Miller v. City of Louisville

• Decision Date: 20 February 1959
• Citation: 321 S.W.2d 237
• Parties: John Atherton MILLER, Individually and as a Representative of all the Citizens and Taxpayers of the City of Louisville, Kentucky, Appellant, v. CITY OF LOUISVILLE, Appelle.
• Court: United States State Supreme Court — District of Kentucky

Page 237

321 S.W.2d 237

John Atherton MILLER, Individually and as a Representative

of all the Citizens and Taxpayers of the City of

Louisville, Kentucky, Appellant, v. CITY OF LOUISVILLE, Appelle.

Court of Appeals of Kentucky.

Feb. 20, 1959.

Leo T. Wolford, Louisville, for appellant.

William E. Berry, Wyatt, Grafton & Grafton, Cornelius W. Grafton, Louisville, for appellee.

Jo M. Ferguson, Atty. Gen., as amicus curiae.

MILLIKEN, Judge.

The constitutionality of our urban renewal and urban development statutes, KRS Chapter 99, is at stake here.

As stated in the City's brief, 'The meat of the case is around the bone of urban redevelopment and urban renewal--whether these are proper objectives of government, whether tax moneys may be spent for them, whether the power of eminent domain may be brought to bear in furtherance of them, and whether the statutes attempt improper delegation of legislative power.'

This case specifically presents the question of the validity of the City of Louisville's $5,000,000 'Voted Medical Center, Civic Center, and Urban Redevelopment and Urban Renewal Bonds.' The City of Louisville (hereinafter called the City) contends that the bonds will be valid obligations of the City. The appellant, John Atherton Miller, for himself and for all citizens and taxpayers of the City, contends that the bonds will not be legal obligations of the City.

In the complaint, the City has set forth the facts concerning the actions taken by the Board of Aldermen, and has filed exhibits which are referred to in the complaint. The appellant, Miller, does not raise any question concerning the facts stated in the complaint or the accuracy or correctness of these exhibits.

On August 13, 1957, the City's Board of Aldermen passed an ordinance determining that it was necessary for the City to incur the indebtedness of $5,000,000, and ordered an election to be held for the authorization of the bond issue. This ordinance was regularly advertised in a daily newspaper. The election provided for in the ordinance was held on November 5 1957, on a regular election day, and the question of the bond issue was submitted to the voters. The votes cast were 38,941 in favor of the bonds, and 10,004 against the bonds. On August 12, 1958, the City's Board of Aldermen adopted another ordinance, pursuant to the election, providing for the issuance of the bonds and this ordinance was regularly adopted. The bonds have not been issued pending approval of the courts, KRS 66.210.

The value of the taxable property in the City, estimated by the assessment made as of January 1, 1957, and the estimated assessment of January 1, 1958, was about $720,000,000. Deducting the monies accumulated in the City's Sinking Fund, the net indebtedness is less than $54,000,000. It is therefore apparent that the existing indebtedness plus the amount of the bonds to be sold will be below the constitutional maximum of 10% of the aggregate of the assessed values of property in the City as required by Kentucky Constitution, Section 158.

The City proposes to use the proceeds of the sale of the bonds for the following purposes: acquiring and preparing land for a medical center in the area of General Hospital; acquiring and preparing land for a civic center; one or more projects or programs for urban redevelopment or urban renewal, including undertakings and activities for the elimination of slums or blighted or deteriorated or deteriorating areas, and the acquisition, clearance, replanning, or rehabilitation of substandard or unsanitary areas, and the preparation of such areas for such residential, commercial, industrial, public, recreational, or other structures, works, improvements, facilities, or spaces as may be appropriate or necessary, with appurtenances. These aims are all to be accomplished in accordance with a master plan adopted by the proper planning authorities.

The City proposes to cause an 'agency' to be created for the purpose of preparing the development plans, conducting public hearings thereon, acquiring lands by purchase or condemnation, grading and clearing, construction of utilities or other facilities or site improvements, and disposing of the lands by conveyance or lease to public or private bodies or individuals.

The case was fully argued in the trial court, and a judgment was entered holding that the bonds would be valid obligations of the City. However, it must be noted that this is an attempt by the City, through the medium of the declaratory judgment law, not only to ascertain whether the bonds will be valid but also whether any of the stated purposes for which they may be issued are unconstitutional. In other words, the City wishes to know where it stands on the overall plan before proceeding further and inevitably incurring additional expense. We believe the City is entitled to such an opinion from this Court--that there is a genuine justiciable issue presented the resolution of which will not preclude any individual litigation arising from the administration or execution of the program.

In its brief, the City asserts that 'the subject of urban development and urban renewal is an urban area where rigor mortis is the heritage of streets too narrow, lots too small, access inadequate, sanitation and fire protection unthought of, space too precious to spare, and all the related health, safety and other deficiencies and unacceptabilities that grow out of such things. Neglect becomes the pattern, because an owner can have neither the incentive nor the pocketbook to improve in the middle of squalor. Mortgage money will not invest in rat holes; not even between them. Bad conditions inevitably become worse, and the unwholesomeness becomes a concern of the entire community rather than of property owners in the limited area alone.'

Unlike building codes and zoning laws which create standards for future construction and urban development, the present legislation (KRS 99.330-550, as amended through 1956) permits a concerted public attack on the cumulative evils of the urban development of the past and provides for public agencies for coping with such forces in the future.

After it had become apparent that the elimination of a slum area accomplished only part of its purpose when the area involved was no longer suitable for low cost housing, the Congress adopted the Housing Act of 1949, 42 U.S.C.A. Sec. 1441, and following, which authorized Federal grants in aid of municipal corporations for the public elimination of slum and blighted areas under state redevelopment laws like our co-ordinate state legislation, KRS 99.330 to 99.550, as amended in 1956. That legislation contemplates the acquisition of the individual pieces of property in the designated areas either by purchase or eminent domain, the replatting or replanning of the area by the proper public authority and the subsequent sale or lease thereof to private individuals or public agencies under restrictions compelling conformity to the over-all plan. Implicit in the scheme of things is the possibility that the widening and elimination of streets, the creating of parks and playgrounds, the erection of public buildings in the area, and the enlarging of lots therein may result in the property in the area being sold or leased in the future at a financial loss to the public. It was 'for the purpose of paying all or a part of the cost of acquiring land' and its redevelopment that the voters of Louisville authorized the issuance of the $5,000,000 bonds pledging the 'full faith, credit and resources' of the City.

If a redevelopment or renewal plan is carried out in conformity to the rather detailed procedural provisions set forth in the statute, the resulting cleared or 'prepared' area is not given away or leased with no regard for its value, for KRS 99.450 provides that appraisals be made by independent appraisers according to the permitted re-use values of the area. If the value for the new uses permitted by the plan is less than the cost of acquisition and preparation, there is a monetary loss to be borne by the community as a whole, a substantial portion of which would be defrayed by Federal funds. The community is not authorized to go beyond acquisition and 'preparation' of the land; it may not construct any new buildings for residential, industrial or commercial use contemplated by the development plan, KRS 99.360(2); but it may construct public buildings in the area.

The substance of the matter is...