Price v. Philadelphia Parking Authority

Appellant, Philadelphia Parking Price, v.

Authority. 1966. April 19, 1965; reargued June Argued Eagen, Cohen, Musmanno, Jones, J., C. Bell, Before JJ. Roberts, O’Brien him

Theodore Voorhees, with O. Lawrence Turner, L. Jr., Lenard Wolffe, & Dechert, Rhoads, Price for appellants. him David N. for

Harry Shapiro, ap- with Bressler, pellee. W.

Matthew Bulloch, Jr., Deputy Solicitor, City (Jerald with him and (Jornish, Assistant City Solicitor, (J. Edward for Bauer, City Philadelphia, Jr., Solicitor, intervenor. B. Philip

David F. and Berger, Newman William for intervenors. Rudenho, by

Opinion Mr. Justice June 1966: Roberts, In B. Price and Barook Ma- May 1964, appellants, equity enjoin action appellee, instituted suda, Philadelphia Parking Authority, proceeding negotiated agreements for the separate develop- under hereafter projects, of two referred to ment as the and the Project House Square Rittenhouse Academy such to have agreements declared null Project, void. public “a Philadelphia is Parking Authority corporate body exercising powers,”1 politic, en- City Philadelphia pursuant created a co- abling legislation2 purpose establishing ordinated system off-street facilities.3 to act under the en- Purporting powers granted challenged into abling entered act, projects: Project House National Academy with Land and Investment and the Rittenhouse Company Project with Square Wolgin Ephraim Jack Prankel. Due to nature of the action and the is- it that we necessary sues set out the presented, es- terms of the contested agreements. sential

I. House Academy op- Philadelphia presently Parking Authority on the open-air erates an facility of a 100 car capacity Watts, southern half of block bordered Broad, and Locust of Philadel- Streets Spruce, City phia.4 National Land and Investment Company record portion owner remaining block, Bartram situs a vacant structure John formerly Hotel.

In the National Land Park- Fall and the negotiated into a agreement entered ing development Project.5 1 Authority Law, Parking 5, 1947, §5, Act of June P. L. supplemented, (Supp. 1965). §345 and P.S. amended 53 as 2 supplemented, Ibid, §§1-16, and §§341-56. as amended 53 P.S. 3 supplemented, Ibid, §5, §345. and 53 amended P.S. 4 City Philadelphia the record owner of the situs of of The $1,000,000, purchased having facility, land for the and leases Authority. passed by City, An Parking ordinance was the the it to 5, 1962, authorizing Mayor by approved December the and Authority Parking $1,100,000. for to land sale 5 “Letter from of Intent” agreement embodied was The Authority. letter This contained the es- to National

321 agreement provided essential terms, tbe Au- that thority purchase portion was to that block by acquire owned National and to the remainder City Philadelphia.6 Authority further The agreed to existing demolish the fi- to structure and nance eight-story and parking ga- construct an rage proposed on the site. garage, The estimated to cost pro- between $8,000,000 and to $9,000,000,7was space approximately vide 862 and was automobiles to operation be Authority leased National as an parking facility. term The of the lease with National garage for the was to be co-terminous with the life of by Authority bonds issued land finance ac- quisition and construction costs. however, National, granted option was an exclusive to renew the lease “if, and whenever and to the extent the life of the that, Authority is . . extended . .”8 garage, agreed addition to the also proposed

to lease for a like term the air over the private facility developer to the for the construction apartment high-rise complex. contemplated The apartment structure was consist two towers ris- ing garage,9 22 containing floors above the excess agreement approved accepted by sential and terms was Authority. vote of the members of the paid price to be to National for the acquired from it has not been determined. land to be The record suggested however, $1,500,000 reveals, has been National. Parting the Chairman of Au- reveals The record building garage thority estimated the cost testified $8,000,000 $9,000,- between architects the builder However, indicated whether this estimate included not it 000. are not costs. If such amounts acquisition demolition land in the could run well over included, investment overall $10,000,000. aggregate lease term ex- However, initial and the year beyond the 2059. not extend could term tension provide for or limit the use does Intent” “Letter air-rights may put in- leasehold. The record National per- be to developer was units. apartment concourse and on the space ground mitted to allocate lease or for of the for its use garage levels own approxi- occupy commercial tenants. This area was to pri- sublet feet and was to be mately 74,000 square and bank, for offices, shops, vate commercial tenants restaurant.10 the lease under National’s financial commitments separate payments: for three rental called agreement of an were to consist “debt-service which (1) rentals” inter- amount to meet the amortization sufficient the to finance bonds issued by est j11 garage and construction of the acquisition the situs pay- “Authority which were to consist rentals” (2) in the space garage ments for the of air over the use first for the sequence and amounts: following $5,000 for the year $10,000 $15,000 the lease term, second, for the $25,000 for the for the third, $20,000 fourth, for last every year except fifth and thereafter, years payment the lease which the was term, be rentals” $30,000 annually; (3) “excess receipts of a percentage gross were consist amount received from developer over a given and the lease of commer- operation garage Neither space cial therein. nor percentage receipts at which excess rental gross payments level in the due is stated written or has agreement become parties. been fixed yet project title agreement, Under to be in the name Authority. developer, option an obtained exclusive to acquire the however, apartment including land, garage entirety, contemplates the construction National here described. dicates p. 2. P. Exhibit 10Ibid. parking garage facility, produced both from 11 incóme of commercial lease available payments. rental for such structure at the end of tliereon, the lease term amount based upon the cost ap- at praised value the time purchase. no ac- Thus, tual payment was to be required for the acquisition by National of title to the structure to be constructed by it over the garage facility. aspect

As an of the the to developer lease, agreed operate the proposed garage “as a fa- parking of the . cility . . .” The Authority rates and other for charges use the the garage by were to be determined the by Authority subject proviso to the the fees could not be reduced below the amounts ini- the set without lessee’s consent. tially II. Square Rittenhouse At the same approximately negotiations time the took place between the and the Authority National, also entered into a construction and lease agreement with Jack Frankel. and Wolgin Ephraim provided The over agreement for the lease of air rights Author- parking operated a owned and the facility at 1815-27 Walnut ity Street, Pennsyl- Philadelphia, vania.12

Under Wol agreement, tenant-developers, empowered were to gin Frankel, construct a 19 over office story building Authority’s parking ga permitted tenants were also to be “im The to rage. space within the occupy Garage access prove and... con support Office-Building, to and [to] in the basement and on ... the ground struct [stores] . to . .” be used for Garage their or benefit level commercial private other tenants.13 to sublet garage location had at this been constructed The the Au thority in 1953. agreement capacity resulted a reduction of Since agreed to a existing add fifth tier garage, lessees to replace the diverted. structure tier four were under tenant-developers, agreement,

obliged pay for the spaee within above the $25,- rental averaging approximately annually. term to extend lease was for the life of the extension Authority, including any but was thereof, During exceed 99 years. lease term, parking improvements facilities and thereto made by Wolgin including Frankel, office to be building were to be owned constructed, the Authority. developers given were However, purchase option exclusive land, entire project, and all sum facilities, improvements, after ranging $1,000,000 exercisable $1,318,000, after the retirement of all January outstand- whichever occurred ing revenue later. bonds, III. Grounds Challenge In their Price challenge and Masuda complaint, that projects of both legality alleging essentially rather by employing negotiated agreements Authority, statutory competitive than had exceeded its bidding, en- to that the not authorized Authority was authority; were in the because as envisioned projects they gage and predominantly private nature; primarily no there was to the that, Project, as need present anticipated future demonstrable proposed. parking facility for the filed an to com- answer facts in put essential issue, plaint trial, At the testimony. start presented parties appellants’ when case, again at the conclusion to closed, Authority moved dismiss was the record that Price Masuda lacked standing on the ground transactions and that had failed they challenge to entitled to relief they that were sought. to establish complaint averring separate two Treating granted the chancellor the Authori- action, causes ty’s motion to respect dismiss with the Rittenhouse to Square Project on the ground the complaining parties lacked standing to the transaction. challenge He denied the motion Project as to the Academy House and proceeded to make an findings with adjudication, of fact and conclusions law.

