In re Redevelopment Auth. of Philadelphia

• Decision Date: 27 December 2007
• Docket Number: No. 36 EAP 2006.,36 EAP 2006.
• Citation: 938 A.2d 341
• Parties: A Condemnation Proceeding in rem by the REDEVELOPMENT AUTHORITY OF the CITY OF PHILADELPHIA for the Purpose of Redevelopment of North Philadelphia Redevelopment Area Model Cities Urban Renewal Area Condemnation No. 30 B Philadelphia, PA including certain Land Improvements and Properties Re: 1839 North Eighth Street.
• Court: Pennsylvania Supreme Court

938 A.2d 341

A Condemnation Proceeding in rem by the REDEVELOPMENT AUTHORITY OF the CITY OF PHILADELPHIA for the Purpose of Redevelopment of North Philadelphia Redevelopment Area Model Cities Urban Renewal Area Condemnation No. 30 B Philadelphia, PA including certain Land Improvements and Properties Re: 1839 North Eighth Street.

No. 36 EAP 2006.

Supreme Court of Pennsylvania.

Argued April 16, 2007.

Decided December 27, 2007.

David J. Perlman, David Paul Heim, George Bochetto, Bochetto & Lentz, Philadelphia, for Redevelopment Authority of City of Philadelphia, appellant.

Lewis Rosman, City of Philadelphia Law Dept., for City of Philadelphia, appellant amicus curiae.

Edward M. Posner, Drinker, Biddle & Reath, L.L.P., Philadelphia, for The Hope Partnership, appellant amicus curiae.

Robert J. Sugarman, Sugarman & Associates, P.C., Philadelphia, for Mary Smith, appellee.

Steven Freeman, New York City, for Anti-Defamation League, appellee amicus curiae.

Barry E. Ungar, Theodore R. Mann, Judah Isiah Labovitz, for Jewish Social Policy Action Network, et al., appellee amici curiae.

BEFORE: CAPPY, C.J., CASTILLE, SAYLOR, EAKIN, BAER, BALDWIN and FITZGERALD, JJ.

OPINION

Justice BALDWIN.

The primary question raised in this appeal is whether taking private property, certified as blighted 36 years previously, by eminent domain, in order to convey the property to a religious entity as part of a redevelopment plan, violates the Establishment Clause of the United States Constitution. The Commonwealth Court, in a four-three en banc decision, reversed the Court of Common Pleas of Philadelphia's determination that the taking was lawful, and found that, among other things, the taking violated the Establishment Clause. Because we believe that under the limited facts of this case the taking was Constitutional, we reverse.

In 1968, the neighborhood surrounding 1839 North Eighth Street in Philadelphia (the "Property") was certified as blighted by the City of Philadelphia's Planning Commission (the "Planning Commission"). Veronica Smith Howard and her mother, property owner Mary Smith ("Condemnee") resided in the house on the Property at that time.

On September 4, 2002, the Hope Partnership for Education (the "Hope Partnership"), a coalition of several Catholic groups, sent a letter to Philadelphia's Redevelopment Authority (the "RDA") requesting that the RDA acquire 39 specific parcels that the Hope Partnership had targeted in eastern North Philadelphia (including the Property) for the purpose of building a non-denominational, faith-based, not tuition based school for children of the blighted neighborhood and its surroundings. The RDA prepared a redevelopment proposal for the Planning Commission, including the request from Hope Partnership. The Planning Commission approved the proposal, which was then submitted to Philadelphia's City Council ("City Council"). Following a public hearing, the City Council passed an ordinance approving the acquisition of, among other things, the 39 properties designated by the Hope Partnership and the Partnership was identified as the developer. There is no question that these properties were blighted—only two were actually still occupied—and the estimated just compensation for the Property was $12,000. All 39 properties were to be transferred to the Hope Partnership. R. 69a.

The Thirtieth Amended Redevelopment Proposal ("Redevelopment Proposal") covered significantly more than just the acquisition for the Hope Partnership. One thousand three hundred seventy six parcels were acquired for eighteen separate projects, with purposes including: (1) building affordable housing units for first-time homebuyers; (2) renovating historic structures for affordable housing for the elderly; (3) building low-income senior rental housing; (4) creating community gardens and related programs; (5) building a religiously operated middle school (the Hope Partnership program); (6) building low-income rental housing; (7) expanding existing business use; (8) building rental units for persons or families living with HIV or AIDS; and (9) future development. R. 88b-91b. Of the eighteen projects, only four had their acquisition costs paid for outside of the Redevelopment Authority's funding for renovation of the area: (1) the Women's Christian Revitalization Program low-income rental housing development (acquisition costs paid for by the Office of Housing and Community Development ("OHCD")); (2) an expansion of an existing business, Komplete Welding (acquisition costs paid for by the Philadelphia Authority for Industrial Development); (3) Advocate Community Development Corporation's development of rental units for persons or families living with HIV or AIDS (acquisition costs paid for by OHCD); and (4) Project H.O.M.E.'s development of housing for low-to-moderate income first-time homebuyers (acquisition costs paid for by Project H.O.M.E.). Of the entities designated as developers, some were religiously affiliated and others were not.

