Brief for Respondent — Gart v. Cole

UMiCe-supre ne Court. US.

F FD

FILE ‘copy

Ix THE

| > ) SR BRL Nive. Clers

Supreme Court nf the. Anited eee

‘Octoper Term, 1958

No 771

+

WILLIAM GART, ADA BASS, HARRY MYERS, SOPHIE BERGMAN,

GEORGE KAY, d/b/a Lorie Press, WILLIAM LOE Re -R, HOWDI-

' BON GARAGE CO, INC, SCHUCKMAN PRESS, INC. 145447 W

6lst CORPORATION, individually: 3 and gn behalf of all others ‘sumilarly

situated, ° ‘

. he “titiomers,

. ed

‘ALBERT M COLE. as Administrator, Federal Housing and Home Finarice

Agency; WALTER S FRIED, as Regional Acosta, Remon 1,

Feder?! tlousing and. Home Finance Agency ; CITY OF NEW YORK;

, eROBE RT F. WAGNER, individually and ay Mayor of the City of New

* York and a member of the Board of bstumate ; ABE STARK, individually

and as President of the City Couneil of the City of vew York and a mem-

ber of the Board of Fstumate;. HUL AN E TACK, individually and as

» Present of the Borough of M anhattan, C ity ot New York, and a member

of the Board of Estimate; JAMES | LYONS, individually and as Presi-

dent of the Borough of Bronx, City ot New York, and a member of the

‘ Hoard ot Estimate; TORN ¢ ASH MORE, individually and as President ot

‘the Borough of Brooklyn, ity ot New York, and a member of the Board

{ ot Esumate; TAMES J. -CRISONA, madividually and as Président of the

Bowough of Queens, City of New York, and a member of the Board ot

- Estumate; AL “BERT VM ANISC ALCO. yndividually: and. as, President: of

She Korough of Richmond, C ity of New York, and a ‘member of the Board ‘

* ot bstumate; ROBERT MOSES, idividuallysand as Chairman of the Com-

mittce on Slum Clear: ance of the City ot Net York FORDHAM UNI-

VERSITY: LINCOLN CENTER. FOR THECPERFORMING ARTS;

INC; ahd WERB & KNAPP LINCOLN SQEYRL CORPORATION,

\ Respondents

Be SE Me \

; ON PETITION FORA WRIT OF CERTIOR. JRE TO THE UNITED

STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

. BRIEF FOR RESPONDENT WEBB & KNAPP

LINCOLN SQUARE. CORPORATION.

y . IN OPPOSITION \

— ——. —-———_ --—- — -

-— -——: ——— —

‘

I Sameer 1, RoseNMAN

573 Madison Avenue,

New York e2. New York

: Attorney for Respondent

¢ : S Webb & Knapp Lincoln

: Square C or poration.

Of Coun sel:

¥ Max FREUND '

MM JekomMe L. SInDLER . re

NLAWRENCE BL BUTTENWIESER

, 375 Madison Avenue

New. York 22, New York.

: PAGE

Opinions ‘Below ..::...0... CONEY er eee or

Jurisdiction ! peer ‘ete dege e's Bi ad ula cies ok ye

Constititional, and Statutory Provisions heiies .. 2

Questions Presented. ... * Peace ea tes “3 er pues ane

Statement eS Ree eee Gree itachi papa ee

Argument seen eb eee eteeees eels eben enna tes 4

a use of federal funds for the Lincoln °

Square Project does not raise & substantial .

federal question ..:.... deve dd meeecekecinks ae 4

II—'Fhe decision of the Court of Appéals herein

permitting the use of federal funds for the Lin-

~~ coln Square Project does: not conflict with the

applicabfe decisions of this COMME oe ccaesces: 11

‘Conclusion .....: Gb sep eeesieemerboneesene Cee aa ee es

. vasccame

Cases: : ; ries

Berman v. Parker; 3g U. s. 26. EAA cee nce 9,10

Burt v. Pittsburgh sa) Us 8: B08 Reel hcg 8

on v. Peoria Howliag. , 399 Il. 579, 78. ;

»N. E, 2d + ee re Pekan AT txhe ewe ‘15

Everson v.. Board of Education, $30 U. B. 1 ....... Ps 12

Fi Toeller v.: Miiisiag Authority of Portland, 198 Ore.,’

* 205, 256 P. ns since ia a eee ogee et 3 ee

Be

Ne

/

327 U. S. OE iis soca auR Ko Teerr ee

Velishka v. City of Nashua, 99 N. H. 161, 106 A. 2d

pap OTL... 2. eee. BR cceeveecenesceecedenecasssneegbe

| Borach v. tiem 343 U. S, “eee

. ‘STaTUTEs: . ;

* Bitle 26 U. B.C. §19E oo. scape desc as eeewes

| Harris, et al. v. City of New York, « al., 357 U. S.

