Court Opinion

ID: 9845328
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:19:05.657447+00
Date Added: 2024-06-11T09:16:01.277534
License: Public Domain

Higgins, J.,
concurring in result:
The foundation in redevelopment is a valid plan for the project. Requirements for such a plan are set out in G.S. 160-463. Among other things, the Act provides: “(c) A commission shall not acquire real property for a development project unless the governing body of the community has approved the redevelopment plan as hereinafter prescribed.”
“(d) The redevelopment commissioners’ redevelopment plan shall include, without being limited to, the following: ... (6) a statement of proposed changes in street layouts or street levels, (7) a statement of the estimated cost and method of financing of acquisition of the redevelopment area and of all other costs necessary to prepare the area for redevelopment.”
They are discussed in Redevelopment Commission v. Hagins, 258 N.C. 220, 128 S.E. 2d 391, and Redevelopment Commission v. Bank, 252 N.C. 595, 114 S.E. 2d 688.
*325Redevelopment, slum clearance, urban renewal, are public purposes but they are not necessary public purposes. For that reason the municipality may not spend tax money and may not go in debt to finance the plan unless authorized by vote. Article VII, Section 6, North Carolina Constitution. The Redevelopment Commission filed its plan, which the City approved. The City must, according to the plan, bear one-third the cost oí the project. The planners estimate this cost to be approximately twelve million dollars. We may assume they were not in anywise inclined to overestimate the cost. When the value of the property is fixed by agreement, or, in the absence of such agreement, by a condemnation proceeding, the estimate will probably be a fraction of the actual cost. This likelihood should be taken into account in passing on the provisions for financing the project. Just compensation must be paid whatever the final cost may be.
It appears obvious that the public expenditures for improvements already made before the plan was prepared and approved cannot be considered as a part of the financial arrangement for carrying out the plan. Does the plan disclose an arrangement to finance the City’s one-third of the cost involved in the project?
The authorities assume the expenditure of public funds for off-street parking facilities is a necessary public expense. It is doubtful if there is authority for the expenditure even as a public purpose, and no authority for assuming that it is a necessary public purpose. See Britt v. Wilmington, 236 N.C. 446, 73 S.E. 2d 289.
The City of High Point and the Redevelopment Commission filed a joint answer in which they set up the method by which they propose to finance the project. The City proposes to pay its part of the cost in the following manner:
“(a) The City of High Point will receive credit for the sum of $80,537.00 spent by the City of High Point during the two-year period next preceding approval of the redevelopment plan by the United States of America, said expenditures having been for improvements to streets, traffic controls, water, sewer and electric distribution facilities benefiting the project area.
“(b) The City of High Point will also receive credit for the sum of $261,423.00 spent by Guilford County during the two-year period next preceding approval of the redevelopment plan by the United States of America, said expenditure having been for school construction benefiting the project area.
“(c) The City of High Point will receive credit for the sum of $475,750.00 for new school construction benefiting the project area *326which Guilford County plans to carry out within the period ending December 31, 1967.
“(d) A credit of $730,485.00 will be received by the City of High Point for off-street parking facilities to be provided and financed by revenue bonds issued by the City of High Point, said bonds to be repaid solely from revenues received from said off-street parking facilities, so that said bonds will not create a debt, pledge of faith or loan of credit on the part of the City of High Point or the Redevelopment Commission of High Point within the meaning of Article VII, Section 7, of the North Carolina Constitution.
“(e) The City of High Point will receive credit in the sum of $27,526.00 for donation of various parcels of land now owned by the City of High Point to the Redevelopment Commission of High Point for use in effecting the Redevelopment Plan.
“(f) The remainder of the participating share of the City of High Point, amounting to $1,551,267.00, will be provided by direct installation of certain capital improvements benefiting the project area, including storm sewers, neighborhood parks, grading for new street construction, street lighting, traffic controls, street paving and construction of a pedestrian plaza. The City of High Point plans to pay for said capital improvements from its non-tax revenues by appropriations made from year to year from currently available non-tax revenues.”
This is a pledge to be satisfied by future revenues and not an appropriation of money on hand.
How much of the foregoing is now, or is likely hereafter, to be available to pay a landowner for his property? How much does the plan require the City to put into the fund out of which the landowner is to be paid? Not one cent.
Remembering the City, without voter approval, cannot use tax funds to meet obligations except for a necessary public purpose, the question arises whether the City’s obligations under this plan meet legal requirements. Examination of each item in the plan discloses that $80,-537.00 has been expended on street improvements, traffic controls, water and sewer and electric distribution facilities. The City claims credit for the amount. The City claims a credit for $261,423.00 expended by Guilford County for school construction planned by Guilford County for the period ending December SI, 1967. The City claims credit for $730,485.00 for “off-street parking facilities to be provided and financed by revenue bonds issued by the City of High Point, said bonds to be *327repaid solely from revenue received from said off-street parking facilities.” In other words, High Point will refuse to pay the bonds if the parking facilities fail to produce sufficient revenue for that purpose. The meaning is, the City will issue revenue bonds but will limit their payment to income from a facility which has not yet been built and limit its obligations to profits which are purely speculative. The outcome at best is a business uncertainty. May the City issue and sell bonds for this unnecessary purpose even though it fixes an escape from liability if the parking meters do not pay the debt?
The City also takes credit for $27,526.00, “for donation of various parcels of land now owned by the City of High Point to the Redevelopment Commission.” Presumably the land was purchased with tax money, so its conveyance to the Commission is the expenditure of tax money for a public — but not for a necessary public purpose. Yokley v. Clark, 262 N.C. 218.
