Mayor of Baltimore v. Chertkof

Murphy, C. J., delivered the opinion, of the Court. The United States District Court for the District of Maryland, pursuant to Maryland Code (1980 Repl. Vol.), § 12-601 of the Courts and Judicial Proceedings Article, has certified for our determination the following questions of State law:* 1 1. Where Baltimore City, by an ordinance describing a "Renewal Plan,” proposes to condemn private industrial property for the purpose of enlarging a public park, but also has, as a primary purpose, the conveyance of part of the condemned property to a different industry for expansion purposes, is such action prohibited by the Baltimore City Charter, Article II, § 15A (a) "Industrial and Economic Development”? 2.

Where Baltimore City, by an ordinance describing a "Renewal Plan,” proposes to condemn private industrial property for the purpose of enlarging a public park and has, as only an incidental and secondary purpose, the conveyance of ³⁵ part of that condemned property to a different industry for expansion purposes, is such action prohibited by the Baltimore City Charter, § 15A (a) "Industrial and Economic Development”? 3. Pursuant to Article II, § 15 (a) "Land Development and Redevelopment,” of the Baltimore City Charter, may the City, by ordinance, designate a renewal area authorizing condemnation of private industrial property for a public park, where the City also has, as a primary purpose, the conveyance of a portion of the condemned property to a different industry for expansion purposes? 4. Pursuant to Article II, § 15 (a) "Land Development and Redevelopment,” of the Baltimore City Charter, may the City, by ordinance, designate a renewal area authorizing condemnation of private industrial property for a public park, where the City also has, as only an incidental and secondary purpose, the conveyance of a portion of the condemned property to a different industry for expansion purposes? 5. Where Baltimore City, by an ordinance describing a "Renewal Plan,” proposes to condemn private industrial property for the purpose of enlarging a public park, but also has, as a primary purpose, the conveyance of part of the condemned property to a different industry for expansion purposes, is such action prohibited by Article II, § 2 of the Baltimore City Charter? 6.

Where Baltimore City, by an ordinance describing a "Renewal Plan,” proposes to condemn private industrial property for the purposes of enlarging a public park and has, as only an incidental and secondary purpose, the conveyance of part of the condemned property to a different industry for expansion purposes, is such action prohibited by Article II, § 2 of the Baltimore City Charter? ³⁶ 7. Where the City, by an ordinance describing a "Renewal Plan,” proposes to condemn private industrial property for the purpose of enlarging a public park, but also has, as a primary purpose, the conveyance of part of the condemned property to a different industry for expansion purposes, has Article XI-B of the Maryland Constitution been violated? 8. Where the City, by an ordinance describing a "Renewal Plan,” proposes to condemn private industrial property for the purpose of enlarging a public park and has, as only an incidental and secondary purpose, the conveyance of part of the condemned property to a different industry for expansion purposes, has Article XI-B of the Maryland Constitution been violated? 9. May Baltimore City, pursuánt to Article II of the Charter of Baltimore City, lawfully under State and City Law, pass an Ordinance designating certain land within the City as a "Renewal Area,” and commanding the City to acquire certain private property within this "Renewal Area” by condemnation, where the primary purpose in passing the Ordinance and commanding the land acquisition thereunder is to assure compatible land uses within the "Renewal Area” itself and not to cause industrial or economic growth for either the City or for a particular private corporation, although a secondary purpose is to achieve either or both of the latter and it is planned that a part of the condemned land will be sold to the adjoining industrial landowner for expansion purposes? 10.