: “Kaskel Impellitteri, 306 N.-Y. 73, 115 N.. -E. 2d. 659,

ii A . ._ INDEK

PAGE

Gohld ete: ‘Co. v. City of Hartford, 141 Wonn. 135, ;

; 104 A. 2d 365 ..- =." Masten PTL tii treet

~

907

a denied, Hi Wh a Se, cca kek bec ocean

64th Street Résidences, lee val v. City of New

- York,’et al., 4.N. Y. 2d 268; 150 N. E. 2d 396,

cert. denied sub nom. Harris, et al. v. City of New

*. York, et al., 357 U:S. 907 73... kines 5 een 3,691

Site v. Land Clearance, ete., , 364 Mo. 974, 270.8, W.

oa tt ane Cuskaghanentds s5ccan be akedneee :

U0: 8. ex rel Tennessee Valley Authority v. Welch,

District of Columbia. Redevelopment Act of 1945, 60

Stat. 790; D. C. Code, 1951, Title 5, 9) 5-701—

5-719 . Mis caodes feeeeeses - seccctccceedosess .

IN THE '

Supreme Court of the United States

' individually and as Mayor of the City of New York and

Ocroser TERM, 1958 A

4--—--

No. 771

.

Bg

Wituam Garr, Apa Bass, ‘Harry Myers, Sopuie BaromMan,

Grorce Kay, d/b/a Lorie Press, Witiiam LOEBNER,

Howpison Garage Co., Ixc., ScHUCKMAN Press, Inc.,

145-147 W. 61st Corporation, individually and on hehalf -

of all others similarly situated,

Aim, 2s Petitioners, ©

v ;

Auserr M. CoLz, as Administrator<Federal Housing and

Home Finance Agency; Water S. Friep, as- Regional

Administrator, Region 1, Federal Housing and Home

Finance Agency; Crry or New York; Roserrt F. WaGner,

a member of the Board of Estimate; Ape Stark, in-

dividually and-as President of the City Council of the

City of New York and’ a -member of the Board of

Estimate; Hvtay E. Jack, individually and as President

. °0f the Borough of Manhattan, City of Ney York, and a -

member of the Board of Estimate; James J. 4YONS,

individually and as President of the Borough of Bronx,

and

City of New York, and a member of the Board of Bxti-

mate; Jonn Casumore, individually and as President 0

the Borough of Brooklyn, City of New York, and a

member of the Board of Estimate; James J. Crisona,

individually and as President’ of the Borougli of Queens,

Cts of “ew York, ahd a member of the Board of Esti-

mate Avsert V. Maniscarco, individually and as Prési-

dent of the Borough of Richmond, City of New York,:

and a member of thé Board of Estimate; Roserr Mosrs,

individualy and as Chairmarf of the Committee on Slum

« Tlearance of the City 6f New York; Forpuam Usiver-

sity; Lexcotn Cewrer ror THE Perrormine Arts, INxc.;

Wees & Kwarr Lixcois Sevare Conporatiox,

! ‘ ° Respondents.

.

yoo

On Petition for a Writ of Certiorar? ta the United

States Court of Appeals for. the Second Ciredit

be /B

BRIEF FOR RESPONDENT WEBB &*KNAPP

LINCOLN, SQUARE CORPORATION

IN OPPOSITION

ee Pee.

re 2 ee

~ | | ae

| Opinions Below

‘The opinion of the United States Court of Appeals for

“the ‘Second Circuit is reported at 263 F. 2d 244.

The opinion of the United States District Court for the

Southern District of New York is reported at 166 F.

Supp. 129.

Jurisdiction 2 8

Petitioners yeedieate the jurisdiction of this Court upon ,

98 7 1234. a; |

4

sti and Statutory | Provisions Involved

The constitutional and statutory provisions which peti-

tioners allege to be involved herein are set forth in Appen- -

dix ‘‘A’’ to the petition herein.

