“It is impossible to reconcile the Copley Place Project as consistent with the concerns of the Congress as expressed in the UDAG statute and the regulations promulgated by HUD…” (from Greater Boston Legal Services’June 5, 1980 letter to local HUD Director, which complained about use of UDAG funds to develop site of Simon Properties Group & Neiman Marcus’ proposed “Jim Crow” Skyscraper of luxury residential units at Copley Place)
Following is the text of Judge Caffrey’s August 17, 1981 memorandum in the Munoz-Mendoza v. Pierce court case regarding the use of $18.8 million in federal funds from HUD to construct the Copley Place project:
August 17, 1981 court decision
Viviana MUNOZ-MENDOZA, Maggie Morris, Arturo Juarbe, Pat Quintana, Marcia Wiley, Bruno Rodriguez, Kam Yun Lee, and The Chinatown Housing and Land Development Task Force, Individually and on Behalf of all others Similarly Situated, et al., Plaintiffs,v.
Samuel R. PIERCE, in his Official Capacity as Secretary, Department of Housing and Urban Development, Robert C. Embry, in his Official Capacity as Assistant Secretary for Community Planning and Development, Marvin Siflinger, in his Official Capacity as Area Manager, Boston Area Office of the Department of Housing and Urban Development, Robert Pacquin, in his Capacity as Area Director of Community Planning and Management in the Boston Area Office, Kevin H. White, in his Capacity as Mayor of the City of Boston, and Robert Ryan, in his Official Capacity as Executive Director of the Boston Redevelopment Authority, Defendants
The opinion of the court was delivered by: CAFFREY
Plaintiffs, seven individuals and an unincorporated organization, the Chinatown Housing and Land Development Task Force, are before the Court challenging federal funding for the development of a project known as " Copley Place ." The plaintiffs, seeking declaratory and injunctive relief, sue the Secretary of the Department of Housing and Urban Development (HUD) and other federal officials, as well as two officials of the City of Boston, claiming that the award by HUD of a $ 18.85 million Urban Development Action Grant (UDAG) was not preceded by adequate planning and will have a discriminatory impact on low-income residents of Boston's South End, in violation of civil rights laws (Title VI, 42 U.S.C. ? 2000d et seq. and Title VIII, 42 U.S.C. ? 3601 et seq.). Cross-motions for summary judgment have been briefed and argued.
Copley Place is a $ 318 million multi-use development which will include a 712-room luxury hotel, a 960-room convention hotel, a retail center, office space, enclosed parking and 100-150 units of housing, 25% of which are to be subsidized. The site for Copley Place is 9.5 acres of vacant land, cleared 16 years ago for construction of the Massachusetts Turnpike extension. There is no presently existing residential housing located anywhere on the 9.5 acre tract. The tract, bordering the South End, Fenway and Back Bay neighborhoods, has remained undeveloped except for several exit ramps and a rail line located in the center of the site. All of the plaintiffs live in neighborhoods close to the project site. The South End is a fully integrated residential area.
In April of 1980 the City of Boston submitted to HUD a UDAG application for Copley Place , and HUD announced preliminary approval of the funding on October 9, 1980. The Chinatown Housing and Land Development Task Force and one other organization filed an administrative complaint with HUD in June 1980 expressing concern over the displacement impact of the project on neighborhood residents. On October 21, 1980 HUD notified the complainants of the project's approval. The City of Boston and HUD signed a formal UDAG contract in the early months of 1981.
I. Threshold Issues
The federal funding at issue was authorized by the Housing and Community Development Act of 1977, and a threshold issue is the application of the civil rights duties of Title VI (42 U.S.C. 2000d et seq.) and Title VIII (42 U.S.C. 3601 et seq.), i. e. of non-discrimination and the promotion of fair housing, to UDAG grants and applicants under that statute, 42 U.S.C. 5318. Fairly recent amendments to the UDAG regulations, effective on November 11, 1980, leave no doubt as to the relationship between civil rights laws and Urban Development Action Grants. All applicants for grants must certify, 24 C.F.R. 570.458(c)(16)(xiv)(A) and (B), that their UDAG projects comply with Title VI of the Civil Rights Act of 1964 and Title VIII of the Civil Rights Act of 1968. The new regulations, 24 C.F.R. 570.458(c)(12), also specify that information about involuntary displacement of low-income minorities should be submitted.
Although the regulations in effect at the time of Copley Place UDAG approval were not as explicit, I rule that the Copley Place UDAG was, and is, subject to the civil rights obligations of Title VI and Title VIII. "It is clear that anti-discrimination statutes have a significant impact on all federal financial assistance programs." NAACP v. Wilmington Medical Center , 426 F. Supp. 919, 923 (D.Del.1977)….
The primary relief sought in the instant case, however, is further HUD study of Copley Place displacement impact, and complete relief cannot be awarded without HUD's presence in the suit. Indeed the gravamen of the complaint is that action against the City alone is not sufficient. Plaintiffs claim that representations concerning Copley Place impact presented by the City of Boston , as the interested potential recipient, should not determine the federal agency's own study of the civil rights aspects of the grant.
This is not a case of claimed past discriminatory practice raising the spectre of terminating financial assistance but an action designed to prevent such a practice and to ensure that HUD follows certain procedures...
There are two interrelated claims in this case, one alleges a procedural injury and the other alleges a substantive harm. The plaintiffs assert that prior to the UDAG award HUD failed to study the indirect displacement that low-income residents living in the impact area would suffer as a result of the Copley Place project. They trace this alleged planning failure directly to the conduct of the federal officials responsible for approving the UDAG, and they seek a procedural remedy which would mandate the completion of such a displacement study by HUD. The alleged substantive injury is that the Copley Place UDAG discriminates against low-income minorities residing in abutting neighborhoods by providing critical financial aid for the Copley Place development, which in turn will work to indirectly displace the nearby plaintiffs by triggering increased rents, condominium conversions and threatened evictions. Plaintiffs seek relief which would mitigate the alleged indirect discriminatory displacement impact.
