Opinion ID: 2308226
Heading Depth: 1
Heading Rank: 5

Heading: The Conveyance to the PRA

Text: Tidewater also argues that the state breached the contract with it because the termination clause was effective only if the city properly exercised its right to purchase the property under § 37-7-3. It asserts that the city strayed beyond its statutory entitlement when it designated the PRA as its agent because the PRA had no authority to purchase the property. The Superior Court granted summary judgment in favor of the state, holding that § 37-7-3 did not prohibit the use of an agent on behalf of the city. On appeal, plaintiff argues that the city did not exercise its right in accordance with the statute because (1) the property was conveyed to the PRA and not the city; (2) the city did not have the power to designate an agent to exercise its prerogative under § 37-7-3; and (3) the PRA acted ultra vires in purchasing the property. [7] The narrow question before this Court is whether the purchase by the PRA was valid. In our opinion, the PRA did not comply with the procedures set forth in the Redevelopment Act of 1956, or the legislative purposes set forth therein. Because the PRA did not have the authority under § 45-32-5 to purchase this property, the conveyance of the property to it was a breach of Tidewater's purchase and sales agreement by the state. [8] In our opinion, because the state neither conveyed the Shipyard to the city nor to Tidewater within the time prescribed in the agreement, it breached its obligation to Tidewater. Therefore, we reverse the grant of summary judgment in favor of the state. The Redevelopment Act of 1956 outlines the powers and purposes of redevelopment agencies in Rhode Island. Section 45-32-5(a)(4) governs the powers of the redevelopment agencies to purchase property. It provides in pertinent part:  Within the redevelopment area or for purposes of redevelopment: to purchase, lease, obtain an option upon, acquire by gift, grant, bequest, devise, or otherwise, any real or personal property, or any estate or interest in it, together with any improvements on it; to acquire by the exercise of the power of eminent domain any real property or any estate or interest in it, although temporarily not required to achieve the purposes of chapters 31-33 of this title   . Section 45-32-5(a)(4) (emphases added). The defendants argue that the PRA has the power to purchase the property not only because the property falls within a redevelopment area, but also because it was purchased for purposes of redevelopment. General Laws 1956 § 45-31-8(15) defines redevelopment area to mean any area of a community which its legislative body finds is a blighted and substandard area whose redevelopment is necessary to effectuate the public purposes declared in this chapter. Furthermore, redevelopment has a statutory definition; it means the elimination and prevention of the spread of blighted and substandard areas. Section 45-31-8(14). Our holding in Capital Properties, Inc., 749 A.2d at 1087 is instructive. There, we considered the power of the PRA to condemn certain property under the Redevelopment Act. Id. at 1075. In that case, neither the Redevelopment Agency nor the City Council had made any findings of fact to support the conclusion that the parcel of land was blighted and substandard, or in danger of becoming such an area. Id. at 1087. For that reason, we reversed the lower court and entered judgment for the plaintiff because the evidence showed that the area was considered by the parties to be a very valuable location and the condemnation did not follow the purposes of the chapter or the process set forth in it. [9] Id. We are certainly cognizant that the issue before us concerns acquisition by purchase, and not acquisition by condemnation. But, we think that the vehicle of acquisition is less significant than the importance of the PRA following its prescribed statutory requirements and procedures before it exercises its broad powers, whether that is the power to condemn or purchase.