IN THE COMMONWEALTH COURT OF PENNSYLVANIA

In the Matter of Proceedings by the : Redevelopment Authority of the City : of Erie for the Condemnation of : Property Commonly Known As: 2708 : Downing Avenue, Erie, : Pennsylvania :

: Zac Associates, Owner(s) or : Reputed Owner(s) :

: No. 1453 C.D. 2021 Appeal of: Zac Associates, LLC : Submitt ed: October 11, 2022

BEFORE: HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE STACY WALLACE , Judge HONORABLE MARY HANNAH LEAVITT, Seni or Judge

OPINION
BY SENIOR JUDGE LEAVITT FILED: November 22, 2022

Z ac Associates, LLC (Landowner) appeals an order of the Court of

Common Pleas of Erie County (trial court) that overruled Landowner ’s preliminary

objections to the declaration of tak ing filed by the Redevelopment Authority of the

City of Erie ( Redevelopment Authority). The Redevelopment Authority seeks to

condemn Landowner’s real property as blighted

. Landowner asserts that the

Redevelopment Authority did not serve the Notice of Bli ght upon Landowner and,

further, acted in bad faith by pursuing a condemnation before it had formulated a

plan for the property subject to the condemnation . For the reasons to follow, we

affirm.2 Background

On March 20, 2017, the City of Erie’s Blighted Property Review

Committee issued a Notice of Blight for Landowner’s property at 2708 Downing

Avenue (Property), which identified the items that led to the determination of blight:

1. Violation Notice sent 11/28/07 & 7/13/16[;] 2. Premises

remain v acant with repairs needed from fire in 2013[;] 3. Doors must be repaired or replaced[;] 4. Windows must be repaired or replaced[;] 5. Soffit & Fascia must be repaired[;] 6. Gutters & downspouts must be repaired or replaced[;] 7. Roof must be repaired[;] 8. Rear ramp must be repaired[;] 9. Garage must be demolished or repaired[;] 10. Junk & debris must be removed & property maintained[;] 11. Weeds must be cut & property maintained[;] 12. Taxes must be made current[;] 13. All utilities must be restored[; and] 14. MUST PASS PROPERTY
MAINTENANCE INSPECTION

.

Reproduced Record at 56a (R.R. __) (emphasis in original). T hat same day, t he

Notice of Blight was posted on the Property.

On June 14, 2021, the Redevelopment Authority approved a resolution

to secure th e Property through eminent domain and authorized its counsel to initiate

eminent domain proceedings. See Declaration of Taking, Exhibit A; R.R. 10a

- 11a.

Thereafter, on June 30, 2021, the Redevelopment Authority filed a Notice of

Condemnation under Sectio n 305 of the Eminent Domain Code, 26 Pa. C.S. §305,

and a Declaration of Taking under the Urban Redevelopment Law. 1

In response, Landowner filed preliminary objections to the Declaration

of Taking, asserting that the Property was not blighted. Landowner challenged the

Redevelopment Authority’s power to condemn and the procedures it followed in its

condemnation of the P roperty.

1 Act of May 24, 1945, P.L. 991, as amended , 35 P.S. §§1701

- 1719. 2

.3 On October 4, 2021, the trial court held an evidentiary hearing on

Landowner’s preliminary objections . At the hearing, Landowner , an LLC, presented

documentary evidence and the testimony of its managing member, Donald

Crenshaw. Crenshaw testi fied

, inter alia , that there is an outstanding mortgage on

the P roperty of $40,000. On April 13, 2016, Landowner received a letter from the

Redevelopment Authority that it could be eligible to participate in the “Home

Program,” which provides “home owners hip, rehabilitation, and [] training

program[s] for [] minority youth in [the] community.” Notes of Testimony,

10/4/2021, at 15

- 16, 19 (N.T. __); R.R. 77a

- 78a, 81a. After working “for about six

years” to receive Home Program funds, Landowner learned on A ugust 1, 2020, that

funds from the program wer e available. N.T. 16; R.R. 78a. Home Program funds

provide “a reimbursement or really a down payment assistance, that goes to the

homebuyer so that the homebuyer can acquire the home [

. ] ” N.T. 24

- 25; R.R. 86a

87a. However, Landowner still had to “ borrow the money, or somehow get the

money to fix up” the Property before its sale. N.T. 24; R.R. 86a. Crenshaw testified

that Landowner was able to secure a line of credit from Erie Bank to make the repairs

to the Property one week before the hearing and would be signing the documents on

October 6, 2021. Crenshaw did not present any documents about this line of credit.

