Court Opinion

ID: 9758265
Source: CourtListenerOpinion
Date Created: 2023-08-28 23:18:07.221797+00
Date Added: 2024-06-11T07:28:48.744212
License: Public Domain

DISSENTING OPINION BY
Judge SMITH-RIBNER.
I respectfully dissent from the decision of the majority to affirm the trial court’s dismissal of preliminary objections and approval of the condemnation and transfer from one private owner, Alan R. Yarnall, to another private owner, Vahan Gureghi-an, under circumstances that are highly constitutionally suspect. As the majority notes, Yarnall’s property at 200 East Fifth Street in the City of Chester (Property) is located in the South East Central Business District Redevelopment Area # 1 (Redevelopment Area), which the City Planning Commission certified as blighted on April 14, 2004. One month later, the Redevelopment Authority (Authority) authorized an *1150Agreement of Sale and Redevelopment Agreement with Gureghian to place into motion the steps necessary for him to obtain and develop the Property to expand his Chester Community Charter School (Charter School) to add a library, copy center and classrooms.
The July 14, 2005 Declaration of Taking in this matter provides that the Property is being condemned pursuant to the former Eminent Domain Code1 and pursuant to the Urban Redevelopment Law, Act of May 24, 1945, P.L. 991, as amended, 35 P.S. §§ 1701-1719.2, for purposes of acquisition and redevelopment of educational institutional buildings (including public, private and charter schools) and for uses accessory thereto. The Charter School is located directly next door to the Property. Although the Charter School is required by law to be a nonprofit corporation, Section 1703-A of the Charter School Law, Act of March 10, 1949, P.L. 30, as amended, added by Section 1 of the Act of June 19, 1997, P.L. 225, 24 P.S. § 17-1703-A, there is no dispute that Gureghian leases other properties that comprise the Charter School to the Charter School at a profit and further that it is operated by a for-profit management company owned by Gu-reghian.
The authority to exercise eminent domain powers is necessarily in derogation of a private right and must be strictly construed. See Middletown Township v. Lands of Stone, 595 Pa. 607, 939 A.2d 331 (2007); Winger v. Aires, 371 Pa. 242, 89 A.2d 521 (1952). In Redevelopment Authority of Erie v. Owners or Parties in Interest, 1 Pa.Cmwlth. 378, 390, 274 A.2d 244, 250 (1971), this Court stated:
Nothing, of course, is better settled than that property cannot be taken by government without the owner’s consent for the mere purpose of devoting it to the private use of another. In Lance’s Appeal, 55 Pa. 16, 25 (1867), the Supreme Court held that the power of eminent domain can never be exercised except for a public purpose supposed and intended to benefit the public, and that “after the right has been exercised the use of the property must be held in accordance with and for the purposes which justified its taking. Otherwise, it would be a fraud on the owner, and an abuse of power.”
In Philadelphia Clay Co. v. York Clay Co., 241 Pa. 305, 309-310, 88 A. 487, 488 (1913), the court stated the following: “While the power of the Legislature to invest individuals or corporations with the right to take private property for a public use is clearly recognized by the Constitution, there is not a suggestion anywhere that private property may be taken for a private use. It has been uniformly held by the courts in our own state as well as in other jurisdictions that under the right of eminent domain private property can only be taken for a public use, and that it is not within the power of the Legislature to invest either an individual or a corporation with the right to take the property of a private owner for the private use of some other individual or corporation, even if a method is provided for ascertaining the damages and paying what shall be deemed just compensation. The underlying principle is that the owner of property has the right to the uninterrupted use and enjoyment of it against all the world, subject, however, to the sovereign *1151right of the state to take so much of it as may be necessary to serve the various public uses to which it may be properly subjected.”
The effect of a certification of blight under the Urban Redevelopment Law must be considered with these underlying principles in mind. In Redevelopment Authority of Scranton v. Kameroski, 151 Pa.Cmwlth. 345, 350, 616 A.2d 1102, 1104 (1992), this Court stated:
A certification of blight does not in and of itself give a condemnor, such as [Scranton Redevelopment Authority], the authority to condemn all property within the area. Under the URL, a certification of blight is merely an internal finding that certain physical conditions exist in the project area that make the area “blighted.” The certification itself does not affect property rights but only sets the stage for redevelopment.
The Supreme Court recently reiterated in regard to “public purpose”:
