CMR D.N. Corp. v. City of Phila.

• Decision Date: 14 January 2013
• Docket Number: No. 11–4362.,11–4362.
• Citation: 703 F.3d 612
• Parties: CMR D.N. CORP. and Marina Towers Ltd., t/a Waterfront Renaissance Associates, LLP, Appellant v. The CITY OF PHILADELPHIA; City Council of the City of Philadelphia; Philadelphia City Planning Commission; Old City Civic Association; River's Edge Civic Association; The Penn's Landing North Civic Association; Andrew Sacksteder; Richard Horrow; Brian Abernathy; Richard Thom; Elizabeth E. Whitaker; John and Jane Does 1 Through 10.
• Court: U.S. Court of Appeals — Third Circuit

703 F.3d 612

CMR D.N. CORP. and Marina Towers Ltd., t/a Waterfront Renaissance Associates, LLP, Appellant

v.The CITY OF PHILADELPHIA; City Council of the City of Philadelphia; Philadelphia City Planning Commission; Old City Civic Association; River's Edge Civic Association; The Penn's Landing North Civic Association; Andrew Sacksteder; Richard Horrow; Brian Abernathy; Richard Thom; Elizabeth E. Whitaker; John and Jane Does 1 Through 10.

No. 11–4362.

United States Court of Appeals, Third Circuit.

Argued Oct. 1, 2012.

Opinion Filed: Jan. 14, 2013.

Thomas A. Leonard, Esq., [Argued], Richard P. Limburg, Esq., H. David Seidman, Esq., Obermayer Rebmann Maxwell & Hippel LLP, Philadelphia, PA, for Appellant, CMR D.N. Corp. and Marina Towers Ltd., t/a Waterfront Renaissance Associates, LLP.

City of Philadelphia Law Department, Shelley R. Smith, Esq., City Solicitor, Jane Lovitch Istvan, Esq., [Argued], Philadelphia, PA, for Appellees, The City of Philadelphia, Brian Abernathy, Philadelphia City Planning Commission, and Philadelphia City Council.

Before: FUENTES, FISHER and GREENBERG, Circuit Judges.

OPINION OF THE COURT

FUENTES, Circuit Judge:

Waterfront Renaissance Associates, LLP (“Waterfront”) owns a lot in the Delaware River waterfront neighborhood of Philadelphia, Pennsylvania. For almost twenty years, Waterfront pursued the development of a large commercial and residential real estate project on this lot. In 2006 the City of Philadelphia (“City”) enacted an ordinance that extended certain construction restrictions from a nearby neighborhood to most lots within the area known as the Central Riverfront District, including Waterfront's property. Asserting that the construction height restriction imposed by the extension foreclosed its development plans, Waterfront sued.

In 2010, however, the City rescinded the application of the height restriction to Waterfront's property. The City then sought to dismiss Waterfront's constitutional claims based on the height restriction as moot, and moved for summary judgment on all other claims. Waterfront opposed these motions and, to avoid the mootness problem, sought leave to amend its complaint to challenge as unconstitutional a width restriction that had also been extended by the 2006 ordinance but had not been rescinded in 2010. Waterfront also sought to add a claim that an ordinance enacted in 2009, which had imposed additional requirements on construction along the Central Delaware River waterfront, was unconstitutional.

At issue in this appeal are the District Court's rulings on these motions. The District Court held that the rescission of the height restriction mooted Waterfront's federal constitutional claims against the 2006 ordinance, denied Waterfront's motion to further amend its complaint to attack the width restriction, and granted summary judgment for the City on all other claims, including those based on the 2009 ordinance.

For the reasons that follow, we find no reason to disturb any of the District Court's rulings. We will, therefore, affirm the judgment of the District Court.

I. Factual BackgroundA. The Initial Stages of Waterfront's World Trade Center Project

The key facts relevant to this appeal are not in dispute. The origins of this protracted controversy can be traced to 1987, when Waterfront purchased a 5.3–acre lot (the “Site”) to develop a high-rise project (the “Project”) in the Central Riverfront District of Philadelphia, Pennsylvania. The Site is located at the southwest corner of Delaware Avenue (now known as Columbus Boulevard) and Noble Street.

Waterfront pursued the development of the Project over the next several years. In 1988, with the support of a recommendation letter from Philadelphia Mayor Wilson Goode, Waterfront obtained an exclusive license to develop its Project as a World Trade Center-type development. At the time of Waterfront's purchase, the Site was zoned G–2 industrial. Consequently, Waterfront worked with the Philadelphia City Planning Commission (“Planning Commission”) to obtain rezoning of the Site. The Planning Commission is the Philadelphia agency empowered to propose zoning ordinances to the Philadelphia City Council (“City Council”), and is required by law to make recommendations to the Mayor for transmission to the City Council on any matters that may affect zoning. See351 Pa.Code §§ 4.4–601, 4.4–604 (Supp.2012). The Planning Commission agreed to support Waterfront's request to rezone the Site C–4 commercial, a permissive designation that would allow Waterfront to build a mixed-use, high-rise project. In exchange, Waterfront agreed to enter into a series of restrictive zoning covenants with certain civic associations to govern any construction on the Site. In 1989, per the Planning Commission's recommendation, the City Council rezoned the Site C–4 commercial, and Waterfront subsequently entered into the required covenants.

