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BPG Real Estate Investors- Straw Party II, L.P. v. Board of Supervisors of Newtown Township

March 5, 2010

BPG REAL ESTATE INVESTORS- STRAW PARTY II, L.P.
v.
BOARD OF SUPERVISORS OF NEWTOWN TOWNSHIP, DELAWARE COUNTY, PENNSYLVANIA AND NEWTOWN SQUARE EAST, L.P. AND BPG REAL ESTATE INVESTORS- STRAW PARTY-1, L.P.
APPEAL OF: NEWTOWN SQUARE EAST, L.P.



The opinion of the court was delivered by: Judge Simpson

Argued: February 8, 2010

BEFORE: HONORABLE ROBERT SIMPSON, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE JIM FLAHERTY, Senior Judge.

OPINION

In this complex land use appeal, Newtown Square East, L.P. (NSE),*fn1 a neighboring landowner, asks whether the Court of Common Pleas of Delaware County (trial court) erred in approving a settlement agreement between BPG Real Estate Investors -- Straw Party II, L.P. (BPG-2) and several other entities (collectively, Developers), and the Board of Supervisors of Newtown Township (Supervisors). The settlement agreement allows for development of BPG-2's 51-acre property in Newtown Township, which was the subject of a land use appeal and a mandamus action. Significantly, the settlement agreement also permits mixed-use development on adjoining properties owned by the other Developer entities. The total acreage affected by the Settlement Agreement is 219 acres (subject properties). NSE challenges the propriety of the settlement agreement. Upon review, we conclude the trial court lacked authority to approve development of that portion of the subject properties beyond the 51-acre tract at issue in the underlying litigation. Therefore, we reverse and remand for reconsideration in light of this opinion.

I. Background

This appeal arises out of the trial court's disposition of a complaint in mandamus and a land use appeal, both filed by BPG-2 in October 2007. The underlying zoning proceedings that resulted in the mandamus action and the land use appeal stemmed from BPG-2's conditional use application for a proposed three-story, 140,000 square-foot office building on approximately 51 acres of the subject properties.*fn2 The Supervisors approved BPG-2's conditional use application subject to certain conditions, including a condition that no additional office buildings be constructed on BPG-2's 51-acre property. The only parties involved at the municipal level were the Supervisors and BPG-2, and only the 51-acre property was involved.

BPG-2 challenged the conditions through a land use appeal and also filed a mandamus action with the trial court.Through its mandamus action, BPG-2 sought a deemed approval of its conditional use without conditions. The land use appeal requested the trial court sustain the Supervisors' approval of BPG-2's conditional use application and invalidate the conditions.

Initially, the only parties in the court actions were the Supervisors and BPG-2. Later, NSE intervened by consent. Still later, the other Developer entities which owned the 168 acres adjacent to BPG-2's 51 acres (which together comprise the 219-acre subject properties addressed in the settlement agreement) intervened by court permission.*fn3

Developers (BPG-2 and other landowners of the 219-acre subject properties) previously filed several "by right" development applications with the Township for other portions of the subject properties under existing zoning. Developers' "by right" applications included: a preliminary land development application for construction of 202,000 square feet of retail space in three buildings to be known as "Crossroads Center;" a different application for conditional use approval for a three-story, 178,083 square-foot office building on BPG-2's 51-acre property; and, an application for conditional use approval for a 240-unit elderly housing development on 24.45 acres in the northeast corner of the subject properties. These applications remain pending before the Supervisors.

Around September 2007, Developers proposed an alterative mixed-use plan for the overall development of the entire subject properties in a manner that addressed the Supervisors' concerns with their proposed "by-right" development. Over several months, Developers worked with the Supervisors and other Township representatives to negotiate the terms under which the Supervisors would permit development of all the subject properties in accordance with the September 2007 proposal.

After months of negotiations, Developers and the Supervisors jointly proposed a draft settlement agreement that set forth the terms and conditions under which the Supervisors would permit Developers to develop the subject properties in accordance with the September 2007 proposal. This proposal would allow for the overall development of the subject properties as a mixed-use development consisting of approximately 1.8 million square feet of new retail, commercial, office and residential space. The proposal would divide the subject properties into four sectors: a "town center" mixed-use community (comprised of a diverse mix of retail, office, residential, hotel and entertainment uses and public spaces in a pedestrian-oriented environment with preservation of 14 acres of opens space); office building development; residential development; and, existing buildings. The agreement included detailed development conditions and design criteria to be imposed upon the further development of the subject properties. The agreement also required Developers to make designated off-site road improvements at a cost of approximately $8.6 million.

The draft agreement was presented to the public at three public meetings. At the conclusion of the public meetings, the Supervisors voted to approve the draft settlement agreement upon the condition that it be revised to address several additional concerns. After these revisions, the Supervisors executed the agreement (Settlement Agreement). The Supervisors and Developers jointly petitioned the trial court for approval of the Settlement Agreement.

In March 2009, a very patient trial court held a hearing on the joint petition for approval of the Settlement Agreement, at which Joseph Catania, Esq., the Supervisors' Chairman, and Dennis Glackin, a professional land planner involved in the planning of Developers' proposed mixed-use development, testified. Shortly thereafter, the esteemed trial court issued an order approving the Settlement Agreement. NSE appealed to this Court, and the trial court issued an opinion in support of its order.

In its opinion, the trial court noted the terms and conditions of the Settlement Agreement resolved all the issues involved in the underlying land use litigation as well as the Supervisors' concerns over additional development. The trial court pointed out there is a strong judicial preference in favor of the voluntary settlement of litigation. It also noted this Court upheld a number of settlement agreements in land use cases that were approved over the objections of intervening landowners. The trial court further stated this Court has upheld settlement agreements that permit departure from existing zoning regulations. The trial court rejected NSE's contention that approval of the Settlement Agreement was improper because it included land not involved in the underlying litigation.

Finally, the trial court stated the issue of whether a settlement agreement should be approved over the objection of an intervening landowner involves considerations of whether the settlement agreement imposes any duty on the objecting party (which it does not here) and whether the settlement agreement is in the public interest (which, the trial court stated, it was here).

The trial court's approval of the Settlement Agreement is now before this Court for disposition.*fn4

This Court reviews a trial court's acceptance or rejection of a settlement proposal for abuse of discretion. T.H. Props., L.P. v. U. Salford Twp. Bd. of ...


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