Posted by: Patricia Salkin | August 18, 2015

PA Appeals Court Holds Developer May Not Recover from City For Failure to Pave Road Finding no Taking

Parker Avenue, L.P. purchased and in the City of Philadelphia zoned for residential development for the purpose of building 48 single-family, semi-detached. A portion of the applicable street was legally-open and sat upon City owned land. The City had already improved the legally-open portion of the street, but the portion that ran through the subject property had not been legally opened and was an unimproved trail. Parker Avenue sought the approval of two separate ordinances to permit the paving the City-owned street and to create a cul-de-sac which were met with community opposition. In May 2013 Parker Avenue filed a petition arguing that since it had been deprived of the Property’s beneficial use and enjoyment, it suffered a de facto condemnation of the entire Property, and sought appointment of a Board of Viewers to determine its just compensation and special damages. The trial court granted Parker Avenue’s Petition. The City appealed.

On appeal the Court reversed. hree issues were before the Court: (1) whether the trial court erred in holding that City Council’s inherently discretionary inaction in not enacting legislation gave rise to a de facto taking; (2) whether the trial court erred in finding Parker Avenue was substantially deprived of the beneficial use and enjoyment of its property; and (3) whether the trial court erred in finding a de facto taking occurred two weeks after the proposed legislation was introduced by a City Council member.

The Court agreed with the City that no duty exists to compel City Council to enact legislation, an inherently discretionary function that requires weighing competing interests of multiple stakeholders and the best interests of Philadelphia at-large, City Council’s inaction cannot support a de facto taking claim. The Court noted that to
prove a de facto taking, the property owner must establish exceptional circumstances that substantially deprived him of the beneficial use and enjoyment of his property. The Court also noted that Parker Avenue purchased the Property knowing it was landlocked for the purposes of such development, as no paved, legally-open, Philadelphia Zoning Code-compliant street provided access for such a use. In addition, he project sponsors met with local residents to discuss its residential subdivision development proposal more than six months before purchasing the Property, and was on notice at that time that the community was opposed to the proposed development. Ridge Park (and its predecessor organization) had for decades opposed development. Further, the Court noted that the risk that the Property may not be subject to development was reflected in the Property’s net purchase price of $150,000.00 for 7.62 acres, on which Parker Avenue intended to construct 48 single-family homes. When compared with the market value of the sliver of Parker Avenue’s lot with street access, which Parker Avenue sold in May 2006 for $350,000.00 (for two-thirds of an acre) for the construction of five single-family homes, it was clear that Parker Avenue’s net purchase price fully incorporated the risk that the 7.62 acres would never be developed. Thus, nothing was “taken” from Parker Avenue that it had or legitimately expected to get.

Next, the City argued that there was no evidence to support the conclusion that a residential subdivision was the Property’s highest and best use. The Court concluded that although Parker Avenue paid $500,000.00 for the entire 8.3 acres, it received $350,000.00 for the .68 acres it sold in 2006. Thus, comparatively, $150,000.00 for 7.62 acres was not “substantial.” Parker Avenue was aware that this was a risky venture given the necessary approvals needed and the community resistance. Moreover, even if the ordinances had passed, Parker Avenue still needed the Board of Surveyors’ endorsement which required a publicly-advertised hearing at which public testimony was taken, and the Planning Commission’s final plat approval. Given, the community’s resistance, the Board of Surveyors’ endorsement was speculative. As a result, “Parker Avenue had not met its burden of proof showing that the alleged detriment, underlying the claim of de facto taking, was the direct and necessary consequence of the City’s failure to pass a routine paving ordinance.”

Parker Ave., L.P. v City of Philadelphia, 2015 WL 4597601(Pa Commw Ct 7/30/2015)

The opinion can be accessed at: http://www.pacourts.us/assets/opinions/Commonwealth/out/1162CD14_7-30-15.pdf?cb=1


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