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WEINTRAUB v. RURAL ELECTRIFICATION ADMIN.

July 18, 1978

Edward WEINTRAUB et al., Plaintiffs,
v.
RURAL ELECTRIFICATION ADMINISTRATION, U. S. DEPARTMENT OF AGRICULTURE, et al.,Defendants



The opinion of the court was delivered by: MUIR

I. Introduction.

 The Plaintiffs Edward Weintraub, director of the Office of Historic Preservation for the Pennsylvania Historical Museum Commission, and the Historic Harrisburg Association, Inc., brought this action pursuant to 28 U.S.C. § 1331, the general federal question jurisdictional statute, alleging that the Defendants, the Rural Electrification Administration of the United States (REA), the Telegraph Building Corporation (TBC), the Association Building Corporation (ABC), and the Allegheny Electric Cooperative, Inc. (AEC) have violated 16 U.S.C. § 470f by planning to and beginning the demolition of the Telegraph Building which is located at 214-216 Locust Street, Harrisburg, Pennsylvania.

 On March 3, 1978, the Secretary of the Interior placed the Telegraph Building on the National Register of Historic Sites. 16 U.S.C. § 470f *fn1" requires that the head of any federal agency having direct or indirect jurisdiction over a proposed federal or federally assisted undertaking in any state and the head of any federal department of independent agency having authority to license any undertaking shall prior to the approval of the expenditure of any federal funds on the undertaking or prior to the issuance of any license take into account the effect of any undertaking on any district, site, building, structure, or object that is included in the National Register. In addition, the National Advisory Council, is to be given an opportunity to comment on the action. The Defendants maintain that the demolition of the Telegraph Building does not involve federal funds or the issuance of any federal license. On June 8, 1978, the Plaintiffs requested that the Court grant a temporary restraining order to prevent the demolition of the Telegraph Building. After a hearing which lasted approximately 21/2 hours, the Court denied that request. On June 19, 1978, the Plaintiffs filed an amended application for a temporary restraining order to prevent the demolition of the Telegraph Building. On June 21, 1978, beginning at approximately 4:30 P. M. and ending at 8:15 P. M. the Court held another hearing concerning the issuance of a temporary restraining order. The Court denied the motion for the issuance of a temporary restraining order because it found that there was not enough federal action to require the application of 16 U.S.C. § 470f. On June 29 and June 30, 1978, July 3, July 7, and July 8, 1978, the Court heard testimony concerning the Plaintiffs' motion for a preliminary injunction. The Plaintiffs refused to have the hearing for a preliminary injunction consolidated with the hearing for a permanent injunction. The Court interrupted hearing testimony in this case on July 6 and 7 to hold pretrial conferences and to select juries for cases on its July, 1978 Harrisburg trial list. The following are the Court's findings of fact, discussion, and conclusions of law.

 II. Findings of Fact.

 1. Plaintiff Edward Weintraub is the Director of the Office of Historic Preservation for the Pennsylvania Historical and Museum Commission. (Undisputed)

 2. The Pennsylvania Historical and Museum Commission is an agency of the Commonwealth of Pennsylvania. (Undisputed)

 3. Plaintiff Weintraub, by virtue of a gubernatorial appointment, also serves as the State Historical Preservation Officer. (Undisputed)

 4. Plaintiff Historic Harrisburg Association, Inc. is a non-profit Pennsylvania corporation having its mailing address at P.O. Box 951, Harrisburg, Pennsylvania, 17108. (Undisputed)

 5. The corporate purposes of plaintiff Historic Harrisburg Association, as set forth in its corporate charter, are as follows:

 
"(a) To promote community participation, cooperation, interest and goodwill among residents and property owners in the City of Harrisburg, Pennsylvania; and
 
"(b) To preserve, maintain and enhance through all available means the aesthetic and wholesome character of Harrisburg's neighborhood environments; and
 
"(c) To maintain where possible and restore where necessary those elements of Harrisburg's manmade and natural environment which are deemed to possess historic, cultural, or civic value; and
 
"(d) To cooperate with the City of Harrisburg and other public and private bodies in the reconstitution of neighborhoods for residential and residentially compatible uses." (Undisputed)

 6. Plaintiff Harrisburg Historic Association, Inc. has among its members property owners and residents within "Historic Harrisburg". (Undisputed)

 7. The Telegraph Building is located within the immediate vicinity of Historic Harrisburg.

 8. The Telegraph Building was listed on the National Register by the Secretary of Interior on March 3, 1978. (Undisputed)

 9. The demolition of the Telegraph Building and the establishment of a parking lot in place of said building will affect the aesthetic and environmental values of Harrisburg.

 10. Defendants Telegraph Building Corporation (TBC) and Association Building Corporation (ABC) are closely held corporations.

 11. ABC was incorporated with an authorized capital of 2500 shares having a par value per share of which two shares are issued and outstanding, one owned by AEC and one owned by PREA.

