In re Condemnation by Urban Redevelopment

• Citation: 823 A.2d 1086
• Court: Commonwealth Court of Pennsylvania
• Decision Date: 19 May 2003
• Parties: In the Matter of CONDEMNATION BY URBAN REDEVELOPMENT AUTHORITY OF PITTSBURGH of certain land in the 22nd Ward of the City of Pittsburgh, Allegheny County, Pennsylvania, Redevelopment Area 51 (Federal North) being property of New Garden Realty Corporation; A Pennsylvania Corporation; Its Administrators, Executors, Successors, Assigns or any other persons found to have any interest in the property, Appeal of New Garden Theatre, Inc. In the matter of Condemnation by Urban Redevelopment Authority of Pittsburgh of certain land in the 22nd Ward of the City of Pittsburgh, Allegheny County, Pennsylvania, Redevelopment Area 51 (Federal North) being property of New Garden Realty Corporation; A Pennsylvania Corporation; Its Administrators, Executors, Successors, Assigns or any other persons found to have any interest in the property, Appeal of New Garden Realty Corporation.

823 A.2d 1086

In the Matter of CONDEMNATION BY URBAN REDEVELOPMENT AUTHORITY OF PITTSBURGH of certain land in the 22nd Ward of the City of Pittsburgh, Allegheny County, Pennsylvania, Redevelopment Area 51 (Federal North) being property of New Garden Realty Corporation; A Pennsylvania Corporation; Its Administrators, Executors, Successors, Assigns or any other persons found to have any interest in the property,

Appeal of New Garden Theatre, Inc.

In the matter of Condemnation by Urban Redevelopment Authority of Pittsburgh of certain land in the 22nd Ward of the City of Pittsburgh, Allegheny County, Pennsylvania, Redevelopment Area 51 (Federal North) being property of New Garden Realty Corporation; A Pennsylvania Corporation; Its Administrators, Executors, Successors, Assigns or any other persons found to have any interest in the property,

Appeal of New Garden Realty Corporation.

Commonwealth Court of Pennsylvania.

Argued February 4, 2003.

Decided May 19, 2003.

Peter N. Georgiades, Pittsburgh, for appellant.

Joel P. Aaronson, Pittsburgh, for appellee.

BEFORE: SMITH-RIBNER, Judge, FRIEDMAN, Judge, and JIULIANTE, Senior Judge.

OPINION BY Judge SMITH-RIBNER.

The New Garden Theatre, Inc. (New Garden Theatre) and the New Garden Realty Corporation (New Garden Realty) appeal from two orders of the Court of Common Pleas of Allegheny County. The first, of June 24, 1999, dismissed preliminary objections filed by New Garden Theatre to the declaration of taking filed by the Urban Redevelopment Authority of Pittsburgh (URA) on May 9, 1997 in regard to a property owned by New Garden Realty at 12 W. North Avenue in the City. The second order, dated April 18, 2002, overruled remaining preliminary objections filed by New Garden Realty to the declaration of taking.

New Garden Theatre questions whether the trial court erred in barring a tenant in premises being taken by eminent domain from filing preliminary objections when it was not served with written notice of the declaration of taking. New Garden Realty states questions as follows: (1) whether a taking by eminent domain to replace one form of speech with another constitutes "content-based" official action; (2) whether the trial court erred by failing to decide whether the last adult theater in Pittsburgh would be able to relocate; (3) whether the First Amendment permits redevelopment officials to use eminent domain to control exhibitions at a theater, where their action is justified only by an unsupported theory that it will foster economic development; (4) whether local officials satisfied "intermediate scrutiny" where they did not consider the impact of their actions upon speech and failed to consider alternative courses of action that would accomplish objectives without sacrificing speech rights; and (5) whether the trial court erred in not considering the condemnee's claim under Art. I, § 7 of the Pennsylvania Constitution after rejecting its First Amendment claim.

I

The subject property contains the Garden Theatre, a movie theater, which since the 1970s has been used as an "adult theater" as defined in the Pittsburgh Zoning Code. The trial court found that in the late 1960s the area near the intersection of Federal Street and North Avenue in the Central Northside District of Pittsburgh was considered to be a neighborhood in decline and in need of renewal. A January 1989 report by the City's Department of City Planning analyzed conditions in the eight-square-block area including rising crime, problem bars, declining population, loss of businesses and services and deteriorating and underutilized buildings. The report stated that the presence of an adult theater added to a negative image; it recommended certification of the area as blighted and eligible for redevelopment through the Urban Redevelopment Law, Act of May 24, 1945, P.L. 991, as amended, 35 P.S. §§ 1701-1719.2.

