Legislative Developments

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March 25, 2013

More from the Shore – Proposed Legislation Seeks to Limit Just Compensation

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , , , , , , , , , , , |
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Photo courtesy of Associated Press

Owners of property along the Jersey shore continue to be battered, this time by their own elected officials.  The New Jersey Senate recently introduced S-2618, which provides:

“Just compensation for an easement over a portion of beachfront property condemned for the purpose of dune construction or beach replenishment shall include consideration of the increase in value to the entire property due to the added safety and property protection provided by the dune or replenished beach. Any additional rights of the public to access property held in the public trust arising as a result of the easement, or the dune construction or beach replenishment, shall not be considered to cause a diminution in the value of the entire property.”

The State Assembly has a companion bill mirroring the above - A-3896 - introduced on March 7, 2013.  Similar legislation has also been introduced in the State Senate and Assembly by other legislators, S-2599 and A-3889.  These bills are awaiting legislative committee review.

So we all understand the jumping off point, “just compensation” is a constitutional term and is found in the New Jersey Constitution (N.J. Const. Art. 1, Par. 20) and the U.S. Constitution (5th Amend.)  The text of the New Jersey Constitution reads: “Private Property shall not be taken for public use without just compensation.”

Every court in the history of the United States has interpreted the Fifth Amendment as limiting government’s authority to take private property.  Within the clause there are two limitations expressed.

First, the taking must be for a “public use.”  Second, government must pay “just compensation”.

While most, if not all, may agree that government taking of private property in order to replenish New Jersey beaches damaged by Superstorm Sandy would satisfy the “public use” criteria of the Constitution, legislation like the bills mentioned above that attempt to legislatively satisfy the “just compensation” part of the analysis appears to be constitutionally infirm for several reasons.

First, it would violate the fundamental concept that the just compensation is to be determined by judicial processes, not by legislative mandate.  United States v. Cors, 337 U.S. 325 (1949);   Monongahela Navigation Co. v. United States, 148 U. S. 312  (1893).   In other words, “there is no precise and inflexible rule for the assessment of just compensation.” State v. Gallant, 42 N.J. 583 (1963).

Second, the proposed legislation might allow government to acquire private property “without just compensation” in violation of the Constitution.  If a statute mandates a particular valuation rule which fails to afford “just compensation”, it is contrary to the constitutional mandate.

Third,  the proposed statute seeks to preemptively decide the issues pending before the New Jersey Supreme Court is a case known as Borough of Harvey Cedars v. Karan, 425 N.J. Super. 155 (App. Div. 2012).  The issue in Karan is whether the decision of an Ocean County jury to award a property owner “just compensation” for the taking of their private property should be affirmed.  The government has appealed the award of just compensation arguing that the property owners should not receive more than $1 dollar for the taking of their private beachfront property because the government put a public dune on the part taken that benefits the entire beach-going public, as well as the inland residences and businesses occupying the barrier island.  The trial court and the Appellate Division rejected the government’s argument, and the Supreme Court decided to take the case before Superstorm Sandy struck.

Finally, any legislation which seeks to treat some people or classes of people differently than others may itself violate the Equal Protection Clause contained in the 14th Amendment to the U.S. Constitution.

Now, in the aftermath of a devastating natural disaster, government seeks to remedy the devastation – that it alone could have prevented – by making private property owners the scapegoat.

But the property owners are not to blame. Let’s not forget that the Army Corps warned of these very dangers decades ago, and government failed to prepare use for the coming storms.  Let’s not let government attempt to foist its responsibility on the narrow shoulders of a small group of property owners.

For more on these issues, see our prior blog postings:

In the Wake of a Superstorm the Debate Continues – Who Should Pay for the Dunes?

Rebuilding After Sandy: Government Assistance at Odds With Private Property Rights

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March 7, 2013

Eminent Domain Bill Clears Senate Committee, Would Update Redevelopment Procedures

Posted by Anthony F. Della Pelle under In the news, Legislative Developments | Tags: , , , , , , , |
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Legislation that would rework some of the procedures used by local governments to their redevelopment powers cleared a State Senate committee earlier this week.  The bill, S-2447, codifies certain protections to property owners which were decided in court decisions in recent years, and also would provide a negotiation alternative to using eminent domain in local redevelopment projects.

