What happens when a developer needs additional land that it does not control to construct an access way in order to reach an arterial highway to make its planned shopping center a reality? The answer, obviously, is to buy an easement from the private property owner.
But what happens if the private property owner refuses to sell to the developer, or demands a price that is so unreasonable that it amounts to holding the project hostage? The answer to this common problem can be condemnation. The problem is that developers do not possess the power of eminent domain. Only the government can exercise that power and only if the purpose is for the public benefit.
This problem presented itself not long ago to the developer of Valley Gate, a mixed use, commercial development now under construction in Warrington Township. William Benner served as the developer’s land use attorney. Although the property planned for the project had frontage along a major arterial highway, municipal officials insisted that the project needed another access point to another public street. The problem was that separating the developer’s land from that street in question was a narrow strip of land owned by a private party who showed no interest in selling to a competitor.
William Benner succeeded in satisfying Township concerns that it did, indeed, possess the power to condemn a small strip of land even though superficially it appeared that the beneficiary of the condemnation was a private developer. Relying upon Appeal of Heim, and Appeal of Pine Township, that hold that a Township may exercise its eminent domain power to create a public road across privately-owned property even if a private entity – the developer – benefits as a result.
In the Hein Opinion, the developer agreed to bear all of the costs associated with the condemnation. The objecting landowner argued that the fact that the developer agreed to pay all of the costs associated with the condemnation proved that the taking was for the benefit of the developer and not the public at large, the Commonwealth Court disagreed finding that townships have the right to condemn private property for the public purpose of providing better traffic patterns even if a private party incidentally benefits as a result. In Appeal of Pine Township the facts showed that the Township condemned a small strip of land that allowed the developer to construct a public road to connect its strip mall to a public street. Following its holding in Heim, the Commonwealth Court re-affirmed the proposition that a condemnation does not lose its public character simply because there may be a feature of private gain. The Court reasoned that if the condemnation enhances the public good, it is immaterial that a private interest may also benefit as a result.
Recently, Judge Waite of the Court of Common Pleas of Bucks County, reached a similar result in a case that involved a condemnation of private property where the beneficiary of the taking was Parx Casino in Bensalem Township. In that case, Parx Casino agreed to underwrite the costs associated with the condemnation and the installation of the planned improvements. Finding that the public would benefit by the condemnation, Judge Waite dismissed the Preliminary Objections that had challenged the legality of the condemnation on the grounds that its purpose was to benefit a private landowner. See Appeal of Sagot, 88 Bucks County L.R. 105 (2014).
In these cases, the presiding court looked closely at the authorizing township resolution to determine if the primary purpose of the exercise of eminent domain power was primarily for the public or whether the primary purpose was for private gain. For the Valley Gate project, William Benner played a key role in assisting the township solicitor in drafting that resolution in such a way that it would withstand legal challenge.
For more information contact William E. Benner.