* Questions Presented

- We believe that petitidners do not raise any subotentia!

federal questions herein and that all of the questions herein

which petitioners allege to be substantial have aiready been

foreclosed by decisions of this Court.

We further believe that the decision of the Cours of is

peals herein does not conflict with any decision of this

“Court. *s oe

» Statement

° 7 °

Petitioners, who are business and residential tenants in

the Lincoln Square area of the Borough of Manhattan in

the City of New York, brought this action to enjoin the

prosecution of the Lincoln Square Title I Urban Renewe!

3

Projeet (hereinafter referred to as the **Lincoln Square

"Project”’ or as the ‘‘Project”’) and to have certain actions

of the Federal Housing and Home Finance Agency (here-

inafter referred to as the **‘HHFA'**) and The City of New

+ York, (hereinafter referted to as ‘‘the City’’) relating to

the Project declared illegal. ;

- The Lincoln Square Project envisages the reclamation

aa the redevelopment of. a‘thirteen-block portion of the

Lincoln Square area (hereinafter referred to as,the ** Pro}-

ect Area’’), The Project is divided into five component

parts—the Collegiate Site, the Cultural Site, the Institu-

tional.'Site, the Residential Site and the Co-Operative Site.

Respondent. Webb, & Knapp Lincoln Square Corporation

(hereinafter referred to as ‘* Webb & Knapp"’) is the re-

developer only of the.Project’s Residential Site. As such . -

veloper, Webb & Knapp is now relocating tenants from

the Residential Site and demolishing the existing buildings

thereon and will erect. thereon modern, fireproof —_

dwellings and related retail facilities.

Petitioners eommenced this action on June 16, 1958 by.

filing a complaint with the Clerk of the United States Dis-

trict Court for the Southern District of New ‘York. Peti-

' tioners served the summons and complaint herein upon all

respondents between June 17, 1958 and June 20, 1958.

Thereafter, respondents moved to dismiss the complaint

and for summary judgment and petitioners moved" for a

preliminary injunction.

On August 5, 1959, the, District Court (Dimock, J.)

ranted respondents’ mioticas to dismiss the complaint and

forsummary judgment and denied petitioners’ motion for

8 preliminary injugetion.

On August 28, 1958, petitioners filed a notice of appét

ffim the order and judgment of the District Court.. On

January 16, 1959, the Court of Appeals for the Second Cir-.

‘eait (Clark; C. J., and Hincks and Lumbard, J..).s) affirmed

the order and judgment of the District Court. On February

——

re

_ 11, 1959, an water was made and filed making the judy. |

ment of the Court of Appeals the judgment of the District °

Court. ’

Petitioners then filed the present petition to this Court. :

‘Argument -

We understand petitioners’ contentions in this Court to

be as follows: (a) that the use: of féderal funds for

‘the Lincoln Squarg Project raiges a substantial federal

. question (petition, pp. 9-11); (b). that the denial br

the HHFA of petitioners’ request to be‘ heard in ‘sup.

post of their’ objections to, the relocation plan for the |

Lincoln Square. Project raises a substantial federal “ques- |

_tion (petition, pp., 11-16) ; and (c) that the decision of the

Court of Appeals herein with respect to those two~issues ,

conflicts with applicable decisions of this Court aes

pp. 9-1T, 11-16). ° |

The brief of respondents of, le nil Fried herein will ade.

quately demonstrate that the denial by-the HHFA of peti-

tioners}request to be heard does not raise a substantial

persons Sri and that the decision of the Court of Ap

_peals herein with respect to that issue.does not conflict

with applicable decisions of this Court. | *

Accordingly, in this brief, we endeavor to show that the

use of federal funds for the Lincoln Square Project does

“not. raise a substantial federa} question and that the deci-

sion of the Court .of Appeals herein permitting. such use

of. federal funds does not conflict with applicable’ Aleci-

sions ,of . this* Court.

j : P ‘

The use of federal funds for the Lincoln Square

Project does not raise a substantial federal question.

Petitioners seni that the use of federal funds for the

~ Lincoln’ Square Project raises a substantial federal quet-

« . ° . /

5 je

tion not heretofore resolved by this Court {petition, pp.

_ 9-11). ; i a 3

~ Petitioners base that assertion upon the ground that

*the use of federal furids for a slum clearance project in- .