Finally, the City’s closing contribution to the plan, “amounting to $1,551,276.00, will be provided by direct authorization of certain capital improvements benefiting the project area, including storm sewers, grading for new street construction, neighborhood parks, street lighting, traffic controls, street paving and construction of a pedestrian plaza.”
For the pedestrian plaza the City takes credit for $1,150,875.00. There is serious legal question whether the plaza can qualify as a public purpose, and I know of no authority under which it may be considered a necessary public purpose for which tax money may be used or a debt incurred.
Where does the City’s one-third of the cost of this project come from? The plan provides it is presently contemplated that the City’s share shall be made up by the listed items discussed in the Court’s opinion and herein previously referred to. For a time it was difficult for me to understand how High Point was able to sell the Federal authorities on a scheme by which the City’s one-third of the cost consisted of paper work — the recital of expenditures by the City and by Guilford County in years gone by; and by improvements the County has on the planning board through 1967. The answer to the riddle, I think, is to be found in Section (d) of the City’s contract with the Commission in which it agrees to pay cash for all of its one-third of the cost, less any qualifying grants in aid which it lists. With (d) in the contract the City must offer a qualifying grant in aid or put up cash. The scheme is to pay cash not in the treasury and hence is a pledge of the City’s credit not permitted by Article VII, Section 6, of the State Constitution. The City of High Point plans to pay for said capital improvements by appropriations made from year to year from *328currently available non-tax revenues. The pledge is for payment out of future receipts and not from presently available funds. Article VII, Section 6, of the State Constitution forbids the expenditure of tax funds for unnecessary purposes without voter approval. It likewise prevents a pledge of the City’s faith and credit to be fulfilled by future receipts, regardless of the source. “The opportunity to spend matching funds from the Federal Government and from other sources without voter approval are attractive to many county and city governing authorities. But if the proposed appropriation is for an unnecessary public expense (as in this case) the town and county officials are without authority to use tax money or to incur debt in furtherance of the project.” Yokley v. Clark, supra.
The urban redevelopment law and the decisions of this Court have given ample notice that the City must show present ability to finance the project. This may be done by the use of funds on hand derived from sources other than taxation, or the City must have the present authority to get the money by means other than by pledging the credit of the City. This is so because the filing of the plan prevents the owner of the property from dealing with it as his own. He cannot improve it, or rent it, or sell it, except at the hazard of being ejected at the will of the Commission. His property is virtually frozen by the plan. The filing of a lawful plan is equivalent to a restriction of the owner’s right to use his property as of the date of the taking of any interest therein. The law wisely provides that authorities may not acquire property until the plan shows financial ability to complete the project. The taking of private property is in derogation of a common law right of the owner, and the act which authorizes the taking must be strictly construed.
The law requires that the plan disclose a satisfactory arrangement for displaced persons. The plan in substance provides: (1) They will be permitted to rent new facilities as they are available in the project, (2) the Relocation Director will refer them to reliable firms, rental agencies, etc., (3) . . the local newspapers will be studied carefully for advertisements for units for rent or for sale,” and the information will be passed on to the Relocation Director; (4) the urban renewal staff employees and city employees will be instructed to report all the “for rent” or “for sale” signs they notice throughout the city. Finally, here is the concluding paragraph of the Plan: “All families will be urged to notify the Relocation Director before they move. If a family does move without notifying the Relocation Director of their new address, they will be traced through the following sources of information: schools, post office, telephone company, last known place of em*329ployment, neighbors, friends and utilities companies. A family will not be considered ‘lost’ until all possible sources of information have been checked, and no information as to their whereabouts is available.”
It may be of some comfort to a displaced family (forcibly removed from its home or apartment, or business) to know that the Director will be concerned and will go to considerable pains to find out where they are before he finally marks them off as “lost.” Such is the provision for displaced persons.
In passing on the validity of the present plan, it must be borne in mind the City contracts to provide one-third of the cost — whatever it may be. This plan does not put one penny in the fund out of which the owner of property may receive pay for that which has been taken from him.
It is subject to some doubt whether the proposed plan, even if properly financed and proper provisions were made for displaced persons, could qualify at all as a slum clearance, or urban renewal project. It partakes of an effort to rebuild a substantial part of the City of High Point out of Federal funds, the City’s one-third to consist of bookkeeping entries rather than of money in the fund. Under the Constitution, however, the City may not, without a vote, use tax money on hand. It may not pledge its faith or credit either to borrow money for the present payment or to meet future payments. These things may be done only after voter approval.
The record in this case is deficient in many particulars. Disputed issues and questions of fact are not pinpointed by proper exceptions and assignments of error. The plan, however, is attached to the petitioners’ complaint and made a part of it. The respondents’ answer showing the method of financing, is a part of their pleadings and a part of the record proper. The methods of financing proposed fail to meet the minimum requirements of G.S. 160-463. This failure appears upon the face of the pleadings. Legal precedent requires this Court to take notice of this deficiency ex mero motu. Redevelopment Commission v. Hagins, supra; Skinner v. Transformadora, 252 N.C. 320, 113 S.E. 2d 717; Woody v. Picklesimer, 248 N.C. 599, 194 S.E. 2d 273; Fuquay Springs v. Rowland, 239 N.C. 299, 79 S.E. 2d 774.
I vote to reverse the judgment below and to return this proceeding to the Superior Court of Guilford County for an order restraining the City and the Commission from proceeding further until the plan complies with the requirements of the statute, or is approved by the voters of the City.
PARKER, J., joins in concurring opinion.