The Senate Community and Urban Affairs Committee voted 5-0 for the bill, which is sponsored by committee chairman Jeff Van Drew, D-Cape May, and Sen. Ronald Rice, D-Essex.  It shares some of the provisions which had been included in earlier legislative efforts by Senator Rice that failed to pass before the full Senate two years ago.

S-2447 codifies Gallenthin Realty Development Inc. v. Paulsboro, 191 N.J. 344 (2007), in which the New Jersey Supreme Court held that a blight determination requires a finding of a “deterioration or stagnation that has a decadent effect on surrounding property,” which could not ordinarily be applied to a large tract of vacant land.  The Gallenthin scrutinized the then-common use of municipalities in New Jersey of a standard in the Local Redevelopment and Housing Law, N.J.SA. 40A:12A-5(e) — a “stagnant or not fully productive condition”  to justify that an area was blighted, or “in need of redevelopment”.

S-2447 also codifies Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), in which an appeals court held adequate written notice of condemnation for redevelopment needs to be provided during the redevelopment planning process.

The other significant provision in the bill, and its companion bill in the State Assembly (A-3615),   is that local governments will be given an option as to whether they will be empowered to use eminent domain to acquire properties in redevelopment areas.

“The bill says municipalities can go with Option A or Option B,” says Michael Cerra, the senior legislative analyst with the New Jersey State League of Municipalities.

If enacted, this bill could help to spur redevelopment in certain areas without having to threaten the property rights of the existing owners.

The companion bill in the Assembly is scheduled for consideration in the Assembly Economic Development and Commerce Committee today.

PolitickerNJ reported on the bill earlier this week in this article.

Stay tuned for more on this legislative development.

 

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February 5, 2013

More on Dune Replenishment – Taking Private Property Without Just Compensation

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , , , , |
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Photo courtesy of wirednewyork.com

Photo courtesy of wirednewyork.com

The Borough of Mantoloking is one of several beachfront municipalities that has asked owners of beach-front property to donate their private property to the municipality.  A copy of the most recent form of dedication agreement (identified as an easement) is available on the Borough’s website here.  The Borough is attempting to force property owners to turn-over their private property for the public good, without payment of compensation.   The guilt trip being laid on the property owners is that the Borough will not be able to participate in an Army Corps of Engineers dune replenishment program without the easements in hand.  The sign-off on the website – ” Thank you all for your patience with this process.  We will do all that we can to make this project happen once we have the easements in hand.  The very existence of our community depends on it.”   This last statement underscores the public necessity of the easements, and underscores why the Constitution demands just compensation – the purpose of the taking is to benefit the general public at large.  A private citizen cannot be forced to pay for a public improvement project by forced donation of private property.  It’s no different from exacting a cash payment from only the beachfront property owners in order to benefit the entire community.

Toms River is another municipality that is seeking to exact private property without just compensation.  As reported by the Toms River Patch, legal counsel for that municipality suggests that the town is without the lawful authority to rebuild the dunes without beachfront property owners’ donating their property.  If dune replenishment is a public use, the municipality is reposed with the lawful authority from the ultimate source of law – the New Jersey Constitution.  But, again, the municipality wants to lay the blame on the property owner.

Notably, the Army Corps Report referenced in the Mantoloking easement was issued 10 years ago!  It is only now, post-Superstorm Sandy devastation, that they believe they have the political sway to engage in such unconstitutional conduct.   Why didn’t they implement the program ten years ago?  The cost to replenish the dunes is only a fraction of the cost of repairing the damage caused by Sandy.

I’m sure many of our readers do not own property along the shore-line or live on the beachfront (yours truly does not).  Yet, if we permit government to take that first step down the slippery slope of unconstitutional conduct, we have only ourselves to blame when we’re looking down the wrong end of the barrel of some other heavy-handed government conduct.

