                  UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT

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                           No. 96-50065
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HOUSE THE HOMELESS, INC., A NON-PROFIT ORGANIZATION,
RICHARD R. TROXELL, President, CHRIS LYNE,
                                             Plaintiffs-Appellants,

                                versus

SHEILA E. WIDNALL, Sec. Air Force, in her official
capacity of Secretary of the United States, et al.,
                                                             Defendants.

JESUS GARZA, In His Official Capacity as City Manager
of the City of Austin,
                                              Defendant-Appellee.

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                             No. 96-50265
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HOUSE THE HOMELESS, INC., A NON-PROFIT ORGANIZATION,
RICHARD R. TROXELL, President, CHRIS LYNE,
                                             Plaintiffs-Appellants,

                                versus

SHEILA E. WIDNALL, Sec. Air Force, in her official capacity
as Secretary of the United States Air Force, WILLIAM J. PERRY,
Honorable, In His Official Capacity as Secretary of the Department
of Defense, JESUS GARZA, In His Official Capacity as City Manager
of the City of Austin,
                                              Defendants-Appellees.

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          Appeals from the United States District Court
                for the Western District of Texas
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                           August 21, 1996

Before BENAVIDES, STEWART and DENNIS, Circuit Judges.

FORTUNATO P. BENAVIDES, Circuit Judge:
     Plaintiffs-Appellants appeal the district court's order and

partial judgment    denying    Plaintiffs-Appellants'         request   for a

temporary    restraining    order   and    preliminary        injunction   and

dismissing Plaintiffs-Appellants' claims against Defendant-Appellee

City of Austin, and the district court's order and final judgment

dismissing Plaintiffs-Appellants' claims against all remaining

Defendants-Appellees.      We affirm.

                               BACKGROUND

     In 1942, the Air Force1 and the City of Austin ("City")

negotiated   an   agreement   whereby     the   Air   Force    used   $466,000

supplied by the City to purchase 2,892 acres for a military air

base, which became Bergstrom Air Force Base ("Bergstrom").                 The

terms of the agreement, set forth in a "night letter," included the

following:

     TITLE TO VEST IN THE UNITED STATES AND TO BE CONVEYED TO
     CITY OF AUSTIN WHEN NO LONGER NEEDED BY GOVERNMENT AFTER
     PRESENT WAR SUBJECT TO RIGHT OF RECAPTURE OF USE IN ANY
     FURTHER FUTURE EMERGENCY

     ANY STRUCTURES ERECTED BY GOVERNMENT WILL REMAIN PROPERTY
     OF UNITED STATES

     RUNWAYS[,] ROADS[,] ETC WHICH ARE NOT SALVAGEABLE WILL
     REMAIN IN PLACE

     LANDS WILL BE TURNED OVER TO CITY IN PRESENT CONDITION
     EXCEPT AS TO EXISTING BUILDINGS WHICH ARE TO BE
     DEMOLISHED

     GOVERNMENT TO HAVE OPTION OF LEAVING OF LANDS PART OR ALL
     STRUCTURES TO BE ERECTED IN LIEU OF RESTORATION.



    1
       The Air Force did not become a separate branch of the Armed
Services until 1947; until that time it was part of the United
States Army.

                                    2
Then on February 27, 1947, the Austin City Council passed a

resolution declaring that the City wanted the Air Force to continue

using Bergstrom as an air base, stating that "only upon abandonment

of Bergstrom Field as a permanent Army [Air Force] Air Base should

the City of Austin request or demand that full legal and equitable

title to said lands, together with all improvements...revert to and

vest in the City of Austin."2

     In April 1991, Bergstrom was recommended for closure on

September 30, 1993.   Prior to the closure, the Air Force submitted

virtually all of the after acquired property, i.e. 324 acres of

land that was purchased with federal funds after the 1942 land

purchase and all improvements on the total land acreage, to the

Department of Housing and Urban Development ("HUD") for evaluation

under the McKinney Act.3    HUD determined that this property was

unsuitable for use by the homeless, publishing its findings.    See

58 Fed. Reg. 9208, 9215 (1993); 58 Fed. Reg. 15158 91993); 58 Fed.

Reg. 45353 (1993).

     Bergstrom was closed on September 30, 1993, whereupon the City

immediately took physical possession and control of the land.   The

Air Force was unable to execute a quitclaim deed immediately,

    2
       In 1954, the Army Corps of Engineers, on behalf of the Air
Force, informed the City of the government's position that
"whatever legal interest the City may have in Bergstrom AFB is
limited to the land acquired with funds furnished for that purpose
by the City," and not in improvements constructed on the land by
the federal government.
        3
         Since that time, the Air Force has discovered that 3.5
acres were overlooked, and is now providing HUD with the
information on this parcel for a suitability determination under
the McKinney Act.