The chancellor concluded that Authori- the Parking into the ty, by entering Academy House with- out competitive had not violated the bidding, provisions act. enabling He further concluded that project a public endeavor and had appellants failed conclusively establish the need lack proposed construction.14 he had although And, dismissed that previously portion of complaint seek- ing to enjoin Square Rittenhouse the chan- Project, cellor proceeded to make findings of fact and conclu- sions of law on the merits order provide a record in the event that his determination that and Ma- Price standing suda lacked it challenge On reversed. he concluded merits, the Authority had not contrary enabling acted to the act. Standing

IV. Sue Price and Masuda are citizens and taxpayers Philadelphia. their City sustaining standing the Academy House the chancellor challenge Project, fell found that Price and Masuda within the ambit rule that a taxpayer may challenge the well-defined expenditures of tax and monies “wrongful wasting v. 389 Pa. Shapiro, Loewen 133 610, 613, of assets.” Although 527 is not 2d 525, (1957). A. 14 recognized appellants that the chancellor had es- While present prima no case that need facie existed a tablished that garage, could proposed he concluded have rea- respect present reasonably otherwise, to and with an- both soned arbitrarily. need, had not therefore acted ticipated future 826 per created it is body,

a traditional governmental of a medium through form essential services taxes subject is not publicly enterprise owned de for or upon acquired any property assessments 458, P. L. of June purposes. 5, 1947, voted to such Act pursuant as 53 P.S. enacted §355, §15, amended, Public §1; Pittsburgh Pa. Art. see Const., IX, Pa. 279, Bd. 377 Property Assessment, 274, Auth. v. 359 Fitzgerald, A. v. (1954); 2d 166 165, McSorley 105 Moon Town A. 144 cf. (1948); Pa. 59 2d 267, 142, 264, A. 2d West 387 Pa. 127 361 ship Appeal, 144, (1956); Auth. Pa. Borough Municipal 416, View 381 Appeal, A. if to proceed, 113 2d 307 (1955). permitted Thus, presumably will result the removal of a tract of real estate large Au because of the location of an tax rolls thereon Park Public thority Cf. parking facility. Pittsburgh v. Auth. Bd. 377 Pa. ing 274, Property Assessment, A. Moon 387 Pa. 2d 165 (1954); Township Appeal, 105 A. 361 (1956). appellants’ 127 2d Based upon 144, exempted that real be allegation estate would illegally the chancellor project reasoned thereby, tax would amenable one whose burden challenge with agree affected. We this conclusion. As the “to the extent tax stated, real estate chancellor be diminished illegal exemption, revenues be unavailable for future hence . . . use, [Price as contributors to that fund will have Masuda] loss.” pecuniary a suffered 411 v. Pa. Hemphill, 190 Mayer 1, 6, A. 2d 444, Court reiterated the (1963),

446 well-settled rule taxpayer may enjoin seek the wrongful or un expenditure funds even he is though lawful any injury other to establish than to unable his inter Smith See v. taxpayer. Gallagher, 408 est Pa. 135 Scudder v. (1962) ; A. 2d Smith, 331 Pa. (1938); Atl. Harris v. Philadelphia,

327 (1930); Page King, Pa. 149 Atl. 722 Pa. 473, v. (1926). correctly 131 Atl. 707 153, The court below reasoned that the reduction of re tbe tax base which exemption property sults from the taxation from practical purposes, upon all has, the same effect taxpayer expenditure as an latter funds. If the challengable by repeatedly taxpayer, as has been so held, therefore must be the former. Cf. Bernstein v. Pittsburgh, (1951).15 366 Pa. 77 A. 2d 200,

Proceeding portion complaint dealing to that Square with the proposal, Rittenhouse chancellor concluded that standing Price and Masuda lacked challenge project. that distinguishing In that trans- action from House, the chancellor reasoned Authority that presently since the enjoys exemp- a tax existing tion on facility, its the mere lease of commer- cial within building, and above the even if im- proper, appellants did not threaten any pecuniary with injury. He appellants concluded, that therefore, could jurisdiction equity not invoke to attack the Rittenhouse Square Project. the chancellor this, erred. taxpayers’ Given the litigation ultimate basis of a means mobilizing politic body self-interest of individuals within the prevent illegal governmental Notes, and unwarranted action. Taxpayers’ Survey Summary, Suits: A 69 Yale L.J. 904-06 (1960), public by dismissing interest would not be served ground Authority may instant suit on the be denied exemption garage. Pittsburgh for the Cf. Public Auth. v. Property Assessment, (1954). Bd. 377 Pa. 105 A. 2d 165 presumably will be funded ex The construction reliance on the facility exemption emption from taxation. Were the following completion ground project on the denied to be illegal, security would the bond issue was unauthorized interest the credit of and the threatened therefore, appropriate, sub impaired. transaction be It is juncture rather than at under some later date ject at this review may prevent being interest

circumstances vindicated. agreement tbe been under previously

As has noted, Rit- tbe developers and tbe between ex- an given tbe latter were Square tenbouse Project, facility purchase to tbe option existing garage clusive in- Project Square and land. tbe Rittenbouse Thus, envisions not a lease transaction but also merely volves to of and financed facilities publicly tbe sale owned developers. private Rit- tbe tbe claim that considering Authority’s instant to tbe Square Project subject

tenbouse is of it existence significant is to note tbe challenge, fifty of term Parking Authority tbe is limited to a Philadelphia power to the of tbe of subject City years, Act to extend its life for an additional like term. P.S. 53 June P. L. as 5, 1947, 458, amended, §5, existence, §345(b)(1). Upon tbe termination its pass City tbe assets of tbe to tbe as Act of P. L. Philadelphia. 458, §14, June 5, 1947, 53 tbe foreseeable P.S. within amended, Thus, §354.16 acquire tbe to City Philadelphia destined future, improper of tbe Authority. alleged assets And, following acquisition property, diversion tbe at subject judicial scrutiny tbe would be City, Au- if of a tbe instant taxpayer.17 case, behest Yet, Ma- improperly Price and thority property diverted, of tbe of Philadel- taxpayers City as citizens suda, Under pecuniary a similar injury.18 will sustain phia, led to Price we are conclude that circumstances, such representatives of tbe tbe taxpayers Masuda, 16 Evading Morris, Building Debt with Limitations Public Cf. Costly Constitutions, of State 68 Tale Subversion Authorities: (1958). 234, 245-46 L.J. Pittsburgh, (1951) ; 17 200, 366 Pa. v. 77 A. 2d 452 Bernstein See 473, (1930) ; Philadelphia, Pa. 149 Atl. 722 299 v. Harris Wolff 215, Philadelphia, (1907). 217 Atl. Pa. 66 344 v. Co. Chemical 200, (1951) ; Pittsburgh, 18 Pa. A. 366 77 2d 452 v. Bernstein Cf. 473, (1930). Pa. Philadelphia, Atl. 722 299 149 v. Harris City possess requisite pecuniary Philadelphia, interest in Square Rittenhouse challenge the transaction.

Our conclusion is reinforced recognition need to subject the activities of public authorities judicial scrutiny.19 As bodies, they pub exercise powers lic and must act strictly legisla within their tive mandates. stand Moreover, they re fiduciary lationship are created serve they and their conduct must guided faith and good sound judgment. See Schwartz v. Urban Redevelop ment 411 Pa. Auth., 2d 530, A. 536, 192 (1963); Bros. Heilig Co. Inc. v. Kohler, 366 Pa. 72, 77-78, A. 2d (1950). The of authori mushrooming ties at all of levels government and the frequent com plaint that such in bodies act an and ca arbitrary pricious in manner violation of law dictate existing that a check kept rein be upon them. Schwartz v. Ur ban Redevelopment 411 Pa. Auth., 192 A. 2d 530, 536, 374 371, (1963); Keystone State Raceway Corp. v. Harness Comm., Racing 405 Pa. A. 173 2d 1, 5, 99 97, (1961). These considerations dictate that the inde pendence of authorities of some the usual restric tions on governmental activity20 not be extended so as to insulate them from judicial scrutiny through the medium of taxpayers’ suits.21 19 Davis, Cf. “Judicial Control of Administrative A Action”: Review, 635, (1966) ; Davis, Standing L. Colum. Rev. 659 66 Action, Challenge (1955) ; Minn. L. Rev. Governmental 39 391-96 Jaffe, Standing Actions, to Secure Judicial Review: Public (1961). Harv. L. Rev. 1265 20 Morris, Evading Building Debt Limitations With Public See Costly Constitutions, Subversion State 68 Yale Authorities: Shestack, ; Authority, (1958) Public L. Pa.. 105 U. L.J. (1957). Rev. 553 suit, taxpayer’s as alternative to reliance on 21 A wrongful conduct, prevent and redress serves an prosecutions availability litigation “[T]he public interest:

important such

Having appellants standing concluded that have well enjoin Square Project seek to the Rittenhouse as proceed as the to a Academy Project, we now of their challenge. of the merits consideration Y. House Project Academy in erred first that chancellor Appellants urge upon impose act enabling did concluding bidding competitive Authority to utilize duty proposed in the of the air over the leasing rights agree- are House construction. While we Author- ment with the chancellor’s conclusion proposed ga- free to the lease o'f the ity negotiate was dis- we do not it free to facility,22 agree rage air competitive bidding leasing with pense rights. gen- broad grants act enabling and lease —both as lessee powers

eral to operate, own, statutory or lessor —facilities the fulfillment its public off-street Act providing parking. purpose P.S. P. L. June 5, 1947, §5, amended, defray- 1965). order to assist (a) (Supp. §345 also expenses, empowered ing “to enabling portions act lease level street . . for commer- or other floors . facilities . com- use . . .” Ibid. leases such However, cial subject within Authority mercial facilities are insurance tors, illegal mary, 1280, 1282 challenged 194 Secure 2dA. ^[22] usually political See 69 practice.” judicial Yale L.J. against 606 or are Seligsohn (1961). (1963) Review: overly the Notes, Taxpayers’ 895, v. ; officers, instances Clark Philadelphia burdened to 911 Public v. are themselves allied with (1960) ; Public in which Actions, identify Parking Auth., Suits: see Parking Auth., 74 Harv. L. Rev. the also A responsible prosecu Jaffe, Survey rectify every 412 Pa. 372 Standing and Sum Pa. action 1265, 481, . . . 372, to (1953). 2d 576 A. 94

331 explicit entered statutory requirement that they into “on a fair competitive basis.” Ibid.23 Thus, enabling act distinguishes between facili- leasing for ties operation as an parking Authority leasing commercial space for revenue incidental, producing lat- purposes, explicitly that mandating ter commercial leases be granted only on the basis competitive bidding. Ibid. 1961, Legislature pro- added the following

viso to of the Act: herein “Nothing §5 contained shall be construed prohibit to Au- the sale or leasing thority of the right above occupy and use the space any parking facilities commercial than uses other . . . .” Act parking of June amend- P. L. 5,1947, 458, Act of ed, September P. L. 53 P.S. 2, 1961, 1229, §1, §345(a) (Supp. 1965). This amendment merely grant- ed the Authority power for non- lease air parking commercial uses just previously as the had Act authorized the “to Authority portions lease street level other . floors of . . parking facilities commercial . . use . .” It is clear, therefore, to lease power air rights aspect Authori- power to ty’s lease non-parking commercial space and only incidental to its primary purpose providing facilities for the general public. statutory phrase competitive We deem the “on fair basis” impose requirement competitive any bidding, since other meaningless. render the direction construction would White See Elwert, 329, Twp. (1964) ; v. marsh Auth. 413 Pa. 196 A. 2d 843 Co., v. Junk 412 Pa. A. 2d Commonwealth Sitkin's Daly Hemphill, (1963). (1963); v. 411 Pa. A. 2d 835 duty act inter inherent to advance has the necessarily duty in dictate that leases be entered would This est. open fair, manner. We must conclude there and reasonable ain statutory explicit direction, Legislature, in fore competitive bidding entering utilize tended leases. into such

332 un policies Court has previously expressed

This noting the requirement competitive bidding, of derlying that favorit competition against the resulting guards in the award ism, improvidence, corruption fraud, Pa. 418 Burrell, contracts. Yohe v. ing Lower Philaelphia, v. 208 A. 2d 850 Corcoran (1965); 23, 28, Pa. A. (1950); 70 2d 623 606, 609, 363 Corporations see 10 Municipal also McQuillin, §29.29 ed. to these (3d 1950). Giving recognition policies, Legislature competitive mandated the use of explicitly respect non-parking both with to the bidding leasing 24 commercial and the space letting of construction repair contracts.25 Act 1961 Amendment to the language space specifi- of air neither

providing leasing nor cally impliedly exempts such leases from the re- quirement competitive there con- bidding. Nothing tained suggests part Legisla- intent alter competitive bidding ture to its policy requiring in the commercial so as exclude the leasing to of air from the bid- leasing rights requirement of such protection af- ding deny thereby a expression forded. Absent clear we such an intent, are to conclude that compelled subject such leases are as all requirement same commercial non-parking that they granted be “on a fair leases, competitive ba- sis.”26 5, 1947, 458, §5, amended, L. P. as Act June 53 P.S. 1965).

§345(a) (Supp. amended, 25 lbid, §11, (Supp. 1965). P.S. §351 duty employ bidding competitive Our conclusion by by peculiar imposed reinforced Act is consideration is- advent, right to their recent Due leaseholds. standards air may yet By valued have not evolved. re leaseholds such which Legislature bidding, competitive has established quiring “market-place” operate ensure method arbitrary capricious into in an entered are leases such good of favoritism or faith reason mistakes in manner, whether valuation.

We hold, therefore, between the agreement Parking Authority and National of air the lease over the rights Academy House into entered Project, private negotiation rather bid- competitive than by ding, unauthorized and void. Price Accordingly, and Masuda were entitled to the they relief which sought below and action in dis- the chancellor missing their complaint must be reversed. in

However, light the importance public issues raised challenged find it we transaction, appropriate aspect discuss another of the litigation which also mandates reversal of the court below.

Price and Masuda attacked the Project not on the in- only ground that it was entered to without competitive but also on bidding ground that any benefit to be derived pre- therefrom would be not in dominantly public private, nature and that project was therefore beyond scope powers conferred statutorily upon Authority. Our con- sideration of the transaction entirety leads us conclude that prevail must they on this as ground well.

The Parking public as a ex Authority, corporation, public powers. ercises Act P. June L. 5, 1947, P.S. amended, (Supp. 53 §5, 1965). engage Its §345 public ments are and its nature, whether facilities, or operated private leased to parties, See public property. are Pittsburgh Public Parking Auth. 76 A. 2d Petition, 620 (1950). Em Pa. public for the powered only act benefit, the Author not its resources for employ ity may primary a private benefit paramount endeavor. An engage in nature essentially private may ment not justified be public theory be incidentally bene fited. whether determining the instant project es private

sentially we are nature, confront with, presented frequently analogous ed to that issue proceedings. in that have said eminent domain We power employed may for the be context that such purpose not acquired devoting property mere so Redevelopment ly private Belovsky benefit. See v. Philadelphia, 2d 277, A. Auth. 357 Pa. 329, 340, (1947). Although may bene incidental there be an taking, private parties invalidating the fit without employed power may un of eminent domain paramount primary and less the beneficiary is to be the dowe And while its exercise. Ibid. confronted not deal we are domain, here with eminent powers statutorily purported sub with the exercise ject to the limitation.27 The same power other to act confers no on the Law park public providing off-street than for benefit the Academy ing Accordingly, House facilities. the presently permitted proceed may unless as not be to public predominantly in bene it will result envisioned public through the creation additional off-street fit parking invest the facilities commensurate with project. in the ment considering validity agreement be-

In the Authority and first we examine National, the tween private developer to derived the benefits be Project. agreement, Under purchase develop- Parking land from will project, existing demolish for the situs er garage National and construct thereon. structure, operate garage and also construct and will lease 27 County Ross, City 52, San Francisco v. & 44 Cal. 2d Cf. Enterprises O’Dwyer, ; (1955) Denihan v. 302 N.Y. P. 2d 529 279 (1951) ; N.E. 2d McClelland v. 99 235 2d N.Y.S. 100 Wilmington, (Del. 1960) ; Mayor A. 2d 159 596 Council Ranken, (Del. 1954) ; v. Wilmington Auth. 2d A. Limitations on the Power of Eminent Note, Constitutional State (1964). 717, 724-25 Rev. Domain, L. Harv. operate high-rise apartment building thereover a containing developer excess 1000 units. The permitted portions ap- also be to devote substantial — proximately square ground feet—of and base- 71,000 purposes ment levels to to its own portions enterprises. private sublet other to commercial option National will have to addition, exclusive acquire public garage. the land and

