Municipal, Land Use & Zoning

By: Kimberly P. Venzie, Esquire

On November 3, 2011, Act 84 of 2011 was signed into law in Pennsylvania and becomes effective on January 1, 2012. Act 84 amends certain provisions of the Second Class Township Code which require Townships to advertise and seek bids for purchases and contracts of a certain minimum dollar amount.   Act 84 increases that minimum dollar amount from $10,000 to $18,500 which will lessen the regulatory bidding restraints on Townships.   Townships will not have to comply with the state’s burdensome bidding and advertising requirements if the amount of the purchase or contract is below $18,500.  Additionally, the threshold amount for written or telephonic price quotations has been raised from $4,000 to $10,000. Townships are required to seek written or telephonic price quotations from at least three contractors for all contracts between the amounts of $10,000 to $18,500.   Township will not have to comply with the state’s bidding and advertising requirements for purchases of less than $10,000 which gives Townships greater flexibility and results in costs savings. Similar new laws will also provide bidding relief to boroughs and school districts.

For a full copy of Act 84 provisions, click here and search by House Bill No. 278. For more on this topic, please contact Kim Venzie in our West Chester office. Unruh, Turner, Burke and Frees maintains law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Pennsylvania Main Line.

By: Anthony Verwey

On November 23, 2011 the Supreme Court of Pennsylvania rendered a decision that may have far reaching implications with regard to state, county, municipal and school district leasing of buildings and office space. In a case captioned 500 James Hance Court, et al. v. Pennsylvania Prevailing Wage Appeals Board, ___ A.3d ___, 2011 WL 5865752 (Pa. 2011), a developer planned to construct a building and then entered into a preconstruction lease with a charter school. The construction of the building was to take place in essentially two phases, the shell and the interior fit out. The Bureau of Labor Law Enforcement made a determination that the entire project was subject to the provisions of the Prevailing Wage Act and the developer filed a grievance to appeal this conclusion. The matter worked its way through the Prevailing Wage Appeals Board, the Commonwealth Court, and finally to the Supreme Court of Pennsylvania. Through the appeal process the Bureau and Prevailing Wage Appeals Board, which had initially decided the matter, took the position that a five part test utilized by the federal government to determine the applicability of the Davis-Bacon Act must also be used to determine whether the Act applies to a preconstruction lease between a private developer and a public entity.

After consideration of the Pennsylvania Prevailing Wage Act and the facts of the case, the Supreme Court concluded that although the lease and construction agreements did not clearly separate the construction of the shell and interior fit out of the building, such bifurcation was a natural result of the construction process into phases which are to be treated separately for prevailing wage analysis. Because it was undisputed that the interior fit out would be completed by the charter school, there was no question that prevailing wage requirements would apply to that phase of the construction. However, with regard to the shell of the building, the Supreme Court flatly rejected the Prevailing Wage Appeals Board’s position that the five part federal analysis must be applied to the shell of the building.

In that regard, the Supreme Court articulated a test to be used to determine whether the Prevailing Wage Act applies to a preconstruction lease arrangement between private developers and a public entity subject to the Act. The court noted that “privately financed construction work does not facially implicate the terms of the act …” and that a developer could establish a prima facie case that the prevailing wage relation is not implicated where it presents evidence that “… it is incurring the risk and obligations of an owner/mortgagor in construction, that there is no public financing component to the work (or, under, Penn National I, in the relevant major phase of construction), and that its relationship with the covered entity is as a lessor under a facially legitimate lease… .”

Central to this analysis was the question of whether there was any public financing as the Prevailing Wage Appeals Board asserted based on rents to be paid under the lease, which would ultimately be used to recoup the costs of construction. The Supreme Court also rejected this position as there was no evidence that the recoupment period would be substantially shorter than the industry norm for building shells of the type involved in that matter. Likewise, the Court found that provisions in the lease allowing for an option to purchase did not satisfy the public financing component where the building would be purchased at fair market value. In rendering its decision, the Supreme Court has now provided a clear analytical tool for determining whether a preconstruction lease will be subject to the requirements of the Prevailing Wage Act.