Regarding the Notice of Blight, Crenshaw testified that he did not see

its posting on the Prope rty in March of 2017 and did not recall receiving the Notice

of Blight in the mail. Crenshaw stated that Landowner did not receive the Notice

but confirmed that Landowner’s business address is 1854 East 26 th Street, Erie.

Crenshaw testified that only in a meeting with Aaron Snippert, Executive Director

of the Redevelopment Authority, did he learn that the Property had been declared

“blighted.” N.T. 18

- 19; R.R. 80a

- 81a.4 Crenshaw testified that since 2017, Landowner has addressed some of

the issues i dentified in the Notice of Blight, such as cleaning up garbage, replacing

boards kicked down by kids, and paying the real estate taxes. Landowner has not

done more repairs at the Property because the contract for the Home Program funds

was not signed with the City of Erie until August of 2020 and with COVID

- 19

, “there [was not] a whole lot happening.” N.T. 23; R.R. 85a. On cross

- examination,

Crenshaw acknowledged that the Property was still vacant, the windows boarded,

the soffits and fascia not repaired

, and the gutters and downspouts not fixed, and

there were no utility services to the Property.

On behalf of the Redevelopment Authority, its Executive Director,

Aaron Snippert, testified. He stated that on March 20, 2017, the Notice of Blight

was posted to the Property, and a copy was mailed to Landowner’s address of record:

1854 East 26 th Street

, Erie. The Notice was not returned as undeliverable.

Snippert testified that in July of 2021, he spoke with Crenshaw about

the condemnation. Snippert expla ined t o Crenshaw that Landowner had to guarantee

that the items identified in the Notice of Blight would be rectified in order to have

the condemnation withdrawn. In his visit to the Property on July 6, 2021, Snippert

found the windows and doors boarded u p, siding missing, open windows and trash

in the driveway. Also during the meeting with Crenshaw, Snippert informed

Crenshaw that the P roperty had been certified in March of 2017 as blighted , and “the

Redevelopment Authority had drafted a resolution in Au gust of 2017 to follow

through with eminent domain on the [P] roperty, but [he] had no documentation as

to why that process stopped back in 2017, and that all [he] could assume

. . . is that

there was a conversation had with the [then

- ]Executive Director[,] ” to which he was

not privy. N.T. 33

- 34; R.R. 95a

- 96a.5 On cross

- examination, Snippert testified that he started working at the

Redevelopment Authority in May of 2011 but had not been involved in issuing blight

notices until December 1, 2020, when he beca me Executive Director. He testified

that the Redevelopment Authority was aware of the mortgage on the Property.

Snippert stated that although Crenshaw is a contractor, Crenshaw could not

guarantee that Landowner will “do whatever needed to repair the [P] roperty.” N.T.

39; R.R. 101a. Snippert told Crenshaw that the blight notice was issued in 2017 but

“nothing has been done with the [P] roperty since.” N.T. 39; R.R. 101a. Snippert

testified that at their meeting in July of 2021, Crenshaw did not deny know ing that

the Property had been declared blighted in 2017.

On November 23, 2021, the trial court overruled Landowner’s

preliminary objections. The trial court found that the determination of blight was

made by the City’s Blighted Property Revi ew Committee on March 8, 2017.

Crenshaw, on behalf of Landowner, testified that he never saw the Notice of Blight

posted on the Property and that Landowner did not receive the notice in the mail.