And, in the end, we, the taxpayers of the United States of America, have already paid the bill to restore the beaches the tune of $51 billion dollars ($4 billion of which has been allocated to the Army Corps to rebuild the beaches).   Notably, over the past 50 years, the total expenditure of beach replenishment in New Jersey has been about $1 billion.  Let’s insist that government spend that money wisely and do the rebuilding job right the first time.   Why should the beachfront owners have to pay for this benefit twice?

For more background on these issues, check out our earlier blog posts:

NJ Beach Replenishment Saga Continues, This Time in Sea Bright

NJ Beach Replenishment Town Seeks End Around in Federal Court

Harvey Cedars Complaining About Payments to Property Owners For Beachfront Takings

 

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January 7, 2013

Rebuilding After Sandy: Government Assistance At Odds With Private Property Rights

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , , , , , |
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The following quote is attributed to President Ronald Reagan:

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One example of government assistance post-Hurricane Sandy was the removal of an entire house because it was allegedly in the right of way:

Ortley Beach home removed

Well, photographic and video evidence proved that the house was not in the right-of-way, but the State removed and demolished it anyway.

Another example, a local government unit in LBI decided that sand removed from the right-of-way was best deposited on a private property owner’s front yard.  It cost the small homeowner thousands of dollars to remove the sand from his front yard and then the government refused to reimburse the property owner for his removal costs.

Finally, a clear example of government failure can be found in its dune replenishment policy.  In 1999, thirteen years before Sandy struck, the United States Army Corps of Engineers came up with a plan to protect all private property owners from a tidal surge.  That plan was not fully implemented before October 29, 2012.  Part of the problem is that plan implementation was left up to local government, and various local government agencies had varied levels of interest, participation, and results with the plan.

Now, those local politicians are looking for a scapegoat.  Private citizens who happen to own beachfront property are in the cross-hairs.  The politicians have cried foul because of the property owner’s refusal to give-up their private property for the public good and the news agencies have trumpeted the cries almost on a daily basis:

NJ.com today – Tom’s River Homeowners Slow to Give Up Land Needed to Rebuild Protective Dunes;

NJ.com Dec. 2, 2012 – N.J. Shore Towns Near Showdown With Dune-Building Foes.

In mid-December, the Town of Mantoloking wrote to all beach-front property owner demanding that they donate their property by signing an easement before year’s end  (Merry Christmas!).  This practice has been followed by other municipalities in Monmouth and Ocean Counties, as they rush to build and replenish sand dunes before the next big storm hits.

Two of the most fundamental rights found in the bundle of rights known as “property” are the right to “exclusive possession” and the “right to security” defined as “immunity from expropriation.” (“Expropriation” is a synonym for “eminent domain”). See Denise R Johnson, Reflections on the Bundle of Rights, Vermont Law Review (2007).  Neither of those rights would be honored if the public forced private property owners to donate their property for the public good, i.e. without payment of just compensation.

Ms. Johnson’s article references Lucas v. South Carolina Coast Commission, 505 U.S. 1003 (1992).   That case examined the effect of the State’s adoption of  the Beachfront Management Act in 1988.  The South Carolina legislation created the Coastal Commission to manage its shoreline due to the regularity of hurricane strikes along its barrier islands and shoreline.  The Commission determined that Mr. Lucas, a beachfront property owner, would not be able to build a residence upon his land.  Lucas sued the Commission, and won at the trial level – a jury awarded $1.2 million for the taking, but he ultimately lost in State Court.  The United States Supreme Court reversed, holding “when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good… he has suffered a taking.”

Perhaps our State should look at South Carolina’s Beachfront Management Act as a guide on how to rebuild after Sandy.  Regardless of whether a State or regional commission is created in New Jersey to manage coastal development, a serious, informed analysis of the issues and possible solutions must be undertaken on a statewide level, rather than continuing a piecemeal, hodgepodge and hurried set of “band-aid” responses.

We questioned the wisdom of the continuing these past practices which have proven problematic at best in our recent Op-Ed in the Asbury Park Press (“Don’t Vilify the Greedy“).  While legislators have recently suggested various “solutions”, unfortunately the pressures of getting the Jersey Shore “ready” for this coming summer is apparently standing in the way of a better, sustainable plan for coastal development which Sandy has given us an opportunity to create.