_ volving a sectarian institution violates the ‘‘establishmert -

of religion”’ clause of the First Amendment.

Specifically, petitioners allege (petition, p. 11):

‘‘Here, where the provisions of the plan and the

sponsorship contract provided for the sale of an edu-

cational site to Fordham. University for a sum about

314 million dollars less than its cost of acquisition

(two-thirds of which is payable by the federal govern-

ment) and land née restrictions which lowered the land

value were adopted with Fordham University—and, . -

only Fordhain University—in mind and in conteia-

plation, federal support and approval were prohibited,

By. principles: of separation of church and state based

upon the ‘establishment of ‘religion’ clause of the

First Amendment. acl )

In short; petitioners’ challenge is based upon, the re-

‘sale of the Coilegiate Site of the Lincoln Square, Project -

to respondent Fordham University (hereinafter referred

to as ‘‘Fordham’’), a denominational educational institu-

/ tion, at a ‘‘writedown’’ from the cost of. acquisition.

(a)

"First, we submit that the use of federal funds fer the

Lincoln Square Project does not raise a substantial federal

question because of: this Court’s denial of the petition for .

_a-writ of certiorari in 64th Street Residences, Inc., et-al.

v. City of New York, et al., 4.N..Y. 2d 268, 150,N. E. 2d

896, cert. denied sub-nom. Harris, et al. v. City - New)

_ York, et al., 357 U.'S. 907,.° :

‘The Harris case came up through the Now ork courts

and reached this Court, on a‘petition for a writ of certiorari

to the New York Court of Appeals. ‘ .

4

. use of Cit@ funds an

6

In the Harris case—as in this case—tenants in the Lin.

coln Square area challenged the validity of the Lincoln |

Square Project on the ground that the sale i a Collegiate

Site to Fordham at a writedown violates, the ‘establish.

ment of religion’’ clause (petition for certiorari, October

Term, 1957, No. 1014, pp. 1415).

The only difference Reeween the Harris ease and this

case on the ‘‘establishment of religion’’ issue is that,

im the Harris case, in challenging the validity of the Lincoln

Square Project, the .petitioners therein attacked both the

ite use of federal] funds (petition

for certiorari, October’Term, 1957, No. 1014, pp. 14-15)

whereas, in this ‘case, petitioners’ attack is limited to the

use of federal funds (petition, p.. 11).

- In‘the Harris case, this Court refused to teview a de.

cision of the New ‘York Court of Appeals whigh had -

held specifically that the sale-of the Collegiate Site to

Fordham at a writedown. did not. violate the ‘‘establish-

ment of religion’’ clause. The New York Court of Appeal!

had stated (4 N. Y. 2d ag 275,276, 150 N. E. 2d at 398

399) : ye

“Plaintiffs say that the condemnation of this land

and the sale thereof) to the university is completely |

void because Fordham is a denominational schoo! and

the sale to it, aécording to plaintiffs, at $7 per square

foot of land for which the city will pay an estimated

cost “of about $16 per square foot would thus he an

unconstitational grant or subsidy of publie.moneys to

a religious corporation. The argument, however, )ro-

_ceeds on an assumption false, in fact. Plaintiffs say .

that because the city arranged to, sell this land at a

price much below what the city will ‘pay -for it, thir’

necessarily amounts te a subsidy or gift. But what

the city is buying is not the same as what Fordham is

‘ buying. The city buys land and buildings. Fordham

buys the same property but subject to its agreement te

’ cleared land for a collegiate campus

; — 7

raze the buildings, relocate the tenants and use the

d buildings only

all of which seperted

square foot. Therefore,

nce to the assertion, on which this

whole suit depends, that Fordham is getting a gift,

grant or subsidy of publie-property. It is, of course,

getting a benefit in the sense that it is beef” per-

mitted to acquire valuable and desirable. property. at

a price whigh is probably lower than it would have

to pay if it had to negotiate with all the private

owners, but the private owners are getting from

the city the full value of the property in its present

condition and use. The city benefits by the achieve-

ment of its valid municipal purpose of eliminating

that fhe purchas¢@f from the city will pay less than

the city pays si it. will always be the case that

the city is buyéng land and buildings and selling

either cleared land ar land which the purchaseg must

agree to clear and use far restricted purposes..

