Wilmington Parking Authority v. Ranken

• Decision Date: 03 June 1954
• Citation: 105 A.2d 614,34 Del.Ch. 439
• Parties: WILMINGTON PARKING AUTHORITY v. RANKEN.
• Court: Supreme Court of Delaware

Page 614

105 A.2d 614

34 Del.Ch. 439

WILMINGTON PARKING AUTHORITY v. RANKEN.

Supreme Court of Delaware.

June 3, 1954.

Clair J. Killoran, of Killoran & Van Brunt, Wilmington, for plaintiff.

John J. Morris, Jr., and Henry van der Goes, of Morris, James, Hitchens & Williams, Wilmington, for defendant.

SOUTHERLAND, C. J., and WOLCOTT and TUNNELL, JJ., sitting.

SOUTHERLAND, Chief Justice.

The Wilmington Parking Authority, the plaintiff, seeks in the court below a declaratory judgment against the defendant, a taxpayer of the City of Wilmington. The issues raised concern the constitutionality of the Parking Authority Act of 1951, as amended, and the legality of the acts of the Authority taken under it.

The facts are undisputed, and are set forth in the pleadings, which form part of the certification. Upon these facts six questions of law have been framed and certified to us for answer.

The general legal and factual background of the case is as follows:

By the provisions of 22 Del.C. Ch. 5 any incorporated city or town is authorized to create, by appropriate action, a Parking Authority. Such an Authority is a public body corporate, and is declared to be an agency of the State, not of the municipality. It is charged with the duty of conducting research in the matter of off-street parking facilities, and is empowered to plan, construct and maintain such facilities, and to acquire land for the purpose by purchase or eminent domain. To finance the project the Authority is authorized to issue revenue bonds, payable in not exceeding forty years, and to pledge the revenues of the Authority for their payment. It is forbidden to pledge the public credit, but any municipality establishing an Authority may appropriate to the Authority such sum as may be necessary to acquire the land upon which the parking facility is to be erected. All property of an Authority is exempted from taxation.

Any Parking Authority is also expressly empowered to lease portions of any of its garage buildings or structures for commercial use if such leasing is found to be necessary and feasible for the financing and operation of such facilities.

Ample incidental powers in aid of the main purposes of the Authority are also conferred.

The plaintiff Authority (hereinafter called 'the Authority') has been created by the City of Wilmington. It has determined that its first project should be the establishment of a downtown parking facility in the heart of the central district of the City of Wilmington. It has acquired the greater part of a tract of land having a frontage of about 178 feet on Ninth Street between Shipley and Orange Streets and a depth of about 350 feet extending southerly toward Eighth Street. The tract consists of four parcels. The Authority has bought the principal parcel for the sum of $1,585,730. This purchase was partly financed by 'advances' from the City of Wilmington of $934,000. It has also acquired one other parcel in the tract and is negotiating for the purchase of the other two. It appears probable that as to one of these it must have recourse to the exercise of the power of eminent domain.

The Authority has employed expert professional assistance in order to determine the size and kind of parking facility to be erected. It has been advised that the capacity of the facility cannot exceed 800 cars without affecting the free flow of traffic in the nearby streets. It has further been advised that the average annual net income from such parking alone would be about $150,000. It has also been advised that the cost of such a facility, devoted to parking only, would be from $3,600,000 to $3,800,000; that the indicated return from such a facility would approximate only 4.15% upon the lower figure; and that a return of 8.5% upon the investment is required to market its revenue bonds. The Authority has accordingly determined that such a facility, i. e., one devoted to parking alone, could not be financed by the sale of revenue bonds.

Having made this determination, the Authority proceeded to consider the feasibility of leasing areas of the proposed facility for commercial purposes. It accordingly advertised for 'inquiries from responsible business concerns relative to long-term leases for commercial space' in the proposed structure. It received only one response from a prospective tenant requiring space in excess of 25,000 square feet and ready to pay an annual rental in excess of $50,000. The Authority decided that it should first attempt to negotiate a lease with 'a major tenant' willing to lease an area with a rental contributing very substantially to the net income of the facility. Thereupon negotiations were opened with the Kennard-Pyle Company, which operates a large department store on Market Street in the City of Wilmington. An agreement was thereafter reached. It is embodied in a lease between the Authority and Kennard-Pyle Company dated January 7, 1954. The lease provides, inter alia, that the Authority shall erect a building for public parking containing space for retail stores and commercial uses, certain portions of which are to be leased to Kennard-Pyle at a rental fixed at a percent age of the construction cost. Other provisions of the lease will be considered hereafter.

