Capital City Holdings, LLC v. DOT

CourtCommonwealth Court of Pennsylvania
DecidedAugust 31, 2022
Docket407 C.D. 2021
StatusUnpublished

This text of Capital City Holdings, LLC v. DOT (Capital City Holdings, LLC v. DOT) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capital City Holdings, LLC v. DOT, (Pa. Ct. App. 2022).

Opinion

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Capital City Holdings, LLC : : v. : : Commonwealth of Pennsylvania, : Department of Transportation, : No. 407 C.D. 2021 Appellant : Submitted: May 6, 2022

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge HONORABLE CHRISTINE FIZZANO CANNON, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE FIZZANO CANNON FILED: August 31, 2022

The Commonwealth of Pennsylvania, Department of Transportation (Department), appeals from the March 9, 2021 order of the Court of Common Pleas of Dauphin County (trial court). The trial court found the Department’s action resulted in de facto takings under the Eminent Domain Code (Code)1 of two properties owned by Capital City Holdings, LLC (CCH), overruled the Department’s Preliminary Objections to a Petition for Appointment of Board of Viewers (Board of Viewers Petition) filed by CCH, and granted the Board of Viewers Petition. Upon review, we affirm.

1 26 Pa.C.S. §§ 101-1106. I. Background This matter involves the effect of the Department’s proposed plan to widen and reconstruct the I-83 Capital Beltway surrounding Harrisburg (Beltway Project) on two commercial properties owned by CCH and located at 3570 Paxton Street, Harrisburg (Paxton Street Property), and 535 South Cameron Street, Harrisburg (Cameron Street Property). See Trial Court Memorandum Opinion dated March 9, 2021 (Trial Court Opinion)2 at 1. The Beltway Project is a large highway improvement project originally planned in 2003 and divided into three sections that were developed simultaneously to ensure continuity and compatibility of the sections. See id. at 3. The Paxton Street Property is part of Section 2 of the Beltway Project, whereas the Cameron Street Property is part of Section 3. See id. The Department obtained funding for Sections 2 and 3 of the Beltway Project in 2016.3 See id. Once the Department obtains the requisite environmental clearances,4 the Department will be able to begin the right-of-way acquisition process for affected properties located within the respective project Sections. See id. at 3-4. Actual construction of the Sections will not occur until the final project design has been approved, all required rights of way have been condemned, and all affected utilities have been relocated. See id. at 4.

2 On July 15, 2021, the trial court issued an opinion pursuant to Pennsylvania Rule of Appellate Procedure 1925(a) that adopted the previously filed Trial Court Opinion as its Pa.R.A.P. 1925(a) opinion. See Trial Court Pa.R.A.P. 1925(a) Opinion dated July 15, 2021. 3 The Department obtained funding for Section 1 in 2006 and began construction thereon in 2016. See Trial Court Opinion at 3. 4 Each section of the Beltway Project requires an environmental clearance of some kind, be it a Categorical Exclusion, an Environmental Assessment, or an Environmental Impact Statement. See Trial Court Opinion at 3. The Department received a Categorical Exclusion for Section 3 and an Environmental Assessment for Section 2 in October of 2019 and June of 2020, respectively.

2 As part of the environmental approval process, the Department held a public open house regarding Beltway Project Sections 2 and 3 on October 18, 2018 (October 2018 Open House), to share the Department’s intended designs for Sections 2 and 3 with the public and obtain public feedback.5 See Trial Court Opinion at 4. While not detailed enough to indicate the full impact of the Department’s proposal, aerial map diagrams of proposed Sections 2 and 3 shown at the October 2018 Open House did indicate that the new highway would be placed directly on the Paxton Street Property, and that the front of the Cameron Street Property would also be affected.6 See id. at 4-5. At the time of the October 2018 Open House, the Department projected construction on Beltway Project Sections 2 and 3 to begin approximately five years later, or sometime around 2022 or 2023, with required private property condemnations scheduled to commence one and a half to two years before the start of construction. See id. at 5. When finally approved by the Department in November 2019, the plans for Sections 2 and 3 of the Beltway Project remained relatively unchanged from those produced at the October 2018 Open House. See id. Ted Keleman is an auto broker7 and owner of CCH. See Trial Court Opinion at 6. Beginning in 2007, Keleman operated an automobile retail venture called Manheim Car King (Manheim) out of the two CCH properties in question. See id. Manheim rented and used the Paxton Street Property as its retail showroom

5 The Department conducted a second public open house on November 19, 2019. See Trial Court Opinion at 5. 6 These diagrams ultimately became part of the environmental reports finalized thereafter. See Trial Court Opinion at 5. 7 Auto brokers buy traded-in vehicles from new car dealerships for resale to third parties through auctions and other platforms. See Trial Court Opinion at 6.

3 and the Cameron Street Property as a repair and service center intended to support the retail side of the venture. See id. However, near the end of 2017, and prior to the October 2018 Open House, Keleman decided to shutter the Manheim operations at both the Paxton Street Property and the Cameron Street Property.8 See id. Thereafter, Keleman listed both properties for lease. See Trial Court Opinion at 6. Specifically, on November 27, 2017, Keleman signed a real estate listing agreement that authorized a listing of the Paxton Street Property for lease at $4,000 per month, triple net.9 See id. at 7. This listing agreement was amended on April 12, 2018, to authorize the sale of the Paxton Street Property for $750,000. See id. CCH thereafter received two offers to purchase the Paxton Street Property for $775,000. See id. The first offer came from Bay, LLC (Bay), an outfit that intended to utilize the Paxton Street Property as a marijuana dispensary, and was contingent on Bay receiving a marijuana dispensary permit from the Commonwealth. See id. The second offer came from Rhada, Inc. (Rhada), a Dunkin Donuts franchisee that intended to open a Dunkin Donuts location at the site. See id. CCH ultimately accepted Bay’s offer to purchase the Paxton Street Property, keeping Rhada’s offer in reserve in case the Bay deal fell through. See Trial Court Opinion at 8. On November 7, 2018, the Bay offer did fall through for reasons unrelated to the potential condemnation of the Paxton Street Property as a result of the Beltway Project. See id. Thereafter, on January 10, 2019, Rhada’s consultant contacted CCH’s real estate agent to inquire whether the Paxton Street

8 Keleman’s decision to shutter Manheim’s operations was in response to learning of employee theft, not in response to the Beltway Project. See Trial Court Opinion at 6. 9 “Triple net” refers to a real estate leasing arrangement whereby the leasing tenant is responsible for all taxes, insurance, and common area maintenance costs associated with a property in addition to the monthly lease amount. See Trial Court Opinion at 7 n.6.

4 Property was still available for purchase. See id. The October 2018 Open House having occurred, CCH’s real estate agent disclosed to Rhada’s consultant the possibility of the condemnation of the entire Paxton Street Property within three to four years.10 See id. Rhada did not submit another offer to purchase the Paxton Street Property. See id. CCH did thereafter receive an offer to lease the Paxton Street Property at a rate of $4,000 per month to a fireworks retailer, but the deal was not consummated based on concerns over the potential condemnation of the property. See id. CCH received no further comparable offers to purchase or lease the Paxton Street Property. See id. at 9.

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Bluebook (online)
Capital City Holdings, LLC v. DOT, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capital-city-holdings-llc-v-dot-pacommwct-2022.