Waterfront also explored ways to finance the World Trade Center Project, including forming a committee with the City and several business associations to analyze the Project's feasibility, and enteringinto a partnership with the Delaware River Port Authority to develop a plan for construction financed in part by the Port Authority.¹

When financing for the project became a concrete possibility in early 2005, Waterfront obtained a permit from the City's Department of Licenses & Inspections, the agency with actual authority to issue building permits, see351 Pa.Code § 5.5–1002 (the “Licensing Department”), that allowed demolishing existing structures on the Site and constructing a 28–story apartment tower upon the issuance of a building permit.² Waterfront also entered into a financing agreement with a major bank, with a loan closing date of January 2006 and a construction start date of February 2006. Unfortunately, however, Waterfront had to postpone construction so it could rework the financing due to rising costs.

B. The March 2006 Ordinance

The loan scheduled to close in early 2006 was the closest Waterfront would get to the development of its Project. On March 16, 2006, the City enacted a zoning ordinance (the “March 2006 Ordinance”) that extended to certain areas of the Central Riverfront District, including Waterfront's Site, a zoning overlay known as the “Old City Residential Area Special District Controls” (the “Old City Overlay”). See R. 578. The Old City Overlay included a building height restriction of 65 feet, as well as a width restriction of 70 feet. SeePhiladelphia, Pa., Zoning Code § 14–1610(4), (5) (1990), repealed by Bill No. 110845 (Dec. 22, 2011); R. 159–61.³

Waterfront alleges that its Site was never intended to be included in the March 2006 Ordinance. It alleges that City Councilman Frank DiCicco, whose jurisdiction includes the Site, admitted to Waterfront's attorney that the inclusion of the Site in the area covered by the March 2006 Ordinance was a “mistake,” R. 682, and that Philadelphia Mayor John Street stated that he would not have signed the legislation had he known that the 65–foot height restriction applied to the Site. The City disputes Waterfront's characterization of these statements. However, Waterfront asked Councilman DiCicco to repeal the inclusion of the Site from the extension of the Old City Overlay, but he refused. Moreover, Waterfront never applied for, or was denied, a permit under the March 2006 Ordinance, and it did not seek a variance.

II. Procedural HistoryA. Initial Stages of the Litigation

On February 23, 2007, Waterfront sued the City, the Planning Commission, the City Council, City Councilman aide Brian Abernathy, three civic associations with which it had entered into zoning covenants, and certain members of those associations, in state court. The City removed the case to federal court on March 15, 2007.

An amended complaint, filed in 2008, alleges fourteen counts of constitutional and state law claims, focusing on the fact that the March 2006 Ordinance “impos[ed] a sixty-five foot (65') height restriction on [Waterfront's] Site.” R. 87 (Compl. ¶ 5).⁴ Counts I through VIII are directed at the City. Count I seeks a declaratory judgment, claiming that the March 2006 Ordinance is “defective” because the City “did not at any time discuss or consider the effect that extending the 65' height restriction would have on the public and private objectives established for the Site,” and, therefore, the Site's inclusion within the ordinance was a “product of mistake” and “constitute[d] an instance of arbitrary and unreasonable zoning bearing no substantial relationship to the public health, safety, and welfare of the City and its inhabitants.” R. 111–13 (Compl. ¶¶ 148–63). Count II seeks a declaratory judgment that the ordinance was “procedurally invalid” because “the newspaper advertising of the March 2006 Ordinance was insufficient to put [Waterfront] on notice” that the City planned to enact the ordinance. Id. ¶ ¶ 165–70. Counts III, IV, and VIII seek a variety of remedies including injunctive relief and damages, based on state law claims of promissory estoppel, detrimental reliance, and unjust enrichment. Id. ¶¶ 172–85, 187–95, 212–21. Count V seeks a declaration that the “application of the [March 2006 Ordinance] to [Waterfront's] Site ... deprives [Waterfront] of its constitutional right to substantive due process.” Id. ¶ 201. Count VI seeks a declaration that “any application” of the March 2006 Ordinance “to [Waterfront's] Site” violates Waterfront's “constitutional right to equal protection” because the City had “arbitrarily treated [Waterfront's] Site differently from other similarly situated C–4 sites....” Id. ¶¶ 203, 206. Count VII seeks monetary damages for the alleged violations of due process and equal protection. Id. ¶¶ 208–210.⁵

On March 31, 2008, the District Court dismissed the Planning Commission, the City Council, and Abernathy from the case. The District Court also dismissed Counts II and V. It reasoned that those counts...