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October 29, 2012

Morristown Morris Street Redevelopment Moving Along

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , , |
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After a relatively long hiatus, it appears that the Morris Street Redevelopment Plan is on the road towards adoption.  As recently reported in the Morristown Patch, the Council introduced an Ordinance to adopt the plan at its October 11, 2012 meeting, and it should be on the Morristown Redevelopment Agency Agenda for November 11, 2012.

As set forth in the Redevelopment Plan:  ”The Redevelopment Area is comprised of three large parcels (Block 3701, Lots 10, 11, and 14) that abut the New Jersey Transit right-of-way along with three smaller out parcels that front along Morris Street (Block 3701, Lots 12, 13, 15, and 18 as well as Lot 18 in Block 3702). Although Lots 16, 17 and 19 in Block 3701 were originally studied for inclusion in the Redevelopment Area, the Town Council ultimately decided not to include those parcels in the Redevelopment Area.”

The redevelopment plan also authorizes the Town to exercise the “power of eminent domain to acquire properties for the purpose of redevelopment. It may be necessary for the Town to exercise its power of eminent domain on behalf of a redeveloper or redevelopers. Accordingly, the Town is hereby authorized to acquire any or all of the real property located within the Plan Area and all interest therein by contribution, gift, grant, bequest, purchase, exchange, condemnation, or otherwise, as it may deem necessary or proper for the purpose of implementing this Redevelopment Plan.”

Morristown has completed several successful redevelopment programs including the former Epstein’s property, and appears to be about to start working on a portion of the Speedwell Avenue Redevelopment Plan.  We’ve posted on these topics previously.

Morristown’s Speedwell Ave Redevelopment Nears Approval

Speedwell Avenue Plan Approved

We’ll keep you posted.

 

September 26, 2012

Eminent Domain to Save Property Owners from Foreclosure?

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , , , , , , , |
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Will eminent domain be allowed to seize “underwater” mortgages?  Opposing viewpoints appear to be coming up every day:

A recent National Law Journal blog suggested that the practice would be legal and according to its title: ”Eminently Reasonable.”

Dana Berliner is the head of Litigation at The Institute for Justice and a direct link to her posting on Double Think is here.  Berliner concludes that “the proposed use of eminent domain for mortgages violates state statutes and state constitutions.”  However, she also issues a warning to property owners: “If it can happen to mortgage investors, it can happen to you.”
Reason.org apparently sides with the Institute of Justice in its Case Against Using Eminent Domain to Acquire “Underwater Mortgages“ posting.
Meanwhile, a California Congressman has introduced legislation to halt this procedure from being used, even before it starts, and federal loan regulators have invited comments from interested parties before issuing any type of decision or finding.
Our earlier blog post on this issue is available here.
We’ll keep you posted.
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March 1, 2012

House Passes Anti-Kelo Eminent Domain Bill

Posted by Anthony F. Della Pelle under In the news, Legislative Developments | Tags: , , , , , , , , , , |
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The United States House of Representatives this week passed bipartisan legislation that proposes to withhold for two years all federal development funding to states or local governments that take private property for economic development.  The bill, labeled the Private Property Rights Protection Act (H.R. 1443), also bars the federal government from using eminent domain for economic development purposes and gives private property owners the right to take legal action if provisions of the legislation are violated.

A copy of the bill, H.R. 1443, is available here.

The legislation was sponsored by an unusual combination of lawmakers –Wisconsin Republican Congressman James Sensenbrenner and California Democratic Congresswoman Maxine Waters.  It received nearly unanimous support, with only Michigan Democrat John Conyers voicing opposition.  Congresswoman Waters stated that her support for the bill comes in part from the idea that poor people and minorities stand the most to lose from the use of eminent domain for economic redevelopment, where powerful developers or other politically-connected people or companies may prosper at the expense of those who are poor or week.

