Under North Carolina statute, once the department of transportation files  a map depicting a future taking, “no building permit shall be issued for any building or structure or part thereof located within
the transportation corridor, nor shall approval of a subdivision . . . be granted with respect to property within the transportation corridor.” N.C. Gen. Stat. § 136-44.51(a).  The property owners here complained that the filing of the map effectuated a taking of their property without just compensation. Kirby v. North Carolina Dep’t of Transportation (No. Carolina Court of Appeals, Feb. 17, 2015).  The statute provides for three exceptions to the general rule.  The plaintiffs filed complaint alleging takings claims, and further alleging that the administrative remedies set forth in the statute were “inadequate and unconstitutional.”

The question presented:  “In the present case, this Court must consider whether the restrictions of the Map Act that were applicable to Plaintiffs at the time the maps were filed substantially interfered with the elemental rights growing out of Plaintiffs’ ownership of their properties so as to have effected a taking and provided grounds for the trial court to consider Plaintiffs’ claims for inverse condemnation as ripe.”

The conclusion:  “Therefore, with potentially long-lasting statutory restrictions that constrain Plaintiffs’ ability to freely improve, develop, and dispose of their own property, we must conclude that the Map Act is distinguishable from the cases that established the rule that “the recording of a map showing proposed highways, without any provision for compensation to the landowners until future proceedings of condemnation are taken to obtain the land, does not constitute a taking of the land, or interfere with the
owner’s use and enjoyment thereof.”

The holding:  “we hold the trial court erred when it concluded Plaintiffs’ claims for inverse condemnation were not yet ripe based on its determination that Plaintiffs did not suffer a taking at
the time NCDOT filed the transportation corridor maps for the Western and Eastern Loops.”

New Jersey has a “map act.”  But unlike North Carolina, the statute does not expressly limit the owner’s future use or development of the property.  That statutory absence did not provide any relief or comfort to Helen Schnack when the State, Dep’t of Transportation filed a highway alignment map depicting her house within the path of a future highway. Schnack v. State (Docket No. A-4840-76).

Maybe its time to revisit the issue here in the Garden State.

Last week, the New Jersey Supreme Court decided a case brought by property owners to challenge a municipal ordinance that “down-zoned” their property. (A full copy of the decision is here).  The property owners lost before the trial court, won before the Appellate Division, but lost in the Supreme Court.

The Supreme Court held:  “We conclude that the ordinances represent a legitimate exercise of the municipality’s power to zone property consistent with its Master Plan and Municipal Land Use Law (MLUL) goals, and we hold that plaintiffs have not overcome the ordinances’ presumption of validity.” (p. 5).

As is most relevant to our fellow condemnation practitioners, the Supreme Court also “reassert[ed] the importance of exhausting administrative remedies and conclude that plaintiffs’ claim for redress for the down-zoning of their property is better addressed through their inverse condemnation claim, which, as the trial court held, plaintiffs may pursue if they are denied a variance.” (p. 5).  (Speaking of, our colleague, Robert Thomas (writing from sunny Hawaii), beat us to the punch on this one in his Inverse Condemnation blog on the case, found here).

The property owners went from owning (a) a 34 acre tract of land zoned for mixed residential and commercial uses “including use for hotel, retail, medical, and office facilities — on a minimum of one-acre lots, while the R-2 residential zone permitted single-family dwellings, public parks, and nature preserves on a minimum of two-acre lots”, to (b) an Environmental Conservation District with a minimum lot size of twenty acres.  The property owners’ direct challenge to the ordinance was denied based on the lengthy and substantial planning process set forth in the record before adoption.  With respect to the inverse claim, “the court later reinstated plaintiffs’ inverse condemnation claim and ultimately granted the Township’s motion for summary judgment, holding that it was not clear that an application for a variance would be futile. The trial court’s judgment held open the opportunity for plaintiffs to pursue an inverse condemnation claim if a variance were to be sought and denied.”

While this decision may give local government agencies something to cheer about in making land use and zoning decisions, the Supreme Court’s ruling did give the owners’ takings claim a glimmer of hope in the event variance relief is later denied.  Perhaps more will be heard at a later date.