I rule, on the basis of the limited record presently before the Court and for the purpose of these motions only, that plaintiffs' have shown sufficient standing to withstand defendants' motion for summary judgment...
The plaintiffs have the burden of demonstrating that the increased rents and threatened evictions are "fairly traceable" to the UDAG funding of Copley Place, and that court-ordered relief can redress the harm. It is arguable that Copley Place, a $ 318 million project, would have been built even without the $ 18.85 million UDAG, and that the South End's ongoing gentrification and displacement of low-income minorities would have continued to accelerate at a significant pace even without any Copley Place project whatsoever. Nevertheless, I am satisfied on the current record that the plaintiffs have sufficiently personalized issues at stake to further litigate the legal claims presently before the Court...
These plaintiffs say they face increased rents and threatened evictions. They live in the claimed impact area. Their personal stake in displacement allows them to raise the issue with HUD and City officials.
In attacking HUD's study of the civil rights implications of Copley Place, plaintiffs assert that part of HUD's failure lay in its unwillingness to review the City of Boston's general eligibility for UDAG awards...
II. Title VIII and Title VI Claims
Title VIII, particularly 42 U.S.C. 3608(d)(5), places an affirmative duty on HUD to promote fair housing opportunities. That duty extends to prospective situations as well as to past or continuing practices in the private and public sector. The Second Circuit held in Otero v. New York City Housing Authority, 484 F.2d 1122, 1134 (2d Cir. 1973), that 42 U.S.C. 3608(d) (5) "requires that consideration be given to the impact" of a proposed project "on the racial concentration" in the impact area. Accord, Marin City Council v. Marin City Redevelopment Authority, 416 F. Supp. 700 (N.D.Cal.1975).
Title VI, 42 U.S.C. 2000d et seq., also imposes a duty on HUD, less affirmative but broader ranging than that under Title VIII, designed to eliminate racial discrimination in all federally assisted programs or activities. 24 C.F.R. 1.7(c) states that HUD "shall make a prompt investigation whenever a compliance review, report, complaint, or any other information indicates a possible failure to comply" with Title VI.
The issue in this case is whether HUD, in conjunction with the City of Boston , met or failed to meet its duties under Title VI and Title VIII. HUD satisfied its Title VIII duty to promote fair housing if it used an "institutionalized method" to reach an "informed decision," based on "the relevant racial and socio-economic information." Shannon v. HUD, 436 F.2d 809, 821 (3rd Cir. 1970). It met its Title VI responsibilities if it conducted the investigation outlined in 24 C.F.R. 1.7(c). NAACP v. Wilmington Medical Center , 426 F. Supp. 919, 924-5 (D.Del.1977). ..
I find, on the basis of a limited record, that the nature and extent of HUD's civil rights inquiries concerning the impact of the Copley Place project on low-income minority residents of the neighboring areas presents a genuine issue of material fact.
The administrative record reveals the following. In early 1980 Boston submitted a UDAG application, including assurances of Title VI and Title VIII compliance. Several preliminary observations by HUD officials attest to their awareness of displacement concerns (Record, 189; Record, 195). An administrative complaint was filed by two housing organizations on June 5, 1980, raising civil rights issues concerning the project's indirect displacement. The Deputy Assistant Secretary for Fair Housing and Equal Opportunity was notified of the administrative complaint on June 11, 1980. The City of Boston responded to the complaint on August 25, 1980, and in the meantime the project's developer had forwarded a housing impact study, completed in late 1979 for the City, to HUD (Record, 358).
HUD officials met with the administrative complainants on September 2, 1980, but never responded to the complainants' written request for findings. The most revealing document in the record is a letter dated September 19, 1980, from the Director of the Area's Division of Fair Housing and Equal Opportunity to the Area Manager in charge of Copley Place UDAG review. (Record, 710). It notes that HUD is "extremely concerned about the involuntary displacement of minorities," but observes that no HUD guidelines exist on the issue and that indirect displacement is hard to measure in any event. In the absence of "hard evidence" the report recommends that "the project not be stopped based on civil rights considerations." The last sentence of the letter declares that "it does not appear that either Title VI or Title VIII will be violated." (Record, 711). No supporting material or explanation is offered.
HUD's record, granting plaintiffs all inferences, is one of reaction and bureaucratic feedback, not of initiative and study. On September 24, 1980, HUD's Area Manager merely reiterated the concerns about the project's "potential negative impact" on low income households that he had voiced in a June 3 letter (Compare Record, 713-716 and Record, 195). Nothing more substantive emerges from the present record. On October 9, 1980, a press release announced the UDAG award…The record as it now appears does not clearly establish that HUD had the "relevant racial and socio-economic information" at the time of UDAG approval…
This Court, on the present record, will not rule that defendants did all that was legally necessary to satisfy Title VI concerns….
III. Arbitrary and Capricious Agency Action
The third and final claim of plaintiffs is that HUD's funding of Copley Place was arbitrary and capricious agency action, subject to review and relief under 5 U.S.C. 706(2)(a). The ultimate standard of review under this statute is a narrow one, Citizens To Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971), and precludes judicial review on a de novo or even a substantial evidence basis. King v. Harris, 464 F. Supp. 827 (E.D.N.Y.1979).
HUD must establish that its decision on Copley Place was based on all relevant information and included the appropriate inquiries. Given the ambiguity of the current record, and the existence of the independent claims, the Court reserves on this claim seeking judicial review. NAACP v. Medical Center, Inc., 599 F.2d 1247, 1259 n.49 (3rd Cir. 1979).