Anthony Verwey is a partner at Unruh, Turner, Burke and Frees. The firm maintains law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Main Line, and many surrounding communities such as Devon, Exton, West Chester, Ardmore and others.

By: Andrew D.H. Rau

The oil and gas industry’s race to develop the Marcellus Shale across Pennsylvania has brought to the forefront the tension between large-scale development interests and local government.  Pennsylvania boroughs, townships and cities are grappling with the limits of local zoning power as they consider the means of regulating and controlling drilling locations and the related traffic, noise, and other uniquely local impacts.

The appellate courts are helping define this legal landscape, and in a series of recent decisions the dividing line between the state’s oil and gas laws, and local ordinances, is being established.

The Pennsylvania Supreme Court case of Huntley & Huntley v. Oakmont Borough Council, 964 A.2d 855 (Pa. 2009) leaves the door open for local zoning regulation pursuant to the powers granted by the state’s Municipalities Planning Code (MPC).  The Huntley decision expressly recognized the power of the MPC when it comes to zoning prerogatives of the local government.  The court wrote that “the MPC’s authorization of local zoning laws is provided in recognition of the unique expertise of municipal governing bodies to designate where different uses should be permitted in a manner that accounts for the community’s development objectives, its character,” and what was described as the “suitabilities and special nature of particular parts of the community.”  The conclusion—local zoning power lives on in the Marcellus Shale era.

But how far does the municipal power extend?  In Range Resources Appalachia, LLC v. Salem Township, 964 A.2d 869 (Pa. 2009) a case decided at the same time as Huntley, the Supreme Court said that local governments go too far if they try to regulate things already controlled by the state’s Oil and Gas Act, such as detailed technical standards for drilling, oversight of well heads, well casings and capping requirements.

There is more to come.  The case of Penneco Oil Company, Inc. v. County of Fayette, 4 A.3d 722 (Pa. Cmwlth. 2010), was recently issued by the Commonwealth Court, and attempted to further define the limits of local control.  The Commonwealth Court found that appropriate local zoning controls included “preserving the character of residential neighborhoods, and encouraging beneficial and compatible land uses.”  The case also upheld the local government’s right to adopt ordinances requiring special exception applications before a zoning hearing board in some cases.  The gas industry players have asked the Supreme Court to consider an appeal.

Meanwhile, local governments, and oil and gas interests across Pennsylvania, hope for more clarity from the courts.  Contact Andrew D.H. Rau in our West Chester office for more information.

Andrew D.H. Rau is a partner at Unruh, Turner, Burke and Frees. Andrew practices in the areas of municipal and zoning law, real estate and land use. The firm maintains law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Main Line, and many surrounding communities such as Devon, Exton, West Chester, Ardmore and others.

By: Andrew D.H. Rau

This week’s budget approvals in Harrisburg included legislation that will have an effect on landowners, as well as state and local government entities across Pennsylvania.  Senate Bill 1042, signed into law as Act 46, will extend the life of many land development and related approvals, if the approvals are in place on or after January 1, 2009.  The extension period runs through July 1, 2013.

The extensions may not apply or will involve special rules as to certain state permits, for example some Department of Environmental Protection and PaDOT approvals. Unique provisions also apply to Philadelphia.

Local governments retain the power to suspend or revoke approvals for non-compliance with written conditions, and enforce conditions that are imposed as a pre-requisite in moving from preliminary to final plan approval.  Developers are, however, protected in many cases from changes in law, regulation or policy during the extension period.

For a full copy of the bill’s provisions, click here and go to Article XVI-I, “Permit Extensions,” beginning at page 99.

For more information, contact Andrew Rau in our West Chester office.