Under the Maryland Constitution, the Acts of the General Assembly, and the City Charter, may the City take by condemnation, through an ordinance which on its face purports to be an urban renewal plan, an industrial site and then convey part of that property to another industry if the trier ³⁷ of fact determines that the City’s agents, servants and employees included the industrial site to be taken in an urban renewal ordinance because Section 15A of Article II of the City Charter prohibited the use of the power of eminent domain for industrial and economic growth? The statement of relevant facts accompanying the certification discloses that Jack O. Chertkof is the legal owner as trustee of an eleven-acre tract of land bordering the Middle Branch of the Patapsco River in South Baltimore; part of the land is under long-term lease to a Maryland corporation which operates a concrete batching plant on the property. Anchor-Hocking Corporation (A-H) operates a glass manufacturing plant upon a parcel of land contiguous to the Chertkof property. On December 5, 1979, Chertkof filed a civil action in the federal district court against the Mayor and City Council (the City) and A-H, alleging a conspiracy between the defendants to deprive him of the trust property in violation of the Due Process Clause of the Fourteenth Amendment.

Redress was sought by way of monetary damages and injunctive relief under 42 U.S.C. § 1983 for claimed deprivations of federal rights under color of state law. 2 According to the averments of the complaint, A-H sought to purchase the Chertkof property in 1977 to expand its manufacturing operations but Chertkof refused to sell for the proposed price; that thereafter A-H conspired with City officials to have the Chertkof property included as a part of the City’s Middle Branch urban renewal project; that in pursuance of the conspiracy, the City agreed to utilize its power of eminent domain to condemn the Chertkof property and ³⁸ later sell part of it to A-H to expand its industrial operations; that on July 27, 1979 the City enacted the Middle Branch urban renewal ordinance (the ordinance) which encompassed acquisition by purchase or condemnation of the Chertkof property, along with other properties included in the renewal area; and that shortly thereafter steps were initiated by the City leading to the property’s acquisition through condemnation. The complaint alleged that the ordinance violated § 15A (a) of Article II of the Baltimore City Charter (1964 revision), which prohibits exercise of the City’s condemnation power to acquire property "for or in connection with the industrial and economic growth of Baltimore City.” This section was violated, Chertkof contended, because the City intended to condemn his property solely to enable A-H to expand its industrial operations and enhance its economic growth in South Baltimore. In moving to dismiss the complaint, the City and A-H asserted that the urban renewal ordinance was enacted under § 15 (a) of Art. II of the Charter, which empowers the City to acquire property by condemnation "for development or redevelopment, including but not limited to, the comprehensive renovation or rehabilitation thereof.” The City claimed that the urban renewal ordinance for Middle Branch was consistent with this provision of the Charter because its stated purpose was to establish a renewal area in order to rehabilitate and encourage recreational development in that part of the City. The use of its power of condemnation for urban renewal purposes under § 15 (a) is not limited, the City and A-H argued, by the eminent domain prohibition contained in § 15A.

The district court denied the motion to dismiss but certified the questions of State law heretofore outlined, concluding that "the Maryland courts have never interpreted the City Charter provisions in this case.” ³⁹ (1) Article XI-B of the Maryland Constitution entitled "City of Baltimore — Land Development and Redevelopment” (ratified in 1948) provides in § 1 (a) that the General Assembly of Maryland, by public local law, may authorize the City: "To acquire, within the boundary lines of Baltimore City, land and property of every kind ... by purchase, ... condemnation or any other legal means, for development or redevelopment, including, but not limited to, the comprehensive renovation or rehabilitation thereof.” (Emphasis supplied.) Section 1 (b) of the Article authorizes the legislature to empower the City, inter alia, to sell or otherwise dispose of property so acquired, regardless of whether it has been developed or redeveloped, to any private or public entity. Section 2 of Art. XI-B authorizes the General Assembly to grant the City additional powers necessary to carry into effect the specified development and redevelopment powers; the section also provides, by way of limitation, that the General Assembly may restrict the exercise of any of the powers granted to the City by Art. XI-B. The General Assembly, by ch. 217 of the Acts of 1949, generally implemented Art. XI-B by adding to the City Charter what is now § 15 of Art. II, thereby granting "in large measure ... powers of urban renewal to the City in the terms of that Article.” Master Royalties v. Balto. City, 235 Md. 74, 80-81 , 200 A.2d 652 (1964). Section 15 (a) authorizes the City to condemn property "for development or redevelopment,” not limited to the "comprehensive renovation or rehabilitation thereof.” Section 15 (b) authorizes the City to develop or redevelop the property so acquired.