According to our Court, “a taking will be seen as having a public purpose only where the public is to be the primary and paramount beneficiary of its exercise.” In re Bruce Ave., 438 Pa. 498, [505,] 266 A.2d 96, 99 (1970). In considering whether a primary public purpose was properly invoked, this Court has looked for the “real or fundamental purpose” behind a taking. Belovsky v. Redevelopment Authority, 357 Pa. 329, [340,] 54 A.2d 277, 283 (1947). Stated otherwise, the true purpose must primarily benefit the public.
Middletown Township, 595 Pa. at 617, 939 A.2d at 337. The meaning of this requirement is that a redevelopment authority is not free to do whatever it wants with a person’s private property once an area is certified as blighted. The courts still must assure that the true purpose of a taking is for a public use.
In the Pennsylvania Supreme Court’s recently filed decision in In re Redevelopment Authority of Philadelphia, 595 Pa. 241, 938 A.2d 341 (2007), it affirmed that part of this Court’s order that overruled the trial court’s finding of a waiver of issues for the condemnee’s failure to challenge the blight certification against the neighborhood surrounding the subject property.2 The court, moreover, did not endorse the position taken by the trial court that once the subject land was certified as blighted it was then proper to transfer it to private development regardless of “who” that future developer might be. Deciding based on the limited facts presented, the Supreme Court however reversed this Court’s determination that the transfer at issue to a religious organization to establish a faith-based but nondenominational school to serve students in a disadvantaged area violated the Establishment Clause of the First Amendment. Although stating that elimination of blight is a valid public purpose and that this Court was correct in concluding that an effect of the taking was to advance a religious organization’s mission to provide faith-based educational services, the Supreme Court nevertheless held that because the exercise of eminent domain to eliminate blight has been approved by both it and the United States Supreme Court, the taking of the condemnee’s property and sale to a private developer, even one that is a religious entity, did not make the taking unconstitutional under the three-prong test laid out in Lemon v. *1152Kurtzman, 408 U.S. 602, 91 S.Ct. 2125, 29 L.Ed.2d 745 (1971).
In a lengthy dissent in In re Redevelopment Authority of Philadelphia, Justice Baer concluded that the government provided direct aid to a religious school in violation of the Establishment Clause, which rendered the taking unconstitutional. He strongly dissented to what he characterized as an unfortunate decision by the court much like Justice Clarence Thomas in Kelo v. City of New London, 545 U.S. 469, 125 S.Ct. 2655, 162 L.Ed.2d 439 (2005), who totally disagreed with the decision in Kelo to affirm a taking of the petitioners’ private property to implement a comprehensive economic development plan for the city. After examining current public use clause jurisprudence, Justice Thomas concluded that the conflict of principle raised by the “boundless use of the eminent domain power should be resolved in petitioners’ favor.” Id. at 523, 125 S.Ct. at 2687, 162 L.Ed.2d at 479.
Assuring that the true purpose of a taking is for a public use is of overriding importance. The Supreme Court has concluded: “Nothing, of course, is better settled than that property cannot be taken by government without the owner’s consent for the mere purpose of devoting it to the private use of another, even though there be involved in the transaction an incidental benefit to the public.” Belovsky v. Redevelopment Authority of Philadelphia, 357 Pa. 329, 340, 54 A.2d 277, 282 (1947). It also has stated that a taking does not “lose its public character merely because there may exist in the operation some feature of private gain, for if the public good is enhanced it is immaterial that a private interest also may be benefited.” Id. at 341, 54 A.2d at 283. See also In re Forrester, 575 Pa. 365, 836 A.2d 102 (2003). In Justice Kennedy’s concurring opinion in Kelo, 545 U.S. at 491, 125 S.Ct. at 2669, 162 L.Ed.2d at 458, he warned: “A court applying rational-basis review under the Public Use Clause should strike down a taking that, by a clear showing, is intended to favor a particular private party, with only incidental or pretextual public benefits....”
In the present case, there are many indications that the primary and paramount beneficiary of this taking will be Gureghian, with any public benefit being incidental and pretextual. As Yarnall stresses, Gureghian will receive considerable money on the rental of the subject property by the Charter School. Gureghi-an testified that he owns the ground that the Charter School occupies and that the School leases the ground from Gureghian and pays rent directly to him. He owns Charter School Management, Inc., which manages the School, and it made a profit for 2005. The trial court found it irrelevant that the Charter School paid an annual rent of $1.1 million directly to Gureghi-an for 2003-2004. The trial court erred in finding this evidence to be irrelevant as it related directly to the issue raised, ie., that the taking was to promote the private profit-making enterprise that Gureghian developed in Chester, using the Authority as the vehicle to take private property from A to give to B (Gureghian) for his private business. When asked by counsel for Yarnall whether the Authority knew before the hearing that Gureghian rents the ground occupied by the Charter School, the Executive Director (David Sci-occhetti) stated that he either read about it or had seen newspaper accounts, and he responded in the affirmative when asked if he was concerned to learn that Gureghian would continue to charge rent to the School to his own benefit.
