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Public Power, Private Gain Ennsylvania P Public Power, Private Gain ennsylvania P Known Condemnations Benefiting Private Parties* Filed 2,517 Threatened 108 Total 2,625 Known Development Projects w/Private Benefit Condemnations* 10 State Record of Condemnation Appeals Filed, for All Purposes:† 167 Legend =1000 =100 =1 Overview Pennsylvania has been a hotbed of eminent domain controversy over the past five years. There have been takings for private use, threatened takings for private use, bills for legislative reform, and an appellate court case holding that a City unconstitutionally delegated its power to a private developer. Pittsburgh and other cities threatened major condemnation projects, and local groups organized and demonstrated against eminent domain abuse. With all the controversy and news coverage, as well as the court decision, it is possible that Pennsylvania cities will actually think twice about taking property for private business in the coming years. *These numbers were compiled from news sources. Many cases go unreported, and news reports often do not specify the number of properties against which condemnations were filed or threatened. †Pennsylvania Commonwealth Court, which releases a breakdown of case filings and disposals (includes condemna- tions for traditional public uses). Because the Commonwealth Court is an appellate court, this number reflects only those eminent domain cases in which a party appealed from the Court of Common Pleas. 173 Public Power, Private Gain CVS, Victim and Beneficiary of Legislative Eminent Domain for Private Use Actions CVS, the largest pharmacy chain in the nation, has seen both sides of the coin when it comes to eminent The Pennsylvania state legislature has consid- domain abuse. In two cases over the last five years, ered several bills in the past five years that local redevelopment agencies tried to condemn CVS store affect the state’s rules regarding condemnation locations for the benefit of CVS competitors. of private property for redevelopment purposes. As part of a convoluted 1999 deal to condemn pri- Not surprisingly, the one that made almost no vate property for a Nordstrom department store, changes in the law is the one that made it Cincinnati began the process of condemning a CVS for a through. The bill that would have helped Walgreens (CVS’s chief regional competitor) that had potential condemnees the most was House Bill been condemned for the Nordstrom, which in turn was 507, which Rep. William Robinson introduced to never built. CVS sued to stop the condemnation of its the House floor in February 2001. If passed, store, but eventually got to keep the land under a settle- H.B. 507 would have granted landowners a ment by which the City moved Walgreens to a location number of protections against overreaching across the street from the CVS. In 2002, Warwick, New redevelopment agencies, including prohibiting York, began condemning a CVS store. After the Grand government from selling any property taken Union grocery store chain went bankrupt, CVS opened up through eminent domain to another private in the former Grand Union location in downtown Warwick. party for a 10-year period following condemna- The town’s mayor, who is part-owner of a competing local tion. It would also have given condemnees the pharmacy, operated by his brother and sister, decided to right to seek compensation for lost business condemn the CVS, supposedly so that City officials could goodwill and lost profits due to forced reloca- lure another grocery chain to open in the Grand Union 580 tion. Rep. Robinson says that H.B. 507 was location. As of early 2003, the Warwick condemnation is written in response to the heavy-handed tactics still under negotiation. of Pittsburgh’s redevelopment authority during One would think, after these two bitterly-fought bat- 581 its attempt to revamp that city’s Hill District. tles to keep its stores from being condemned for private use, that CVS would refrain from trying the same tactic to Another bill that got mired in the House Urban take others’ land for its own benefit. However, as cases Affairs Committee took aim at the state’s blight from Pemberton Township, New Jersey, and Ambridge, designation rules. House Bill 615, introduced Pennsylvania, demonstrate, CVS may want to keep its by Rep. Darryl Metcalf, would have made cities own stores but doesn’t see that other people might want wait two years after rejecting a previous plan that as well. At the chain’s request, Pemberton officials before trying again to declare an area blighted. threatened to condemn a solo obstetrician’s medical If a blighted area was not redeveloped within 10 practice and a clothing store unless the owners of the years, the blight designation would automatical- properties agreed to sell. In the Ambridge case, CVS ly be terminated. The bill also would have convinced the Borough Council to condemn four homes allowed business owners displaced by eminent and five businesses, none of whose owners wanted to domain to seek compensation for lost goodwill move, and none of which were vacant or dilapidated, just 582 and lost profits. because CVS wanted to have a more central location than its other store 10 blocks away. A third bill that actually became law amends the Oh well, in the case of CVS, at least the score is state’s redevelopment laws to include a provi- even. 580 See H.B. 507, 185th Sess. (Pa. 2001). Sources: All of these cases appear in this report in the 581 “Bill Would Revamp Eminent Domain Process,” sections for their respective cities. AP Wire, Nov. 5, 2001. 