STATE ACTION REAFFIRMS AUTHORITY OVER RIPARIAN RIGHTS

     HARRISBURG, February 22, 2008 – The state has enacted two pieces of legislation confirming that submerged lands along the Delaware River belong to the taxpayers of the commonwealth. The bills leave no doubt that the state has exclusive authority to convey permission for the use of those riparian rights, and to impose terms and conditions upon that use.

     Acts 4 and 5 of 2008, which were signed today by Governor Ed Rendell, grant riparian rights along the Delaware River to two condominium developers. They began as House Bills 1621 and 1627, sponsored by Rep. Michael O’Brien (D-Philadelphia) and were first considered by the General Assembly in July of 2007. They include requirements for Community Benefits Agreements between the developers and neighborhoods.

     “The legislation allows development in a manner that will be good for the community, while providing public access to the river and green space,” O’Brien said. “The bills are the result of an open and transparent process with community input. The state was able to establish conditions when permitting this development.”

     To address a legal controversy that arose late last year concerning authority over riparian rights, the Senate and House of Representatives recently added amendments to the two bills, clarifying that submerged riverbed lands are state property whose use can be authorized only by legislative action. They then passed the final versions by overwhelming margins (49-0 for both bills in the Senate, and 169-26 and 162-33 in the House) and sent them to the Governor.

     “We believe the matter was clear from the beginning, but these two pieces of legislation eliminate any confusion, once and for all. The state has sole power to award rights to submerged riverbed land, which state taxpayers own,” said state Senator Vince Fumo (D-Philadelphia.)

     State Rep. Bill Keller added, "I have always maintained that the Pennsylvania Legislature has the sole authority to grant riparian rights to submerged lands along the Delaware River. Passage of this legislation removes any and all clouds on this issue and makes it crystal clear that the Pennsylvania Legislature is the overriding authority when it comes to granting riparian rights."

     In November 2007, the administration of Philadelphia’s then-mayor John Street had announced that it was granting a license to use a tract of submerged Delaware River land to the developers of the proposed Sugarhouse casino. The City relied on an outdated 1907 law. Doing so would have deprived commonwealth taxpayers of compensation in exchange for allowing Sugarhouse to occupy the taxpayers’ land.

     Fumo and O’Brien, whose respective Senate and House districts include the Sugarhouse location, challenged the City’s action before the state Supreme Court in December. A bipartisan group of five other House members whose districts abut the Delaware River joined that appeal – Senator Michael Stack and Representatives Keller, John Taylor, Michael McGeehan and Robert Donatucci. HSP Gaming LP, parent of Sugarhouse, has sought dismissal of the appeal.

     New mayor Michael Nutter revoked the City-issued riparian license for Sugarhouse shortly after taking office in January, but did so without clarifying that riparian authority rests with the state. HBs 1621 and 1627, as amended, address the central issues in HSP’s attempt to have the appeal dismissed, by reaffirming that only the General Authority can authorize conveyance of public land, and that the General Assembly can impose costs, terms and conditions that it may deem appropriate when executing such conveyances.

     For example, the two bills impose a $5 per square foot charge upon the land footprint of the development, and an additional $1 charge per each square foot of building space. This is expected to produce $500,000 in revenue for the Commonwealth. The 99-year leases also includes the requirement that a community benefits agreement be executed between the developer and the local neighborhood association within 18 months.

     "There has always been a process, and that process usually worked well when all parties followed the law rather then trying to circumvent it. We can now all get back to encouraging and monitoring neighborhood-friendly development along the waterfront that adds to the overall quality of life in our city, without threatening local neighborhoods," Keller said.

     “These two statutes, and the margins by which they were approved in both chambers of the legislature, represent a clear rebuke of the City’s attempt to turn over state property to a private developer at bargain basement rates,” Fumo said. “Obviously, members of the House and Senate believe state taxpayers are entitled to appropriate levels of compensation for their land.”

     The bills extend 99-year leases for two parcels of submerged Delaware River land to VTE Philadelphia, LP, and to NCCB Associates, LP for the purposes of condominium development.

     “The signing of these bills breaks a logjam on waterfront development that the administration created 18 months ago when it imposed a moratorium,” O’Brien said.

     Language in both bills states as follows:

     “The General Assembly hereby affirms its existing, sole and exclusive authority to consider and specifically authorize the conveyance of any title, easement, right of way or other interest in commonwealth-owned lands, such as those set forth herein, pursuant to the . . . Administrative Code of 1929 and the . . . Dam Safety and Encroachment Act.”

     The language goes on to note that there are limited circumstances under which the state Department of Environmental Protection may grant such conveyances without additional legislative authorization.

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