** Any collegiate institution coulgTiave been a bidder

at the auction. Special Tefm poirfted out, probably cor-

rectly, that Fordham would be/deprived of constitu

tional_rights if it alone were exelQded from the bidding.

Perhaps this is only another way\of saygng that, since

this sale is an- exchange of* consMerations and not

a gift or subsidy, no ‘aid to religion’ is invelved

and a religious corporation cannyt be excluded from

bidding."’

A — State and Federal statutes contemplate -

Ss (b)

Second, we submit that the use of federal funds for the

Lincpln Square Project does ngt raise a substantial federal

question .because the circumstances surrounding the re-use

-gfa stum clearance area are irrelevant in determining the

lidity of a slum clearance project.

Inder Title I and similar statutes, lend is condemned

y a municipal agency to -achieve the public purpose of

slum - clearance and then re-sold to a redeveloper (see

pp. 12-13, infra, for a discussion of the course of a Title I:

project).

The-courts of New Y ork have held that a taking for slum —

' . clearance is in itself a taking for a publie pur rpose, and that

the nature of the re-use is irrelev ant.

Thus, in Kaskel v. Impellitteri, 306 N. Y. 73, 115 N. E.

2d 659, cert. denied, 347 U.S. 934, the New York Court of

Appeals stated (306 N. ¥. at.93, 115 Nv E. 2d at 669- G70).

‘*Section 72-k of iiie General Municipal Law is drawn

. upon the basis, uph@ld.in Matter of Murray v. La Guar.

_ dia, that slum clearance is in 1 tog te purpose,

which. is separate and distinct frowf the objects to.

which. the land may subsequéntly he’ devoted after be-

ing redeveloped by private capital; The State Con-

stitution does not require thgt.slumis shall be rehabili-

tated: exclusively. by reconstruction for low cost

housing, which is a different public purpose that may

or may not be superimposed on slum clearance (Matter

of Murray v. La Guardia, supra}. rveee ea:

cept. where an ‘applicable statute requires( the sluin

area may be cleared, replanned, reconstructed and

rehabilitated according to any design atid for att@5par-

WQS which renders the frrea no longer substandard *

insanitary.’ .

o;

Since this Court has never condenined as a violation of

the Constitution a taking upheld by a state court as a tak-

er

.

aa °,* re

i We r es |

: “ o

a : “8k ‘

a> ‘ “

ing for public uses in conformity with.its laws, U.S. ex rel.-

Tennessee Valley Authority.v. Welch, 327 U. S. 546, 55

this Court should not look to the circumstances surround.

ing the re-use of an area to be cleared of. slums. ane

In Harris v. City.of NewYork, supra as in this case—

we opposed, the petition for a writ of ¢ertiora#i on the

ground that the circunistances surrounding the re-use of

the Lincoln Square Project'were irrelevant in ‘determining

_ the validity of the Project (brief in opposition to petition

for certiorari, October Term, 1957, No. ‘1014, pp. 6-8) and,

as noted above, this -‘ourt denied that petition.

_ Our position finds further’ support in the decisions of

this Court in Burt v. Pittsburgh, 340 U. S. 802, and Berman

v. Parker, 348 U. S. 26. a

In the Burt case, this 5 Court affirmed, on the. authority of

the Welch case, supra, the judgment of a three-judge Dis-

trict Court which refused to look beyond the condemnation .

of a siffim area to the character of the re-use. -

In the Berman case, this Court, in affirming the dismissal

by a three-judge District ‘Court of an action seeking to en-

join a Washington; D. C. Title 1 project, refused to look to

the circumstances of .re-use as a ground for invalidating :

the project. | This Court stated that the object—slum clear-

ance—was within the power of Céngress to attain and that

‘‘fojnce the object is within the authority of C ongress, the

means by which it.will be attained is dlso fot Congress to

‘.determine’’ (348 U.S, at 33). ~

° : . : : (c) :

Third, asswuing, arguendo, that the circumstances sur-

rounding the re-use of a slum clearance area are relevant

sin determining fhe validity of a slum clearance project, we

submit that the‘use of federal funds for the Lincoln Square .

« Project does not raise a substantia! federal question under

the ‘‘establishment of religion”’ clause in view of Berman

v. Parker, supra. ‘eh

r

" 36.