By arrange- essentially what is and lease-back sale National will to costs ment, be able finance its site through long financing, medium term with arrangement, all the benefits which attend such an generally private available de- to other commercial velopers. on were National to embark Moreover, proposed apartment construction absent reliance Authority provided required parking, it would to provision approxi- make for its tenants to the extent spaces mately comply 500 car order the Phil- with adelphia Zoning By advantaging Code.28 itself of the Authority’s commitment to construct to lease public parking facility to National it, is able avoid required req- comply the initial investment with provisions. zoning uisite And the use of its exclusive option acquire garage facility Na- the future, major capital tional is able defer such investment to gener- a much later date and to accumulate revenues facility ated and the concourse and ground acquisi- commercial for level rentals cost tion.29 Academy Project

To this House extent, involves private public financing of a Ir- substantial endeavor. Zoning §§14-1402(2) (a) (.1), Code 28 Phila. 14-1403. 29 though agrees pay garage facility to National Even option, ability any capital upon of its to defer in the exercise years facility supports to some date in the future vestment involving public of the transaction as one the characterization financing.

336 ultimate- public

respective may benefit tbe any ingredi- that a ly significant it cannot be denied derive, Author- ent of tbe tbe of tbe transaction is use is able ity private developer as a conduit wbicb a lighten regula- substantial both economic burdens, There is wbicb would devolve it.30 tory, upon otherwise degree therefore presented this record substantial of public private prof- involvement and investment in a it making opera- with respect tbe venture, only tion of tbe but in garage facility tbe overall com- itself, mercial tbe aspects complex although as well. And certain such Au- necessarily benefits flow from tbe may to lease air thority’s power particular whether a rights, de- project within the ambit of the enabling act is pendent upon accorded benefits suffi- being ciently substantial nature as to Authori- justify ty’s involvement the endeavor. totality Hence, benefit private accruing National be con- must sidered in determining whether the project proposed predominant reflects required benefit.31 upon It also should be noted were National to embark without the benefit of the parking facility, significantly higher. its real taxes estate would be required garage it would which be construct in order to zoning requirements exempt realty comply would not be with savings challenged arrangement may potential under the taxes. Assuming $8,000,000facility, an be as follows: illustrated 69.6% Allegheny County Prop assessment, Schenley Land Co. v. Bd. see 577, Superior 581, n.1, erty Assessment, Ct. A. Pa. 2d $5,568,000 realty produce (1965), of taxable aside from would n.1 Philadelphia per the current rate at of $4.37 taxed land. When $243,- valuation, tax on the annual would be $100 purposes Assuming of illustration a constant assess 321.60. savings projected potential rate, over a when tax ment $7,299,648, approximat amount year period rise thirty would facility. Any increase or in the decrease ing cost initial assessment, would, facility, the tax rate value market result. the actual course, affect private developer obtained provisions Other determining project whether the as envi considered must

837 the instant in the face of ease, the numerous and sub- stantial benefits accruing private developer the Academy House disclose Project, record fails to benefit any public of more than a limited and incidental nature.

The parking Au- facility presently operated by at thority situs of the project has a capacity 100 cars. The proposed capacity will have a garage 862 approximately cars. The chancellor made a that finding the Academy apartment House develop- ment would require 356 spaces car for ten- residential and ants 80 car spaces for commercial a total tenants, of 436 spaces. He concluded that proposed project provide would spaces excess for the and an spaces increment over that presently available at the air open Authority’s facility. at arriving his conclusion apartment that

complex would only generate a daily demand for 436 car the chancellor relied spaces, upon pre- a report pared for National September 1963 Smith Wilbur by and traffic consultants. Associates, However, although Report the Smith repeatedly discusses the de- mand to generated guests be and by visitors business to apartment its conclusion residents, the Acade- apartment development my would utilize only car fails to account spaces It demand. that an apartment is obvious house of the size con- permissible private balance of sumed embodies and bene inability of tbe fit include: tbe to reduce rates below initially National; the consent set without the exclusive purchase options to renew its National lease and obtained any provision facility; garage and the absence of in the writ performance posting security of a agreement for the bond or ten option reason of the noted lease and deposit. It should Authority has, practical effect, created limited provisions, facility the lease sale private market operator poten exclusive establishing sole National purchaser. tial generate Report

template*! indicated, as the Smith will, by ten- significant beyond the that created a demand Report to The failure of the Smith ants themselves. projection to the in its include such demand development required apartment that renders the be report utility. circumstances, of limited such Under Academy House the reliance on the Smith data unjusti- spaces require complex only car 436 was will fied and unreasonable.32 index

In the more reliable absence another, projec- appropriate think the reference demand, we zoning requirements of tion have the the should been previously minimum code. Under the as a code, noted, Taking required. spaces car would have been Report spaces Smith into account the 80 found the required by rea- it could to be the commercial tenants, sonably anticipated be that a total demand Proj- spaces generated by Academy the House will be presently Parking Authority the ect. Since, however, spaces open-air provides facility, 100 car up by complex, be taken situs which upon completion public gain net to the approximately spaces. project 180 car bewill public, light to the This net increment of the project garage magnitude of the and the substantial accruing public to not suffi- is therefrom, benefits public proposed. involvement to here cient warrant respective weighing parties, to the the benefits compels Academy the conclusion that the House record Project, results in the envisioned, subordination of private developer. to that interest specific report limitation Another the chancellor concluding Academy apartment upon House com- relied spaces only require 436 car plex the failure of the re- would upon projections or criteria the data which its port indicate to based. were

In the extent, face of the limited to a great and, spaces conjectural number of gain which will be made general public available developer private Project, assured of As very substantial and benefits. significant project, a result of the in the engagement Authority’s large National will be the of a scale beneficiary primari- utilized facility investment ly by its own tenants. re contemplate act enabling does employed shall be Parking Authority

sources on a private carry activities means secure pur private enterprise objective whose primary of public and not the satisfaction pose private gain 44 Francisco v. Ross, need. Cf. & San City County of In weighing P. (1955). Cal. 2d 2d 533 53, 60, to compelled are the relative benefits be we accrued, contemplated present facility conclude enterprise. to such an Cf. appears case to be narrowed ibid. The of these circumstances leads us totality para public primary is not the conclude In of the House Academy Project. mount beneficiary neither prospective public the absence of such benefit, governmental grant nor the public participation perm here be private parties proposed may benefits itted.33 this conclusion we are not unmindful reaching been which has advanced that

of the suggestion represents a contribution to Philadelphia. of center-city However, development limited act to enabling engage- is in the fulfillment of will result its statu- ments which off-street providing parking. mandate tory private developer ato as is here eon- assistance Such Note, Limitations on Constitutional the Power of State Of. (1964). Domain, L. Rev. 724-25 Harv. Eminent scope Authority’s

templated beyond statu- tbe powers. tory the effect careful consideration of

Moreover, project participation Authority’s instant grave cen- doubt on ultimate contribution to casts its Authority’s ter-city By in- renewal. reason placed at National volvement venture, comparable competitive advantage existing fa- over privately properly But financed and taxed. cilities competitive advantages importantly, accord- more Authority’s participa- National as a result of the ed pri- wholly discouraging tion effect of will have the development. center-city To in similar investment vate permit project proceed the instant would establish dangerous precedent all unwise and under which development require future would simi- such seek equalize Parking Authority assistance in lar order to advantages accorded National. un- Furthermore, precedent employ der could such including power powers, other of eminent' primary private developers. for the benefit of domain,34 For the reasons heretofore we hold that stated, private Parking Authority may not cloak a interest, proposed, dispropor- grossly here with benefits so public. to the benefits accorded the tionate The chal- lenged agreement, beyond therefore, the Authori- appellants power injunctive ty’s were entitled relief.35

