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MPL General Counsel Corner – Time is “Not” Always on My Side

Apologies I did not get out my update last week.  We were out of town and if I let work seep into one more day, my wife may have sent me home early.  I don’t know about you, but work-life balance can get off-kilter at times, actually more than at times, a lot of the time.  I was listening to the Rolling Stones channel the other day and the song “Time Is On My Side” came on.  The first thought that came to mind was that this song is the exact opposite of most of my days.   However, it does not have to be that way.

When you run your own business or make your own hours, I have learned that it is critical that I make a schedule and set boundaries.  However, that very statement alone, while easily said, is not so easy to execute when you are constantly looking to keep your book of business filled.  Below are some good articles with tips on achieving the holy grail of “work-life” balance.

I will leave you with this quote from Jack Welch:

“There’s no such thing as work-life balance.  There are work-life choices, and you make them, and they have consequences.”   

Lastly, if you have articles or events that you would like for me to share, please send them over.  I have one rule, whatever you send must be educational or informational (please don’t send a sell or pitch piece).

Here are a few other things that may be of interest:

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com) or anyone in our office with questions or comments.  

Local Government’s Perspective on Solar Farms

Last year the Pennsylvania State Association of Township Supervisors (the “Association”) provided testimony before the Senate Agriculture & Rural Affairs and Local Government Committees on the local government perspective on solar farms. The Association represents Pennsylvania’s 1,454 townships of the second class.

Why is this testimony important? The Association is the predominant lobbying and professional association for second-class townships in Pennsylvania. Most Townships where solar farms are being proposed are members of the Association. These Townships regularly receive guidance and assistance from the Association, and because of this, Townships sometimes defer to the Association. Samuel F. Cressler, on behalf of the Association, presented the following testimony. It is helpful to revisit that testimony to understand the municipal landscape for solar projects in Pennsylvania.

Here is an overview:

Solar Farms are high on the Association’s radar

The Association understands that plans for commercial solar farms are springing up across the state. As a result, municipalities are tasked with reviewing and amending existing ordinances, or adopting new ordinances, to regulate this use. It seems that the Association is trying to force Townships to be proactive, as opposed to reactive, when it comes to this type of development.

The Re-Occurring Issues

The Association cited the following issues that seem to be cropping up regularly: view shed, glare, stormwater, security, fencing and the best location for these projects (with a focus on soil type). Some municipalities (with a high proportion of Class A Soils) are deciding to permit Solar Farms in an industrial zone rather than an agricultural or agriculturally-adjacent zone. With this testimony specifically, it seems that the Association is pushing Townships away from permitting solar farms in areas with prime farm soils.

Decommissioning

The Association wants to ensure that the owners and operators are responsible for these projects after the facility is done operating. The Association also wants to know how long these leases actually last. Additionally, developers need to be ready to explain whether their solar panel equipment will need to be updated and replaced as a result of the rapidly shifting technology landscape.

Note: As everyone knows, the Pennsylvania legislature is looking to provide statewide decommissioning standards. You can find the current status of the legislation here and here.

Tax Assessment

Developers need to be weary proclaiming that Solar Farms will result in a significant increase in local tax revenue and local jobs. The Association understands that these facilities are not permanently attached to the ground, and therefore, they aren’t usually assessable for property taxes. Furthermore, the Association understands that the construction labor is short-term and will not necessarily be completed by the local community. Therefore, the Association does not view these projects as big job generators.

As an interesting aside, machinery, equipment, parts and supplies which are to be used in an electricity generating operation, are excluded from Pennsylvania Sales and Use Tax.

Key Takeaways

  • Working in tandem with a Township to amend or even adopt a renewable energy ordinance is of the utmost importance.
    • There still exist concerns that developers need to address immediately and appropriately (noise, glare, property value, stormwater, etc.).
  • Addressing these issues up-front with a township by submitting a study or even a preliminary report early on in the zoning process can go a long way.
  • It is still important to emphasize the benefits of renewable energy development, but don’t oversell (see tax assessment) when it is not needed. Be ready if you get little traction on these points.

