Cohen v. City of Philadelphia

806 A.2d 905
CourtCommonwealth Court of Pennsylvania
DecidedAugust 22, 2002
StatusPublished
Cited by11 cases

This text of 806 A.2d 905 (Cohen v. City of Philadelphia) 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
Cohen v. City of Philadelphia, 806 A.2d 905 (Pa. Ct. App. 2002).

Opinions

OPINION BY

Senior Judge DOYLE.

Before this Court in our original jurisdiction are the preliminary objections filed by the City of Philadelphia (City) and the Honorable John F. Street, Mayor, the Commonwealth of Pennsylvania (Commonwealth), the Honorable Mike Fisher, the Attorney General of Pennsylvania, the Honorable Tom Ridge, Governor of Pennsylvania,2 the Philadelphia Authority for Industrial Development (PAID), The Philadelphia Eagles, a Limited Partnership (Eagles), and “The Philhes, Inc.” (Phillies) (collectively, Respondents) in response to a petition for review in the nature of a complaint for declaratory judgment and permanent injunction filed by the Honorable David Cohen (Cohen or Petitioner), a taxpayer, a registered voter, and a Councilman-at-Large for the City of Philadelphia.

The petition for review challenges a series of ordinances that Philadelphia’s City Council enacted on December 20, 2000, and that were signed into law by Mayor Street on December 28, 2000. These ordinances, particularly Ordinances 721-A and 722-A, set the structure for the development, finance, construction and operation of a new baseball ballpark and football stadium in South Philadelphia at a cost of a little over $1 billion. The City will provide $394 million towards the project; the Teams and the Commonwealth will provide the bulk of the remaining funds, although there is a $53-million shortfall in funding and no record of a source to provide for the difference. By ordinance, however, the source of the $53 million must be other than the City.

City Council authorized the ordinances and the leases that they approved by a vote of fifteen to two pursuant to the Philadelphia Home Rule Charter (Home Rule Charter or Charter),3 the Economic Development Financing Law,4 the Capital Facilities Debt Enabling Act (Debt Enabling Act)5 and the Eminent Domain Code.6 City Council’s vote of fifteen to two was the result of over two years of negotiations between all of the interested parties and seven days of public hearings during which many different individuals testified for and against almost every aspect of the proposal, including the project’s financial risks and the structure established to handle the risks.

Ordinances 721-A and 722-A establish a four-lease structure for acquiring, financ[908]*908ing, constructing and operating each stadium. The City will provide most of its share of stadium funds through this complex lease arrangement. The four types of leases involved are the Ground Lease Agreements between the City and PAID (providing for the City’s lease to PAID of certain lots of land owned by or to be acquired by the City), the Prime Lease Agreements (agreements between PAID and the City that provide for the sublease by PAID back to the City of all or a part of such land and certain improvements to be built on the land, including the Eagles’ stadium and the Phillies’ ballpark), the Lease-back Lease Agreements (agreements between PAID and the City that provide for the sub-sublease of the improved land back from the City to PAID, which in turn allow PAID as landlord to enter into the Team Subleases with the Eagles and the Phillies). The Team Subleases outline project development, financial terms, and nonfinancial terms. With respect to the nonfinancial terms, the sublease lease terms and conditions provide that the term of the leases is a “30 year base term, with ten consecutive five year renewal options exercisable by the Team[s].” (Eagles’ Lease and Development Terms and Conditions (Sublease Lease Terms) at 7); (Phillies’ Lease and Development Terms and Conditions (Sub7 lease Lease Terms) at 7). For purposes of Cohen’s arguments, the terms of each of the four Eagles’ leases are largely the same as the terms of the Phillies’ leases. The parties to the leases are the City, PAID, the Eagles and the Phillies.

In his petition for review, Cohen avers, inter alia, that the City “is a municipal corporation organized under the Constitution and laws of the Commonwealth, and the Philadelphia Home Rule Charter” (pet. for rev., para. 2); that PAID “is the corporate entity charged under various lease documents described herein with various duties in connection with the erection of two new sports stadiums in Philadelphia. The board of directors of PAID is entirely appointed by the Mayor, serves at his pleasure, and functions fully subject to his direction and control” (pet. for rev., para. 6); that the Eagles “is a limited partnership organized and existing under the laws of the State of Delaware, and the owner of the Philadelphia Eagles National Football League [NFL] franchise” (pet. for rev., para. 7); and that the Phillies “is a limited partnership organized and existing under the laws of the Commonwealth of Pennsylvania and is the owner of the Philadelphia Phillies Major League Baseball franchise” (pet. for rev., para. 8).7

In count one of the six-count petition, Cohen asserts that the City’s legislative power is to be exercised only by City Council (pet. for rev., para. 10) and that, inter alia,

[t]he process for appropriating funds is spelled out with great specificity and particularity under the Charter, requiring specific lump sum amounts to be appropriated to particular Departments, within specified classes of expenditure. Philadelphia Home Rule Charter, Section 2-300. The sums appropriated each year must match expected revenues exactly so as to assure enactment of balanced budgets, and to forestall the possibility of budget deficits. Philadelphia Home Rule Charter, Section, 2-302.

(Pet. for rev., para. 14). Cohen further asserts that Ordinances 721-A and 722-A, which were part of a “package of ordinances to finance the development of two new stadiums in Philadelphia” (pet. for [909]*909rev., para. 15), and a variety of lease agreements which were approved pursuant to the ordinances, illegally require unspecified appropriations to be made by the present and future City Councils in contravention of the provisions of the Philadelphia Home Rule Charter. Ordinance 721-A relates to the Eagles’ new stadium and Ordinance 722-A relates to the Phillies’ new stadium, and these ordinances authorize, inter alia, the leases between the City and PAID and authorize PAID to issue $304 million of bond financing for land acquisition, construction, and maintenance. (Pet. for rev., paras. 16, 16a-b).8

Cohen avers that, while “the City’s contribution is purported to amount to 394 million dollars payable for land acquisition, partial construction of the Phillies park, and partial operation and maintenance of the Eagles stadiums[,]” (pet. for rev., para. 18), he further asserts that number is inaccurate because, “the true cost to the City of the purported 394 million dollars of assistance is 1.3 billion dollars, since the vast bulk of the assistance will be borrowed and will have to be paid back with interest over 30 years.” (Pet. for rev., para. 19). Cohen further alleges that even the $1.3-billion estimate is just that — “a mere estimate” — because “the legislative package explicitly allows for unspecified additional borrowings for land acquisition, and contains no limit on the amount of interest, principal and other costs associated with repayment of the bonded indebtedness that the City will be required to pay.” (Pet. for rev., para. 20.)

Moreover, according to Cohen, a clause, viz.,

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Cohen v. City of Philadelphia
806 A.2d 905 (Commonwealth Court of Pennsylvania, 2002)

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Bluebook (online)
806 A.2d 905, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cohen-v-city-of-philadelphia-pacommwct-2002.