—

In the Berman case, this Court, -in upholding the consti-

tutionality of the District of Colambia Redevelopment Act

of .1945,° clearly indicated that a £eligious institution may

participate in a Title.1 projeet. The Court said of the

« Title I project there. challen ed (348 U.S: at 34-35):

“The entire area neéded redesigning so that a bal-

anced, integrated /plan could be developed’ for the

‘region, eclaiiea not only new homes but also schools,

_ churches, papks, streets, and shopping centers. In this

i hoped that the cycle of decay of -the area

“controlled and the birth of future slums’ Pre.

* *-*. Such diversification’ in future use ts

inly relevant to’ the maintenance of the desired

ousing standards and therefore within’ congressional

. power.’’ (emphasis supplied)

Petitioners themselves admit that this allegedly substan-

tial federal question may have been settled by the Berman.

- case. Petitioners state (petition, p. il): ; |

etitioners do not believe that the question presented

has ever been settled by this Court unless that portion

of the-opinion in Berman v. Parker, 348 U. S. 26, 3+

35, which states that it-was within the power of Con-

‘gress to authorize the District of Columbia Land Re-

peta 3 Ageney to attack the problem of Slum

Clearang? on an area or regional basis and to redesign

the area “so that a balanced integrated plan could be

developed for the region, including not only new houses

but also schools, churches, parks, streets and shopping

centers’, may be taken to mean that churches (and

/othef religious institutions) may,participate as urban

' redevelopers, and pay less than market value, or even

nothing, for the land which they redevelop.”’

* 60 Stat. 790 4D. C. Code, 1951, Title 5, §§ 5-701—S-719.

¥

al

ll

—

II

‘The decision of the Court ‘i Appeals herein per-

mitting the use of federal funds for the Lincoln Square

‘Project does not conflict with me epee ene

- of thls Cont.

" Petitioners assert that. the decision of the Court of

Appeals herein permitting the use- of federal funds

« for the Lincoln Square Project conflicts with the decisions

of this Court in Everson v. Board of Education, 330 U.S.

1; MeCollum vy. Board of Education, 333 U. S. 203; and

: Lorach v. Clauson, 343 U. S. 306 (petition, pp. 9, 10).

°

In those three cases, this Court ‘ruled that: cities and ©

’ states may not subsidize religious. institution’, but none of

. those cases conflict with the case at bar.

In the Everson case, this Court, in upholding a New

Sergey statute which authorized local school dist¥icts to

makg rules and contracts for ‘the transportation of” chil-

dren to and from pareceial oe stated (330 U..S.

_ at aria de ; ‘

“The ‘establishment of religion’ clause of the First

Amendment means at least this: - Neither a state nor

the Federal Government can set up’a church. Neither

can pass laws-which aid one religion, aid all religions,

or prefer one religion over another.’ Neither can force ,

nor influence a person to go-to or to remain away

from church against his will or foree him to profess

‘a belief or disbelief in any religion.” No person can

be punished for éntertaining or professing religious

beliefs or disbeliefs, for-church ‘attendance .or non-

attendance. No taX in any amount,-large or small,

ean be levied to support any religiqus activities

institutions, what@ter thex_may be called, or whatever

form they may adopt to teach or practice religion.

Neither a staté)\nor the Federal Government can,

openly or secr@&ly\ particfpate’ in tI® affairs of any

' religious opgamiadtions-or groups and vice versa.”’

: ee...

In the McCollum case, ‘this Court, in striking -down a.

‘released time”’ program of the Champaign, Illinois, pub. .

lie school system, — the language of Everson

_ quoted above. -

In the Zorach ease, this Court upheld a New York City

‘“‘released time’’ program because it ‘‘involves’ neither

religious instruction in public school classrooms nor the

expenditure of publie funds’” (343: U, §. at 308-309).

" Thus, the decision of the Coprt of Appeals herein could

be held to conflict with the decisions of this Court in the.

Everson, McCollum and Zorach: eases, supra, only if the ~

use of federal funds for the Lincoln Square Project a:

in a subsidy to-a religious institution. ©

Petitioners allege that the. use of ede ‘fuihds for

the Lincoln Square Project results in a subsidy to a re- .

ligious institution ‘(a) because Forgham is one of the

redevelopers of the Project and the Title I scheme nec-

essarily. results in the subsidization of the redeveloper

(petition, p. 11) and. (b) because of the particular facts.

underlying Fordham’s partic ipation in the Lincoln Square 4

Project" (petition, pp. 5-6, 10-11).

