Pennsylvania municipalities are charged with overseeing and regulating the local subdivision and land development process. To do so, the governing bodies of municipalities enact subdivision and land development ordinances ("SALDOs") laying out the requirements that applicants must satisfy to gain municipal approval. However, the Pennsylvania Commonwealth Court recently clarified in PSIP JVI Krumsville Rd., LLC v. Board of Supervisors of Greenwich Township1 that municipal SALDOs are preempted where the Pennsylvania Department of Transportation ("PennDOT") uses eminent domain and land acquisition powers for a public purpose. The PSIP court further held that a township's board of supervisors acted in bad faith in its review and processing of the applicant's land development plan.
The court in PSIP relied on two other Commonwealth Court cases2 to explain that a condemnor like PennDOT does not need a municipality's subdivision approval to effect a condemnation of land for a public purpose. The court further noted that PennDOT could exercise its eminent domain power by contract in lieu of a formal condemnation proceeding.
In the PSIP case in particular, a developer submitted a preliminary land development plan to the Board of Supervisors of Greenwich Township, seeking to develop a large warehouse distribution facility on property that fronted a state road. The plan's proposed access to the state road required a highway occupancy permit from PennDOT, which determined that the existing right-of-way had to be widened. The developer was required to convey a strip of its property to PennDOT. Likewise, PennDOT required the conveyance of another strip of land owned by the developer's neighbors to the south as well. However, since the neighbors were not the applicants for the highway occupancy permit, PennDOT directed the developer to first acquire the neighbors' strip of land, and then convey the entire strip of land to PennDOT in a single deed.
The developer followed PennDOT's required path, but the Township engineer found that the developer's acquisition of the neighbors' property had been done "without the required subdivision plan submission, review, and approval process." The developer responded that the subdivision approval was not required because the area in question was limited to a highway dedication.
The Planning Commission recommended that the Board of Supervisors disapprove the developer's application, because in its view, the developer engaged in an "illegal" subdivision of land in relation to the development. The Board agreed, and voted down the plan for the same reason.
On appeal, the trial court reversed the Board's decision and specifically noted that the developer's acquisition of the neighbors' strip of land "was limited to the sole purpose of dedicating that interest to the right-of-way for [the state road.]," and that "[a]ny acquisition of real property for PennDOT's right-of-way did not require subdivision approval from the Township." The trial court further held that the Board acted in bad faith by denying the plan since the Township never advised the developer on how to comply with its SALDO after the Township learned of the developer's acquisition of the "partial lot."
Like the trial court, the Commonwealth Court also ruled in favor of the developer, finding it relevant that each deed in question limited the use of the conveyed real estate to the single public right-of-way purpose. "This public purpose," the court held, "rendered the Township's SALDO inapplicable."
The Commonwealth Court likewise affirmed the trial court in finding that the Board acted in bad faith. The court noted that the developer had no reason to believe that land acquisition, for the sole purpose of dedicating PennDOT right-of-way, would be subject to a subdivision requirement. Essentially, in the court's view, the "the Township devised 'self-serving technical violations'" to improperly reject the plan.
Practically speaking, the PSIP case is a cautionary tale for municipalities in analyzing PennDOT-related conveyances for a public purpose, whether by eminent domain or agreements in lieu of condemnation. In this circumstance, municipalities should pay careful attention to whether, and/or to what extent, they attempt to enforce local subdivision regulations. For greater clarity, always consult with counsel.
Footnotes
1. PSIP JVI Krumsville Rd., LLC v. Bd. of Supervisors of Greenwich Twp., 284 A.3d 547, 549 (Pa. Commw. Ct. 2022).
2. See Joseph v. N. Whitehall Twp. Bd. of Supervisors (Pa. Commw. Ct. 2010); Valley Twp. v. City of Coatesville, 894 A.2d 885 (Pa. Commw. Ct. 2008).
Originally published March 7, 2023.
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