In a recent Commonwealth Court decision, Appeal of Chester County Outdoor, LLC, No. 1761 C.D. 2016, 2017 WL 3198266 (Pa. Comm. July 28, 2017), the Court held that, after a successful validity challenge to an ordinance, the challenger must file an application for site-specific relief with the municipality prior to filing an action with the court pursuant to Section 1006-A of the Municipalities Planning Code (MPC).

Chester County Outdoor, LLC (CCO), a billboard developer, filed a challenge to the substantive validity of the East Pikeland Township Zoning Ordinance (the “Ordinance”) with the Township Zoning Hearing Board (the “ZHB”), alleging that the Ordinance unlawfully excluded billboards. CCO did not request site-specific relief from the ZHB, or submit plans for a proposed billboard with the validity challenge.

Before the ZHB made a decision as to the validity challenge, the Township Board of Supervisors adopted a resolution which declared the challenged sections of the Ordinance to be invalid.  The ZHB then issued a decision sustaining the validity challenge, and the Township subsequently adopted a curative amendment to the Ordinance.

After adoption of the curative amendment, CCO filed a declaratory judgment action with the trial court, seeking a declaration that CCO is entitled to site-specific relief to permit a billboard on the subject property, and a hearing held pursuant to 1006-A(d) of the MPC.

Section 1006-A(d) provides, in part, that upon motion by any of the parties or upon motion by the court, the judge of the court may hold a hearing or hearings to receive additional evidence or employ experts to aid the court to frame an appropriate order.

After CCO petitioned for a hearing under 1006-A(d), the Township filed a motion for the ZHB to be appointed the special hearing master under 1006-A(c).  However, after granting the Township’s motion, and reviewing the ZHB’s special master report, the trial court ruled that CCO’s request for site-specific relief did not belong before the trial court because, after prevailing on its validity challenge, CCO should have submitted plans to the Township before filing an action with the trial court.  Because CCO never applied for and been denied site-specific relief form the Township, no relief was available under Section 1006-A of the MPC.  CCO appealed the trial court’s decision to the Commonwealth Court.

The Commonwealth Court ultimately remanded the case back to the trial court and ruled that, while CCO is required to first submit its request for site-specific relief to the ZHB for consideration and determination, the trial court is the ultimate decision maker. The trial court is required under Section 1006-A of the MPC to conduct a de novo review of the evidence, and need not give deference to the ZHB’s findings.  As part of its de novo review, however, the trial court, in its discretion, is permitted to accept the ZHB’s findings as its own.  The trial court is also permitted, but not required, to hold a hearing and take additional evidence.  After conducting its de novo review, the trial court is required to grant the request for site-specific relief, unless the Township meets its burden of proving the materiality of certain “unchallenged, pre-existing, and generally applicable” provisions of the Ordinance, and that the proposed billboard is incompatible with such provisions.  When applying these unchallenged, pre-existing and generally applicable provisions to the billboard proposal, however, the trial court must be mindful to not apply these provisions in a manner that would exclude all billboards, or limit the trial court’s discretion in fashioning site-specific relief to CCO.

In addition, the Court held that the trial court is not permitted to apply the curative amendment to CCO’s request for site-specific relief because it was adopted after CCO filed its validity challenge.  In the event that the trial court concludes that CCO’s proposed billboard (i) is incompatible with any of the Ordinance’s “unchallenged, pre-existing, and generally applicable provisions,” and/or (ii) that the proposed billboard is contrary to the public health, safety and welfare, the trial court must consider alternative sites and/or alternative configurations for the proposed billboard and fashion some form of site-specific relief to CCO.

Kevin Scott writes:

In case you missed it last week, The Wall Street Journal and others reported (sub. req.) that the rate index LIBOR is going to be discontinued by the end of 2021. LIBOR has been the base index for most all variable rate loans, bonds, interest rate swaps and other instruments for many years. Various industry working groups are trying to establish an alternative index to replace LIBOR.

Globe on financial reportWhile most of the loan documents utilized over the years already have provisions that take effect if LIBOR is discontinued, it is doubtful that those provisions received much, if any, scrutiny.

For companies or individuals with LIBOR loans, please consider the following:

  1. If the loan matures prior to December 2021, there should be nothing to do. However, if the loan is a revolving line of credit, with annual renewals, even that loan will need to be reviewed.
  2. If the loan extends beyond December 2021, they should review the documents to see if there is a replacement mechanism that makes economic sense and actually works. Below are a few examples:

LIBOR: for any Interest Period for a LIBOR Loan, the per annum rate of interest (rounded up, if necessary, to the nearest 1/8th of 1%) determined by Agent at or about 11:00 a.m. (London time) two Business Days prior to such Interest Period, for a term equivalent to such period, equal to the London Interbank Offered Rate, or comparable or successor rate approved by Agent, as published on the applicable Reuters screen page (or other commercially available source designated by Agent from time to time); provided, that any such comparable or successor rate shall be applied by Agent, if administratively feasible, in a manner consistent with market practice.