If the primary purpose of a taking is to benefit a public institution, then the most direct way of benefiting it is to give the property to that institution, not to bestow *1153the property on an intervening owner who will charge rent for as long as the institution exists. The trial court accorded substantial weight to the provision in the agreement that Gureghian, his successors and assigns will devote the property to charter school purposes for a minimum of twenty years. In view of the fact that this is a charter school, not a municipal or even a private school, control over such use is not in Gureghian’s hands. A charter once approved and signed by the board of school directors of the local school district is initially for a period of not less than three nor more than five years and may be renewed for five-year periods upon reau-thorization by the local board or by the State Charter School Appeal Board. Section 1720-A of the Charter School Law, 24 P.S. § 17-1720-A.
In addition, the provision relied upon operates only for twenty years; Gureghian or any other owner at that time would be free to apply the property, taken from the original owner through eminent domain, to any permitted use. This is similar to the situation in a case cited by Justice Baer in his dissent in In re Redevelopment Authority of Philadelphia, namely Tilton v. Richardson, 403 U.S. 672, 91 S.Ct. 2091, 29 L.Ed.2d 790 (1971) (plurality opinion), where a plan to provide direct grants to religious and secular institutions for construction of academic facilities required assurances from religious beneficiaries that for twenty years the facilities would not be used for sectarian purposes. Justice Baer noted that the Justices unanimously agreed that the lack of restrictions after twenty years violated the Establishment Clause by leaving a religious institution with something of considerable value, given by the government, in which to forward religious interests.
The arrangement here is akin to that in Tilton inasmuch as a majority of this Court has sanctioned the Authority’s actions to take property from Yarnall in derogation of his private property rights, to convey it to Gureghian for use as a profit-making rental property and then after twenty years to remove all restrictions or limitations on use of the Property for school purposes. In my view, the primary and paramount beneficiary of this taking is Gureghian, and to permit the taking to occur merely because the area in which the Property is located has been certified as blighted is to reach an unfortunate decision and one that opens the door for the “boundless use” of eminent domain power in this Commonwealth.3 The decision by the majority forecloses any inquiry by the private property owner or by the courts into the question of whether the transfer of private property is for a “true” public purpose. Moreover, the decision conflicts with settled case law and flies in the face of the principle recently reiterated in Mid-dletown Township. More fundamentally, “[t]he specter of condemnation [now] hangs over all property.” Kelo, 545 U.S. at 503, 125 S.Ct. at 2676, 162 L.Ed.2d at 466 (Justice O’Connor dissenting).
Judge COHN JUBELIRER joins in the dissent.

. Act of June 22, 1964, Special Sess., P.L. 84, as amended, formerly 26 P.S. §§ 1-101-1-903, repealed by Section 5 of the Act of May 4, 2006, P.L. 112, and replaced by the consolidated Eminent Domain Code, 26 Pa.C.S. §§ 101-1106, effective in 120 days. Provisions of the former Eminent Domain Code apply to the operative facts in this case.

. Review of a certification of blight and subsequent taking by a redevelopment authority is limited to a determination that the authority has not acted in bad faith, that it has followed the statutory procedures and that it has not violated any constitutional safeguards. Crawford v. Redevelopment Authority of Fayette County, 418 Pa. 549, 211 A.2d 866 (1965).

. I note Section 204(a) of the new Eminent Domain Code, 26 Pa.C.S. § 204(a), which provides: “Prohibition. — Except as set forth in subsection (b), the exercise by any condem-nor of the power of eminent domain to take private property in order to use it for private enterprise is prohibited.” Although not applicable here because of its enactment after the controversy arose and after the decision in Kelo, it is worth noting that the statute reflects legislative intent to preclude exercise of eminent domain power to take one’s private property for another’s gain.