Not All Takings for Private Development Are Illegal

November 2012Articles In the Zone

After the U.S. Supreme Court’s decision in Kelo v. City of New London, 545 U.S. 469 (2005), confirmed an expanded view of the scope of the government’s eminent domain power under the U.S. Constitution, many states – including Pennsylvania – passed legislation that restricted those powers within their jurisdictions. In May 2006, Pennsylvania enacted the Property Rights Protection Act, which was incorporated into a revised Eminent Domain Code at 26 Pa.C.S.A. §§ 201-207.

One of the central goals of the Property Rights Protection Act was to prohibit the taking of private property in order to use it for private enterprise, subject to certain exceptions, including takings under redevelopment laws. Ever since this restriction went into effect in September 2006, there have been debates as to how it would be applied by Pennsylvania courts. The recent case of Reading Area Water Auth. v. Schuylkill Riv. Greenway Assoc., 2012 WL 3079156 (Pa.Cmwlth.), provides some insight.

In this case, the Water Authority condemned an easement over property of the Greenway Association for water, sewer and storm sewer facilities which would serve the needs of a residential subdivision being developed on property adjacent to the Greenway Association’s property. The Greenway Association filed preliminary objections to the taking which asserted, among other things, that the condemnation violated the Property Rights Protection Act, since the easement would primarily benefit the adjacent development. In fact, the water, sewer and storm sewer facilities were to be installed by the developer. Although this taking of private property would significantly benefit the adjacent development as a private enterprise, the Commonwealth Court nonetheless held that the provision of these types of utility services constitutes a sufficient public purpose to withstand a challenge under the Property Rights Protection Act.

Although the result of this case is good news for developers and bad news for those who would oppose similar condemnations to assist development, it is important to note that this outcome is not assured in every case. The court’s opinion indicates that, had the condemnation been structured differently, the outcome may very well have been different. Accordingly, any similar situation should be evaluated on a case-by-case basis, and developers and utility authorities should be careful in their planning.