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Statements of Support for developer do not bind township

Real estate developers in Philadelphia and its suburbs frequently seek informal backing from zoning officials before investing money in a project. Occasionally, an informal expression of approval by one or more members of a zoning board can lead to a dispute about the board's intentions if the project is formally rejected. A recent court ruling has shown how verbal assurances of support for a project do not bind the municipality.

In 2013, the Archdiocese of Philadelphia entered into an agreement to sell 213 acres of land in Marple Township to commercial real estate developer Bruce Goodwin. Goodwin intended to redevelop the land for retail space and townhouses. Goodwin paid a $5 million non-refundable deposit as part of his winning bid for the land. After receiving what he called "statements of support" from local officials, he also spend an additional $2 million on studies and plans for the project. Unfortunately for Goodwin, the town board rejected his request to rezone a portion of the land after township residents voiced significant opposition to the project.

Believing that he had obtained the zoning board's informal approval, Goodwin sued to compel the board to rezone the property. The court, however, disagreed. In dismissing the lawsuit, the judge observed that "If 'statements of support' prior to official votes are legally binding, every disappointed zoning or land use applicant would be able to sue the municipality in a separate Common Pleas Action . . . based on alleged 'promises' made to them during the process." Goodwin's attorney said that the developer intends to appeal the ruling. The Archdiocese has put the land on the market, stating that it hopes to complete a "successful transaction."

This case highlights the difficulties of turning informal verbal statements by government officials into legally enforceable obligations. Anyone involved in a similar dispute can benefit from consulting a lawyer who specializes in real estate litigation. A knowledgeable attorney can provide advice about the legal nature of the statements at issue and can suggest strategies for prevailing in the dispute.

Source: Philly.com, "Developer loses latest battle in bid to develop 213 acres in Marple Twp.," Charles Fox, Oct. 13, 2016

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