 12. The property numbered 214-216 Locust Street, Harrisburg, Pennsylvania, is commonly referred to as the Telegraph Building. (Undisputed)

 13. The property numbered 212 Locust Street, Harrisburg, Pennsylvania, is commonly referred to as the Locust Court Building. (Undisputed)

 14. Defendants TBC and ABC purchased the Telegraph Building in conjunction with their development of the Locust Court Building. (Undisputed)

 15. TBC and ABC have entered into a contract with Swatara Contractors, Inc., in order to accomplish their intent to demolish the Telegraph Building. (Undisputed)

 16. On or about September 23, 1977, the Defendants TBC and ABC were issued a permit by the City of Harrisburg allegedly authorizing them to demolish the Telegraph Building. (Undisputed)

 17. The demolition permit mentioned in the preceding paragraph was to expire on June 15, 1978. (Undisputed)

 19. On May 22, 1978, the City of Harrisburg issued to Defendants TBC and ABC a "Stop Work Order" directing said Defendants to cease all work in connection with the demolition of the Telegraph Building. (Undisputed)

 20. On or about May 23, 1978, Defendants TBC and ABC filed suit in the Court of Common Pleas, Dauphin County, Civil Docket No. 3720, 1978, against the City of Harrisburg and City officials, requesting that the Court order the dissolution of the "Stop Work Order" and that the City be permanently enjoined from interfering with the demolition of the Telegraph Building. (Undisputed)

 21. On or about May 25, 1978, Judge Lipsitt of the Dauphin County Court of Common Pleas, the presiding judge in the case listed at Civil Docket No. 3720, 1978, issued a preliminary injunction and ordered (a) that the demolition permit which was to expire as of June 15, 1978, remain valid until such time as the Common Pleas Court had the opportunity to decide the claims asserted in the lawsuit and (b) that if said claims are resolved favorably to TBC and ABC that the demolition permit remain valid for a reasonable period of time so that TBC and ABC can effectuate the demolition of the Telegraph Building. (Undisputed)

 22. The City of Harrisburg on June 7, 1978, revoked the "Stop Work Order."

 23. The demolition of the Telegraph Building commenced on June 8, 1978. (Undisputed)

 24. This Court issued a temporary restraining order (TRO) enjoining the demolition of the building at 3:49 p.m. on June 8, 1978 at the beginning of the first hearing on the application for a TRO when the Court was advised that demolition of the building had commenced just minutes before.

 25. The aforementioned TRO was lifted at approximately 7:00 p.m. on June 8, 1978, at the conclusion of the hearing because the Court was not convinced that the Plaintiffs were likely to prevail on the merits.

 26. The City of Harrisburg issued a Stop Work Order on June 8, 1978, against Swatara Contractors, Inc., agents of ABC, TBC, and AEC to cease demolition of the building because the health and safety of a tenant in the front portion of the building was being affected by the demolition. (Undisputed)

 27. All tenants vacated the Telegraph Building by June 12, 1978.

 28. The conditions supporting the issuance by the City of Harrisburg of the June 8, 1978 Stop Work Order are no longer in existence. (Undisputed)

 29. The demolition of the building is imminent.

 30. The building is being stripped, windows are left open, and final preparation for demolition is taking place. (Undisputed)

 31. Defendant Association Building Corporation, Inc. (ABC) is a Pennsylvania business corporation owned fifty percent (50%) by Defendant Allegheny Electric Cooperative, Inc. (AEC) and fifty percent (50%) by Pennsylvania Rural Electric Association. (PREA).

 32. AEC is a federation of all 12 Pennsylvania Rural Electrification Administration (REA) borrowers, Sussex Rural Electric Cooperative (Sussex, New Jersey), and one non-REA borrower.

 33. AEC is a Pennsylvania non-profit corporation with its principal place of business in Harrisburg, Pennsylvania organized in 1946 as a tax exempt cooperative under § 501(c)(12) of the Internal Revenue Code to allow the local cooperatives to purchase electricity on a larger wholesale basis than was possible formerly when each cooperative negotiated with the private utility companies or investor-owned utilities on an independent basis. (Undisputed)

 34. AEC has "all requirements" wholesale power contracts with its 14 members extending through 2025. (Undisputed)

 36. Prior to January, 1978, AEC met all of its members' power and energy needs through purchase arrangements with 5 power suppliers. (Undisputed)

 37. Defendant Telegraph Building Corporation, Inc. (TBC) is a Pennsylvania business corporation which owns the Telegraph Building, the property in controversy. (Undisputed)

 38. TBC is owned by Locust Court Associates, Inc. (LCA). (Undisputed)

 39. LCA is a Pennsylvania business corporation and owns all of the stock of the Telegraph Building Corporation.

 40. LCA is owned by ABC.

 41. PREA is a Pennsylvania non-profit corporation and is a coordinator and member service organization for Pennsylvania's rural electric cooperatives. (Undisputed)

 42. The Defendant Rural Electrification Administration (REA) is an agency within the United States Department of Agriculture. (Undisputed)

 43. REA provides direct loans at interest rates of 2% To 5% To rural electric cooperatives.

 44. REA guarantees loans for the construction of large-scale electric power plants.

 45. REA has lent and is currently lending substantial sums to all of AEC's members with ...


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