Looking ahead after high court ruling

Aug. 25

By Kellie Patrick Gates
For PlanPhilly

     A group of state legislators said Monday they will seek federal court review of last week’s Pennsylvania Supreme Court decision that upheld SugarHouse Casino’s right to build on the submerged lands of the Delaware River.
     “There will definitely be a federal court action,” Christopher Craig, legislative counsel to Sen. Vincent Fumo, said Monday. Craig would not say whether that meant an appeal to the U.S. Supreme Court. See press release.
     The city may also take legal action, said Richard Feder, the city’s chief deputy solicitor for appeals.
     Riparian rights are usually granted by the General Assembly. But with no legislator willing to introduce a bill for the casino, SugarHouse’s legal team presented Mayor John Street’s administration with a 1907 state law, Act 321, in which the legislature conveyed its right to the City of Philadelphia. While the Street administration agreed the city could issue riparian rights, Mayor Michael Nutter’s legal team disagreed. They revoked the license first on grounds that proper procedure was not followed. Then, after doing more research, they agreed with the waterfront legislators that the 1978 Dam Safety and Encroachments Act repealed any previous laws that gave the power to grant riparian rights to an entity other than the legislature.
    This is what attorneys representing the legislators, city council and the city argued during April’s oral arguments.  But the court, in short, agreed with SugarHouse attorneys that the city had the power to grant the license because the 1978 law does not specifically name Act 321. The Court also agreed with SugarHouse that the city acted improperly when it revoked that same license soon after Mayor Michael Nutter took office.

    (Read high court’s opinions below). 

    Many who strongly support or oppose the building of casinos along the waterfront closely watched the State Supreme Court case, because the riparian rights issue was one of the last remaining hurdles for SugarHouse to build its project as planned. City officials and most of the waterfront legislators who made Monday’s announcement are actively working to convince SugarHouse to build somewhere off the waterfront. 
     But Feder, Craig and the waterfront legislators say the court’s decision has ramifications far beyond gaming – and beyond Philadelphia.
    The legislators – Fumo and Sen. Michael Stack and state representatives Michael O’Brien and William Keller – say that the State Supreme Court’s decision gives the city the power to grant the right to state-owned property to virtually any private enterprise, taking away the General Assembly’s exclusive right to grant leases on land that is owned by the all citizens of the Commonwealth and to collect revenue for those citizens. (SugarHouse paid $250,000 to the city after the Commerce Department issued its license)
    “The notion that a casino can acquire public lands, without even paying a single cent to the commonwealth is offensive to both good public policy and common sense,” said Stack in a written statement.
     The legislators are concerned that an inability to revoke a riparian license will hamper the Philadelphia Regional Port Authority’s ability to use riverfront property to meet future maritime shipping needs. “The city can effectively block any expansion of the PRPA’s harbor facilities by granting such licenses to other entities or refusing such licenses to the PRPA.  The PRPA, a state created regional authority, is placed in the untenable position of being subordinate to the City,” they said in a written statement.
     PRPA spokesman Joseph Menta said this morning that he was not aware of the Supreme Court’s decision, but that his organization is opposed to building casinos and other large developments on the waterfront. He said the traffic they generate can tie up truck traffic that is necessary for successful port operation.
     Both the legislators and the city’s attorneys said they are troubled by the court’s decision that the city’s attempt to revoke SugarHouse’s riparian license was invalid.
     The legislators say this means SugarHouse has control over the land in perpetuity, and that the land is “lost from the public forever” once the city grants a lease.
    “What makes the decision so hard to understand is that in all precedence we are familiar with a license issued by a government entity to use government land is always revocable,” said Feder. “The implication (in the decision) is that once a government entity grants a license to use public land, the government cannot revoke it for any reason,” he said. “It seems like a gigantic change in the law,” Feder said, one that would have implications far beyond the city of Philadelphia.
    “It is a contradiction to say that the city has the authority vested in it to give the license but not take it away.  If that is really true, then no one has the authority to protect the public interest,” O’Brien said.
      Feder said he thought that even if the court decided the city had the right to grant a riparian license, it would have ruled that the administration was also well within its rights to revoke it – particularly since it was revoked at a time when the city’s authority to grant such a license was already in question.
     Had this been the case, SugarHouse would have to reapply to the city for its license, he said.
     While keeping all options open, Feder said the city’s most likely legal action is to ask the Pennsylvania Supreme Court to reconsider the portion of its decision that applies to revocation of a riparian lease. Any action the city takes would be separate from the legislators’ action, he said.
     The text of the decision does not say explicitly that the city can never revoke a license once granted.  Writing for the majority, Justice Ronald Castile said that the city’s Notice of Revocation issued in January was invalid because the city tried to revoke it after the period for SugarHouse to file an appeal had passed and no notice of the revocation was given nor a hearing on the matter held, among other reasons.
     SugarHouse spokeswoman Leigh Whitaker forwarded a question about the revocation portion of the decision to attorney Stephen Cozen,
     “Once again we are very pleased that the Supreme Court, in a meticulous legal and factual analysis, has validated a position which we and the prior City government always believed was correct. While we certainly respect the dissenting Justices we do not believe that their analysis is consistent with legislative history and rigorous legal analysis. Our clients are anxious to work with their neighbors, put thousands of people to work, and start generating the funds which the current administration already has in their future budgets. We anticipate that the city will abide by this decision and follow its legal obligations to facilitate our project.” 