582 See H.B. 615, 185th Sess. (Pa. 2001). 174 Public Power, Private Gain sion requiring developers to obtain written consent from the condemning authority before selling or leasing any part of the redevelopment to a private party. H.B. 1952 was signed into law on September 25, 2002.583 Because the condemning authorities generally condemn the property specifically to transfer it to a private party, this provision will provide little restraint. Private Use Condemnations Ambridge In September 1999, the Borough of Ambridge condemned nine properties to help a private developer assemble the half-acre of land it needed to construct a new CVS Pharmacy. The Gustine Company wanted the land so that it could build a CVS “mega drugstore” more centrally located than the current CVS store 10 blocks away. The targeted properties consisted of four homes and five businesses, none of which were vacant or dilapidated, and none of whose owners wanted to move.584 After trying unsuccessfully to pur- chase the parcels, the developer asked the Borough to act on its behalf in taking the property through emi- ennsylvania nent domain. The Borough Council complied, after voting to declare the area blighted because of “lack of P measurable reinvestment, business growth, and the continuing demise of the downtown business base.”585 In June 2000, the buildings were demolished and the property given to the developer on a 20-year lease under which Gustine will pay the City a mere $100 annually.586 “That’s what eminent domain is all about. It’s the misfortune of the few for the benefit of the many.” Coatesville Dick and Nancy Saha bought their 48 prime acres of rural Pennsylvania farmland more than 30 years ago. They restored the 250-year old farmhouse on the property, and raised their five children there. Today the Sahas’ cherished family land has additional homes on it for their children and grandchildren. However, the Town of Coatesville wants the Sahas’ land for part of the Coatesville Regional Family Recreation Center, a proposed $60-million, 230-acre “funplex” featuring go-karts, batting cages, a golf course, miniature golf, bowling and ice skating. The entertainment mecca would also have a privately owned, 270-room hotel and conference center. Coatesville has already bought out the Sahas’ neighbors, but the Sahas refuse to sell. Even though their land is actually located in neighboring Valley Township, Coatesville condemned the prop- erty, under a state law that allows certain cities to take land in a neighboring municipality, as long as the targeted property touches the condemning city’s border. Town leaders in Valley Township opposed Coatesville’s actions, but were ultimately powerless to stop the condemnation. Coatesville City Manager Paul G. Janssen, on the other hand, sees nothing wrong with destroying an extended family’s rural homestead for upscale private development. Janssen says, “That’s 583 See H.B. 1952, 185th Sess. (Pa. 2001). 584 John Hanna, “CVS Proposal Angers Residents,” Pittsburgh Post-Gazette, Mar. 31, 1999, at W1. 585 Letter from Timothy S. Brown, Borough Manager of Ambridge, Pa., to William Barlamas (Sept. 21, 1999) (on file with author). 586 “Business Briefs from Across Pennsylvania,” AP Wire, June 26, 2000. 175 Public Power, Private Gain Pittsburgh Mayor’s Plan to Take what eminent domain is all about. It’s the misfor- Properties for Redevelopment at tune of the few for the benefit of the many.” Since Fifth & Forbes Is Derailed they became targets of a town where they do not even reside, the lives of their whole family have been In 1999, the City of Pittsburgh proposed a plan to turned upside-down. The Sahas have spent redevelop the Fifth and Forbes district of downtown $125,000 of their retirement savings on billboards, a Pittsburgh. The project was endorsed by Mayor Tom website and lawyers. Fortunately, the family is not Murphy and other city leaders and would have trans- alone in its indignation: Many of their neighbors ferred ownership of the entire district to Urban Retail have rallied to support the family in opposing the Properties, a Chicago developer. While the plan called condemnation of their home.587 for preserving some of the historic storefronts in the area, it did not call for preserving any of the small In January 2002, a Chester County judge upheld the businesses in the area.
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