Mazur v. Washington County Red. Auth.

• Decision Date: 11 July 2008
• Docket Number: No. 1866 C.D. 2007.,1866 C.D. 2007.
• Citation: Mazur v. Washington County Red. Auth., 954 A.2d 50 (Pa. Commw. Ct. 2008)
• Parties: Edward M. MAZUR, Jeffrey D. Bull and Citizens Against Tax Increment Financing, Appellants v. WASHINGTON COUNTY REDEVELOPMENT AUTHORITY and South Strabane Township.
• Court: Pennsylvania Commonwealth Court

954 A.2d 50

Edward M. MAZUR, Jeffrey D. Bull and Citizens Against Tax Increment Financing, Appellants v.WASHINGTON COUNTY REDEVELOPMENT AUTHORITY and South Strabane Township.

No. 1866 C.D. 2007.

Commonwealth Court of Pennsylvania.

Argued May 6, 2008.

Filed July 11, 2008.

Reargument and or Reconsideration Denied September 4, 2008.

Jody Rosenberg, Pittsburgh, for appellants.

Colin E. Fitch, Washington, for appellee, Washington County Redevelopment Authority.

Thomas A. Lonich, Washington, for appellee, South Strabane Township.

Dusty E. Kirk, Pittsburgh, for amicus curiae, Tanger Properties Ltd. Partnership.

BEFORE: McGINLEY, Judge, and SMITH-RIBNER, Judge, and KELLEY, Senior Judge.

OPINION BY Judge SMITH-RIBNER.

Edward M. Mazur, Jeffrey D. Bull and Citizens Against Tax Increment Financing (Taxpayers) appeal from an order of the Court of Common Pleas of Washington County(trial court) that sustained preliminary objections and dismissed Taxpayers' complaint seeking declaratory and injunctive relief against Washington County Redevelopment Authority(Redevelopment Authority) and South Strabane Township (Township) for lack of a ripe controversy.Taxpayers question whether the trial court abused its discretion and committed an error of law in ruling that they failed to allege adequate facts to present a ripe controversy.

I

In two opinions issued by Judge Katherine B. Emery, the trial court noted that the present case involves another legal challenge to the Tax Increment Financing Plan (TIF Plan) to construct the Victory Centre Development Project (Victory Centre) on approximately 333 acres at the intersection of Race Track Road and Interstate 79 in the Township.The $365,150,000 Victory Centre is to be anchored by two major developments, Tanger Outlets (Tanger) and Bass Pro Shops (Bass Pro), and will combine a Tanger Outlet Mall, a Bass Pro store, hotels, restaurants and a variety of entertainment opportunities.The Tanger development, at 517,000 square feet, is to cost approximately $77,800,000, and the Bass Pro development, at 866,000 square feet, is to cost approximately $287,350,000.

Victory Centre is to be funded in part through the mechanism created by the Tax Increment Financing Act (TIF Act), Act of July 11, 1990, P.L. 465, as amended, 53 P.S. §§ 6930.1-6930.13.¹The governing bodies of Washington County, the Township and Trinity Area School District(taxing bodies) formed a TIF Committee.The Redevelopment Authority presented its proposal at a public meeting of the TIF Committee calling for each of the taxing bodies to allocate 80 percent of the tax increment to the Authority for payment of the TIF loan and 20 percent to each taxing district.The taxing bodies adopted the proposal, and the Township created the TIF District and declared it to be a "blighted" area as required by Section 5(a)(6)(iv)(H),53 P.S. § 6930.5(a)(6)(iv)(H).The TIF Plan also provided for creation of a Neighborhood Improvement District(NID), under the Neighborhood Improvement District Act (NID Act), Act of December 20, 2000, P.L. 949, 73 P.S. §§ 831-840.The Authority planned to issue $27,210,000 in bonds: $14,462,115 in TIF funding and $12,747,885 in NID funding.The TIF Plan provides for debt on the bonds to be retired in 20 years by increased property tax revenues within the TIF District and increased business taxes within the NID.²

Taxpayers filed an amended complaint January 30, 2007 alleging that on December 28, 2006, the Redevelopment Authority issued bonds for the Tanger development of approximately $23,000,000 (2006 Bonds), or approximately 85 percent of the entire amount of available bond funding, and that as a result no tax increment revenues from the Bass Pro development would be available to pay debt service on the loans.Bass Pro was to be open for business in September 2007.From the delay in construction schedules and issuance of most of the bonds to Tanger, Taxpayers concluded that Bass Pro is not a definite component of Victory Centre and that, if it does not come to fruition, there will have been a "substantial deviation" from the TIF Plan, which would require an amendment under Section 5(a)(8) of the TIF Act, 53 P.S. § 6930.5(a)(8), andMercurio v. Allegheny County Redevelopment Authority,839 A.2d 1196(Pa.Cmwlth.2003).