                                 3
however, due to the environmental cleanup requirements under §

120(h) of the Comprehensive Environmental Response, Compensation

and Liability Act of 1980 ("CERCLA").                 Therefore, the Air Force

entered into a lease with the City under which the Air Force

reiterated its intent to execute a quitclaim deed upon completion

of the CERCLA obligations, reserving its right to access the land

in order to complete the environmental cleanup.

      Plaintiffs-Appellants approached both the Air Force and the

City about its concern over the disposition of the land, the

proposed City airport, and funding for a detoxification program for

the   homeless        on   the   improved   land.      The   Air   Force   informed

Plaintiffs-Appellants that because it no longer owned the land, it

could not interfere with the City's ownership and use.                 In January

1995, the City issued a Request for Proposal to use some of the

improvements on the land as interim transitional housing for

homeless individuals or families.4                  The City received only one

response, which was deemed non-responsive.                   Although Plaintiffs-

Appellants wrote to express their support in a proposal submitted

by another organization, they did not propose their own plan to use

the land improvements.

      On December 11, 1995, Plaintiffs-Appellants5 filed suit under

Title   V       of   the   Stewart   B.   McKinney    Homeless     Assistance   Act


        4
          The City's Task Force also considered relocating the
improvements off the base. Plaintiffs-Appellants criticized the
plan because no funding was available to move the housing.
            5
             Plaintiffs-Appellants include a homeless advocacy
organization, its president, and an individual homeless person.

                                            4
("McKinney Act"), 42 U.S.C. § 11411, seeking injunctive relief to

prevent the removal and/or destruction of housing stock on 2,892

acres of land, which was the former Bergstrom.6              Plaintiffs-

Appellants originally filed suit against the United States Air

Force and the Department of Defense ("Federal Defendants"), later

joining the City as a party defendant.

     An evidentiary hearing was held on Plaintiffs-Appellants'

Application    for   Temporary   Restraining   Order   and   Preliminary

Injunction on December 19, 1995, after which the district court

denied both.    The court concluded that Plaintiffs-Appellants had

failed to show a likelihood of success on the merits of their

claim, and that the harm that would befall the City              if the

preliminary injunction were granted would far outweigh any harm to

Plaintiffs-Appellants in denying it. The court found that the City

maintained an equitable reversionary interest in the land and its

improvements, subject only to a limited lease with the Air Force

required under CERCLA to remediate environmental hazards on the

land, which the court found did not disrupt the City's reversionary

interest.     The court also noted that the City could face delay

damages of over $73,000,000 if a one-year injunction were granted.

     On January 9, 1996, the district court granted the City's

motion to dismiss, holding that the McKinney Act did not apply to

the City because it was not a federal agency, and that the McKinney

       6
           Plaintiffs-Appellants sought to enjoin the City from
destroying or disturbing in any other way the improvements on the
land at Bergstrom and to force Federal Defendants to report all
land and improvements at Bergstrom pursuant to section 11411(a) of
Title 42.

                                    5
Act did not apply to the land because it was subject to reversion.

See 24 C.F.R. § 581.2(b)(9).    Then on March 20, 1996, the court

granted a motion to dismiss filed by the federal defendants,

concluding that the land was not "unutilized" or "underutilized"

