Pennsylvania Eminent Domain Lawyer & Attorney : Fox Rothschild Law Firm : Condemnation, Real Estate Valuation : Philadelphia, Bucks County, Pennsylvania

The Superior Court of New Jersey has ruled that a property owner that withdraws the “estimated just compensation” deposited into court waives its right to challenge the condemnation.

In Township of Piscataway v. South Washington Ave., LLC., the Township of Piscataway condemned a 75 acre farm to preserve it for open space. In New Jersey, condemnors initiate a condemnation action by filing a complaint and also file a “declaration of taking” either at the time the complaint is filed or some time thereafter. In this case, the property owners challenged the condemnation when the Township filed its complaint. While that challenge was pending, the Township filed its declaration of taking and deposited its estimate of the fair market value of the property – known as “estimated just compensation” or “EJC” – into court. The property owners withdrew the money but continued the challenge to the condemnation.

The New Jersey Superior Court held that a condemnee who withdraws the EJC funds is barred from asserting any other than those relating to the amount of compensation owed to the condemnee. The Court explained that “having accepted the benefit” of the funds, the condemnee cannot now challenge the taking.

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The Commonwealth Court of Pennsylvania recently upheld the condemnation of a strip club for the use of a Charter School. The property, located in the City of Chester, Delaware County, Pennsylvania, was located in an area certified as blighted. The property owner challenged the condemnation primarily on the basis that the project would allegedly benefit the private developer retained for the project. Therefore, the property owner argued, the taking violated the Fifth Amendment’s requirement that condemnations must be for a “public use.”

The Commonwealth Court rejected the property owner’s argument and restated the principal that “a taking is proper if the benefit to the public is primary and any benefit to a private individual is only incidental.” In this case, the Court found the Charter School and the elimination of blight were “public uses” and the fact that the developer may profit from the project does not negate those public uses.

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Pennsylvania Governor Ed Rendell announced a plan to repair 1,145 bridges across Pennsylvania. The list and a county-by-county map of all the bridges are available on PennDOT’s Web site at www.dot7.state.pa.us/RebuildPA/Main.htm

Rendell has asked the General Assembly to approve this plan which he estimates will require state funding of an additional $200 million a year for three years, to be combined with federal road repair funds. The "structurally deficient" bridges include 91 in Southeastern Pennsylvania including 35 in Bucks County, 26 in Chester County, 15 in Montgomery County, nine in Philadelphia, and six in Delaware County. Most are smaller bridges.

It is unclear at this time whether the General Assembly will approve this project. According to press accounts, Senate Republicans acknowledged repairs were necessary but expressed reluctance to borrow more funds. This issue will likely by an important part of budget negotiations.

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PennDOT has been planning a project known as the “Marshalls Creek Bypass” for many years. It is aimed to alleviate gridlock at the bottleneck of Routes 209 and 402 in Smithfield and Middle Smithfield townships, Monroe County Pennsylvania. PennDOT has already acquired some properties for this project and was sent to acquire more properties when it decided to put the project on hold in April.

I represent some of the property owners that will be impacted by this project and spoke with a PennDOT representative about its plans. PennDOT still intends to go forward with the project. However, it is revisiting some of its plans to determine if there are ways to cut costs.

It appears that we will know more about PennDOT’s plans later in the summer or early fall.

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Eminent domain remains a popular campaign issue. John McCain recently repeated his criticism of the U.S. Supreme Court’s Kelo decision.  In Kelo, the Court held that the use of eminent domain to acquire property for “economic development” was not unconstitutional.

On May 6, 2008, McCain reiterated his feelings during a speech regarding his judicial philosophy and said:

The year 2005 also brought the case of Susette Kelo before the Supreme Court.  Here was a woman whose home was taken from her because the local government and a few big corporations had designs of their own on the land, and she was getting in the way.  There is hardly a clearer principle in all the Constitution than the right of private property.  There is a very clear standard in the Constitution requiring not only just compensation in the use of eminent domain, but also that private property may be taken only for "public use."  But apparently that standard has been "evolving" too.  In the hands of a narrow majority of the court, even the basic right of property doesn't mean what we all thought it meant since the founding of America.  A local government seized the private property of an American citizen. It gave that property away to a private developer.  And this power play actually got the constitutional "thumbs-up" from five members of the Supreme Court.

