May 21, 2013

NJ Assembly Unanimously Approves Bill Allowing Redevelopment Without Eminent Domain

Posted by Anthony F. Della Pelle under In the news, Legislative Developments | Tags: , , , , |
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Yesterday, the New Jersey State Assembly unanimously approved legislation that codifies important redevelopment case-law, and provides municipalities with an option to undertake local redevelopment projects without using eminent domain.   The bill, A-3615, sponsored by Assemblymen Coutinho, Bucco and Munoz, has a Senate companion, S-2447, and shares some of the provisions which had been included in earlier legislative efforts that failed to pass two years ago.

A-3615 codifies Gallenthin Realty Development Inc. v. Paulsboro, 191 N.J. 344 (2007), in which the New Jersey Supreme Court 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”.   The legislation 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 this legislation  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.  If signed into law, this bill could help to spur redevelopment in certain areas without having to threaten the property rights of the existing owners.

The New Jersey Law Journal reported on the bill today in this article.  We also covered some earlier committee activity on this bill in this NJ Condemnation Law blog post.

Stay tuned for more on this legislative development.

McKirdy & Riskin’s Rich DeAngelis, Ed McKirdy and Tony DellaPelle served as counsel to the property owners in the DeRose case referenced above.   In addition, DellaPelle serves on the Redevelopment Committee of the New Jersey Builders’ Association, which was a proponent of the current legislation.

 

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 25, 2013

Hoboken North End Redevelopment Moving Forward

Posted by Joseph Grather under In the news | Tags: , , , , , |
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The Hoboken Planning Board recently completed its investigation of a proposed redevelopment area dubbed the North End Redevelopment Area.

A full copy of the Study Report is available on the City’s website.

Image

Photo courtesy Google maps.

As noted in a recent article by Amanda Palasciano of the Hudson Reporter, the next step in the process is for the Planning Board to hold public hearings on the proposed redevelopment designation.  Thereafter, the planning board will make a recommendation to the governing body on whether the entire area (or a portion thereof) is in need of redevelopment.   The governing body then would then adopt a resolution acting on the planning board’s recommendation.

Notably, if the area is blighted (i.e. designated in need of redevelopment) and a redevelopment plan is subsequently adopted, the City would be able to use eminent domain to take private property within the designated area.

The hearing dates should be up on the City website shortly.

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February 7, 2013

Mortgagee Not Entitled to Bona Fide Negotiations

Posted by Joseph Grather under Court Decisions | Tags: , , , , |
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On February 5, 2012, the Appellate Division published its decision in a condemnation case captioned Borough of Merchantville v. Malik & Son, LLC (full text here).  The property was acquired by the municipality in connection with an earlier “in need of redevelopment” designation.  In short, the Appellate Court affirmed a trial court’s rejection of a “right to take” challenge based on an alleged failure to engage in bona fide negotiations.  The court also held that a condemnor had no duty to engage in bona fide negotiations with the “assignee of a mortgagee.”

Regarding the mortgagee’s assignee, the appellate court published its decision despite its comment that the trial court’s decision was based on “established principles” of case-law and the language of the act.  Section 6 requires a condemnor to negotiate with the person or entity “holding the title of record to the property being condemned.”  The trial court’s decision was therefore consistent with the express terms of the statute as interpreted by existing cases. City of Atlantic City v. Cynwyd Investments, 148 N.J. 55 (1997); and Town of Kearney v. Discount City, 205 N.J. 386 (2011).   Again, even though the case was published, it would appear that the holding is based on a clear reading of the statute and existing case-law.

Regarding the appellate court’s affirmance on the bona fide negotiations claim – it too was based on existing case-law.  The property owner rejected the offer in writing but failed to include any substantive basis or facts that would require the condemnor to reconsider the bona fides of its offer.  For instance, the property owner did not tell the condemnor about the two prior offers to purchase ($1,850,000 and $1,250,000), or the amount of the existing liens on the property.  Simply stated, a mere rejection of the offer without more cannot form the basis of a later bona fide negotiations defense.

 

December 7, 2012

Morristown Council Amends Redevelopment Plan for CVS Pharmacy

Posted by Joseph Grather under In the news | Tags: , , , , |
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The Morristown  Town Council approved an amendment to the Speedwell Avenue Redevelopment Plan that would permit development of Phase 4 with a stand-alone retail pharmacy at the corner of Spring Street and Speedwell Avenue formerly occupied by an auto dealership and related uses.  Indeed, the Town’s website declares the amended plan the “CVS Pharmacy Speedwell Redevelopment Plan.”

The vote was 6-0, signaling that the governing body is anxious to get the redevelopment moving along the Spring, Speedwell, and Early Street intersections.  While Phase 1 of the redevelopment plan involves construction of  mixed-use and residential improvements along Early Street, it appears from the detailed nature of the redevelopment plan amendment that the CVS pharmacy (technically Phase 4) may have shovels in the ground by early next year.

A redeveloper has not been appointed for Phase 4, and the amended plan maintains all previous authorizations, including use of eminent domain to acquire any properties needed to facilitate the project.