This is the latest effort by federal legislators to curb the use of eminent domain for economic development, and to minimize abuses of the government’s condemnation power.  A similar bill was passed by the House in late 2005, months after the controversial ruling by the U.S. Supreme Court in City of New London v. Kelo, but did not gain approval in the Senate.

Washington, D.C.’s Institute for Justice wrote an op-ed piece about the anti-Kelo legislation which was published by the Washington Times, and is available here.

The current bill will now move on to the Senate for consideration.  We’ll be watching to see if this version gets any further than its predecessor.

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February 27, 2012

Thomas Edison Battery Building Moving Towards Redevelopment

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , |
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The Thomas Edison Battery Building in downtown West Orange is moving closer to being redeveloped.  According to Karen Yi of the West Orange Patch, the Council passed two ordinances on first reading and a resolution authorizing issuance of bonds to pay for the municipality’s share of the development costs.

Some residents voiced concerned about the Township getting repaid, but members of the Council were apparently not as concerned as the citizens.  The governing body also granted the developer a 30-year tax exemption, and established a payment in lieu of taxes for the property.

It appears that many people agree that redevelopment is a good thing for this particular piece of property, but some question the wisdom of the use of municipal funds to finance the project.

We’ll see how it works out.

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Photo courtesy http://www.nps.gov.

 

January 26, 2012

California Redevelopment Law No Longer a Blight to Property Owners

Posted by Cory K. Kestner under Court Decisions, In the news, Legislative Developments | Tags: , , , , , |
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In December 2011, the California Supreme Court upheld legislation dissolving the State’s redevelopment agencies which must now turn over their property tax revenues to the State.  Dissolving the redevelopment agencies was part of cost-cutting measures taken by Governor Jerry Brown to address a massive budget shortfall.  Approving the Court’s decision, critics of the redevelopment agencies believed they lacked sufficient oversight on spending, abused eminent domain, and that the funds could be best used elsewhere.  The development community believes future development is going to be difficult without the ability to coordinate the assemblage of parcels, environmental remediation, and necessary infrastructure.

California’s “experiment” will be closely watched by other states as the need for eminent domain reform hit a fevered pitch nationwide following the United States Supreme Court’s decision in Kelo v. City of New London.  In New Jersey, municipalities have adopted local ordinances to ban the use of eminent domain for redevelopment purposes, while at least one town has abandoned redevelopment in favor of rehabilitation.

A copy of the California Supreme Court’s opinion in Cal. Redevelopment Assoc. v. Matosantos, Docket No. S194861 (Ca. Dec. 29, 2011) can be found here.

For more on the California story, please see the following blog posts and articles:

Taking from the Takers? California Budget Would Eliminate Redevelopment Agencies (New Jersey Condemnation Law Blog)

Abandoning Redevelopment: California’s Big Experiment (UrbanLand)

California high court puts redevelopment agencies out of business (L.A. Times)

California Redevelopment Agencies: Counties Split On Supreme Court Ruling (Huffington Post)

For more on actions taken by New Jersey’s municipalities, please see the following blog posts:

Long Branch Considers Rehabilitation in Lieu of Redevelopment

Spring Lake Council Enacts Anti-Eminent Domain Ordinance by Overturning Mayor’s Vetoes

Old Bridge Adopts Ordinance Restricting Eminent Domain

 

January 13, 2012

Speedwell Redevelopment Plan Approved

Posted by Anthony F. Della Pelle under In the news, Legislative Developments | Tags: , , , , , |
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The Morristown Town Council unanimously approved the Speedwell Redevelopment Plan last evening.  This plan calls for the development of  650 new housing units and 40,000 square feet of retail space over three phases.

The first phase of the project calls for the redeveloper to construct 268 housing units on a Morristown DPW property off of early street.  10% of those units will be set aside as affordable housing.

The Plan authorizes the use of eminent domain on any of the properties within the designated redevelopment area, although it remains to be seen if the condemnation process will, in fact, be utilized.  Area residents and businesses may also be entitled to relocation assistance in the event that they are displaced.

More information about the approval and the meeting is available in John Dunphy’s article in today’s Morristown Patch, available here.

 

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