By: Kimberly P. Venzie

The Pennsylvania Commonwealth Court’s recent decision in BPG Real Estate Investors v. Newtown Township may cause developers and townships to more carefully consider whether settlement agreements are reaching too far. The ultimate result may be courts refusing to approve such settlements.

In the BPG decision, the Commonwealth Court determined that a settlement agreement between the developer and Newtown Township was too expansive because it included land which was not part of an original conditional use proceeding. The conditional use involved a 51 acre portion of property upon which commercial development was proposed. The developer appealed the conditions attached to the conditional use approval. Certain entities owning 168 acres adjacent to the developer’s 51 acres intervened in the appeal. The settlement agreement ultimately reached by the parties addressed the commercial development upon the 51 acres but also addressed development upon the 168 acres which were not part of the conditional use proceeding. The Court said the settlement should not have included the additional 168 acres, but then sent the case back to the lower court to consider whether to approve the portion of the settlement agreement relating to the 51 acre tract. You can explore media coverage about the case by visiting the Delaware County Daily Times.

For more information on how to draft appropriate settlement agreements, please contact Andrew Rau and Kim Venzie at our West Chester office location.

By: Kimberly P. Venzie

The use of windmills as an energy source is on the rise and rapidly growing in Pennsylvania, even in residential neighborhoods. While windmill farms can be an interesting and peaceful sight from afar, the construction of a windmill in a backyard in a residential neighborhood may not be as welcoming. In the case Tink-Wing Mountain Lake Forest Property Owners Association v. Lackawaxen Township Zoning Hearing Board recently handed down by the Pennsylvania Commonwealth Court, the Court upheld the Zoning Officer’s issuance of a zoning permit for the construction of a windmill on residential property for private use.

The Court found that the windmill use was a permitted accessory use providing an essential service and that the Zoning Officer was correct in issuing a permit. Although windmill use was not specifically enumerated as an accessory use in the Township’s Zoning Ordinance, the Court found that the windmill use was a use customarily incidental and subordinate to the principal residential use – comparing windmills to solar panels, outdoor fireplaces, satellite television – all of which are now often considered to be customarily incidental to principal uses.

With the increased interest in wind power, Townships may need to consider adopting ordinances which specifically regulate this growing use in Pennsylvania. Check out the out the Pennsylvania Land Trust Association’s website for more information on the use of windmills as an environmentally friendly source of power.

For more information on the above, please contact Kim Venzie in our West Chester location.

By: Kimberly P. Venzie

Read my recent article about the affirmation of the Schaffer decision by the Pennsylvania Supreme Court and its impact upon development in Pennsylvania, particularly upon projects developed under the Uniform Planned Community Act. Although the affirmation of the Schaffer decision by the Pennsylvania Supreme Court may cause those utilizing the Planned Community form of ownership to be wary, this form of ownership remains a viable and useful land planning tool. For the full article please click here. Contact Kim Venzie for more information.

By: Kimberly P. Venzie

Despite attempts by the City of Philadelphia and Fox Chase Cancer Center to make alternate use of a portion of Fairmont Park, their efforts have failed to date based upon a recent decision reached by the Pennsylvania Commonwealth Court. In In Re Estate of Ryerss, -A.2d – (Pa. Commw. Ct. 2009), the City of Philadelphia and Fox Chase Cancer Center (the “Appellants”) sought authorization to discontinue the use of nearly 20 acres of Fairmont Park as parkland and lease those acres to the Fox Chase Cancer Center for expansion of the cancer center’s medical facilities. The portion of Fairmont Park at issue was devised to the city in 1889 to be used as a park for the use and enjoyment of the public. Arguments by the parties in this case centered around the act known as the Donated or Dedicated Property Act (“DDPA”), 53 P.S. §§3381-3386. The court determined that based upon the DDPA, the Appellants failed to show that the continued use of the property as parkland was no longer practicable or that the use of the property as a park had ceased serving the public interest.
Although the court acknowledged that the expansion of the cancer center might benefit the city, the court rejected a “balancing test,” stating that “[if] it did permit such balancing, every donated park in the Commonwealth would be at risk of being leased so that cash-strapped municipalities could balance their budgets…it would likely discourage individuals from donating their property to be used for public purposes in the future.”