Eminent domain is likely to remain a local and national topic during this campaign year. 

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The Philadelphia Redevelopment Authority – which regularly uses its power of eminent domain – will have a new chairperson.  Labor Leader John Dougherty, who recently lost his bid for State Senate, announced that he will step down as chairman of the RDA.  His term was not slated to end until early next year.  The stated reason for his resignation is to provide Mayor Nutter, who took office this year,  with the opportunity to select his own chairperson.

Dougherty was appointed to the RDA chairmanship shortly after Mayor John Street took office in 2000.  Dougherty was a major supporter of Street and did not support Nutter in last year’s primary.

The RDA was very active during the Street Administration.  It was the main governmental vehicle for his anti-blight program, the Neighborhood Transformation Initiative.  It regularly used its power of eminent domain and condemned thousands of parcels of property citywide.

Mayor Nutter has stated that the authority will play an important role in his administration.  However, he has not provided many details.  Nutter said he would appoint a successor to Dougherty and fill an existing vacancy on the five-member board as soon as possible.

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The Pennsylvania Department of Transportation ("PennDOT") recently announced its preliminary construction plans for a portion of I-95 in Northeast Philadelphia. These plans include rebuilding two interchanges – one at Bridge Street and one at Betsy Ross Bridge and Aramingo Avenue. PennDOT also intends to rebuild a three-mile stretch of I-95 between Cottman Avenue and the Betsy Ross Bridge. Construction is scheduled to start in 2012. However, according to PennDOT, preliminary engineering is to be completed late this year.

Businesses and residential properties will be acquired for the project – either amicably or through the eminent domain process. I spoke with the outside consultant for the project who told me the acquisition for the project will be in about 2 years. However, we always counsel our clients to engage in “pre-condemnation” planning. This involves a number of potential actions including working with PennDOT to see if you can avoid losing your property. However, most planning involves taking steps to ensure that you receive the maximum payment for your property if it is condemned.

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An appeal recently filed with the U.S. Supreme Court asks the Court to revisit its controversial decision in Kelo v. City of New London. In Goldstein, et al., v. Pataki, et al., property owners are challenging a project in Brooklyn known as the Atlantic Yards Arena and Redevelopment Project.  The properties were condemned for a new basketball arena for the New Jersey Nets as well as high rise apartments and office buildings. 

The challengers — owners of homes and businesses that would be taken to make room for a major part of the development — argue that the purpose of the project is to transfer property from one private owner to another.  The Second Circuit Court of Appeals affirmed the District Court’s dismissal of the lawsuit.  If the appeal is granted, it will be the Court’s first chance to revisit its 2005 Kelo decision. 

Click here to see the petition filed by the property owners.

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One critical aspect of any eminent domain case is selecting the right valuation expert.  Recently, the Commonwealth Court of Pennsylvania ruled that real estate brokers can serve as valuation experts in eminent domain cases even if they do not have a real estate appraiser license.

In King v. West Penn Power Company, a power company acquired a portion of a privately-owned airport for an electronic transmission line by its power of eminent domain.  The property owner in King challenged the amount of “just compensation” that was offered by the power company.  The property owner sought to present the testimony of a real estate broker to testify regarding the negative effect of the taking on the fair market value of the property.

The power company filed a motion to preclude the broker’s testimony on the basis that that the broker did not have a real estate appraiser license.  The trial court granted the motion and precluded the broker’s testimony. The property owner appealed.

The Commonwealth Court reversed the trial court’s decision and found that the broker did not need a real estate appraiser license to qualify as a valuation expert in a condemnation case.  The alleged basis for the motion to preclude the broker’s testimony was the Real Estate Appraiser Certification Act which provides that it is unlawful to perform real estate appraisals “in non-federally related transactions” without a valid certificate from the State Board of Certified Real Estate Appraisers.  However, the definition of “federally related transaction” in the State Board of Certified Real Estate Appraisers’ regulations does not include appraisals for condemnation proceedings.  In addition, the definition of “condemn” in the Pennsylvania Eminent Domain Code does not include “transactions.”   Therefore, the Court held the phrase “nonfederally related transaction” in the Appraisers’ Act does not encompass condemnations of property.

The Court also continued to explain its decision by stating that “it makes no sense to require that qualified valuation experts in condemnation proceedings possess real estate appraiser licenses.”

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