If you have other specific questions about the Association’s recent thoughts, renewable energy, or anything related or unrelated, please don’t hesitate to call our firm at (717-845-1524) or email Andy Miller (amiller@mpl-law.com) or Cory Dillinger (cdillinger@mpl-law.com) with any questions or comments.

Learn More About Solar Farms

Does the Dog Wag its Tail, or the Tail Wag the Dog?

I try to scan headlines and read articles as much as time permits.  Take a look at the following headlines from the media this past week:

Are you catching a theme?  Lots of doom and gloom is on the horizon.  If you just paid attention to the headlines, you would think both the US and World economies are headed for disaster.  Coming out of the Covid and the Great Recession of 2007-09, it would be easy to fall into that mindset.  However, I will tell you that many businesses actually flourished during those times.

This is not to say that a pullback or bad economic environment does not happen. It certainly does.  Economies are cyclical and have both sustained up and downturns.  Thankfully, the US has a system in place which favors more ups versus downs over time.

Those business leaders that realize this phenomenon and choose not to let the headlines dictate their strategy are the ones that typically succeed over the long term.  It begs the question:  Do you believe the dog wags its tail or does the tail wag the dog?

I will leave you with this quote from Richard Branson:

“Business opportunities are like buses, there’s always another one coming.” 

Keep moving forward and don’t fall into the trap of letting the tail wag the dog in your business.

Here are a few other things that may be of interest:

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.  

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com) or anyone in our office with questions or comments.  

Recent Spot Zoning Challenge in Pennsylvania

I don’t need to explain to renewable energy developers how difficult permitting a project can be. Outdated ordinances, public opposition, and slow-moving local government can all contribute to this difficulty. Avoiding a spot zoning challenge is one less permitting aspect to worry about.

When a developer looks to rezone an area they typically only look at the project footprint. If the developer can properly rezone the project footprint it is seen as a homerun. While this is ultimately the goal, a developer must look at the project footprint in conjunction with the greater project area. If the rezoning efforts capture more than just a few project-specific parcels, this rezoning will be much less susceptible to a spot zoning claim down the road such as with the Conshohocken cases described below.

In Conshohocken Borough v. Conshohocken Borough Zoning Hearing Board, 261 A.3d 582 (Cmwlth. Ct., 2021), decided on August 16, 2021, the Commonwealth Court, the Pennsylvania appellate court which handles zoning appeals, ruled that an amendment to Conshohocken’s Zoning Ordinance (ZO) was unlawful spot zoning. The Borough had adopted an amendment, effective five days after its enactment, which, among other uses, added “convenience retail food store, including the sale of fuel, an ATM, and lottery sales”. Significantly, this change was as a direct result of, and in response to, an application to locate a Wawa store on a specific property in the Borough’s Residential Office (RO) zoning district.

The same night that the Borough Council approved the zoning amendment, it also approved the final subdivision plan for the Wawa. This resulted in two (2) parallel appeals. Neighbors filed an appeal to the Borough’s Zoning Hearing Board (ZHB) challenging the substantive validity of the ZO amendment on the basis of spot zoning and filed an appeal directly with the county court challenging the enactment of the amendment on procedural grounds. Conshohocken Borough v. Conshohocken Borough Zoning Hearing Board addresses the substantive spot zoning challenge.

There, after 28 hearings, the ZHB found that the amendment constituted unlawful spot zoning. The developer appealed to the county court, which reversed, finding that the amendment was lawful. The challengers then appealed to Commonwealth Court (the “Court”), which reversed the county court, and upheld the finding of spot zoning, invalidating the ordinance. Importantly, the Court extensively reviewed the findings of the ZHB, and held that those findings were supported by substantial evidence, and thus the Court had no basis to overturn the ZHB’s decision.