If, for any reason, such rate is not available, the term LIBOR Rate shall mean, with respect to any LIBOR Rate Loan for the LIBOR Interest Period applicable thereto, the rate of interest per annum determined by Purchaser to be the average rate of interest per annum at which deposits in Dollars are offered for such LIBOR Interest Period to major banks in London, England at approximately 11:00 A.M. (London time) 2 London Business Days prior to the first day of such LIBOR Interest Period for a term comparable to such LIBOR Interest Period.

As you can see, both examples rely on the lender to choose the replacement index. The first example probably works. The second, which continues the reliance on London-based banks, probably does not work, as it was manipulation of the rate index in London that caused the demise of the index in the first place.

  1. For all new loans, the successor index language should be reviewed carefully to make sure it is clearly written and commercially reasonable.

I am sure we will all be hearing a lot about this in the coming months and I suspect that banks will begin reviewing their documents and proposing amendments as required.


Kevin Scott is a partner in the firm’s Corporate Department, resident in its Philadelphia office.

In a case caption Smith v. Ivy Lee Real Estate, LLC, the Commonwealth Court of Pennsylvania was faced with the question if Section 617 of the MPC permits a private cause of action to enforce a subdivision land development ordinance (SALDO). In the case, the Smith family alleged that Ivy Lee, who was their neighbor, engaged in construction activities that constituted land development under the township’s SALDO. The Smith family requested, among other things, a permanent injunction against Ivy Lee preventing construction activities unless and until Ivy Lee obtains the required SALDO approvals. The Smith family contended that, even though the township refused to enforce the SALDO, the Smith family had a right to bring a private enforcement action under Section 617 of the MPC.

The trial court determined that Section 617 creates a private cause of action solely for zoning violations, but ruled that the Smith family does not have standing to enforce the SALDO pursuant to Section 617 of the MPC. However, the Commonwealth Court found, in reviewing the language of Section 617 of the MPC and certain case law concerning it, that the plain language of Section 617 permits a private cause of action to enforce an alleged violation of any ordinance enacted under the MPC, including a SALDO.

The net of this case is that landowners can bring a private action against another landowner for their failure to comply with ordinances enacted under the MPC, including their failure to obtain land development approval. From a practical standpoint, given the broad definition of land development in the MPC and many municipal ordinances, there may be more instances where a municipality determines that land development approval is not required (such as for a change in use), but a private party might see otherwise and now, based on this case, has a right to bring their own private action against the violating landowner.

If you have any questions concerning the subject matter contained in this blog, on land use issues in general, please contact Rob Gundlach at 215-918-3636 or RGundlach@foxrothschild.com.

In a recent Supreme Court of Pennsylvania case, captioned as Valley Forge Towers, taxpayer brought an action against the school district, as a taxing district, seeking declaratory and injunctive relief claiming that the school district violated the uniformity clause of the Pennsylvania Constitution by systematically appealing only assessments of commercial properties. The Montgomery County Court of Common Pleas sustained the school district’s policy and dismissed the complaint. The taxpayers appealed to the Commonwealth Court of Pennsylvania who affirmed the lower court’s decision. The PA Supreme Court accepted the appeal to address the question of whether the uniformity clause of the Pennsylvania Constitution permits a taxing authority to selectively appeal only the assessments of commercial properties, such as apartment complexes, while choosing not to appeal the assessments of other types of properties- most notably, single family residential homes (many of which are under assessed by a greater percentage than commercial properties). After discussing previous court precedent and the specific facts of this case (i.e., the school district’s concentration solely on the appeal of tax assessments on commercial properties), the Supreme Court found that taxpayer’s complaint set forth a valid claim that the school district’s tax assessment appeal policy violated the uniformity clause. The court reversed the order of the Commonwealth Court and remanded the matter back for further proceedings. The Supreme Court did note, however, that nothing in the opinion should be construed as suggesting that the use of a monetary threshold or some other selection criterial would violate uniformity if it was implemented without regards to the type of property in question or the residency status of its owner; noting that such other methodology was not before the court. I suspect that this decision will not be the “last word” on the subject of school district tax appeals under Section 8855 of the Consolidate County Assessment Law (giving taxing authorities the same right as taxpayers to appeal tax assessments set by the County). If we can be of assistance with your PA real estate tax appeals, or the defense of tax appeals filed by a taxing authority, please contact Rob Gundlach at (215) 918-3636, or rgundlach@foxrothschild.com.