34 5, 1947, 458, §5, amended, (b) L. of P. as Act June P.S. §345 53 (12). 35 disposition make, unnecessary light the we we In of find it Authority unreasonably the of whether had the issue acted reach to anticipated present concluding and that future in need in facility proposed the were sufficient war- of locale the Assuming arguendo the existence of such construction.

rant may propose Authority through not to meet it need, the medi- the predom- overwhelming in an project results which and aof um developers. private benefit inate

VI. Square Rittenhouse of our light previous conclusion that the is not ne- Authority free to air rights private lease we are chan- gotiation, compelled the conclude that cellor erred relief with denying appellants injunctive respect to the Óur Square Rittenhouse well. Project as conclusion that because must be project enjoined of the Parking failure to the comply with Authority’s competitive bidding requirements of act enabling the reinforced of this consideration certain aspects present transaction not Project. the Under the Au- agreement terms their the with the developers Square thority, Proj- the Rittenhouse ect were authorized to lease maintain “construct, and certain commercial areas ... basement ground Garage level the Walnut along [sic] Street thereof .” frontage nego- . . . Accordingly, tiations the parties between envisioned only lease of air but also the commercial space, lease of space within the garage facility. As to lease no construction possible act latter, enabling would obligation pro- remove Authority ceed competitive since the specifically Act bidding, that of such requires leasing commercial a fair competitive done “on basis.” Act June only L. P. 458, amended, §345(a) P.S. §5, This (Supp. 1965). statutory mandate been having agreement between the disregarded, Frankel beyond Wolgin scope the Au- and thus invalid.36 powers thority’s Parking Authority, of the fact take note ac We Square parking facility, agreed quiring the Rittenhouse site prohibits higher construction than feet a restriction suggested private ground It has been de level. above Prankel, and, Wolgin velopers, control restriction as a only parties nego with whom the could result, are the dismiss- the decree of the court below

Accordingly, re- the record complaint tbe must be reversed and ing herewith. manded for further consistent proceedings upon appellee. Costs

Dissenting Opinion : Musmanno Mr. Justice park- all Philadelphia like Parking Authority, is ing empowered public garages. to erect authorities, As a matter convenience and practicability can rise to a certain only which means height remains space above that maximum ordinarily altitude In realiz- unused. 1961, Pennsylvania Legislature of construc- ing this non-use amounted to a waste tion amended the area, Parking Authority Law provide: con- “Nothing herein contained shall be Authority or prohibit strued the sale leasing by any of the right occupy space use the above parking park- commercial uses other than facility ing the sale automo- (except gasoline sale of bile together with the to use accessories), right may such occupy within the as facility be for the necessary purposes support access to and the space of structures above such occupying parldng 53 P.S. facility.” (Amended 1961, §345). respecting rights facility. the air over the tiate contention This may disposed serious consideration and with does not merit propriety Authority’s reaching the issue of the action out body, Authority, binding in this manner. The as itself empowered enabling specifically act do to use eminent is public purpose. 1947, Act of of its June the furtherance main in amended, 345(b) (12). Thus, long so 53 P.S. as the L. P. statutory powers, acting Authority the deed restric within its is development impediment Rit further an no more tion is facility presence Bartram Square than the John tenhouse development impediment to the Hotel acquire empowered instances,

project. In both any private interest which the exercise inhibits domain eminent purpose. had Philadelphia constructed near the corner of 19th and Walnut Streets, a Ritten- it Philadelphia, garage, since faced which, house has become Square, known as the Rittenhouse Square to Garage. side, Next on its west garage, rises the Apartment own- Wellington whose Building, for the ers, purpose continuing being assured light possess prevents a deed air, restriction which the Rittenhouse to above Garage climbing a height 70 feet.

At the time Rit Parking Authority erected the the tenhouse it built also 10th and Garage, a at garage Ludlow Streets it developed not a which, later, profitable I very venture. do believe necessary not it to enter into extended financial any discussion situation which impelled the to con Parking Authority sider project would height which add to the Rittenhouse Garage property. say It to enough is Authority felt it had obligation need en hance its financial market prestige bond private perform order to its undertaken tasks. Author ity totally by private through financed funds raised persons. sale of bonds to private This Court said v. Seligsohn Phila. Pa. Parking Auth., a public fa parking authority required to establish cilities which will bonds it sustain revenue so that will be independent financially government.

Accordingly, Authority entered into negotia- tions owners the Wellington Apartments with to them the air above rights lease re- garage turn for extensive valuable benefits ac- will Briefly crue to the those in- Authority. benefits will following: clude the The lessees will erect at

1. their sole cost and ex- approved according plans by pense, Authority, office over multi-story building modern the Rittenhouse the Walnut improving Street Garage, with an frontage lobby stores. and fashionable entrance attractive their lessees there be default cured Should mortgagees, heir valuable will fall to this improvement single penny investment. without a expense in accordance

2. The at their lessees, replace plans approved by Authority, will with space building parking construction taken each existing ga- adding another level of beautifying existing rage facility, facade all which screen entire with a modern facade, improvements given with- over to the will charge. out charge, relinquish, without

3. lessees right the air above their valuable control Garage. Rittenhouse occupancy, including re- All insurance,

4. costs compliance municipal pairs, maintenance and with by regulations, sole will be borne the lessees at their expense. and cost Authority will harmless

5. The lessees save the gross operating any from loss of revenues and/or particular a Park- tenant incurred rentals Authority during period ing the construction because post operations, of construction and will a bond guarantee to such reimbursement. $50,000 amount pay aggregate The lessees will annual rental 6. for the term of lease. of $27,300 pay any will 7. The lessees full and all forms of personal property estate annual real assess- taxes, govern- and sewer rentals and water similar ments, charges against levied or assessed mental the demised premises. the construction Since cost for

8. the office build- give ing this will of $10,000,000, be course will rise to City Philadelphia rateable to tax a considerable expense significant as well lessees. The de- subject premises be City taxation mised Philadelphia he will not relieved because exemption basic tax fa- cilities used it. improvement magnitude

An of this of course, can, solely productive city be of enormous benefits to phase every almost of economics. It will also add im- measurably beauty to the of the area It is involved. statutorily authorized. possibly objection any can

How then there valid justice utility law, to so an enter- wholesome prise, city government, so beneficial to the advan- so tageous motoring public, helpful to the so com- munity, stimulating such effect to the whole building program city? Majority Opinion does not con- show or even projected improvement any produce

tend that the can Philadelphia. result other than beneficial one to It only says agreement between the negotiations and the lessees is invalid because the be- parties tween the should been have conducted a com- petitive bidding basis. But what there bid parties only about? The lessees were the that con- garage, trolled the ábove the since the deed re- guaranteed higher striction them non-construction than acquire ground. Thus no feet above the one could right Garage to build above the ex- Bittenhouse cept Apartments. Wellington through the owners Parking Authority any Act of offer

Does the negotiations Authority between barrier to the contemplated? the builders of the office structure here Parking Authority 11 of the Not at all. Law, Section provides “all §351 that: 53 P.S. construction ...

any' Authority, where the entire cost . . . shall exceed only be done under . . contract or . shall con- $1000 Authority into to be entered tracts with the upon proper responsible terms bidder, lowest after due' for competitive given asking notice has been bids . . .” com- requirement

It only is clear here that is the construction done petitive where bidding Au- But here the in exceeds cost Authority $1000. Not construction is whatsoever. doing any thority Square the entire of the Rittenhouse cost only that, exclu- to be borne at $10,000,000 estimated project, re- did not even Legislature lessees. The by the sively on a be of the air should quire leasing that competitive “fair basis.” “competitive” appears again,

The word once Authority §5 Parking Act, once only again, “por- leasing the statement is made that where of the street level other floors tions on a granted use . . . shall be facilities commercial competitive fair basis.” competi- “fair phrase

It noted here that will be and not in an illustrative sense, basis” is used tive behind scientifically thought restrictive sense. lower level and explain street language how competitive a fair floor leases shall be granted —on be all prospective is to lessees shall basis, say, must no there requirement alike. There is treated floor and lower bidding where the street level be actual all sound this comes within the are involved, levels discretion of the Parking Authority. administrative emphasized it in the inter- But cannot enough, say of fair ele- legal interpretation, nothing ests Parking there is nothing justice, mentary inhibits Law into negotiations direct the owners entering with Wellington since there adjacent Apartments, to negotiate with, owners Wellington one else no persons who could acquire full only being the deed restrictions men- already because rights, the Rittenhouse Square over Garage. to build tioned,