Section 15 (c) authorizes the City, inter alia, to sell any property condemned under § 15 (a), regardless of whether it has been developed or redeveloped, to any private or public entity "for development or redevelopment, including, but not limited to, the comprehensive renovation or rehabilitation thereof.” Section 15 (f) authorizes the City to ⁴⁰ restrict the use of the property so acquired through binding covenants and to impose controls thereon governing such things as population density, property maintenance, and types of permissible land uses. Section 15 (g) directs the City to designate one of its agencies to exercise and perform the powers so authorized by the provisions of the section. The agency so designated by the City was the Department of Housing and Community Development (the Department). See Baltimore City Code (1976 ed.), Art. 13 (Housing and Urban Renewal), § 20 et seq.

The provisions of Article 13 recite in extensive detail the dire consequences to the public interest caused by slum, blighted, deteriorated and deteriorating areas in the City. The Article outlines with specificity the broad governmental powers vested in the Department to acquire, develop, redevelop, renovate and rehabilitate properties within the affected areas. In pursuance of these powers, the Department prepared an urban renewal plan for Middle Branch, which included acquisition of the Chertkof property. After delineating the boundaries of the area involved, the plan specified that its object was to rehabilitate and redevelop the renewal area "respecting [its] historical heritage . . ., encouraging park and recreational development in the area, providing public access to the water’s edge, providing open space, continuing — on an orderly basis — industrial uses compatible with recreational uses within the project area, resolving parking deficiencies, creating new opportunities for viable economic development, and protecting the area from blighting influences.” The plan specified that four privately owned properties and one City-owned property were to be acquired and made subject to disposition.

The western portion of Chertkofs property, which was zoned industrial and upon which the concrete batching plant was located, was designated for industrial use. The eastern portion of the Chertkof property (about five acres) and three other properties, two of which contained auto junkyards, were designated for use as a public marina. The remaining property was designated for use as a public park. The plan encompassed a mixture of ⁴¹ industrial and public uses, with industrial uses being limited to twenty-three in number, including glass manufacturing — the industry in which A-H is engaged.

Under the plan, the permissible industrial uses are limited to those "compatible with the proposed recreational facilities,” and manufacturing operations are permitted only where they occur "entirely within structures which block public view of such activities . . . .” The plan sets forth detailed regulations, controls and restrictions pertaining to properties in the renewal area, together with specifications governing the redeveloper’s obligations, development rights and the like. The plan recited that properties to be acquired in the renewal area were either for clearance and redevelopment, for rehabilitation, for public facilities or some combination of these purposes. Upon acquisition of the properties in the renewal area, the plan directed the Department either to demolish the structures thereon and dispose of the land for redevelopment, sell or lease the property subject to rehabilitation, or rehabilitate and thereafter dispose of it in accordance with applicable regulations. The plan was implemented by enactment of the Middle Branch urban renewal ordinance.

The ordinance stated that it was "the basic goal of the City ... to encourage recreational development in the [Middle Branch] area, provide public access to the water’s edge, and to maintain industrial uses compatible with recreational uses in the project area.” It specified that under Art. 13 of the Baltimore City Code, the Middle Branch area was "in need of undertakings and activities for the elimination, the correction, or the prevention of the development or the spread of slums, blight, or deterioration.” The ordinance declared that it was necessary to acquire by purchase or condemnation, for urban renewal purposes, the five properties designated in the Department’s plan, and it incorporated within its operative provisions the details contained in the urban renewal plan prepared by the Department. ⁴² (2) Our cases have recognized the authority of the City, acting under Art. XI-B and § 15 of the Charter, to undertake urban renewal projects to renovate slums and to prevent blight and deterioration in urban areas in the public interest. See Donnelly Adv. Corp. v. City of Balto., 279 Md. 660 , 370 A.2d 1127 (1977); Free State Realty v. City of Balto., 279 Md. 550 , 369 A.2d 1030 (1977); Master Royalties v. Balto. City, 235 Md. 74 , 200 A.2d 652 (1964); Herzinger v. City of Baltimore, 203 Md. 49 , 98 A.2d 87 (1953).

