship between the parties.

4. The complaint fails to state a claim upon which injunctive relief can be granted.

The Court will take under consideration in this memorandum the fourth item that "the complaint fails to state a claim upon which injunctive relief can be granted." The City contends that there is no federal question of law involved because the averments in the complaint do not disclose facts upon which the plaintiff would be entitled to relief under any federal statute.

Plaintiff's lawsuit is based on the allegations that the federal government is forbidden to loan funds for redevelopment of areas "not predominantly residential in character" which are "not to be redeveloped for predominantly residential uses," and cites for his authority Public Law 86-372, 86th Congress S. 2654, Sept. 23, 1959, 42 U.S.C.A. § 1460, Title IV, and he relies on the first portion of this section of the act which reads:

"Financial assistance shall not be extended * * * to any urban renewal area which is not predominantly residential in character and which, under the urban renewal plan therefor, is not to be redeveloped for predominantly residential uses. * * *"

Plaintiff failed to take into consideration other sections and amendments of the act which provide for exceptions to the rule. If there had been no exceptions and amendments to the act, plaintiff would be correct in his contention, because when the Housing Act was first written in 1949 there was no provision for allocation of funds for redevelopment of nonresidential areas.

The act has been amended on several occasions by Congress and § 413 of the Housing Act of 1959 has the following exception which appears immediately after the law quoted above and relied on by the plaintiff.

"Provided, That, if the governing body of the local public agency determines that the redevelopment of such an area for predominantly nonresidential uses is necessary for the proper development of the community, the Administrator may extend financial assistance under this title for such project: * * *." (Emphasis added.)

A review of the legislative history of the act will be helpful in determining the issue before the Court and demonstrates Congressional policy and intent with reference to financial assistance to downtown urban areas which are predominantly nonresidential.

42 U.S.C.A. § 1460 had its birth in the Housing Act of 1949, 42 U.S.C.A. § 1450 et seq. The 1949 act made no provision for allocation of federal funds for redevelopment of nonresidential areas.

In 1954 the Housing Act was amended, August 2, 1954, c. 649, Title III, § 311, 68 Stat. 626, and the following provision inserted:

"* * * and provided further, That financial assistance shall not be extended under this title for any project involving slum clearance and redevelopment of an area which is not clearly predominantly residential in character unless such an area is to be redeveloped for predominantly residential uses, except that, where such an area which is not predominantly residential in character contains a substantial number of slum, blighted, deteriorated or deteriorating dwellings or other living accommodations, the elimination of which would tend to promote the public health, safety and welfare in the locality involved and such area is not appropriate for redevelopment for predominantly residential uses, the Administrator may extend financial assistance for such a project, but the aggregate of the capital grants made pursuant to this title with respect to such projects shall not exceed 10 per centum of the total amount of capital grants authorized by this title."

This amendment was embodied in 42 U.S.C.A. § 1460. The committee reports on this amendment are found at 1954 U.S.Code Cong. & Adm.News, page 2757 et seq. With this amendment Congress took the first step toward extending the limits of urban redevelopment.

In 1955, 42 U.S.C.A. § 1460 was once again amended. A further proviso was added, reading:

"Where land within the purview of subparagraph (1) (ii) or (1) (iii) hereof (whether it be predominantly residential or nonresidential in character) is to be redeveloped for predominantly nonresidential uses, loans and advances under this title may be extended therefor if the governing body of the local public agency determines that such redevelopment for predominantly nonresidential uses is necessary and appropriate to facilitate the proper growth and development of the community in accordance with sound planning standards and local community objectives and to afford maximum opportunity for the redevelopment of the project area by private enterprise * * *." Aug. 11, 1955, c. 783, Title I, § 106(c), 69 Stat. 637.

The House report on this bill (Conference report 1622) stated:

"Subsection (c) would add a provision to section 110(c) of the Housing Act of 1949 which would authorize loans and advances to be made under the slum clearance and urban renewal program to assist in the redevelopment of either predominantly open land or open land for industrial or other nonresidential uses." 1955 U.S.Code

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