Condemnee filed preliminary objections to the taking on December 23, 2003. Condemnee alleged, among other things: that the taking of the Property was not for a public purpose; that the taking was arbitrary, capricious and discriminatory; that the taking is the result of a predetermined illegal commitment to a religiously-affiliated private entity; and that Condemnee's due process rights were violated.

The trial court overruled the preliminary objections, finding that "[o]nce the land was certified as blighted, it is proper then to transfer the land to private development, regardless of `who' that future developer may be." In Re: 1839 N. Eighth St., November Term, 2003, No. 2988, slip op. at 3 (Pa. Ct. of Com. Pleas of Philadelphia Cty. February 24, 2004). The trial court relied upon this Court's decision in Belovsky v. Redevelopment Auth., 357 Pa. 329, 54 A.2d 277 (1947), in which we stated that the taking of private land deemed blighted was proper because the statute's purpose was "the clearance, reconstruction and rehabilitation of the blighted area" and the separate, subsequent transfer to a private developer was "purely incidental to the accomplishment of the real or fundamental purpose." Id. at 340, 54 A.2d at 283. Because the trial court found the taking of the property due to its blighted condition was legitimate, it refused to entertain any argument regarding whether the subsequent transfer of the property to a developer that is a religious entity violated the Establishment Clause of the First Amendment of the United States Constitution¹ or Article I, Section 3 of the Pennsylvania Constitution.² The trial court noted that there was no contention that the property was not blighted, the taking of the Property for the purpose of eliminating blight was a legitimate purpose, and that Condemnee had failed to challenge the certification of blight when it was made.

The Commonwealth Court reversed, finding four errors in the trial court's decision. According to the Commonwealth Court, the trial court erred: (1) in holding that land certified as blighted may be acquired and transferred to a private developer without regard to the identity of the developer; (2) in presuming that a condemnee's failure to challenge the certification of blight constituted waiver of any challenge to the taking; (3) in rejecting a condemnee's claim that the taking implicated an impermissible entanglement of church and state; and (4) in finding that a determination of blight was sufficient reason to justify the exercise of eminent domain.

Judge Pellegrini authored a dissent, joined by Judges Leadbetter and Leavitt, in which he found that in order for the taking to be invalid, Condemnee was required to prove that her property was not located in a blighted area, which she failed to do. According to Judge Pellegrini, the fact that the potential developer was a religious entity was not pertinent to the decision. Relying on Belovsky, the dissent would have found that the public purpose necessary to effectuate the taking is completely realized when the taking occurs for the purpose of clearance, reconstruction and rehabilitation of the blighted area. In re 1839 N. Eighth St., 891 A.2d 820, 834 (Pa.Commw.Ct.2006) (Pellegrini, J. dissenting) (citing Belovsky at 340, 54 A.2d at 282-83). Because elimination of blight is a valid purpose, any challenge to the taking based on the Establishment Clause will not prevail. The dissent additionally stated that even if they were to address the Establishment Clause issues, Condemnee would not prevail. Indeed, according to the dissent, to permit them to prevail would constitute "viewpoint discrimination" against religious groups, which is an impingement on the religious group's First Amendment Rights. In re 1839 N. Eighth St., 891 A.2d at 834 (Pellegrini, J. dissenting) (citing Good News Club v. Milford Cent. Sch., 533 U.S. 98, 121 S.Ct. 2093, 150 L.Ed.2d 151 (2001)).

The RDA petitioned this Court for a grant of allocatur, which was granted.

An appellate court's scope of review where a trial court has sustained or overruled preliminary objections to a declaration of taking is limited to a determination of whether the trial court abused its discretion or committed an error of law. Condemnation of 110 Washington St., 767 A.2d 1154, 1157 (Pa.Commw.Ct.2001). Review of the RDA's certification of blight and subsequent taking is limited to a determination that the RDA has not acted in bad faith, has followed the statutory procedures, and has not violated any constitutional safeguards. Crawford v. Redevelopment Auth. of Fayette County, 418 Pa. 549, 553, 211 A.2d 866, 867 (1965).

The record does not support a bad faith claim against the RDA. "Public officials are presumed to have acted lawfully and in good faith until facts showing the contrary are averred, or in a proper case are averred and proved." Robinson v. Philadelphia, 400 Pa. 80, 86-87, 161 A.2d 1, 5 (1960) (citing ...