After a hearing the City Planning Commission certified the Federal North Redevelopment Area No. 51 (Redevelopment Area) as blighted in February 1989, and a team of planning participants was convened to begin preparations for a proposed redevelopment plan. The proposed goals of the redevelopment project included, inter alia, removing existing blight that had resulted in disinvestments and abandonment, encouraging new commercial investment and development and reinvestment in the housing stock and improving the area's appearance. Early in 1994 the new Mayor of Pittsburgh, Tom Murphy, appointed Deputy Mayor Tom Cox as Chairman of the URA. Cox sought a way to accelerate completion of the planning phase and transition to the implementation phase. He approached the founder and director of the Mattress Factory, a museum of contemporary art and a research and development laboratory for artists located a few blocks from the Redevelopment Area. The Mattress Factory agreed to participate in the planning and implementation process for the Garden Theatre Block.

In December 1995 the Pittsburgh City Council approved the Redevelopment Proposal for the Redevelopment Area, authorizing the URA to move forward with redevelopment activities, including the $5 million acquisition of all of the forty-seven properties that comprised the three contiguous blocks constituting the commercial core of the Redevelopment Area. The Mattress Factory submitted its master plan for the Garden Theatre Block to the URA in August 1996. Proposed reuses of the Garden Theatre included performing arts space for music, dance, film, special events and conferences; rental use by a wide range of for-profit and not-for-profit organizations; fund raising events and educational programming in conjunction with local businesses and universities; and periodic venue for Mattress Factory performance programming. The programming schedule was to tie into events such as the Children's Festival and the Three Rivers Arts Festival. The URA acquired forty-six properties amicably.

The URA filed a declaration of taking on May 9, 1997 to acquire title to the Garden Theatre. New Garden Realty filed preliminary objections, and the URA filed preliminary objections to the preliminary objections. In its order of October 29, 1997, the trial court granted in part and denied in part the URA's preliminary objections, thereby narrowing the issues. The parties then engaged in extensive discovery. On May 27, 1998, New Garden Theatre filed its preliminary objections, nearly identical to those filed by New Garden Realty, and by its order of June 24, 1999, the court struck the preliminary objections on the basis of laches. Following an extensive trial, the trial court by its order of April 18, 2002 dismissed the objections of New Garden Realty. The court found that New Garden Realty had not met its burden to prove that the URA acted in palpable bad faith by clear, precise and indubitable evidence, citing Fleet v. Redevelopment Authority of County of Washington, 147 Pa.Cmwlth. 169, 607 A.2d 311 (1992), which rejected similar objections, where the area met the criteria for designation as a blighted area and there was no formal agreement or indication of undue influence or bad faith.

The trial court also rejected New Garden Realty's objections based upon free speech concerns. The court noted that the right to display non-obscene, sexually explicit motion pictures and the right to see such movies are protected by the First Amendment to the United States Constitution and by Art. I, § 7 of the Pennsylvania Constitution. However, the court found that the taking was content-neutral, relying in part upon Forty-Second Street Co. v. Koch, 613 F.Supp. 1416 (S.D.N.Y.1985), where an adult theater owner claimed that the taking of his theaters, as part of an urban renewal project, was a prior restraint based upon hostility. The court in that case stressed that several hundred businesses in a thirteen-acre area were to be shut down, among them some adult uses, and the plaintiffs could not argue that their buildings were being singled out when whole blocks were being demolished or taken for reuse. Similarly, in G. & A. Books, Inc. v. Stern, 604 F.Supp. 898 (S.D.N.Y.), aff'd, 770 F.2d 288 (2d Cir.1985), the same court held that a renewal project for Times Square, which would displace many adult uses, did not constitute a prior restraint, regardless of the motivations behind the project, because it was not disputed that the area suffered from serious blight, and the protected speech was not singled out for special treatment.

Because the URA's action did not represent a content-based prior restraint on free speech, the trial court did not apply a strict scrutiny analysis to the taking. It applied instead the intermediate scrutiny standard set forth in United States v. O'Brien, 391 U.S. 367, 377, 88 S.Ct. 1673, 1679, 20 L.Ed.2d 672, 680 (1968): where governmental regulation has an incidental impact on protected speech, it is constitutional and sufficiently justified

if it is within the constitutional power of the Government; if it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.

The trial court concluded that the URA's condemnation of property for urban renewal is within its constitutional powers and that renewal and redevelopment of blighted areas constitute an important and substantial governmental interest that is unrelated to suppression of free expression. It quoted from Forty-Second Street Co. to the effect that it was beyond cavil that the area at issue suffered from extraordinary blight and that the project was an attempt to radically deal with it. As to the fourth prong regarding the incidental restrictions on First Amendment freedoms, the trial court cited United States v. Albertini, 472 U.S. 675, 105 S.Ct. 2897, 86 L.Ed.2d 536 (1985). The Supreme...