347 And then one cannot ob overlook the common sense servation that in them peculiar there are situations, wholly selves, where but superfluous not bidding only valueless. The 153 Silsby Co. v. Allentown Mfg. case, 319 Pa. is in en point. of Allentown There, City tered into a for purchase patent contract of a flue for use engine a fire built Manufac by Silsby Co. turing City resisted asserting liability, purchased article was without negotiation direct by competitive resort Our held bidding. Court under those competitive not circumstances, bidding was “The necessary: plaintiff. flues only were made could be They bought Competition nowhere else. un der such impossible. circumstances are Ratio cessante lex. The cessit impossi law does not insist on what or absolutely useless.” ble, it would have been advertise

Obviously, useless to leasing bids of the air con- space definitely trolled adjacent apartment owners building controlled not To definitely Parking Authority. procedure competitive require building such circumstances under would be an exercise in fu- law does demand the tility. a vain doing thing.1 may no matter what be said about the Acade-

Thus, which is also project involved my litiga- clear language it is as can make tion, it, project Square comes Rittenhouse squarely within could only and it through judgment law, arbitrary splendid down this to strike caprice project best welfare redound City every viewed. possible angle 1 Utica, (2d 1936) ; F. 2d 616 86 Cir. Potts v. Alexander v. 78, (1953) ;

Natchez, Niagara So. 2d 434 68 Miss. O’Brien v. 219 (1909) ; 92, Cleveland, N.Y.S. 497 Hordin Falls, 119 v. 77 65 Misc. (1945) ; Worthington Boston, 889 App. 2d N.E. v. Ohio cetera, ; (1894) et without ed. 603 number. L. U.S. mean that

To deny project the Rittenhouse would Rittenhouse the space the valuable above extremely if cannot it could never be utilized because Square right have any used one else will by Wellington, .no rights it. utilization property use To the destroy in to increase in fashion cannot be a which way this for law or for courts. respect the oral for at Indeed even able counsel appellants, appel-. that before this conceded argument Court, Project. Square lants had no case Rittenhouse against asAct Authority the Parking He admitted that unless in unconstitutional amended 1961 should be declared be nullified Court he stated by (and otherwise this Rittenhouse for nullification) no such grounds this Court. project upheld by must be Square Authority It contended the Parking is not here as in It is not even arbitrarily. acted bad faith or abused discretion. serted that its Redev. A. 416 Pa. v. Urban Pgh., Schwartz “We Justice said: through Court, speaking O’Brien, what judgment not substitute our cannot of the redevelopment and social is sound economic a Authori for of the Authority, subject project exercise proper been based on a having ty’s judgment in it vested law.” the discretion air development economic is a sound What has authorized and em- Legislature lease commercial powered sound a matter discretion of the purposes, the Courts. Authority —not the lessee will have the option pur- fact that

The part customarily provision long-term chase (a injunction justify restrain the can leases), superstructure pursuant construction question in not even exercisable option lease. 1993 and 2003. between more im- And, sometime until else, option anything than not be may portant every single penny exercised until issued bonds Square only to construct not at Rittenhouse but the one at 10th and Ludlow Streets as well will paid option price have been indicated was full. separate independent appraisals. sustained two overwhelmingly supports finding The record learned chancellor and affirmed the court below entirety the court en that the lease banc, Parking Authority. within the sound discretion legitimate project To strike down this wholesome would tediously path be to roll a boulder of construc- progress, monkey tion it would be to wrench throw machinery in the development, of urban it would be spread pall discouragement municipal, over planners wrestling traffic and economic with the dis- tressing problem adequate parking city. in the Leg-

I do not think this Court should do this. The through placed islature the has, amendment its 1961, projects specific blessings on of this character; the law particular project; authorizes good, sound com- progress mon it; sense recommends demands Since it. nothing displace findings this Court found has of the court since it below, cannot show that the Au- thority its abused decision of discretion, the court Square Project Rittenhouse absolutely on the should affirmed.

I Academy House Opinion Majority bulk is to an devoted Academy Project.

analysis of House There is no challenged the basic to reiterate elements of the need by Philadelphia into Parking entered transactions Land and and National Investment Com- fully they Opin- are detailed in pany Majority since proper pnt necessary into ion. But it is those facts perspective appellants’ analyze contention and to of law. that this transaction is violation project Academy involves the construc- public parking garage story tion of a seven apartment building high it. above of a rise house summary A of the essential terms clearly succinctly forth set House transaction by is findings which fact in his the learned chancellor No one even court banc. been affirmed en have sup- the court below lacked evidence contends that port they findings are conclusive. these of fact. Hence Briefly that: ones state more essential project

“(4) center block in is the The site Philadelphia City Spruce, Broad, bounded Watts, part block of this The southern and Locust Streets. Parking Au- City and is leased to the owned open-air parking operates lot. thority, it as an which part (the balance) by National The northern is owned corporation Pennsylvania Land & Investment aCo., principal Philadelphia, with office its up). (now Bartram Hotel boarded site the John “(5) & National Land October 1963, On Co. of intent to the wrote letter Investment accepted meeting Authority, at 1963. of December project

“(6) intent as outlined the letter of Parking Authority acquire provides the that the will by Spruce, Locust and Watts, Broad, block bounded having John the Bartram Hotel de- after and Streets, garage built have a about seven will molished, parking spaces, cover about will with stories, steps the finance cost these To the Au- block. the long by revenue thority term bonds, issue secured will Authority the received to be activi- revenues project. The will then lease the in the ties to National garage Land & The lease Investment Co. will allow National space and the use air occupy above the garage. ga- National Land the operate will rage as a por- and sublet garage, tions the first floor and basement for commercial use on a fair competitive all in accordance with basis, the Parking Authority Law and the rules Authority’s regulations. and space the air above the garage, National Land will at operate construct, maintain, expense, high-rise apartment building of one two towers and with about rent apartments. As 1,000 for the and the garage air National above it, Land will the pay Parking Authority amount will include principal and interest on bonds is- sued Authority to finance the erection of the term of garage, National lease of Land’s and air garage space will be coordinated with the life of these bonds.

“(9) not in- Although mentioned in letter is tent, plan the cost of building will be determined by competitive bids to be received Authority. ... it

“(10) contemplated expiration that at the of National Land’s will have the lease, option to price at buy, yet land agreed upon, improvements all it, including apartment building.”

In Exhibit P-22 the rentals (860a), which National are pay set required explicitly forth as follows: pay shall “3. National as rentals ini- during the aggregate lease, tial term (a) ‘debt service be an amount shall rentals’ which sufficient to pay and interest on the principal full the capi- less bonds, interest; (b) authority rentals talized which shall be first for year, $10,000 for the the second, $15,000 $5000 for the $20,000 fourth, third, $25,000 for the except year every thereafter, ten fifth last ‘ex- and (c) it $30,000 for each of which be years shall agreed to be cess rentals’ be a percentage which shall the of year of of for each upon the excess the aggregate the within receipts operations from gross for the Project and the rentals received National amount over said commercial occupancy space, to be agreed upon. ex-

“4. during any National shall as rentals pay ‘ex- (a) said aggregate tension term of lease, shall cess ‘extension rentals’, (b) rentals’, per cent equal an amount annually be five (5%) or incurred paid all other purchase price and costs all of the in acquiring clearing cent per land hereinbefore or five referred to, (5%>) which- of the the land within appraisal Project, (p. 861a) ever is greater.”

A more conducive specific, salutary agreement, keep- interests of the City Philadelphia, best of the spirit with the and destined to ing times, greatly it would be difficult motoring public, benefit at the cost find. It must be stated outset that very portion the public parking facility Authori- will be financed entirely by (National Land) revenue bonds. lessee ty’s turn, all part the rent sums meet necessary will pay and interest on those principal bonds. Here again, be must not a emphasized, single penny of will be expended. Here manna indeed, funds top from the descending apart- be skyscraper to an Authority, ment house whose pantry needs re- The lessees will pay expense plenishment. every for the construction required building. What return? give does empty air above Could there ever a more garage. fruitful return falling invisible oranges trees than growing above back own yard? of one’s top I source, no funds from governmental any repeat, Acade- on federal, expended or will be tbe state, city, my Project.