However, we contend (a) that a redeveloper iin not

reecive a subsidy by participating in a Title I project

and (b) that Fordham has not received a subsidy by.

as Siete in the Lincoln ‘Square Project.

a a) °

The course of a Title I project is in barest outline as

foilows: A municipal, agency (e.g., a city) acquires 2

‘slum area. “The agency then either sells (or leases), of

clears and sells (or leases), that area to a rede-

> ae ©

veloper,. either at a negotiated price or after a public anc-

tion, sgbject to specific re-use restrictions, _The difference

between the cost of acquiring (or of acquiring and clear-

ing) that area and the sales price paid by the. redeveloper

é

RO ao a

. 2

3 for that area is shared -by ‘the agency and by the federal. *

government. The redeveloper then red¢évelops that area

‘in acéordance with the redevelepment or renewal plan

embodying the re-use Testrictions. : om,

If a subsidy lurks anywhere ‘in the Title ‘I acheme, it

* gould’ only lurk in the differential betweeti the cost of

— (or of acquisition and clearance ) and the sub-

sale. price. - Petitioners ‘contend that a subsidy

2 sequent

Dr lurk there (petition; p. Th). om,

Howeyer, every -eotr which has ikssed upon slum clear-

ance projects has gejectedsthe contention that the differ-

ential between the cost of acquisition (or of acquisition .

and clearance) and the resale price results i in a spbsidy.

That question was. sjecitcally raised by the petition for

. “a writ of certiorari,in Harris v. City of New York, supra

(petition, October Term, 1957, No. 1014, pp.. 14-15), and, —

as noted .above, this Court t denied that petition. -

_ In State v. Land Clearance, etc., 364 Mo. 974, 270 S. W.

2d 44, the. court, in determining that the redeveloper of

_ the project there involved had not been subsidized, stated.

(364 Mo. at 989-990, 270 S, W. Od at 53 )x

“Tt would be’ difficult ‘0 imagine a ite law

~~ that exacted more from a ‘purchaser than a ‘fair value’

- price. An exaction thei the purchaser pay fair value

, . eannot conceivably . lint « to a grant or subsidy.

« . Both the statuteand the rtakings of respondents

.. pursuant thereto so clearly dentonstrate that the pur-

.° pose in acquiring the land is id it of its blighted .

and insanitary condition and to: thereafter convey it .

to. redevelopers for conversion to useful purposes in

accordance with the redevelopment plan.’ The. great

weight of authority is that there is no private grant

when land is cleared for the purposes herein contem-

plated and i is thereafter sold at a loss, but for its then

fair. value.’

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The statute involved. | in State v. Land’ Oherance is sub.

stantially equivalent to the stathtes under which the

Lincoln Sqdare Project was condemned and sold, If any-

thing, the Land Clearance statute was less likely to ex-

tract ‘‘fair valne’” than the statutes under which the

Lincoln Square Project was condemned and sod. °

In People v.,City of Chicago, 414 Ill. 600, 111 N. B. 24

626,.the court, in uphalding an IIlinois slum clearance stat-

ute, stated (414 Ill. at 617, 111 N. E. 2d at 636-637) : .

**Plaintiff’s assumption of a donation to Normandy

Homes, Inc., the prospective developer here, is errone:

ous. Section 19 does permit the Commission to sell —

_ land in‘a project to a developer at ‘use value.’ : This

term is defined as ‘the value at which the Commission

determines such land should be’ made available in

order that it may be developed or redeveloped for the *

purposes specified in the plan presented,’ Sectigng.

.3(1) and 14 provide that the land for blighted vacant

area redevelopment projects must be developed for.

‘predominantly residential uses. The ‘use value’ will

thus be the value of the land, subject to restrictions

_ placed upon it by the statute and the redevelopment

plan: In.this there is no donation of land to a private

corporation, nor is there any loan of credit. The con-

' stitutional prohibition is not a bar to a municipality

entering into a transaction where there is an exchange

of fonsiderations between the parties.’’ .