Essentially, the ZHB found, among other things, and the Court upheld, that the proposed Wawa site was the only location in the RO district on which a convenience store with fuel could be built, and was contrary to the ZO’s Statement of Community Objectives for the RO district. Other changes were made to setbacks, lighting, and other provisions which would only favor the Wawa. The ZHB found that the use was inconsistent with the RO district.

In analyzing the spot zoning issue, the Court did not break any new ground. It held, consistent with earlier cases, that spot zoning is the singling out of one lot or a small area for different treatment than for similar surrounding land for the benefit or detriment of that lot’s owner, and that challengers must show that the provisions are arbitrary and unreasonable, with no relation to the public health, safety, morals, or general welfare, and cases must be decided on the facts of that case, considering the community’s comprehensive plan. In this case, the Court found that the ZHB had considered all of those factors in ruling that the amendment was unlawful spot zoning, and the Court thus upheld their decision, which it must do under its rules of review.

The results of this case are not ground-breaking and follow established precedent. It is significant that the Court affirmed the ZHB’s decision based on a review of the ZHB’s findings and the established record, and so it was not required to overrule that decision. Rather, the Court was able to base its ruling on the fact that it was bound by the ZHB’s findings, as they were consistent with the law. No appeal was taken from this ruling, so this decision is a final ruling.

As stated earlier, there was also another appeal in this matter arguing that the amendment was invalid as it was procedurally defective. That case, Dorsey v. Borough Council of Conshohocken Borough, 1114 C.D. 2020, was decided by the Court on December 7, 2021. The main issue in this case was that the Borough erred by approving the land development plan (LDP) the same night as the ZO amendment was approved, as the ZO amendment was not effective until five days after approval. Thus, the LDP was approved under the old ZO, because the amendment was not yet effective. However, the Court held that, as the ZO amendment was struck down in the Conshohocken Borough case, then the LDP approval, which was based on the ZO amendment, could not stand either. The parties agreed with this resolution, in light of the Conshohocken Borough case. This opinion was unreported, which means that it has no precedential value; it was effectively a procedural decision.

Nevertheless, the argument raised in Dorsey is a strong, and almost certainly a winning one. The cautionary tale of Dorsey is that municipalities and applicants need to be aware of the effective dates of the prospective ordinances, especially when they are coupled with a related action. Otherwise, the concept of spot zoning is alive and well, though essentially unchanged by these two companion cases.

If you have other specific questions about spot zoning, renewable energy, or anything related or unrelated, please don’t hesitate to call our firm at (717-845-1524) or email Andy Miller (amiller@mpl-law.com) or Cory Dillinger (cdillinger@mpl-law.com) with any questions or comments.

You talked the talk, now walk the walk – Post-Acquisition To-Dos

Well, you did it.  You closed on the acquisition.  All the months of due diligence and planning and now everything is signed and the money (or most of it) is in the hands of the Seller.  Now what do you do?  Everyone talked the talk before the closing, but now it is time to walk the walk.

Below is a good post-acquisition checklist you may want to review if M&A is in your near future:

  1. Who is the point person or team to execute the post-merger checklist?
  2. Who will hold that person or team accountable?
  3. What are the post-closing deliverables?
  4. When are the post-closing deliverables due?
  5. Do you understand all the reps and warranties from the purchase agreement?   What happens if there is an issue with one or several of them?
  6. How quickly will the new employees be merged into the new organization?
  7. What about rebranding?
  8. How are you notifying the clients/customers?
  9. What about technology?
  10. What are the key measurables to know if the integration is working?

While these may seem simple, I can assure you that they are often ignored.  In fact, many become a source of tension and often lead to chaos within an organization in the first 6-12 months post-acquisition.  You likely won’t cover everything but knowing the key issues is more than half the battle.  Make sure you lean on your management team, professional advisors and business mentors for help.  Below are some good resources to review:

Here are a few other things that may be of interest:

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.  

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com) or anyone in our office with questions or comments.