Tbe will parking Project tbe facility operated as a in accordance parking facility with tbe Public Law so that it will be avail- Parking to all able members of the public as regardless whether or not are house. apartment tenants they Philadelphia need in dire Parking Authority is of this project. The in 45th find- chancellor found his ing ample was based on fact, evidence record and also affirmed the court en that: banc, “The Parking operate must on the basis its structures being and it no receives self-supporting, subsidy (such for portion of revenues as, example, from parking meters) assist it its ex- meeting penses. experience has Accordingly, shown its are not bonds salable readily unless secured reve- nue in addition to that received In garage. case, stated above in the on findings the Pro- posed such Project, additional security would be pro- vided National Land & Investment Go/s guarantee pay and interest principal on the bonds.” (p. 710a) (Emphasis added) as the chancellor

Indeed, indicated in adjudi- his cation “thus, although it is true that tenants in apartment building use at least park- some of the ing spaces the Parking Authority it like- garage, wise true that without the apartment building there would be no at all”.

Despite chancellor’s detailed findings fact, one of which was even challenged this Court, Opinion the Majority advances the following reasons invalidating for Academy House Project: 1. The transaction was negotiated rather than ob- of competitive the result tained as bidding.

2. exceeded its statutory authority. predominantly primarily and

3. The private in nature. present future no

4. There was demonstrable proposed. anticipated facility need majority reaching used these conclusions, applied wrong wrong neces- therefore, facts, law, and, sarily wrong arrived at conclusions. Majority substitute

What the has done here is strictly judgment eco own and its views own involving exer nomic and administrative matters jxidgment, Park cise of administrative ing Authority to exercise entrusted under the law (Schwartz judgment. right v. Opin This it no to do. has supra.) Majority reading Urban A of Redev., against background facts ion the uncontested of Majority arrogating is unto itself reveals that powers super Parking Authority, which, and of a duties unnecessary certainly it it constitu has no state, power tional to do. expert indispensable an

Without without the staff, investigate experience, at time needed to without the every for hand each and facet of the con- first reasons cluding that there was a need facility Academy that the House and transaction was proper supplying need, the feasible method that proceeds Majority denounce the impels denuncia- because law that transaction, Majority only says in tion but because effect: “We good place parking garage,” that this is doubt a a good way “If don’t it believe this is, we bring it about.” extra-judicial performance

This is which this constantly upon past frowned in Court has unquestionably continue to discountenance.2 It here. do so should

274; Lazrow Nine-Ten v. Chestnut Phila. Housing Authority, Corp. v. Phila. Authority, Parking 375 Pa. 586; Spann Pa. v. exercising proceed its discretion to with the Project, separate considered 39 situ- fact challenged point physical none of which is in ations, reality. ignored simply Most of them are Ma- jority. cavalierly A are few discarded as a matter opinion! Majority says What the if its effect Parking Authority they members sat with the would Authority’s judgment. not concur in the I venture suggest Majority if factually were aware these 39 different material it not re- would situations, ject, Authority. but concur in the conclusion of the regardless repeat,

However, of all I under this, our uninterrupted well reasoned and hitherto line always this Court decisions, tuting has refrained from substi- judgment body its for that of an administrative properly performing duty. We should not de- now part salutary policy. Any from that modifications policy would be not a mere in semantics; exercise procedure non-expert it would result where the appellate judges views of would be substituted for expert agencies. those It would lead to a lack uniformity important park- business of ing might or whatever else be the function and mission particular agency involved. It would result theorizing displacing mere academic the iron and steel girders go constructing and columns beams, into orderly well-organized society. the edifice of an inquired fully as the court When, here, below has upheld into the matter and has the transaction on the of record we facts, basis should not overrule both the agency. court below and administrative appellant’s I now consider seriatim, challenge upheld by grounds Majority. Directors, 338; Seligsohn School Boards Pa.

Joint v. Phila. Authority, Parking 412 Pa. 372. The transaction resulted from (1) negotiated competitive rather than from agreements bidding to what We have considered whether already ofMnd in competitive extent this bidding required relating part Opinion transaction. of this I out Square pointed Rittenhouse have Project, in the Parking Authority Law of as amended, to con- requirement competitive refers only bidding struction done entire cost where the Authority his in exceeds As the learned chancellor stated $1000. the chairman testified adjudication, fol- without contradiction that the intends procedure low this for the construction contracting garage. plaintiffs can have Therefore, complaint respect. should have no this construc- far as the lease of the air for the rights So tion of the superstructure competitive is concerned, Rittenhouse bidding required. As the case of the transaction not lend Square Project, did itself To make competitive bidding uniqueness. because development, sound feasible economically occupied the John re- site Bartram Hotel was It have been de- would futile and useless to quired. competitive mand lease of bidding air a sub- space, of which includes part space stantial above the ground the old John Bartram on which Hotel now rests. Once it is concluded it (as must be) under Authority Law that the has Parking Authority to build a power lease above inevitably it must follow that it, require competi the peculiar under bidding tive in circumstances here be to demand the performance volved would of a vain it was Accordingly, legal and proper act. to negotiate Co. Mfg. v. Silsby the contract. supra. Allentown, pointed I out part also Again, Opin relating Square ion Project, to the Rittenhouse there requirement following competitive bidding nowas procedures in so far as the lease of the floor of first holding contrary, concerned. In was to the Majority completely confuses the be difference contracting competitive tween aon “fair basis” and contracting “competitive bidding”. as a result of Un project der circumstances the entire case, competitive leased was on fair basis. There no showing contrary. to the

(2) Parking Authority That the had exceeded statutory authority Majority Opinion specify Nowhere does the what respect Parking Authority has exceeded its statu- authority. tory authority Its is to build maintain public parking garages parking and other facilities. Legislature expressly provided doing has Authority may sell or lease the so, above parking garages park- for commercial use other than contemplated ing. Academy That what is in the nothing Project, else. House

(3) Project pre- primarily That the

dominantly private in nature Opinion Majority admits that even in the case private property, of condemnation fact parties private may an incidental benefit to there say taking, goes but it not invalidate on Parking Authority power “the Law confers no to act other than for the benefit providing for off-street facilities. Accord- per- may ingly, not be proceed presently unless as mitted envisioned it will predominantly through benefit result the crea- public parking facilities of additional tion off-street Proj- public in the commensurate with the investment ect.” misunderstanding by key Ma- the to the basic “public phrase,

jority of the basic resides the issue Project.” woven the This a investment is statement conjuration floating higher the roof of out of a than apartment projected single Lin- house. Not one public city— penny moneys, coln or state federal, — project! dealing not will be invested We are governmental agency a here case in with acquire property. employing do We funds taxpayers’ moneys. are to do We not have here with contemplating any municipal, state not here raid on the guard standing treasury. Majority or national empty exchequer at across an which falls slightest monetary aggression. it shadow of Thus, speaks page of the when without record to stand on, it asserts “the involves private financing of a In- substantial endeavor.” 800-page contrary. all record is deed, the absolute finding In fact No. the learned on chancellor, ample finding before evidence and that him, found, by ga- confirmed court en banc: “As rent for the rage air and the above National Land it, will Parking Authority pay amount that will include principal interest bonds issued garage, erection finance the garage of National Land’s the term space lease of and air for be coordinated will life of these bonds”. finding of fact No. also affirmed the court chancellor the learned found en banc, the lessee pay the entire cost of construction will of the su- private parties perstructure. initially Thus will fi- garage by buying construction nance bonds National pay Land issued will the form of sums sufficient both rent, pay and the then principal interest on bonds. these How, can the Majority speak “public investment in the it Project?” Let here be stated conclu- unequivocally, definitively and Land sively, beyond cavil: National pay entire cost of construction both of superstructure and the it.3 above (4) The challenge that no there was demonstrable

present future for the public need proposed facility In of view in Majority record this case, Opinion in respect this like a pages reads few Alice in Blunderland. As the learned court below opinion its sur exceptions declared: “The rec- correctly ord shows that the reasonably Parking Authority could conclude that there both present is a need and future for the and that not abused project, Authority has its discretion or acted or arbitrarily to law.” contrary its reaching in- took conclusions, to consideration the inter following reasons, alia, finding there public that was both a and future need.

