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Deutsche Bank National Trust Co. v. Shelzi

Superior Court of Massachusetts, Middlesex

August 31, 2016

Deutsche Bank National Trust Co.
Antonia Shelzi et al. [1], [2] and Companion Cases [3] No. 134820

         Filed September 2, 2016


          Kenneth J. Fishman, Justice

         The three cases before the court are petitions for damages, which arose after the Somerville Redevelopment Authority (" SRA") took certain property by eminent domain on May 29, 2013, in an effort to revitalize Somerville in connection to the expansion of the MBTA's Green Line at Union Square. At the time of the takings, plaintiff Francis Fahey maintained a residence and business at 26-30 Prospect Street, Somerville, Massachusetts, and plaintiff Prospect Iron & Steel Corp. and affiliated corporations (" Prospect Iron") maintained businesses at 40 Bennett Street also in Somerville. In addition, defendant and cross claimant Antonia Shelzi owned a two-story, single-family residence at 4 Milk Place in Somerville, upon which plaintiff Deutsche Bank National Trust Co. (" Deutsche Bank") was a mortgagee (hereinafter, the " subject properties" or the " properties").

         After the takings, the SRA made pro tanto offers in the amount of $385, 000.00 to Fahey, $3, 165, 000.00 to Prospect Iron, and $75, 000.00 to Deutsche Bank's mortgage servicer, by way of its mortgage instrument with Shelzi. Subsequently, the plaintiffs instituted these actions contending that such offers were not just and reasonable compensation as required by the Fifth Amendment to the U.S. Constitution and art. 10 of the Massachusetts Declaration of Rights.

         The matters are presently before this Court on the SRA's motions for partial summary judgment in each case. The gravamen of the SRA's argument is that the opposing parties are not entitled to increases in the properties' values, which the SRA avers are attributable to the announcement of the revitalization project. Additionally, the SRA argues that the changes in zoning, which were enacted prior to the taking but in furtherance of the revitalization project, should similarly be excluded from the just compensation calculation. After hearing, and upon review and consideration, the motion is DENIED .


         The following relevant, undisputed facts are taken from the summary judgment record, with certain additional facts reserved for later discussion.

         Revitalization of this project area in Somerville (or " the city") began as early as February 1988, when the city published the Boynton Yards Revitalization Plan (" Boynton Yards Plan").[4] Boynton Yards was an 80-acre site adjacent to Union Square, which consisted of industrial, commercial, and residential uses. However, the area suffered from blight, decadent, and substandard conditions, as defined in G.L.c. 121B. The Boynton Yards Plan aimed at redeveloping this area to eliminate such conditions while also creating new jobs and affordable housing opportunities. The Boynton Yards Plan was a two-phase plan, and the first phase was completed on June 22, 2006. The SRA concedes that the second phase was abandoned when the city chose to expand its plans for redevelopment into Union Square.[5]

         In the spring of 2000, Somerville initiated various planning studies, including the Union Square Revitalization Study. The outcome of that study was the Union Square Revitalization Study Neighborhood Revitalization Strategy Area Plan (" NRSA Plan"), which the city published in the spring of 2002.[6] The NRSA Plan targeted low and moderate income areas for economic development and granted the city access to public funds made available through the U.S. Department of Housing and Urban Development (" HUD"). Maps contained in the NRSA Plan denoted the boundary lines of the strategy area, which included a portion of Union Square.

         Subsequently, in April 2003, Somerville published the Five-Year Consolidated Plan (" 2003 Consolidated Plan"), which was written in accordance with HUD requirements to gain access to federal funding. The 2003 Consolidated Plan provided the framework for disbursing those funds to various programs throughout the city. It also commented on the potential for expanding the Green Line to Union Square, noting " [s]ome land assembly may be required by private developers, the MBTA, or the City of Somerville/Somerville Redevelopment Authority in order to facilitate development." (Emphasis added.)

         That same month, Somerville published the Union Square Master Plan[7] (" Master Plan" or " 2003 Master Plan"), which incorporated the goals and objectives of the second phase of the Boynton Yards Plan and the 2003 Consolidated Plan and established a timeline to accomplish those initiatives. Phase I of the Master Plan was simply the 2003 Consolidated Plan. Phase II consisted of ideas unique to the Master Plan, which " identifie[d] new opportunities, [wove] together previously-identified recommendations into a cohesive vision, and then define[d] a step-by-step Action Agenda." The Master Plan also acknowledged that Somerville was in the process of negotiating with the MBTA to implement " new rapid transit services for Somerville as a whole and Union Square in particular, " and it named Prospect Street (a/k/a " Prospect Street Corridor" or " Prospect Street Gateway") as the potential location for the transit station.[8] In addition, the plan predicted that land values and pressures to build in the Prospect Street area would increase, pending commitments for transit funding.[9] The Master Plan also contemplated that the MBTA would acquire easements through the area but stated, " [s]ite assembly may be required as well." (Emphasis added).

         The Master Plan also envisioned new zoning initiatives to incentivize redevelopment. More specifically, the plan stated, " [with] major redevelopment . . . likely to occur in the Prospect Street corridor as transit commitments . . . are confirmed . . . a zoning district boundary change should be considered to extend the CBD [a/k/a Central Business District] to the eastern side of Prospect Street" (see Ex. 9, p. 29), because the CBD zoning provisions were supportive of this new type of development. In addition, the Master Plan proposed a Transit Overlay District within 1, 200 to 1, 500 feet of the proposed transit station location, which would reduce the mandated parking ratios below those already required for entertainment uses. The Master Plan suggested that these zoning changes occur in 2009.

         In 2008, Somerville initiated a study to determine whether the Somerville Zoning Ordinance in Union Square should be amended. A public hearing was held on December 4, 2008, and on April 23, 2009, the Board of Aldermen adopted Ordinance No. 2009-03 (" Zoning Amendment" or " 2009 Zoning Amendment"). The Zoning Amendment acknowledged that it was " in the City's best interest to take advantage of anticipated Federal and State investment in the extension of the Green Line . . ." (Emphasis added).

         On April 19, 2012, Somerville's Board of Aldermen endorsed the SomerVision Comprehensive Plan 2010-2030 (" SomerVision"), pursuant to G.L.c. 41, § 81D, which qualified it as a " Master Plan." [10] SomerVision's goals and objectives not only included transforming Union Square, but also expressed a commitment to undertake redevelopment in the city as a whole.

         On October 2, 2012, Somerville approved the Union Square Revitalization Plan (" Revitalization Plan" or " 2012 Revitalization Plan"), [11] which is a twenty-year urban renewal plan.[12] Revitalization plans, or urban renewal plans, are planning tools, which generally help guide development and revitalization in cities. The SRA previously used a revitalization plan in transforming Somerville's Assembly Square.

         The 2012 Revitalization Plan indicates that it is " a necessary first step to providing both the transit and transit-oriented development (TOD) that will revitalize the Union Square neighborhood." The Revitalization Plan claims that it was predicated on a community consensus to bring rail transit to Union Square in addition to two previously enacted community processes: (1) comprehensive rezoning in 2009; and (2) " Somerville's first comprehensive plan, known as the 'SomerVision Comprehensive Plan.'" (Emphasis added.) The ...

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