However, Snippert testified that the mailed notice was nev er returned, and the

Redevelopment Authority presented photographs of the posting of the notice on the

Property. Further, t he Redevelopment Authority ’s records indicate d that

condemnation proceedings had been authorized but then stalled in the summer of

2 017, which suggested that a conversation between the Redevelopment Authority

and Landowner had taken place, which caused the condemnation to be arrested . The

trial court found, based upon circumstantial evidence, that such a conversation did

take place, w hich refuted Landowner’s claim that it did not know about the Notice

of Blight. The trial court found that Landowner had known for three years of the

need to remediate the Property.6 As to the blighted nature of the Property, Crenshaw admitted that it was

vacant and garbage is often strewn on the premises, although he monitors the

P roperty and removes any garbage as necessary. The trial court found that the

Blight ed Property Review Committee had a reasonable basis to make its

determination of blight.

T he trial court rejected Landowner’s claim that the Redevelopment

Authority had acted in bad faith by allowing Crenshaw to believe he could repair the

Property and avoid condemnation. T he trial court found these last

- minute attempts

were too little and too late . Landowner had over t hree years to correct the problems

set forth in the Notice of Blight and did not do so

. Appeal

On appeal, 2 Landowner raises two arguments. First, Landowner argues

that the Redevelopment Authority did not have the power to condemn the Property

because it did not properly serve the Notice of Blight upon Landowner. Second,

Landowner argues that the Redevelopmen t Authority acted in bad faith by not doing

a suitable investigation and not giving Landowner additional time to remediate the

2 This Court’s s tandard of review of a decision to condemn property and of the extent of the taking

is to determin e whether the trial court’s decision evidences an abuse of discretion or an error of

law. Redevelopment Authority of City of York v. Bratic , 45 A.3d 1168, 1173 (Pa. Cmwlth. 2012). The exercise of discretion over a determination that a property is blighted is solely within the power of the r edevelopment a uthority, and this Court has explained:

The only function of the courts in this matter is to see that the Authorit y has not acted in bad faith; to see that the Authority has not acted arbitrarily; to see that the Authority has followed the statutory procedures in making its determination; and finally, to see that the actions of the Authority do not violate any of our constitutional safeguards . . . . An authority’s exercise of its discretion should not

be disturbed “ in the absence of fraud or palpable bad faith. ”

Id . (quoting In re Condemnation of Urban Redevelopment Authority of Pittsburgh , 822 A.2d 135, 138 (Pa. Cmwlth. 2003)) (internal citations omitted).7

Property upon learning that Landowner had secured the financing needed to make

the necessary repairs.

I. Redevelopment Procedure s for Blight

Section 12.1 of the Urban Redevelopment Law, 3 35 P.S. §1712.1,

governs the condemnation of individually blighted properties, regardless of their

location. I ndividual property c ondemnations must follow certain procedures, which

include: a review by a blighted property review committee; the committee’ s

certification to the planning commission that the property is blighted; service of a

notice of blight determination upon the property owner; notice to the property owner

of the opportunity to correct the conditions; and notice that failure to correct the

blight conditions may subject the property to condemnation. Acquisition and

disposition of an individual blighted property does not require the approval of a

re development area plan or redevelopment proposal

. 35 P.S. §1712.1(f)

. 4 Rather,

at least 30 days prior to acquisition of an individually blighted property

,

the Redevelopment Authority shall transmit identification of the property to the planning commission of the municipality and shall request a recommendation as to the appropriate reuse of the property. The Redevelopment Authority shall not acquire the property where the planning commission certifies that disposition for residential or related use would not be in accord with the comprehensive plan of the municipality.

Id . In this matter, Landow ner’s Property was 1 of 18 individual properties declared

blighted , which the Redevelopment Authority sought to acquire by eminent domain.