In many cases, clients ask us if we can file a motion against the other party for filing a false or frivolous pleading. In a recent opinion, the Commonwealth Court of Pennsylvania outlined the way in which a party must file a motion for sanctions for a false pleading. In the case of Pane, et al., v. Indian Rocks Property Owners Association, a dispute occurred as to if the Panes were entitled to construct a swimming pool on their property that was in a community association. The Association objected, and the Panes filed a complaint requesting a declaratory judgment against the Association, allowing them to build their proposed swimming pool. The Association answered their complaint, but then filed a separate action seeking a preliminary injunction. In this separate action, the Association stated that it had adopted a rule prohibiting swimming pools on individual lots within the development.

The trial court granted the summary judgment motion filed by the Panes in favor of allowing them to construct their proposed swimming pool, denied the Association’s summary judgment motion to prohibit the swimming pool, and denied the Panes’ motion (which was only made orally during argument on the summary judgment motions) for sanctions against the Association.

In denying the motion for sanctions, the trial court noted that the civil rules require that motions for sanctions be made separately from other motions and that the motion include a description of the specific conduct that allegedly gives rise to the sanctions. The trial court also noted that the request for sanctions was filed under the docket number for the Panes’ case for declaratory judgment when it should have been filed in the action initiated by the Association seeking a preliminary injunction. The Commonwealth Court affirmed the trial court’s decision to deny the request for sanctions and also noted that the Panes’ motion for sanctions did not comply with the “safe harbor” requirement of the civil rules (which requires the party moving for sanctions to include a certification with their motion that they served written notice and demand on the party or counsel who verified the pleading at issue and that each false allegation be corrected or withdrawn, and that the moving party then provide the other party 28 days to withdraw the allegations or correct the record before filing the motion for sanctions). The Commonwealth Court noted that the Panes’ motion for sanction was made orally during argument on the summary judgment motions and that the Panes did not file a certification confirming that a demand was served on the Association requesting the withdrawal of the allegations or the correction of the record.

Interestingly, no party seemed to contest the fact that the Association’s pleading included an incorrect allegation as to the fact that the Association had not adopted a rule prohibiting pools on individual lots within the Indian Rocks development. Given the severity of this allegation, and how the Association’s defense was based upon it, it appears that a correctly filed motion for sanctions may have been considered by the court in this case. Although no way to know for sure, as courts normally would only grant such motions in limited circumstances; however, this case does set forth the importance of sending the proper notification to the other party as to the alleged false allegation and allowing such party an opportunity to correct it within the referenced deadline.

If you should need assistance in this area of the law, please feel free to contact Rob Gundlach at (215) 918-3636, or rgundlach@foxrothschild.com.

Obtaining financing for your development project is one of the most important aspects of moving your development plans from paper to reality. Recently, the New Jersey Economic Development Authority (the “Authority”) created a Real Estate Impact Fund (the “REIF”). The REIF supports private and public redevelopment projects on underutilized property in New Jersey by facilitating the procurement of financing for small and mid-size development projects.

Through the REIF’s private component, for-profit and non-profit developers and businesses may obtain up to $3 million in financing from the Authority. REIF funding may be used for a variety of purposes, including property acquisition and assembly; demolition and site clearance; environmental investigation and remediation; pre-development costs; on-site infrastructure; general construction and/or rehabilitation; and associated soft development expenses.

To be eligible for REIF financing, the development project must be located in a “targeted area.” Targeted areas include: Urban Aid Municipalities; projects in Fort Monmouth; and New Jersey university/college sponsored projects that promote emerging technologies or industries. The total cost of the planned development project should not exceed $15 million. In addition, the project must create or maintain one full-time job for every $65,000 in REIF financing procured.

REIF-financed projects can be either new construction or substantial rehabilitation. Potential REIF-eligible projects include: mixed-use (residential and minimum 20% commercial); retail; office; industrial; entertainment venues; associated parking garage structures; and/or land acquisition/assemblages. Residential only projects are not eligible to receive REIF financing.

Obtaining REIF financing requires the completion of an online application and compliance with other certain requirements, such as consulting with a New Jersey Business Development Officer. We can assist you in preparing your application and complying with the application process requirements.

Please contact Rob Gundlach for more information at 215-918-3636 or rgundlach@foxrothschild.com.