“3. That there is at the present shortage time a of in the spaces Spruce Broad and parking Street area (508a-509a, 511a-512a, 514a). present

“4. That there is a park- need public a at the project site ing Academy Project House which a 514a), proper (508a-511a, location (414a, proposed and that size 514a), parking one relation is a correct to the need garage (514a). That the Academy “5. House Project would have on traffic (414a) which impact tak- examined, course, aU costs wiU be borne tbe Naturally, Of lessees. price purchase tbe tbe tbis include John Bartram Hotel. engi- traffic into account the work of City’s

ing Associates Smith and and the Wilbur studies neers, specific in this parking generated to where demand con- ; location (414a) and, regard, ingress traffic engineers traffic and discussed sulted re- and number street egress, spaces, capacity, ways had alternative explore them lated matters, received traffic flow go which the could (414a), from them that satisfied with report they a were proposal (414a). in cen-

“5. That there has been a increase general improvements on number City ter based a traffic, have been going (512a). there facilities “6. That there were number of new supposed were come into existence within period next ten year (131a).

“7. That there will be increased needs re- parking Academy Project House gardless itself, apart- whatever would be generated by in the ment houses would be served adequately parking garage under- and that the size of the neath it, designed into both take account types generation (512a). “13. That there has been some discussion talk is not proposed but there under of, consideration, at Broad and public garage large Pine Streets con- Museum with the of College nection Art 503a- (134a, development Its uncertain 504a). is (134a). That there was to be

“16. of move the Library present from its location at Company Broad and Chris- to the of general area tian Streets Academy House there and was discussion of Project, one or an- coming into institutions this other as well area, (512a). That the size of the proposed “17. garage and use is air-rights thereabove, consistent with parking size of and-the (425a) demand land area (414a). “23. to be building That the constructed type proper air-rights above is parking in relation to land and coverage density (414a), provides for D-25, the maximum use of the site (Exhibit 888a-896a).

“24. That project’s light size proper, studies Wilbur park- Smith and Associates, ing and the relation of of the air- demand, the use over the rights parking (425a).” structure the face these record how can this Court facts, seriously present there is no or for ad- say future need ditional at this site? Only arbitrarily sub- stituting judgment Philadelphia that of the Public Parking can it do Authority so.

The extent Opinion which the Majority purports to substitute the judgment of Court for that this experts, revealed by its total and over- disregard turning of the chancellor’s findings fact affirmed court banc. en

The Majority Opinion purports out-expert indeed one of the on internationally acknowledged experts traffic and Wilbur The parking, Smith and Associates. relies on Authority traffic engineers’ on traffic views ingress and number of street egress, capacity, spaces, other many matters intimately pres- related to the ent and future need for a parking garage here. Opinion Majority does not state on tech- what

nical experience traffic it knowledge overrules tech- on experts nical such technical aspects “projection of space “the contemplated required”, generation of a significant demand” and the other myriad of matters are basically inherently within the province experts employed by reports whose the Parking that extent to proceed based its judgment with the project. Opinion Majority in this respect dramatically the folly

demonstrates Court’s attempting tech- matters, on administrative judgment substitute its study, in of intensive and requiring years nical nature law empowered by for that of administrators perform such functions. in day plaintiffs have had more than their deposi- exhausting in case. had They

court this have had have taken trial They tions before the case. in and fully a case was trial which facet every find- has made thoroughly explored. The chancellor in and of fact are uncontradicted totally ings are evidence supported ample instance every find- The court en has these record. banc affirmed these have plaintiffs reargued and ings. argued to this repose There should and must be a appeals. litigation. record as a fair

When, here, reading of entire public- responsible that a body reveals competent, spirited upon citizens faith good has reasonably investi- impressive the basis of record of exhaustive con- gation every complicated facet situation promising proceed development cluded with great improvement so extensive an we should it. commend not condemn

As a our function matter, strictly judicial law, stop exhausted we find basis in when no law fact no project. There is error the lower court’s ad- opinion exceptions. judication dismissing must and should affirm. We Eagen joins opinion. Mr. Justice dissenting Opinion Dissenting Mr. Justice Cohen : I with the disagree majority’s decision respect with the Academy to both House Project and the Ritten- Project. Square Regarding house I would latter, decree below on the basis of sustain the excellent opinion comprehensive Judge Spaeth, whose of to analysis issue of plaintiffs standing challenge thor- Rittenhouse is a Square oughly enlightening presentation of applicable Pennsylvania law.

With respect to the I would Academy House Project, affirm the decree below of dis- because the very logical cussion by Judge Spaeth the case. the merits of since I do However, had plaintiffs believe that to standing maintain I that portion their action, would not required have Ex- a decision on merits. cept in that I am regard, satisfied that all the chan- cellor’s findings of approved fact and which were law, by court en were rec- banc, supported amply by ord. While I might disapprove of the grant to the developers of to options pur- exclusive chase their respective I projects at some future time, do not believe that ju- that is for issue presently ripe dicial and determination, will not has until there be, been an attempt to option. exercise either I feel addition, position taken by majority is detrimental to the best our interests cities and our State. It has been long recognized a is in a municipality position much better a pri- than vate individual or group a individuals solve problem of parking.

Municipalities make parking on facility decisions considerations the total parking the needs problem, of the persons who will utilize the areas and parking the relationship parking objectives community operations. and other municipal Private is parking profit on a supplied basis only profit and, following profit there no is motive, when there is no parking. parking or the city authority can use its power of to condemn domain eminent property parking pur- exploitation can avoid and poses people in- desiring by property owners who city parking hold out for ex- prices. orbitant guarantee the city authority better also can facility. con-

permanency parking owners Private of a temptation aat tinuously facilities their to sell face non-parking profit purposes hence community facility served. the area lost recognized government generally must It parking. both has done so Government subsidize parking facilities to the extended tax considerations money more by permitting borrow the facilities to se- readily than can be terms favorable more govern- private cured borrower. As return helps parking maintain subsidized sustain ment, property area in the values and taxes real estate produces public com- from the and it revenue served, parking that thrive as a result of mercial activities facilities. dependent

The life of our cities is whole economic upon development, and continuation establishment, position parking ma- of facilities. The taken development center-city jority of Philadel- curtails protecting private operators phia of and does so notoriously pro- parking lots have been deficient who community. viding ma- facilities joint pub- jority strikes this venture between the down growth private interests thus lic and retards development of the cities of our State. and dissent to I differ from the determination of the majority. Opinion Eagen

Dissenting Mr. Justice : cogent join in the unanswerable I dissent However, would further Justice Mr. Musmanno. I involving in the case at least Rittenhouse hold plaintiffs Project, prose- standing Square lack action. cute prevent only taxpayer’s wrongful lies suit a

A public wasting public funds aor expenditure of assets: Ge v. ricke 358 Pa. 44 A. 2d 233 Philadelphia, (1945). opinion as Majority public reasons that sets are because after or more affected, fifty years ownership Square Project property Rittenhouse may revert to the of Philadelphia. previous City No decision of this Court has entertained broad such a view of taxpayers’ suits. every such within case, my where knowledge, sus type action been has tained, property public involved was at the time the action was instituted. con Expectancy trol was not enough. is no question there

Moreover, Philadelphia tax funds here involved. In White v. 408 Pa. Philadelphia, A. 2d 266 we held (1962), recently tax- payer Philadelphia had no to attack standing city ordinance that provided for the acquisition of property, which was to be paid solely by funds of the federal government. We said no direct injury taxpayer to the was involved. Also, that case concerned a hous- ing project, ownership pertinent under which, would law, eventually revert to the None- municipality. plaintiff we ruled the lacked theless, de- standing. The cision of the Majority clearly inconsistent with and in opinion White, my supra, overrules it. dissent. too, strongly

I, ex wealth rel. v. Common Appellant, Bordner,

Russell.

Case Details

Case Name: Price v. Philadelphia Parking Authority

Court Name: Supreme Court of Pennsylvania

Date Published: Jun 24, 1966

Citation: 221 A.2d 138

Docket Number: Appeal, 252

Court Abbreviation: Pa.