Coming to you from Virginia – care of our Owner’s Counsel colleague Robert Thomas – is the case of Ramsey v. Commissioner of Highways, which involves Virginia DOT’s attempt to change its valuation position at trial. Thomas’ Blog entry here.  In a nutshell, DOT offered the owner $246,292 before trial (based on an appraisal prepared by Mr. Savage), but by the time of trial, Savage had retired and the State proffered a new appraiser who opined that the property was only worth $92,127.  It appears that the trial court condoned the practice, and also precluded the owner from introducing the Savage appraisal at trial on the basis that the initial offer was a non-admissible settlement offer.  The jury awarded $234,032.00 and the property owners’ appealed.

The owners argue on appeal that under Virginia law, the initial offer is jurisdictional and must be considered by the jury in the condemnation valuation proceedings.

The case is now pending before the Virginia Supreme Court.

The good news for Virginia property owners is that New Jersey law provides a yuletide blessing in the form of a case right on point. State v. Fairweather, 298 N.J. Super. 421 (App. Div. 1997).  In that case, the State initially offered $23,000 for the taking, but at the time of trial, offered evidence that the property was only worth $21,000 (the State’s original appraiser had died before trial).  The property owner appealed the verdict complaining of, inter alia, the court permitting evidence of value at less than the State’s original jurisdictional offer.  The Appellate Court agreed.  “Although it is clear that the offers themselves are not evidential under the statute, judicial estoppel prevents the State from taking a different position at trial concerning the value of the property from that which it had assumed when it made its offers and deposited with the court clerk what it considered to be the property’s fair market value.”  (at 425).  The New Jersey courts routinely and consistency apply Fairweather to prevent a condemnor from engaging in such litigation tactics clearly designed to reduce a property owner’s constitutional just compensation.

Hopefully, the Virginia Supreme Court will do the same, and reaffirm what we all know to be true:  Yes, Virginia, there is a Santa Claus.

Merry Christmas and Happy Holidays to all.

Yesterday, a United States District Court judge restrained the U.S. Army Corps and NJDEP from any further action towards their joint Little Egg Inlet to Barnegat Inlet Storm Damage Reduction Project pending further hearings to be held in two weeks time.  The City of Margate, which owns the beach west of the State’s public trust area, does not want to be saddled with the DEP/Army Corps dune project, and filed a complaint in federal court alleging that the governmental entities had violated federal and State law when they attempted to “take” part of the municipalities ocean-front property without complying with the Eminent Domain Act.  The federal judge initially agreed and has issued an order temporarily restraining the federal and state agencies from acting in furtherance of the project.

Another hearing has been set for December 17th in the action.

We’ll keep you posted.

Related news coverage of the case:

Press of Atlantic City

Shore News Today

Ocean County Assignment Judge Vincent Grasso dismissed a declaratory judgment action filed by a redeveloper against the Township of Ocean finding that the redeveloper had to exhaust its administrative remedies before coming to the Court for relief.  Alternatively, it appears that the redeveloper was seeking to partially invalidate or revise an ordinance that had been adopted two and half years earlier. Obviously, out of time. See Del Corp. Enterprises I, LLC v. Township of Ocean (Oct. 9, 2014, opinion here)

The redeveloper, Del Corp., was working with the Township in connection with the designation of tract of land as “in need of redevelopment” under the Local Redevelopment & Housing Law (NJSA 40A:12A-1 et seq).  Once designated, the redevelopment plan would call for a residential housing development called the Tradewinds at Waretown consisting of 115  market rate units and 29 affordable units.  The project received site plan approval from the planning board in 2011, subject to the Township enacting an ordinance adopting a redevelopment plan.  Said ordinance was adopted in February of 2012, and provided “[o]f the 144 dwelling units, 115 units are to be for-sale condominium units and 29 units are to be affordable rental units.”  Del Corp did not object to the Ordinance.

Two years later, Del Corp. has contracted to sell the project to a third-party.  However, the third-party will not finalize the transaction with the “for sale” requirement contained in the ordinance.  The third-party wants to be free to sell or rent the market units.  Hence, Del Corp’s declaratory judgment action, which the Court found premature:

“Del Corp’s brief states “[i]f the terms of the ordinance are enforced by the Township and the developer is not permitted to rent out the market rate units, the contract purchaser will terminate the contract.” Because Del Corp has not demonstrated that it has applied to build  apartment units contrary to the Redevelopment Plan and the Township is enforcing the terms of the Ordinance, the court concludes that Del Corp seeks a declaratory judgment here to discern the rights upon facts that are “future, contingent, and uncertain.” (Slip op. at 7).

