Jamie Gauthier in 2022. Photo by Jared Piper - Philadelphia City Council
The recently proposed Philadelphia City Council bill 250804 by Councilwoman Jamie Gauthier that would regulate land dispositions by nonprofit universities in West Philadelphia under the zoning code is an unconstitutional encroachment on a power that belongs only to the Pennsylvania Attorney General.
If passed, the bill would provide a power that originally belonged to the King of England to every member of Philadelphia City Council, turning each into an actual king or queen without a corresponding coronation through the Philadelphia Zoning Code.
Bill 250804 proposes a zoning overlay which attempts to regulate and prohibit land sales through the Philadelphia Zoning Code when made in West Philadelphia by certain universities based on the location of the real property, namely in areas held by the University of Pennsylvania and Drexel University, which are formed as nonprofit corporations under Pennsylvania law. The zoning overlay would prohibit building and use permits on land sold to unrelated entities of these universities for redevelopment.
It is natural that the sale of real property held by Pennsylvania nonprofit corporations be scrutinized for their use to conform to charitable purposes. Under Pennsylvania law, assets of nonprofit corporations are thus imprinted with a charitable trust. This charitable trust requires property acquired by a nonprofit corporation to further an organization’s charitable purposes.
The law — 15 P.S. 5547(b) — holds that property held by nonprofit corporations committed to charitable purposes cannot be sold to another entity that doesn’t further those charitable purposes. But longstanding Pennsylvania precedent notes that “The responsibility for public supervision of charitable trusts traditionally has been delegated to the attorney general to be performed as an exercise of his parens patriae powers.”
The Attorney General’s parens patriae powers overseeing charitable trusts “are the ancient powers of guardianship over persons under disability and of protectorship of the public interest which originally where held by the Crown of England as the ‘father of the country,' and which as part of the common law devolved upon the states and federal government. Specifically, these powers permitted the sovereign, wherever necessary, to see to the proper establishment of charities through his officer, the attorney general, and to exercise supervisory jurisdiction over all charitable trusts.” This common law principle has been incorporated into the Pennsylvania Rules of Civil Procedure 235, which states that any proceeding involving a charitable trust in a Commonwealth court, the Pennsylvania Attorney General must be notified.
In 2006, the Pennsylvania Supreme Court held that “Private parties generally lack standing to enforce charitable trusts. Since the public is the object of the settlor's beneficiaries in a charitable trust, private parties generally have insufficient interest in such trusts to enforce them. Those who may bring an action for the enforcement of a charitable trust include the Attorney General, a member of the charitable organization, or someone having a special interest in the trust. A person whose only interest is that interest held in common with other members of the public cannot compel the performance of a duty the organization owes to the public.”
There have many fights regarding the use of nonprofit property in Pennsylvania where the Attorney General has weighed in. In the most recent example, just earlier this year the Pennsylvania Attorney General intervened in the bankruptcy proceedings of the University of the Arts, which held a considerable amount of real property in Center City. The Attorney General appeared in the case and presented arguments as to which potential purchasers closely matched the original purposes for which the property was purchased by University of the Arts.
Philadelphia, as a home rule charter city, is permitted to “exercise any power or perform any function not denied by this Constitution, by its home rule charter or by the General Assembly at any time” under the Pennsylvania constitution and state statute. Thus, the Pennsylvania Supreme Court has held that “a municipality does not have the power to enact ordinances except as authorized by statute, and any ordinance not in conformity with its enabling statute is void.”
Philadelphia City Council certainly cannot therefore, grab the power from the Attorney General and provide it to itself without express permission. And even if the Pennsylvania Attorney General wanted the Philadelphia City Council to oversee charitable trusts from nonprofit corporations operating in Philadelphia, neither the Attorney General nor the Pennsylvania General Assembly could delegate such power to City Council, as attempts by the Attorney General to do so to private individuals has been prohibited by the Philadelphia Court of Common Pleas on at least one occasion.”
In sum, this power is best exercised by the Attorney General as a duly elected member of the executive branch of the Commonwealth of Pennsylvania. To allow the Philadelphia City Council to enforce the disposition of land by nonprofit corporations through the Zoning Code would be to take councilmanic prerogative to a degree that would crown each City Councilmember to be King of their councilmanic district without a coronation. And that is not permitted by the Pennsylvania Constitution.
Christian J. Matozzo is a Pennsylvania and Indiana-barred attorney with the law firm of Brown & Streza LLP. His law practice focuses exclusively on nonprofit corporations and tax-exempt organizations with a focus on religious organizations. Christian is a former legislative aide for a Philadelphia City Councilmember and represented the Councilmember’s interests before the Zoning Board of Adjustment. He currently resides in South Bend, Indiana.
