The opinion of the court was delivered by: President Judge Leadbetter
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge, HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE DORIS A. SMITH-RIBNER, Judge, HONORABLE DAN PELLEGRINI, Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE MARY HANNAH LEAVITT, Judge.
In consolidated appeals from separate condemnations, the Estate of David Hamilton, and Thomas R. Whittaker together with his wife, Christy L. Whittaker, challenge the order of the Court of Common Pleas of Lawrence County (trial court), which overruled in part their preliminary objections to the legality of the condemnations. In a cross-appeal, the condemnor, Redevelopment Authority of Lawrence County (RALC), challenges common pleas' order insofar as it sustained the condemnees' preliminary objections to the adequacy of the bond posted with the declaration of taking.
In September of 2004, RALC filed separate declarations of taking, pursuant to the authority provided under the Urban Redevelopment Law (URL),*fn1 condemning the Hamilton and the Whittaker properties for the purpose of developing a high technology business park. At the time of the condemnation, David Hamilton owned 2.5 acres, on which he maintained a structure used for both residential and industrial purposes,*fn2 and the Whittakers owned approximately 84 acres, where they lived with their children in a home constructed in 2002. These two properties are located within an approximately 530-acre area, identified as a prime location for industrial development, and labeled "Millenium Park," by the Lawrence County Economic Development Corporation (LCEDC), a private nonprofit corporation formed by the County to reverse a loss of its industrial tax base.
In March of 2003, the County created the redevelopment authority, RALC, which then undertook in conjunction with the County Planning Commission and the County Commissioners, pursuant to the provisions in the URL, to designate a portion of the Millenium Park acreage as a "Redevelopment Area" and to draft a "Redevelopment Area Plan" for what is known as "Millenium Park Phase II." The May 2004-certification of the Millenium Park Phase II (MPII) acreage encompassed six properties, four of which had already been purchased by the L.C.E.D.C. between August of 2003 and March of 2004, and the improvements on those four properties had been razed. Consequently, at the time the Planning Commission found the Area to be blighted only the two properties owned by condemnees remained to be acquired.
Meanwhile, RALC and the LCEDC executed a written agreement calling for properties in the redevelopment area condemned by RALC to be conveyed to LCEDC and for LCEDC to cover RALC's expenses. Subsequently, asserting that condemnees' properties, inasmuch as they were maintained in economically undesirable uses and, therefore, qualified as blighted under provisions of the URL, RALC exercised its power of eminent domain under the URL to condemn the properties. RALC filed its declaration of taking, citing Section 9 of the URL.
Condemnees filed preliminary objections*fn3 contending (1) that the procedures required under the URL were not followed, (2) that their properties are neither individually blighted nor in a blighted redevelopment area, (3) that the taking violated the constitutions of the United States and Pennsylvania insofar as RALC, in declaring the properties blighted, acted pretextually with an intent to facilitate private commercial/industrial development by the LCEDC, a private entity, and (4) that RALC filed an insufficient bond with the declaration of taking. Following a twelve-day hearing, common pleas overruled the preliminary objections challenging the legality of the taking and sustained the objection to the sufficiency of the bond.
Common pleas deemed it "significant that the L.C.E.D.C. owned or was in the process of acquiring MPII properties prior to formal creation of a certified redevelopment area and subsequent condemnations." Common pleas opined:
The argument that Condemnees' properties were within a blighted redevelopment area would seem specious where the ultimate "developer" of said redevelopment area already possessed all of the MPII properties apart from Condemnees' properties. Accordingly, this Court would be hard pressed to determine that the relevant properties were properly condemned merely because they fell within the relevant redevelopment area.
Common pleas' op. at 21. Based on the conclusion "that the L.C.E.D.C. had physical control of 88% of the MPII prior to the creation of a redevelopment plan," common pleas stated that "Condemnors must demonstrate a finding that condemnees' properties are individually blighted." Common pleas' op. at 22 n.15. In evaluating RALC's assertion that the properties qualified as blighted because they were maintained in socially or economically undesirable uses, the court rejected the notion that single family residential use is socially undesirable, calling such an assertion "capricious and not in good faith." But the court concluded that condemnees failed to establish bad faith with regard to RALC's determination that the properties were maintained in economically undesirable uses. Thus the court upheld the legality of the taking. Finally, common pleas ordered that RALC post security in the form of cash or surety rather than the "naked" bond filed with the declaration of taking. The parties filed the instant cross-appeals.
On appeal, condemnees reassert the contentions pressed before common pleas. They argue that the properties are neither blighted nor located in a blighted redevelopment area as those terms are used in the URL, that common pleas misinterpreted and misapplied the URL to sustain the condemnation where RALC acted pretextually to condemn on behalf of LCEDC, a private entity, for private economic benefit and without adhering to the process prescribed under the URL. In its cross-appeal, RALC challenges the finding that it had not provided evidence of sufficient financial security to compensate for the takings.
In reviewing a common pleas court decision on preliminary objections to a condemnation, our inquiry looks to whether sufficient evidence supports the findings of fact or whether the court committed an error of law. Review of a certification of blight and subsequent taking is limited to a determination that the [redevelopment authority] has not acted in bad faith, not acted arbitrarily, has followed the statutory procedures, and has not violated any constitutional safeguards. See Appeal of Redev. Auth. of Phila., 595 Pa. 241, 247, 938 A.2d 341, 345 (2007). See also Crawford v. Redev. Auth of Fayette County, 418 Pa. 549, 554, 211 A.2d 866, 868 (1965).
In Section 2 of the URL, our General Assembly expressed its determination that the elimination of blight through economically and socially sound redevelopment serves a public purpose that justifies the acquisition of private property by the exercise of the power of eminent domain.*fn4 See Belovsky v. Redev. Auth. of Phila., 357 Pa. 329, 54 A.2d 277 (1947) (stating that the taking of private land deemed blighted is proper because the statute's purpose was "the clearance, reconstruction and rehabilitation of the blighted area" and the separate, subsequent transfer to a private developer was "purely incidental to the accomplishment of the real or fundamental purpose."). The URL authorizes ...