- Similarly, in Velishka v: City of Nashua, 99 'N. H. 161,

106 A. 2d.571, the court, in upholding a New Hampshire

- slum-clearance statute, stated (99 N, H. at’ 168, 106 A. 2d

* at 575-6): . ,

“Section 5 of the act permits the housing authority

to sell or lease the land in the project area ‘at its

use value’ which may be lexs than the cost of acquisi-

tion, clearance and site impravements, The sale. or

lease to private enterprise is required to be made

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subject to Conditions that will i insure that the. blighted

‘ or slum conditions do not return.’* * * The sale or

‘lease is not a gratuity since it is made at its use value

_ a8 a means of assuring the’ redevelopment in accord-

‘ance with the redevelopment plan. Cf. Opinion-of the

Justices, 95 .N. H. S48, 65-A. 2d 700. There’is no grant

of public funds for * private purposes in violation of

the Constitution since the housing authority may sell

or lease the land only at a use value and for uses *

which are consistent with the continuous use of the

redevelopment in accordamee with the original public

qq. Purpose and plans.’’

See also, Cremer v. Peoria Housing Authority, 399 Ill.

~ 579, 594-595, 78 N. E. 2d 276, 284-285; Foeller v. Housing

. Authority of Portland, 198 Ore. 206, 236, 256 P, 2d 752, 767 ;

and Gohld Realty Co, v. ed of Hartford; a4 Conn, 135,

104 A. 2d 365.

Actually, far from being a subsidy, the differentigh be )

nd

aS — Pie ee

tween the cost of acquisition (or ‘of acquisition a

clearance) to the municipal agency and the sales’ price

' the redeveloper results (a) from the fact that the acquisi-

tion eost includes not only the value of the land but also

value of the existing buildings which must thereafter

demolished; and (b) from the fact that the recevelop-

ment contract- imposes obligations and restrictions upon

the redeveloper which lessen the value of the land itself.

In the present case and in all other Title I .projects in

New York “ity, those obligations include the relocation.

of residential tenants, the removal of commercial tenan

the demolition of existing buildings andthe construction of

. new improventents. Those restrictions require the rede-

veloper to ,use the land and the improvements which it

erects only in-accordance with the limitations set forth in

. the applicable redevelopment or renewal plan. .

‘As the foregoing Mdicates, what petitioners ‘claim is a

subsidy is rather a bargained-for equivalent which ‘either

arm's length negotiations or a public auction insures is

not # subsidy. >

» ; . . i6

os ie) pee es <_

Petitioners contend that, regardless of the propriety of

. the Title I schethe in general, ‘on the facts of this case

'. @ Fordham has received. a subsid y by its participation in

the Lincoln Square Project (petition, pp. #11). °

Whilé the: petition is unclear as to precisely-how Ford.

ham has received that subsidy, the petition hints that the

subsidy stems (i) from the sponsorship contract between

the City and Fordham (petition, p. 11); (ii) from the con.

demnation of the Collegiate Site (petition, p. 1)); and (iii!

from, the restrictions im upon the redevelopment of

the Collegiate Site (petit pp.5,6,1011).-s . @

(i) Clearly, Fordham has not on the facts of this case

received a subsidy through the sponsorship contract. The ’

assurance therein that the City would sell the Tollegiate

Site to Fordham if it were the highest bidder was in no real

sense a greater assurance than that granted to any pre-

spective bidder at the public auction of that Site, On the

other hand, the contract imposed the steep cbligation solely

upon Fordhaw to bid at least $M 610 for the Collegiate

Site.

(ii) Equally pany Fordham has not received a subsidy

by condemnation of the Collegiate Site. The conden.

nation was an independent act of the City and was legally

unrelated to é. erection of the improvements contemplated

by the Project. Certainly, the condemnation was not for

‘Fordham. If anything, the condemnation was for the

subsequent public auction and that auction «as not bed

for Fordham's benefit. ‘

. (iii) Finally, Fordham has not reevived a subsidy’

throygh the restrictions on the re-use of the Collegiate.

Site. Those restrictions “require thal that Site be aeed

exclusively for educational parposes for a period of forts

years, Beenanse of those restrictions, only educational

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institutions could bid for that Site. - However, that Jimita-

tion upon the potential bidders for that Site hardly **sub-

sidizes"” any one educational institution. .

_ CONCLUSION . a

For the foregoing reasons, the petition for a writ of

certiorari should be denied.

Respectfully submitted,

Samus. L Roser vax,

Attorney for Respondent ©

Webb @ Auapp Lincoln

Square Corporation.

\

Max Faeuwn,

Jeaome L. Stxoran,

Lawaesce B. Dorreswreera,

or Cownse!.

~_

April 9, 1959

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