We have recognized that the City’s condemnation authority for urban renewal purposes under these provisions embodies a broad concept of public use, not limited to actual use by the public, but rather to use benefiting the public. Master Royalties, supra; Herzinger, supra. We have said that "a taking in furtherance of a genuine urban renewal plan... is a taking for a public purpose.” Master Royalties, supra, 235 Md. at 88 (emphasis added). We have also said, in considering the legality of an urban renewal ordinance, that "the fact that after the taking the property may be put into private hands does not destroy the public character of the taking insofar as that taking may accomplish a proper public benefit.” Herzinger, supra, 203 Md. at 60 .

It is elementary, of course, that government cannot use its power of eminent domain to condemn property for the private use and benefit of another. Missouri Pac. Ry. Co. v. State of Nebraska, 164 U.S. 403 , 17 S. Ct. 130 , 41 L. Ed. 489 (1896); Riden v. Phila., B. & W. R. R. Co., 182 Md. 336 , 35 A.2d 99 (1943); Van Witsen et al. v. Gutman, 79 Md. 405 , 29 A. 608 (1894).

Equally elementary is the principle that when legislation authorizes the acquisition of land by condemnation, the extent and type of taking rests largely in the judgment of the condemnor, and will not be declared unlawful unless it is so oppressive, arbitrary or unreasonable as to suggest bad faith. Bouton v. Potomac Edison Co., 282 Md. 142 , 383 A.2d 669 (1978); Wash. San. Comm. v. Santorios, 234 Md. 342 , 199 A.2d 206 (1964). ⁴³ Whether the use for which private property is taken is public or private is a judicial question, to be determined by the court; a legislative body cannot make a particular use either public or private by merely declaring it so, Boswell v. Prince George’s Co., 273 Md. 522 , 330 A.2d 663 (1975); Prince George’s Co. v. Beard, 266 Md. 83 , 291 A.2d 636 (1972); New Cent.

Co. v. George’s Creek Co., 37 Md. 537 (1873). Where the predominant purpose or effect of a particular condemnation action has been to benefit private interests, we have said that the taking is not for a public use. Pr. George’s Co. v. Collington, 275 Md. 171 , 339 A.2d 278 (1975); Perellis v. M. & C. C. of Balto., 190 Md. 86 , 57 A.2d 341 (1948).

Conversely, where private use or benefit resulting from the exercise of eminent domain is merely incidental or secondary to the primary public purpose underlying the taking, the condemnation action is not unlawful. Dobler v. Baltimore, 151 Md. 154 , 134 A. 201 (1926); M. & C. C. of Balto. v. Brengle, 116 Md. 342 , 81 A. 677 (1911). Judge Eldridge, in Pr. George’s Co. v. Collington, supra, reviewed for the Court at length numerous cases involving whether a condemnation was for a private or a public use, pointing out that "merely because private businesses or private persons will also receive benefit from the condemnation does not destroy the public character of the action”; and that "the public character of a condemnation is not necessarily changed because a private entity will own the [condemned] property.” 275 Md. at 187 .

(3) In considering the certified questions, the City suggests that its primary or secondary purpose for including the Chertkof property in the Middle Branch renewal area is of no importance, as long as it can fairly be said that the public will benefit from the project and that the use made of the property, and the controls imposed thereon, are consistent with the development of the renewal area. The City points out that the Middle Branch renewal plan is essentially a recreational project, with only limited industrial uses ⁴⁴ permitted in the project area, which are compatible with