On October 14, 2014, the Pennsylvania General Assembly signed Act 142 creating the Pennsylvania State Construction Notices Directory, which became effective January 1, 2017 (the “Act”). The Act created an online directory whereby project owners or their agents (collectively, “Owner”) can register on an online, searchable state-wide database (the “Directory”) before beginning any construction project that costs over $1.5 million, by filing a Notice of Commencement in the Directory.

If the Owner files the Notice of Commencement in the Directory, a subcontractor or its agent (collectively, “Subcontractor”) must then file a Notice of Furnishing within 45 days of first performing work, services, or first providing materials to the job site. If the Subcontractor fails to properly follow the filing guidelines, it risks losing the right to file any lien claim in the future.

There are also additional filings and compliance requirements for both Owner and Subcontractor that are necessary to protect each party’s rights and interests.  Because of the required filings and additional compliance requirements, it is important for all parties involved to be aware of potential pitfalls and compliance issues that could cost money, time, and are a headache to deal with. For these reasons, it is important to seek professional guidance in these situations to protect your rights and interests and to help you smoothly navigate the process.

If you would like more information, please contact Tim D’Lauro at 215-918-3596 or tdlauro@foxrothschild.com.

A recent case decided by the Commonwealth Court of Pennsylvania confirms how important it is to understand where zoning challenges should be filed and the deadline date by when to file them. In the case of Carr vs. Horsham Township, an objector filed challenges to a zoning ordinance, on both procedural and substantive grounds, to the Montgomery County Court of Common Pleas within 30 days after the publication of the second 108 notice describing the passage of the referenced zoning ordinance. Unfortunately, only the procedural challenge to the zoning ordinance should have been filed to the Horsham Township zoning hearing board. In addition, challenges based on a procedural defects in its enactment must be filed within 30 days of the Ordinance’s effective date. Most zoning ordinances are effective 5 days after its adoption; nevertheless, it is always a safer bet to file the procedural appeal within 30 days after the date when the Ordinance is adopted. In this case, the objectors filed their appeal within 30 days after the publication of the second 108 legal notice. Notwithstanding the late filing, the court did allow the appeal to proceed under a nunc pro tunc basis because the governmental agency publishing the section 108 notice referenced a different and later appeal deadline for the filing of the land use appeal. The Commonwealth Court went on to dismiss the portions of the land use appeal containing substantive challenges due to the failure to properly and timely file such claims with the zoning hearing board and remanded the procedural challenges back to the Court of Common Pleas.

There can be many “trap doors” when filing zoning and land use appeals. Please feel free to consult with us for assistant in this complicated area of law. Rob Gundlach.

Effective July 1, 2017, the City of Philadelphia established a single Department of Planning and Development.  The Department will have three divisions.  The Division of Planning and Zoning will include the Art Commission, the Historical Commission, the City Planning Commission, and the staff for the Zoning Board of Adjustment.  The Division of Development Services will include the development services group which had previously been a part of the Commerce Department.  Lastly, the City’s office of Housing and Community Development, the Philadelphia Housing Development Corporation and the Philadelphia Land Bank will be organized within the Division of Housing and Community Development.

Philadelphia Skyline
Copyright: rudi1976 / 123RF Stock Photo

The idea for the reorganization has been promoted by City Council President Darrell Clarke since 2015 and was approved by the voters as a charter change in November of that year.  In connection with the establishment of the new Department, the Land Bank and the Historical Commission, along with the Development Services section will increase staff.  The remaining sub-groups will not enjoy staff increases.

Within the new Department, particular attention will be paid to the Land Bank which has enjoyed only limited success since its creation in 2013.  While the Land Bank faces challenges associated with assuming duties previously held by a range of departments and agencies, its most acute challenge is likely securing approval for transactions from City Council, particularly in light of the Council’s historic informal policy (known as councilmanic prerogative) of requiring approval from the District City Councilperson in connection with the sale of city property.

The different city offices and agencies which are being coordinated within this single Department will not immediately relocate, so the Department’s offices will continue to be spread among different floors of 1515 Arch Street and 1234 Market Street.  This unorthodox approach will present management challenges to the Director of the Department, Anne Fadullon.

Are you looking to replace or construct a new sign in Philadelphia? Depending upon where your property is located you might first have to get approval from the Philadelphia Art Commission. Any sign application submission to the Art Commission requires the following five things;

  • a cover letter
  • color photographs
  • detail sign dimension plans
  • renderings of the proposed sign
  • a plot plan.

The Art Commission has up to 60 days to approve or disapprove an application. We recommend that you seek legal advice prior to making any submission to the Art Commission.