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SOCIETY HILL TOWERS OWNERS' ASS'N v. RENDELL

September 16, 1998

SOCIETY HILL TOWERS OWNERS' ASS'N, ROBERT D. GREENBAUM, ZOE COULSON, JOHN Q. LAWSON, JEREMY SIEGEL, PENELOPE BATCHELER, GRAY SMITH, and ROXANNE GALEOTA, Plaintiffs,
v.
EDWARD G. RENDELL, Mayor of the City of Philadelphia, CITY OF PHILADELPHIA, ANDREW M. CUOMO, Secretary of the United States Dep't of Hous. and Urban Dev., and UNITED STATES DEP'T OF HOUS. AND URBAN DEV., Defendants.



The opinion of the court was delivered by: ROBRENO

MEMORANDUM

 EDUARDO C. ROBRENO, J.

 September 16, 1998

 Plaintiffs Society Hill Towers Owners Association ("the Association") and other residents of the Society Hill neighborhood in Philadelphia, Pennsylvania (collectively "plaintiffs") *fn1" brought this action seeking judicial review of a decision by the United States Department of Housing and Urban Development ("HUD") to approve an Urban Development Action Grant ("UDAG") in the amount of $ 10 million awarded to the City of Philadelphia ("the City") to assist in funding the public portion of the development cost of a 350-room hotel and 500-vehicle parking garage in the Penn's Landing section of the Delaware River waterfront ("the project"). *fn2"

 Plaintiffs seek declaratory judgment that the City did not follow the procedures mandated by the applicable statutes and regulations in conducting the environmental and historical reviews, and that, in turn, HUD improperly approved the City's application. Plaintiffs also seek to enjoin the City and HUD from carrying out the provisions of the UDAG agreement executed by the City and HUD until all environmental and historical reviews mandated by the applicable statutes and regulations have been properly conducted.

 Specifically, plaintiffs argue that: 1) the City failed to comply with the applicable environmental statutes and regulations and that the finding by the City that the project would have no significant impact on the environment is arbitrary, capricious, without adequate foundation, based upon an incomplete and inadequate environmental review record, and is an abuse of discretion; 2) HUD failed to perform its responsibilities under the applicable statutory and regulatory framework when it approved the City's revised fifth amendment request, and that the approval is arbitrary, capricious, without adequate foundation, and an abuse of discretion; 3) the procedures used by HUD, and the procedures used by the City and "accepted" by HUD, are inconsistent with, and not permitted by, the applicable statutory framework; and 4) the City and HUD failed to take into account the impact of the proposed project on the historic structures and districts in the area, pursuant to the National Historic Preservation Act, 16 U.S.C. ยง 470 et seq., and that the City and HUD failed to afford the Advisory Council on Historic Preservation an opportunity to comment on the proposed project. In addition to declaratory and injunctive relief, plaintiffs seek counsel fees and costs. Both sets of defendants generally respond that all the procedures mandated under the relevant statutes and regulations were followed and that accordingly the request for relief should be denied.

 Before the Court are cross-motions for summary judgment. *fn3" For the reasons stated below, the Court will grant defendants' motion for summary judgment, deny plaintiffs' motion for summary judgment, and enter judgment in favor of defendants and against plaintiffs on all counts.

 I. FACTS

 The following facts gleaned from the administrative record are uncontested or viewed in the light most favorable to plaintiffs: *fn4"

 1. In 1986, the City filed an application with HUD seeking approval of a UDAG grant in the amount of $ 10 million to assist in funding the public portion of the development cost of a festival park at Penn's Landing ("the first application"). (Fed. A.R. 1.)

 2. The application received preliminary approval by HUD, and a grant agreement between HUD and the City was executed later that year ("1986 UDAG agreement"). (Fed. A.R. 2-4.)

 3. Over the next several years, at the City's request, HUD granted several extensions of time to allow prospective developers opportunities to submit proposals for the festival park. (Fed. A.R. 5-25.)

 4. After the first application was approved, the City proposed four amendments to the first application. Id. HUD approved each of these requests for amendments, and, thereafter, amended grant agreements were executed. Id. The festival park, as proposed in the first application and the subsequent amendments, however, was never developed and the grant funds were never dispersed.

 5. In September 1994, the City made a request for yet a fifth amendment to the 1986 UDAG agreement, now proposing the use of the Penn's Landing site solely for the construction of a 350-room hotel and 500-vehicle garage. (Fed. A.R. 27-28.) This request for a fifth amendment constituted a "whole new project" separate and distinct from the festival park proposed in the original plan and in the previous approved amendments. (Fed. A.R. 29) It is HUD's approval of this request for a fifth amendment and the subsequent approval of a revised request for a fifth amendment to the 1986 UDAG agreement, that are implicated in this case.

 6. In November 1994, HUD approved the City's request for a fifth amendment. However, as a condition to the execution of an amended grant agreement, HUD required, in essence, that the City hold public hearings. (Fed. A.R. 29-30.)

 7. On November 16, 1994, the City, acting through the Philadelphia Industrial Development Corporation ("PIDC"), *fn5" published a notice of hearings to be held on November 21, 1994. (Fed. A.R. 31.)