3 A dded by the Act of June 23, 1978, P.L. 556.

4 It states, in pertinent part: “ Acquisition and disposition of blighted property under this section shall not require preparation, adoption or approval of a redevelopment area plan or redevelopment proposal as set forth in section 10[.] ” 35 P.S. §1712.1(f).8 Landowner argues that the Redevelopment Authority did not aver in

either the Declaration of Taking or Notice of Condemnation that Landowner had

been served with “notice of the determination that the property is blighted, together

with an appropriate order to eliminate the conditions causing the blight and

notification that failure to do so may render the property su bject to condemnation

under this act,” as required by Section 12.1(e)(2) of the Urban Redevelopment Law,

35 P.S. §1712.1(e)(2). Further, Landowner contends it was not served with the

N otice of Blight.

We begin with service. Section 12.1(e) (2) of the Urban Redevelopment

Law states as follows :

No property shall be certified to the Redevelopment Authority unless the owner of the property or an agent designated by him for receipt of service of notices within the municipality has been

served with notice of the determination that the property is blighted, together with an appropriate order to eliminate the conditions causing the blight and notification that failure to do so may render the property subject to condemnation under this act.

The notice shall be served upon the owner or his agent in accord with the provisions of a local ordinance pertaining to service of notice of determination of a public nuisance

. The owner or his agent shall have the right of appeal from the determination in the

same manner as an appeal from the determination of public

nuisance.

35 P.S. §1712. 1 (e)(2) (emphasis added). Here, neither party identified a local

ordinance pertaining to service of a notice of determination of a public nuisance.

However, the Notice of Blight referred to the need to pass a City

maintenance inspection , and a property’s violation of the City’s Property

Maintenance Code can cause that property to be declared a public nuisance. Se e9

City of Erie v. Stelmack , 780 A.2d 824 (Pa. Cmwlth. 2001). 5 That ordinance requires

structures and vacant land to “ be maintained in a clean, safe, secure and sanitary

condition as provided herein so as not to cause a blighting problem or adversely

affect the public health or safety.” P ROPERTY M AINTENANCE C ODE OF THE C ITY OF

E RIE ( Property Maintenance Code ) , §301.3 (20 15) (emphasis in original). 6 The

Property Maintenance Code also sets for th the method for service of a notice of

violation . It states:

Such notice shall be deemed to be properly served if a copy

thereof is:

1. Delivered personally;

2. Sent by certified or first

- class mail addressed to the

last known address ; or 3. If the notice is returned showing that the letter was not delivered, a copy thereof shall be posted in a conspicuous place in or about the structure affected by such notice.

P ROPERTY M AINTENANCE C ODE , §107.3 (emphasis added).

Here, the Redevelopment Authority presented testimonial and

documentary evidence to show that the Notice of Blight, with the list of items to be

remediated, was posted on the Property on March 20, 2017. A photo of the Notice

5 In that case, a four

- unit residential building beca me vacant and utility service to the property

end ed in 1996. In 1996, the city notified the landowner about needed window repairs and cutting

of weeds. Thereafter , the city posted a repair or demolish order on the property, specifying

numerous violations o f the city’s Property Maintenance Code and giving the landowner 30 days to make repairs. T he city posted an order to demolish and remove a public nuisance. The trial court held a public nuisance hearing, at which the city’s code enforcement officer testi fied about the numerous violations of the Property Maintenance Code. The trial court declared the building a public nuisance and ordered the city to demolish it

, and this Court affirmed. City of Erie , 780

A.2d at 826, 828

.

6 T he City of Erie has adopted the 2015 International Property Maintenance Code. https://cityof.erie.pa.us/government/departments/code

- enforcement/ (last visited November 22

, 2022).10

of Blight posted on the Proper ty was entered into evidence. Snippert testified that

the Notice of Blight was sent by first

- class mail to Landowner’s business address,

1854 East 26 th Street in Erie, and not returned as undeliverable. Th is mailing to

Landowner’s business address compor ts with the service requirements of Section

107.3 of the Property Maintenance Code.

There was also evidence that Landowner knew of the Notice of Blight.

Records of the Redevelopment Authority indicated that condemnation proceedings

were stalled in the su mmer of 2017, and Snippert testified that this pause in the

condemnation process suggested that the Redevelopment Authority had conferred

with Crenshaw about the Property’s blight. Additionally, Snippert testified that in

their July 2021 meeting Crenshaw did not state that he had not received the Notice

of Blight in 2017.