Even if it were ripe, the Court found that Del Corp had not exhausted its administrative remedies, namely asking the Township to amend the redevelopment plan to exclude the “for sale” requirement.  If aggrieved by the outcome, Del Corp would then be able to seek redress before the Courts.

Almost twenty years ago, a new neighbor moved in across from Sophie Bubis’ house at 1 Ocean Place in Loch Arbour.  At that time, in 1995, the new neighbors, Jack and Joyce Kassin bought the entire beachfront lot consisting of four + acres.  Soon thereafter, the Kassins erected an eight foot high sand berm covered with bushes and trees reaching heights of eighteen feet in some areas.  All of a sudden, Sophie Bubis could no longer see the ocean.

So, what did Sophie Bubis do? She sued the Kassins to enforce a local zoning ordinance restricting fences heights and a restrictive covenant in the Kassin’s title that restricted the height of fences to four feet.  And ten years later, the New Jersey Supreme Court said that Sophie Bubis was right. Bubis v. Kassin, 184 N.J. 612 (2005).  (The outcome of the case fell on whether the sand berm/dune was – in fact – a “fence.”)

The Kassins had to remove the berm and trees and comply with the local fence ordinance.

Six years later both properties were destroyed by Superstorm Sandy. But Sophie Bubis has no regrets.  As recounted in an article by nj.com:  “Despite the destruction that Sandy wrought, Bubis said she has “not an ounce of regret” about her legal battle to remove the barrier.”  The article also notes that even if the berm were in place at the time of the storm, it would have been overtopped and Bubis’ house would have been destroyed.  LIkewise, the Kassin’s property was severely damaged by Sandy.

And perhaps, in a twist of fate, the bulk of the Kassin’s property was later conveyed to the Village of Loch Arbour by way of settlement in lieu of eminent domain.

Sophie Bubis waged a ten-year legal battle to preserve one of the most important aspects of ownership of shoreline property; an ocean view.  And even after having her house destroyed by Mother Nature, she did not regret having waged a ten-year legal battle to maintain her ocean view.  And why would she?  In real estate it’s all about location.  You can always build a new house, but you can’t get a better location to see the ocean.

So when the State comes along to erect an 18-25 high sand dune on your neighbors’ property, don’t be surprised if they expect to be compensated for their loss in value as required by our State and federal Constitutions.

The historic Neumann Leather building sits on Observer Highway in Hoboken and long ago ceased operating as a tannery.  Its industrial zoning clearly outmoded in today’s Hoboken.  As recounted by the Hudson Reporter, residential and commercial developers have been salivating over the property for years, but the City has refused to modify the zoning to permit development to the properties highest and best use.  But, according to the property owner, the City made things even worse when it included the property within an “area in need of rehabilitation” in 2011.

Neuman HobokenThe property owner therefore sued the City and challenged the designation of its property within the rehabilitation zone.  On September 23, 2014, the Appellate Division published its opinion vacating the designation.  Under the Local Redevelopment and Housing Law (LRHL) (N.J.S.A. 40A:12A-1, et seq.), an area may be designated “in need of rehabilitation” if a majority of the area’s “water and sewer infrastructure is over fifty years old and is in need of repair and substantial maintenance.”  In most simple terms, the Appellate Court strictly construed the statute and vacated the City’s action because there was no evidence that the water and sewer infrastructure was “in need of repair and substantial maintenance.” The court therefore vacated the designation without prejudice to the City’s re-examination of the area under current law (the LRHL was amended in 2013).

It is our understanding that – with this decision in hand – the property owner has sold the building and grounds. Read more here.

For more background on the property, see: Debate Swells Over Future of Neumann Leather.

The building has even attracted unsolicited proposals from the blogging community.  philly2hoboken.com has a redesign plan.

There is also a Neumann Leather’s Tenants Association whose mission statement is to “protect and preserve the Neumann complex.”


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