Additional space is to be leased for offices and commercial uses.

As between public parking and commercial use of the proposed structure, the Authority's determination of the relative proportions in respect of space, revenue from rental, and total cost of the project, may be summarized as follows:

Parking space,--61%; leased space, 39%.

Parking revenue, 30.5%; lease revenue, 69.5%.

Cost, parking area, 38.4%; leased area, 61.6%. ¹

Information respecting the foregoing matters having become public, the defendant taxpayer challenged the validity of the project on numerous grounds, and informed the Authority that if necessary he would take action to resolve the legal questions involved. The suit in Chancery was then instituted.

We turn to the consideration of the certified questions. The first is as follows:

1. 'Is Chapter 5 of Title 22 of the Delaware Code of 1953, as amended, in all respects a constitutional exercise and grant of power by the General Assembly of the State of Delaware?'

Although the question as drawn appears to call for an examination of all the provisions of the chapter, counsel have in fact limited the issues under this heading to three questions of law. These we now consider.

(a). 'Is Chapter 5, Title 22, Delaware Code, unconstitutional in that it authorizes the expenditure of funds for off-street parking facilities?'

Defendant invokes the well-settled principle, not here questioned, that public funds may not constitutionally be appropriated for private purposes. 2 Cooley, Constitutional Limitations (8th Ed.) p. 1033ff; Gray, Limitations of Taxing Power, pp. 123-127; Loan Association v. City of Topeka, 20 Wall. 655, 22 L.Ed. 455; State v. Mayor and Council of Wilmington, 33 Del. 238, 134 A. 694. An off-street parking garage, says defendant, does not serve a public purpose; such an activity is traditionally one committed to private enterprise, in which the State, under the rule above stated, is forbidden to engage; and it no more serves a public purpose than many other private business that cater to the convenience and comfort of the public.

The phrase 'public purpose' is not susceptible of precise definition, and it is not possible to adopt any rigid rule by which to determine whether a purpose or use is to be held public or private. Gray, op. cit., p. 127. But it is clear that as public needs vary with the times and with changed conditions, so an activity once thought to be strictly private may become a proper subject for public action or control. Sixty years ago no one would have suggested that a state-operated livery stable served a public purpose. At the present day, who can doubt that the grave problems created by the automobile, including parking, are a fit subject of public concern?

As a predicate for the Parking Authority Act, the General Assembly has specifically found certain facts. These include findings of the increased use of private automobiles in the business sections of cities; the necessity for the free circulation of traffic in the city streets; the serious traffic congestion in the streets, to which parking of motor vehicles upon the streets contributes; and the consequent interference with effective movement of fire-fighting equipment and the disposition of police forces in the congested district. Upon these findings the General Assembly has based the following conclusion:

'* * * therefore it is declared to be the policy of this State to promote the safety and welfare of the inhabitants thereof by the creation in incorporated cities of bodies corporate and politic to be known as 'Parking Authorities' which shall exist and operate for the purposes contained in this chapter. Such purposes are declared to be public uses for which public money may be spent and private property may be acquired by the exercise of the power of eminent domain.' 22 Del.C. § 501.

This legislative finding of public purpose is entitled to great weight. True, it is not conclusive, since the determination of what is a public purpose is ultimately a judicial question. City of Cincinnati v. Vester, 281 U.S. 439, 50 S.Ct. 360, 74 L.Ed. 950; Gray, op. cit., pp. 125-126. But these findings are so manifestly reasonable and justified that we do not think of questioning them. Indeed, they but spell out in logical development facts that are largely common knowledge. Off-street parking is directly related to traffic control, a subject admittedly one of public concern. When the legislature, in the exercise of the police power, seeks to remedy an admitted evil, the test of constitutionality is whether the method adopted bears a reasonable relation to the public health, safety, morals or general welfare. And in determining this...