 8. On November 21, 1994, the City held two hearings. One was held at 2:00 p.m., and the other at 6:00 p.m. Thirteen people attended these hearings. *fn6" (Id.)

 9. On November 29, 1994, the City certified to HUD that the City had complied with the hearing requirements prescribed by HUD. (Id.)

 10. From December 1994 to May 1995, a group of local residents, some of whom are plaintiffs in this case, contacted City and HUD officials objecting to the development of the project, as detailed in the request for a fifth amendment. (Fed. A.R. 32-35, 37-42.)

 11. On June 30, 1995, plaintiffs filed suit in this Court seeking to stop HUD from executing a new grant agreement based upon the request for the fifth amendment ("the 1995 lawsuit"). *fn7"

 12. On October 5, 1995, HUD notified the City that, in connection with the City's request for a fifth amendment, the City had not complied with certain certification requirements, including those pertaining to environmental review and citizen participation. (Fed. A.R. 36.)

 13. On October 11, 1995, the City, in response to HUD's October 5, 1995 request, supplied, inter alia, environmental and public participation certifications. (Fed. A.R. 43.)

 14. On December 5, 1995, the Court dismissed the 1995 lawsuit without prejudice for lack of subject matter jurisdiction because plaintiffs could not allege that there had been final agency action by HUD approving the City's request for a fifth amendment. *fn8"

 15. On August 6, 1996, and August 15, 1996, after publishing notice, the City held additional hearings on the project described in the request for the fifth amendment. (Fed. A.R. 52.) Those hearings, unlike those held in November 1994, were well-attended. The administrative record contains letters from the public, responses from the City, attendance sheets, and transcripts of these hearings. (IV Fed. A.R.-VII Fed. A.R.; III City A.R.-VII City A.R.)

 16. On August 15, 1996, while at a hearing called by the City to hear public comments on the request for the fifth amendment, Ms. Barbara Kaplan, executive director of the City Planning Commission, announced that a finding of no significant impact ("FONSI") and a notice of intent/request for the release of funds ("NOI/RROF") by the City would soon issue. (City A.R. 2036, 2176-77.) At the time these comments were made, the environmental review by the City had not been completed. (Id.)

 17. On August 22, 1996, the City published the FONSI and NOI/RROF. (Fed. A.R. 64.) In response, plaintiffs submitted technical studies and comments to the City challenging the City's findings. (Fed. A.R. 54-55.) Plaintiffs also made submissions to HUD challenging the environmental assessment which resulted in the FONSI. (Fed. A.R. 62, 65, 66, 69; City A.R. 0173-0475). HUD referred these objections to the City and notified plaintiffs that, under the statutory scheme, because HUD had delegated environmental review to the City, it would only consider procedural and not substantive objections to the City's findings. (Fed. A.R. 70, 72.)

 18. On October 23, 1996, HUD informed the City that the request for a fifth amendment was still defective, and "suggested" to the City that the request for a fifth amendment be withdrawn and not resubmitted until the City complied with all regulatory requirements. (Fed. A.R. 73.)

 19. On December 21, 1996, the City published a second FONSI and NOI/RROF. (Fed. A.R. 79-81.) Public comments to this FONSI and NOI/RROF were received from December 21, 1996 to January 21, 1997. (City A.R. 2409-2541).

 20. On January 22, 1997, the City submitted to HUD an RROF and Environmental Certification. (Fed. A.R. 81; City A.R. 2589-2590.)

 21. On February 3, 1997, HUD notified plaintiffs' counsel that it would accept objections to the RROF and related environmental certifications until February 12, 1997. (Fed. A.R. 82.)

 22. On February 5, 1997, plaintiffs' counsel submitted to HUD objections to the second FONSI/RROF. (Fed. A.R. 78.)

 23. On February 21, 1997, the City withdrew its request for a fifth amendment. (Fed. A.R. 75.) On the same day, the City submitted a revised request for a fifth amendment. The revised request described physically the same project as was described in the request for a fifth amendment, i.e., a 350-room hotel and 500-vehicle parking garage. While the project was substantively the same, the developer and financing arrangements were different. (Fed. A.R. 86.) Together with the revised request for a fifth amendment, the City also submitted to HUD the environmental review record ("ERR"). (Fed. A.R. 76-77 (application materials); IV Fed. A.R. - VII Fed. A.R. (ERR).)

 24. On May 20, 1997, HUD approved the revised request for a fifth amendment. (Fed. A.R. 89.)

 25. On June 11, 1997, HUD notified the City that the revised request for a fifth amendment had been approved. (Fed. A.R. 91; City A.R. 2618.)

 26. On July 24, 1997, plaintiffs filed this lawsuit. (See doc. no. 1.)

 27. On August 14, 1997, HUD notified the City that it had approved the City's RROF. (Fed. A.R. 91; City A.R. 2618.)

 28. On September 22, 1997, HUD executed the fifth amended UDAG agreement based on the City's revised request for a fifth amendment to the UDAG. (Fed. A.R. 93.) On October 14, 1997, the City executed the fifth amended UDAG agreement. Id.

 II. LEGAL STANDARD *fn9" ...


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