For more information on this case and how it relates to local governments and developers, please contact Kimberly P. Venzie.

By: Amanda J. Sundquist

In Harleysville Homestead, Inc. v. Lower Salford Township Authority, 980 A.2d 749 (Pa. Commw. Ct. 2009), a residential developer applied to the authority to secure public sanitary sewer service for its development. The developer and the authority entered into an agreement for the construction of sewer lines, under which the developer agreed to pay a certain tapping fee per dwelling unit, plus a one-time connection fee. The developer paid a portion of the fees, but later initiated suit, arguing the authority’s charges under the agreement for tapping fees were in error and therefore, the authority had violated the Municipality Authorities Act by over charging for sewer capacity. The authority argued, in part, that the developer’s action was not timely.

The Commonwealth Court determined the authority’s action was a violation of a statutory duty, not of a contract. As such, the action was governed by the two year statute of limitation for a tort, rather than the four year statute of limitation for a contract action. The court found the developer’s action to be untimely. For questions regarding sewer fees and timelines, please contact our office.

By: Amanda J. Sundquist

In ,Crandell v. Pennsbury Township Board of Supervisors, et al. — A.2d — (Pa. Commw. Ct. 2009), the Commonwealth Court addressed public opposition to a plan by a Township Board of Supervisors member.  Fenton, a resident who ultimately became a board member, formed a group to oppose a developer’s plans.  After being elected to the board on a platform of opposing the plans, Fenton wrote various Planning Commissions seeking support, publicly spoke out against the plans at hearings, directly contacted other organizations to block the plans and acted as a consultant to an opposing citizens group.  The developer filed a petition to enjoin and prohibit Fenton and another board member from taking any action with respect to the plans.  The trial court determined that Fenton could not act in an unbiased fashion and prohibited him from participating in decisions and discussion regarding the plans, but allowed the other board member to remain.  The trial court further required a replacement individual to participate in any vote on any matter pertaining to the plans in place of Fenton.  An appeal followed.

Among other issues, the Commonwealth Court looked at whether preemptively prohibiting Fenton from participating in any decision related to the plans and appointing a replacement board member was proper.  The Court focused on Section 603 of the Municipalities Planning Code which specifically protects board members’ right to vote in accordance with a campaign promise or other past statements.  The Commonwealth Court distinguished Crandall from its decision in Prin v. Council of Municipality of Monroeville, 645 A.2d 450 (Pa. Commw. Ct. 1994).  In Prin, the request for recusal occurred in an actual proceeding when a decision was in the process of being made.  Here, the Court found the developer had bypassed the voting procedures by filing suit in advance to prohibit Fenton from not only voting, but also from expressing his opinion at board proceedings.  The board had already granted preliminary plan approval and Fenton had stated an intention to refrain from future plan votes.  As such, the Court found the developer no longer had any reason to fear Fenton’s vote.  Silencing Fenton’s opinion in his public capacity was contrary to Section 603.

The Court also found the developer’s procedure violated the recusal procedure.  Traditionally, a request for recusal is to be directed to the offending official for his own self-assessment.  It is only after an official refuses to recuse himself and some substantive adverse action occurs, that the issue is reviewable.  The Court found that even if the developer’s plans were presented and Fenton refused to recuse himself, the developer had a right to appeal an adverse decision to the Court.  Therefore, the developer had a remedy at law and a “pre-emptive strike” was not necessary.

Finally, the Commonwealth Court found the trial court erred in ordering a replacement board member to act in place of Fenton on matters relating to development.  As the board was composed of three members, a quorum consisting of at least two members was present to vote.

For more information about how this decision may affect you or your local municipal board, please contact our office.