Further, on August 24, 2018, the Redevelopment Authority provided

Landowner actual notice 7 of the blight with a letter that notified Landowner of the

possibility of condemnation because of the Property’s blight

. Any omission in 2017

was remedied by the Redevelopment Authority ’s 2018 letter

. At the hearing,

Crenshaw testified, “What I recall, that I actually received, was that it was part of

blight and that they were looking to take the property as a blighted piece of

property.” N.T. 18

- 19; R.R. 80a

- 81a. The trial court found that Crenshaw’s

testimony was consistent with the contents of the A ugust 2018 letter to Landowner.

Trial Court P A

. R.A.P. 1925(a) Op. at 4

- 5.

7 “[A]ctual notice is such notice as is positively prove d to have been given to a party directly and personally, or such as he is presumed to have received personally because the evidence within his knowledge was sufficient to put him upon inquiry.” In re Consolidated Reports and Return by Tax Claims Bureau of Northumberland County of P roperties , 132 A.3d 637, 647 (Pa. Cmwlth.
2016).11 Finally, contrary to Landowner’s argument, there is no requirement

under the Eminent Domain Code or the Urban Redevelopment Law that the

Redevelopment Authority must aver in the Declaration of Taking that the owner of

the condemned property had been served with a n otice of b light. In s um , the

evidence supports the trial court’s finding that Landowner was served with the

Notice of Blight issued in 2017 and had actual notice by at least 2018 . Trial Court

P A

. R.A.P. 1925(a) Op. at 4.

II. Bad Faith Condemnation

Landowner argues that the Redevelopment Authority did not make an

intelligent and informed judgment on the condemnation of the Property because it

had no plans for the P roperty after its condemnation

. Further

, the Redevelopment

Authority did not know that the Property was encumbered by a mortgage with

Northwest Bank. For th ese reason s
, Landowner argues that the Redevelopment

Authority acted in bad faith.

The Redevelopment Authority responds that it was aware of the

mortgage and notified the lienholder of the condemnation action. In any case, a lien

against the Property relates to damages, but that is a separate part of the

condemnation proceeding

.

When the certification of blight is challenged by preliminary

objections , the burden of proving bad faith is on the landowner; it is a heavy one

. Redevelopment Authority of City of Scranton v. Kameroski

, 616 A.2d 1102

, 1105

( Pa. Cmwlth. 1992)

. T he redevelopment authority is presumed to have acted in good

faith in making such a determination. Simco Stores v. Redevelopment Authority of

City of Philadelphia

, 317 A.2d 610

, 613 ( Pa. 1974)

. “Bad faith must be described

by clear averments of fact in the pleadings and proved by clear, precise and12

indubitable evidence. ” In re Condemnation by Redevelopment Authority of City of

Lancaster of Real Estate in City of Lancaster

, 682 A.2d 1369

, 1372 (Pa. Cmwlth.

1996)

. Bad faith is not shown by bald assertions. Id

.

Landowner asserted that the Redevelopment Authority “failed to do a

suitable investigation leading to an intelligent, informed judgment by the

[Redevelopment Authority].” Preliminary Objecti ons at 3, ¶12; R.R. 33a.

Specifically, Landowner alleged that the Redevelopment Authority had not

“formulated definitive plans [on] use to be made of the Property; no specifications

have yet been formulated; no estimate of construction/repair is yet avail able; no final

development, architectural, or engineering plan has been completed; and no other

relevant due diligence measures have been completed.” Id

.