       So will the City of Philadelphia now begin using its power to grant riparian land leases – and collect fees for those leases?
      “The question is premature,” Feder said. “I suspect the General Assembly may have some reaction to this, and the authority we apparently have been granted is likely to be fleeting.”
      Feder is right. O’Brien said legislators aim to pass legislation that would repeal the 1907 statute that the Supreme Court says gives the city the authority to grant riparian leases shortly after the session resumes on Sept. 15.
     The legislators hope to specifically repeal Act 321 before the session ends on Nov. 30, O’Brien said. Craig said a repeal might eventually be found redundant by a federal court, but it would not negatively impact any future case.
    The 1907 law applied only to Philadelphia, so other cities and towns with navigable waterways still do not have the ability to grant riparian rights.
    And the court’s decision does not take away the General Assembly’s ability to grant riparian rights in Philadelphia. It means that either the city or the legislature can grant them.
    That’s a confusing and potentially harmful situation in which two different entities could be given the rights to use the same piece of property, wrote Justice Seamus P. McCaffery in his dissenting opinion. Justice Thomas G. Saylor also disagreed with the majority.
    During oral arguments, attorneys for the elected officials tried to persuade the court that even if the 1907 law still stood, it applied only to piers, wharves and harbor structures – and not to a casino.
   But Castile, referencing Black’s Law Dictionary definitions of “wharf” and “structure,” said the majority of Justices agreed with SugarHouse’s assertion that the casino’s proposed public dock and pier, public right-of-way and waterfront promenade fall within the definitions of pier, wharves and harbor structures.
    State lawmakers – and an attorney who represents Casino-Free Philadelphia – were flabbergasted.
     “This is simply the court overstepping the intent and the spirit of the act, and once again, misinterpreting the powers given to it by the General Assembly, in its misguided quest to have gaming up at any cost,” O’Brien said.
    Casino-Free attorney Paul Boni said that the courts are supposed to rely on legislative intent, not dictionaries, to determine what the words within a piece of legislation mean.
    He said any condominium developer could now apply for a city-granted license, so long as they provided a boat slip.
    Boni also was outraged at the court’s assertion that the way for the city to control what lines its waterfront is through zoning.
    In an earlier decision, the State Supreme Court forced the city to change the zoning of SugarHouse’s property to Commercial Entertainment District – the only zoning classification in which a casino can operate.
    “It’s the ultimate insult,” Boni said.
    City Council, which was also a party in the lawsuit, agrees with the legislators’ stance, but will not join in their efforts, said Brian Abernathy, spokesman for Councilman Frank DiCicco. City Council is in discussions with the Mayor’s office, he said.
     SugarHouse is currently doing obstruction removal – taking large pieces of concrete and other objects that would impede construction out of the ground. It is also undergoing a historic review process with the Army Corps of Engineers – the review is required by federal law.  A group of local historians, the president of the Philadelphia Archaeological Forum and other local people advising the Corps on this process fear that the obstruction removal will destroy any historic artifacts remaining underground, but the work is continuing with the blessing of the Army Corps and the state and federal agencies that oversee these historic reviews.
    Whitaker said SugarHouse believes no further historic investigation is necessary because it has determined what it could find through archaeology and where it would be. SugarHouse agrees that further archeology work is necessary in some already identified locations. That includes looking under Penn Street for evidence of the British Revolutionary War Fort that once was on the site. That cannot be done, she said, until utility work is done in the area.
     SugarHouse also has a permit to do rough grading and approval to drive test pilings – the next step after obstruction removal, Whitaker said. A more detailed construction timeline cannot be determined until after the Army Corps makes its permit decision, she said.
Contact the reporter at kelliespatrick@gmail.com

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