prior to closure of the base, and again holding that the disputed

land and improvements were exempted from the McKinney Act as

property subject to a reversionary interest.     Final judgment was

entered the same day. Plaintiffs-Appellants filed an interlocutory

appeal of the denial of injunctive relief and the City's dismissal,

96-50065, and later an amended appeal from final judgment, 96-

50265.   Both appeals have been consolidated.7

     7
            In addition to Plaintiffs-Appellants' challenge to the
merits, Federal Defendants argue for the first time on appeal that
this case should be dismissed for lack of jurisdiction. They claim
that because Plaintiffs-Appellants have not shown that they could
submit a complying application under the regulations of the
McKinney Act, Plaintiffs-Appellants lack the necessary "injury-in-
fact" to support Article III standing. Because such an allegation
calls into question our jurisdiction under Article III, we would
normally resolve it before reaching the merits. There is, however,
a clear exception to this general rule.
      When the merits of the case are clearly against the party
seeking to invoke the court's jurisdiction, the jurisdictional
question is especially difficult and far-reaching, and the
inadequacies in the record make the case a poor vehicle for
deciding the jurisdictional question, we may rule on the merits
without reaching the jurisdictional contention. See Secretary of
Navy v. Avrech, 418 U.S. 676, 677-78 (1974); Richland Park
Homeowners Ass'n, Inc. v. Pierce, 671 F.2d 935, 941 n.3 (5th Cir.
1982); Adams v. Vance, 570 F.2d 950, 954 & n.7 (D.C. Cir. 1978);
Chinese Am. Civic Council v. Attorney Gen. of United States; 566
F.2d 321, 325 (D.C. Cir. 1977); see also CHARLES A. WRIGHT, ET AL.,
FEDERAL PRACTICE & PROCEDURE § 3531.15, at 102-04 (1984) ("Cases have
been dismissed . . . on the merits, without deciding standing.
Despite the occasional grave pronouncements that standing goes to
the jurisdiction of the court, this course is entirely appropriate.
There is no reason to decide a difficult question of standing if .
. . it is easier to reject the claim on the merits.").
      Because standing was not raised below, the record on this
issue is undeveloped and inadequate. Rather than remand the cause

                                 6
                       THE PRELIMINARY INJUNCTION

       A preliminary injunction may be granted only if the movant can

establish four requirements:

       First, the movant must establish a substantial likelihood
       of success on the merits.      Second, there must be a
       substantial threat of irreparable injury if the
       injunction is not granted. Third, the threatened injury
       to the plaintiff must outweigh the threatened injury to
       the defendant. Fourth, the granting of the preliminary
       injunction must not disserve the public interest.

Cherokee Pump & Equipment Inc. v. Aurora Pump, 38 F.3d 246, 249

(5th Cir. 1994) (citations omitted).       We have frequently cautioned

that "[a] preliminary injunction is an extraordinary remedy," and

"[t]he decision to grant a preliminary injunction is to be treated

as the exception rather than the rule."        Mississippi Power & Light

Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir. 1985).

"The decision to grant or deny a preliminary injunction lies within

the discretion of the district court and will be reversed on appeal

only upon a showing of abuse of discretion."           DSC Communications

Corp. v. DGI Technologies, Inc., 81 F.3d 597, 600 (5th Cir. 1996)

(citing Blue Bell Bio-Medical v, Cin-Bad, Inc., 864 F.2d 1253, 1256

(5th Cir. 1989)).

       The district court found that Plaintiffs-Appellants failed to

demonstrate a substantial likelihood that they would succeed on the

merits, concluding that neither Federal Defendants nor the City

were   subject   to   the   regulations   of   the   McKinney   Act,   which



to the district court to more fully develop the record, in the
interest of judicial economy we invoke the exception to the general
rule that calls for reaching the standing issue and proceed to the
merits of this appeal.

                                    7
specifically exempts "property interest subject to reversion" from

coverage.     See 24 C.F.R. § 581.2(b)(9).        In addition, the court

found that Plaintiffs-Appellants failed to show that the threatened

injury outweighs the damage that an injunction would cause the

City, noting that a delay in the City's construction of the airport

would produce damages in excess of $73,000,000.         We agree with the

district court's     conclusions.         Plaintiffs-Appellants   have    not

presented any evidence of their ability to propose, implement, or

finance a homeless program on any part of the land and/or its

improvements.      On   the   other   hand,   Defendants-Appellants      have

clearly shown that the City and its taxpayers would incur severe

damages if a preliminary injunction were granted.             Because the

threatened injury to Plaintiffs-Appellants does not outweigh the

threatened injury to the City, we find that the district court did

not abuse its discretion in denying Plaintiffs-Appellants' motion

for a preliminary injunction.8

                              THE DISMISSALS

     Plaintiffs-Appellants contend that the City failed to claim

the property at Bergstrom in accordance with the 1942 express trust

after World War II and therefore waived all right to do so at a

later date.     In addition, they argue that the City does not have

any interest in the land acquired by Federal Defendants after 1942


      8
          Plaintiffs-Appellants also appeal the district court's
denial of their motion for a temporary restraining order.       We
decline to address this issue in this appeal. "This court has long
held that the denial of an application for a temporary restraining
order is not appealable." Matter of Lieb, 915 F.2d 180, 183 (5th
Cir. 1990) (citations omitted).