The trial court explained, in a detailed and thorough opinion, that

Landowner did not overcome the presumption that the Redevelopment Authority

acted in good faith. The Urban Redevelopment Law authorizes a redevelopment

authority to condemn properties within a redevelopment area 8 or to condemn

individual properties as blighted in accordance with Section 12.1

. The Property was

8 Section 9 (i) of the Urban Redevelopment Law conveys the power of eminent domain to condemn property within a redevelopment area , and it states, in pertinent part:

An Authority shall constitute a public body, corporate and politic, exercising public powers of the Commonwealth as an agency thereof, which powers shall include all powers necessary or appropriate to carry out and effectuate the purposes and provisions of th is act, including the following powers in addition to those herein otherwise granted:

* * * *

(i) To acquire by eminent domain any real property, including improvements and fixtures for the public purposes set forth in this act, in

the manner hereinafter provided, except real property located outside a redevelopment area [.]

35 P.S. §1709(i).13

not part of a redevelopment area; rather, it was designated as blighted pursuant to

Section 12.1 of the Urban Redevelopment Law. Under Section 12.1(f), the

Redevelopment Authority was not requir ed to prepare a redevelopment proposal. 35

P.S. §1712.1(f). 9 See also In re Condemnation by Redevelopment Authority of

Lawrence County , 962 A.2d 1257, 1262 (Pa. Cmwlth. 2008) (“Acquisition of

blighted property under Section 12.1 does not require the ado ption of a

redevelopment plan as set forth in Section 10 [of the Urban Redevelopment Law, 35

P.S. §1710 ]

. ”). In short , the Redevelopment Authority did not need to provide a site

plan, estimates to prepare the area for redevelopment, or a redevelopment contract

with a redeveloper, as Landowner argued. B ald assertions of bad faith do not suffice

. Redevelopment Authority of City of Lancaster

, 682 A.2d at 1372.

As to the Redevelopment Authority’s so

- called ignorance of the

mortgage on the Property, the trial court accepted Snippert ’s testimony that the

Redevelopment Authority not only knew of the mortgage , but also notified the

lender of the condemnation action. T h e certificate of service attached to the Notice

of Condemnation shows service on Northwest Bank

.

Landowner is incorrect that a Declaration of Taking must be filed

within one year of the issuance of the Notice of the Blight. T he Eminent Domain

Code stat es:

(e) Filing.

-- The condemnor shall file within one year of the

action authorizing the declaration of taking a declaration of taking covering all properties included in the authorization not otherwise acquired by the condemnor within this time.

26 Pa. C.S. §302(e). Here, the Redevelopment Authority approved the initiation of

eminent domain proceedings against the Property on June 14, 2021, and it filed the

9 See supra at 7 , n ote 4.14

Declaration of Taking on June 30, 2021. Thus, the Declaration of Taking was filed

less than a y ear from the action authorizing the declaration.

Finally, the Redevelopment Authority was under no obligation to

abandon its condemnation action or to “provide owners of blighted properties an

opportunity to remediate.” Redevelopment Authority of City of York

, 45 A.3d at

1174. Landowner had more than three years to make the necessary repairs to the

Property, but Landowner did not eliminate the conditions causing the blight

determination

. T he Redevelopment Authority did not abuse its discretion or act in

bad faith by not allowing Landowner more time to correct the problems at the

Property that triggered the Notice of Blight.

Conclusion

For the foregoing reasons, we conclude that the evidence supports the

trial court’s finding that Landowner was served with the Notice of Blight

. Further,

Landowner did not establish that the Redevelopment Authority acted in bad faith.

Accordingly, the trial court’s order overruling Landowner’s preliminary objections

is affirmed

.

____________________________ ________________ MARY HANNAH LEAVITT, President Judge EmeritaIN THE COMMONWEALTH COURT OF PENNSYLVANIA

In the Matter of Proceedings by the : Redevelopment Authority of the City : of Erie for the Condemnation of : Property Commonly Known As: 2708 : Downing Avenue, Erie, : Pennsylvania :

: Zac Associates, Owner(s) or : Reputed Owner(s) :

: Appeal of: Zac Associates, LLC : No. 1453 C.D. 2021

ORDER

AND NOW this 22 nd day of November

, 2022, the order of the Court of

Common Pleas of Erie County

, dated November 23, 2021, is AFFIRMED

.

____________________________________________ MARY HANNAH LEAVITT, President Judge Emerita