The amended complaint alleged (1) that issuance of $23,000,000 in bonds to Tanger was an ultra vires act because the amount did not correlate to Tanger's proportion of the total cost; (2) that the Redevelopment Authority may not issue bonds to the Tanger development alone; and (3) that the TIF Plan is invalid unless amended.Taxpayers requested a declaration that Victory Centre as it is currently progressing no longer reflects the TIF Plan and that issuance of the bonds was illegal and sought an injunction prohibiting the Redevelopment Authority from acting further.The defendants filed preliminary objections, including their assertions that Taxpayers lack standing and that the suit lacks a ripe controversy.

The trial court addressed the threshold issue of whether Taxpayers had standing based on their status as taxpayers in the TIF District.The defendants cited Application of Biester,487 Pa. 438, 409 A.2d 848(1979), for the general rule that taxpayers do not have standing to sue simply because they wish to prevent the waste of tax revenue.That case, however, provided a five-part test that applies only when taxpayers challenge obligations placed on the public or government emoluments, which was summarized in Consumer Party of Pennsylvania v. Commonwealth,510 Pa. 158, 170, 507 A.2d 323, 329(1986)("1. the governmental action would otherwise go unchallenged; 2. those directly and immediately affected ... are beneficially affected and not inclined to challenge the action; 3. judicial relief is appropriate; 4. redress through other channels is unavailable; and 5. no other persons are better situated to assert the claim"), abrogated in part on other grounds byPennsylvanians Against Gambling Expansion Fund, Inc. v. Commonwealth,583 Pa. 275, 877 A.2d 383(2005).The trial court concluded that Taxpayers met this test, and it ruled that they have standing.

On the objections asserting lack of ripeness, the trial court noted the purpose of the Declaratory Judgments Act"to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations...."42 Pa. C.S. § 7541(a).A declaratory judgment may be obtained only where there is a real controversy, Gulnac by Gulnac v. South Butler County School District,526 Pa. 483, 587 A.2d 699(1991), and it must not be employed to determine rights in anticipation of events that may never occur or for consideration of moot cases or for the rendition of an advisory opinion that may prove to be academic.City of Philadelphia v. Philadelphia Transp. Co.,404 Pa. 282, 171 A.2d 768(1961).The trial court quoted Section 5(a)(4) of the TIF Act, 53 P.S. § 6930.5(a)(4), as to the information required to be included in a TIF Plan.³It noted that Section 5(a)(8), 53 P.S. § 6930.5(a)(8), provides: "The governing body of the municipality creating the tax increment district may at any time, subject to the provisions of section 6(c), adopt an amendment to a project plan which shall be subject to approval in the same manner as the original project plan."

Taxpayers relied heavily upon Mercurio.The Court noted there that after the Department of Environmental Protection denied a permit to the developer of a project, an amended permit application was submitted that contained many changes from the TIF Plan, including an expansion of a state road from four to six or eight lanes, a new bridge and culvert, the elimination of a movie theatre, entertainment complex and self-storage facility and the addition of a hotel resulting in a three-year delay in construction.The Court held that, although Section 5(a)(8) regarding adoption of amendments is permissive, the directive to amend the TIF Plan should not be flouted.Without some type of check on a TIF Plan's progress and evolution, informal modification could lead to "a situation where a developer submits a `pie in the sky' proposal that promises the government entities that a project will generate greater increases in tax revenues."Mercurio,839 A.2d at 1205.After the project plan is approved the developer could build an entirely different project, which could generate less tax revenues.As the changes alleged might, if proved, amount to substantial changes, the Court reversed the sustaining of a preliminary objection on that point and remanded for further proceedings.

Taxpayers' amended complaint made bald assertions that Bass Pro could be eliminated from Victory Centre, and they sought such an inference based on the lopsided bond issuance.The trial court cited Mazur v. Trinity Area School District,926 A.2d 1260(Pa.Cmwlth.2007), appeal granted in part,___ Pa. ___, 941 A.2d 1256(2008), for the proposition that courts may not rule on the wisdom of legislative enactments(e.g., to create a TIF Plan), and thus the precise manner of carrying out the TIF Plan was not subject to review.No well-pleaded facts permitted a determination that Victory Centre had experienced the kind of drastic changes involved in Mercurio.The trial court concluded that there was no ripe controversy because only one of the TIF bonds had been issued and that it was too early in the construction process to determine whether a substantial deviation from the TIF Plan had occurred.⁴

II

Taxpayers argue that if substantial changes are made to the TIF project after adoption of the TIF Plan in regard to any information required by Section 5(a)(4) of the TIF Act to be in the plan, then under Mercurio the governing body must adopt an amendment subject to approval in the same manner as the original plan.Construction of the Tanger and Bass Pro projects was to proceed concurrently.The TIF Plan allocated...