                                      8
with federal funds, nor does it maintain an interest in any

improvements     on    all   the   property         because   Federal   Defendants

expressly    reserved    their     right       to   the   improvements.     As   an

alternative argument, Plaintiffs-Appellants contend that even if

the City does possess a reversionary interest in the land purchased

in accordance with the 1942 agreement, its right to enjoyment

cannot be granted until Federal Defendants have complied with

CERCLA. They argue that the thirty year lease entered into between

the City and the Air Force affirms title with the Air Force, only

allowing the City access to the land by virtue of the lease

agreement.     Thus, Plaintiffs-Appellants assert, even if the City

prevails regarding the reversionary interest, the land will not

revert   until   the    CERCLA     lease       is   terminated,   thereby   making

available all or part of the unused, excess property to the

homeless for short-term leases.

     The district court granted the Defendants-Appellees' motions

to dismiss finding 1) that the City is not a federal agency and is

therefore not subject to the provisions of the McKinney Act and 2)

that Federal Defendants do not possess or own, for purposes of the

McKinney Act, the land and/or improvements at Bergstrom at issue in

this case because they are subject to the City's reversionary

interest.    "We review de novo the granting of a motion to dismiss,

accepting as true all well pleaded assertions in the light most

favorable to the plaintiff."           Westfall, 77 F.3d at 870 (citing

American Waste & Pollution Control Co. v, Browning-Ferris, Inc.,

949 F.2d 1384, 1386 (5th Cir. 1991)).


                                           9
     Plaintiffs-Appellants' claims against all Defendants-Appellees

are asserted under the McKinney Act.        The City does not fall under

the requirements of the McKinney Act because it is not a federal

agency.    See 24 C.F.R. § 581.2(a).9    Accordingly, we find that the

district court did not err in granting the City's motion to

dismiss.

     With regard to Federal Defendants' motion to dismiss, we find

that the land and the improvements at Bergstrom fall under an

exception of the McKinney Act as "[p]roperty interests subject to

reversion" and are therefore, not subject to the provisions of the

McKinney Act.10 24 C.F.R. § 581.2(b)(9). The reversionary interest

exception to the McKinney Act only requires that the property be

"subject to reversion"; it does not require that the reversion have

already taken place.       The express trust entered into in 1942

clearly asserted that title to the land was to remain vested with

the City.      All   written   agreements   since   1942   have   expressly

reasserted the City's reversionary interest in the land.               Our

review of the record, including all written agreements created

subsequent to the 1942 express trust agreement, reveals no express


     9
          Section 581.2(a) states in pertinent part:

     This part applies to Federal real property which has been
     designated by Federal landholding agencies as unutilized,
     underutilized, excess or surplus and is therefore subject
     to the provisions of title V of the McKinney Act (42
     U.S.C. 11411) (emphasis added).
     10
         All after-acquired property purchased with federal funds
have now been reported to HUD in compliance with the requirements
of the McKinney Act and will therefore not be addressed further in
this decision.

                                    10
or   implied   waiver   or    other    relinquishment       of     the    City's

reversionary interest.       Even the CERCLA lease expressly reserves

the City's right to the land.        Therefore we find that, pursuant to

the language of the McKinney Act, the land at Bergstrom is not

subject to the provisions of the Act because it is "subject to

reversion" to the City.

     Additionally, we find that the improvements made on the land

at Bergstrom are also subject to reversion to the City.                  Although

the Air Force continually asserted its interest in ownership of the

improvements, we find that the buildings and other structures left

on the land when Bergstrom closed in 1993 were permanently attached

to the realty and therefore fixtures under Texas law to be carried

with the land.

     Three factors are relevant in determining whether
     personality has become a fixture, that is, a permanent
     part of the realty to which it is affixed: (1) the mode
     and   sufficiency   of   annexation,  either  real   or
     constructive; (2) the adaptation of the article to the
     use or purpose of the realty; and (3) the intention of
     the party who annexed the chattel to the realty.

Logan v.    Mullis,   686   S.W.2d    605,   607   (Tex.   1985)    (citations

omitted).   The status of the improvements as permanent fixtures to

the land is not altered by Federal Defendants' abandonment of those

structures when Bergstrom closed.            Once the improvements, which

include large buildings, runways, and other similar structures,

were affixed in the manner that they were, they became part of the

land.   Id. at 608.         Therefore, because the improvements are

fixtures on the land, they are also subject to reversion under the




                                      11
Act.    Accordingly, we find that the district court did not err in

granting Federal Defendants' motion to dismiss.

                                 CONCLUSION

       For   the   reasons   articulated   above,   the   judgment   of   the

district court is AFFIRMED.




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