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A request by a political subdivision to dispose of previously-donated property is governed by the Donated or Dedicated Property Act whether or not a formal acceptance of that property was made by the political subdivision, and disposal may be based on fiscal or economic impracticability so long as the public actors have not acted based on fraud, bad faith, capriciousness or abuse of power.
In re: Erie Golf Course, 963 A.2d 605 (Pa. Commw. 2009).
In 1926, a private entity conveyed property, now the Erie Golf Course, to the City of Erie for $1 in exchange for the City’s assumption of a mortgage on the property, a transfer made pursuant to an ordinance authorizing the sale and a deed which required the City to maintain the property as a golf course or park. In 2004, the City approved municipal financing to make significant improvements to the golf course, but in 2006, under new leadership, the City sought to sell the golf course based on its lack of funding for the debt. The City filed a petition to abandon it under the Donated or Dedicated Property Act (“Act”), and several public interest groups intervened to oppose the request. The Trial Court denied the Petition, refusing to allow the City to sell the park, finding the Act did not apply because there was a record that the City accepted the property and agreed to maintain it as a golf course or park. Even if the Act applied, the Trial Court reasoned, the City could not satisfy its burden to transfer the property under the Act because evidence that it was not generating sufficient income was not enough to demonstrate that it was impracticable to continue in its required use.
On appeal, the Commonwealth Court rejected the City’s argument that the Act did not apply to the property because it had been formally accepted by the City. Instead, it found that the Act applies to three types of property – property that is donated to a political subdivision, property for which dedication to a public use is complete (evidenced by formal acceptance) and property offered for dedication where no formal record exists as to acceptance. Under the Act, land and buildings held by a political subdivision must be used for the purposes for which they were originally dedicated unless otherwise allowed by Court Order and a political subdivision can only cease the dedicated use when it can demonstrate that continuation of the original use is no longer practicable or possible and has ceased to serve the public interest. The Court held that, under this standard, the City was entitled to great deference, the Trial Court could only overrule the City’s request to abandon the property/use if the City acted with bad faith, fraud, by arbitrary or capricious conduct or abuse of power. Further, fiscal or economic impracticability is sufficient under the Act. Because the Trial Court did not review the City’s actions under the property standard, i.e. did not review the City’s policy decisions for fraud, bad faith, capriciousness or abuse of power, the Commonwealth Court remanded the matter for proper consideration of the Petition under the Act and evaluation of the evidence it presented concerning impracticability with deference to the actions of municipal officials acting within their discretionary powers.
Opinion Date: January 7, 2009
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