Takings in Pennsylvania Related to Private Projects But With Public Benefits

April 2015Articles In the Zone

A recent case out of the Bucks County Court of Common Pleas has shed further light as to the right of a municipality in Pennsylvania to condemn lands related to a private development. In the case of In Re: Condemnation of Sagot, Bensalem Township enacted a resolution authorizing the condemnation of permanent rights of way and easements for the purpose of installing sidewalks and related improvements in the vicinity of the Parx Casino project. Parx agreed to pay for the costs related to the process, procedure and installation of these improvements. Preliminary objections were filed by neighboring property owners who contended that the condemnations were unlawful for the reason that the primary beneficiary of the condemnation was a single private entity. The issues raised in the preliminary objections were as follows:

  1. Whether the township was required to obtain approval from PennDot prior to condemning the subject properties.
  2. Whether the taking was sufficient and for public purpose.
  3. Whether the taking was excessive.

In reviewing the preliminary objections, the court noted the following black letter law on this subject:

  • Private property can be condemned by a municipality but only if the condemnation is primarily for a public use.
  • The township cannot confiscate private property even if appropriate payment of just compensation is made where the ultimate intended use is exquisitely private.
  • A taking will be seen as having a public purpose only where the public is to be the primary and paramount beneficiary of the exercise.
  • A taking by eminent domain does not lose its public character merely because there may exist some feature of private gain.
  • If public good is enhanced, it is immaterial that a private interest also may be benefitted.

In reviewing the record, the court in this case was satisfied that this taking addressed a fundamental public purpose of protecting the health, safety and welfare of the public, in that sidewalks in this area would be a clear public benefit. In this regard, and after referencing the U.S. Supreme Court Case of Kelo in 2005 (noting that the U.S. Supreme Court expansively determined that private property may be condemned in favor of private economic development in that enhanced business activity developed either directly or indirectly to the ultimate benefit of the general public even if incidental) and the recent Pennsylvania Supreme Court case in Reading (where the court examined the permissibility of takings that benefit private interests), the Bucks County Court of Common Pleas upheld the condemnation in this case. In these cases, it is important to carefully examine the proposed indemnity/development agreement between the municipality and the developer as to the proposed process.

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