For additional coverage, see the articles in MorristownGreen.com and The Star Ledger-NJ.com.

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November 27, 2012

Morris Street Redevelopment Plan Adopted

Posted by Joseph Grather under In the news | Tags: , , , , |
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Following up on our blog entry from two weeks ago, the Morristown Council adopted the Morris Street Redevelopment Plan on November 1, 2012.

A full copy of the Redevelopment Plan is available on the town website here.

Next step is for the Town to appoint a redeveloper and then negotiate a redevelopment agreement as approved by the governing body.  An article by Morristown Patch editor John Dunphy suggests that one of the property owners within the area – Mountain Center Realty, LLC – will be the designated redeveloper.

As noted earlier, the Redevelopment Plan does authorize the Town to acquire any or all of the private property within the redevelopment area by exercise of eminent domain.

We’ll keep you posted.

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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.

 

October 24, 2012

Mount Holly Residents Praying for Supreme Relief

Posted by Joseph Grather under In the news | Tags: , , , , |
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NJ.com reports that the Mount Holly Gardens Citizens in Action has asked the U.S. Supreme Court to hear their case that claims municipal redevelopment activity has resulted in discrimination in violation of the federal Fair Housing Act.

Statistically, its unlikely that the nation’s high Court will take the case, but the residents remaining at the Gardens deserve some relief.  As is clear from the below image, the town has overstepped the boundaries of civil conduct.  The town raised parts of row-houses and just slapped tar paper on the exposed remainder.

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Photo courtesy: Andrews Mills/The Star Ledger

The compelling argument is that the majority of the residents of Mt Holly Gardens are minorities.  Thus, the municipal redevelopment process has had a disparate impact on a discrete insular minority – depriving them of their homes.

Hopefully, the high Court will answer the Citizens’ prayers.  The odds of having a petition for certiorari granted by the U.S. Supreme Court are very low, and the Court ordinarily only takes cases where some paramount public interest is at stake that may affect the interests of other U.S. citizens.

We’ll keep you posted.

Our blog roll on the topic:

http://njcondemnationlaw.com/2011/09/15/mt-holly-gardens-residents-live-to-fight-another-day/

http://njcondemnationlaw.com/2011/05/17/mt-holly-gardens-stay-pending-appeal-continues/

http://njcondemnationlaw.com/2011/06/01/mt-holly-gardens-project-on-hannity-show/

http://njcondemnationlaw.com/2011/03/17/federal-appeals-court-halts-mt-holly-gardens-redevelopment-project/

http://njcondemnationlaw.com/2011/01/05/mt-holly-gardens-project-survives-discrimination-claim/

 

September 27, 2012

Supreme Court Limits Right to Pursue Polluters

Posted by Joseph Grather under Court Decisions, In the news | Tags: , , , , , , |
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Yesterday, the New Jersey Supreme Court affirmed a decision from the lower courts that had dismissed an action brought by the New Jersey Dep’t of Environmental Protection against a property owner for an alleged spill. NJDEP v. Dimant (A-2-11, September 26, 2012).  A link to the full text of the opinion is here.

This decision is potentially significant in the real estate and environmental communities.  In sum, the Supreme Court held unanimously that the NJDEP failed to establish a sufficient causal link between the alleged polluter of contaminated property and the contamination, but it also wrote to “clarify that the Spill Act does not require proof of the common law standard of proximate-cause causation of specific environmental damage as a precondition to relief under the Act.” (at 5).

The trial court made detailed findings of fact regarding DEP’s failure to establish a connection between the former owner and operator of a dry-cleaning business and the alleged groundwater contamination of the adjacent Bound Brook.  The Supreme Court agreed with the lower court’s opinion that there has to be some nexus that “ties the discharger to the discharge that is alleged to be the, or a, culprit in the environmental contamination in issue.”

DEP’s wide net may have just gotten a little smaller.  This decision may make it more difficult for the State to obtain contribution for environmental remediation costs of polluted properties.  According to an article in the New Jersey Spotlight, this case may mark a weakening of the government’s power to force cleanups of contaminated properties, and while the case only involved a small business, it was closely watched by the business community at large, with several industry trade associations joining the case as friends of the Court.

Environmentalists were obviously disappointed in this ruling, and it will be interesting to see how it may affect the commercial real estate and redevelopment landscape in New Jersey in the years to come.

 

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June 5, 2012

Collingswood Redevelopment Moving Forward After Debt Upgrade

Posted by Joseph Grather under In the news | Tags: , , , , , , , |
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Moody’s recently lifted Collingswood out of the junk-pile when it upgraded their credit rating to the lowest investment grade last Thursday.  NJBiz. com quotes  Mayor Maley:  ”Nothing changed on our end. All that changed was that (Moody’s) got a better understanding of what condition the town and the project is in,” Maley said. “Moody’s should have been giving me a gold star, not downgrading us.”

The downgrade originally occurred because of risk of default on an $8.5 million dollar loan caused by its struggles with the Lumber Yards redevelopment project.  This is not uncommon – as we blogged about a year ago, Harrison’s suffered a downgrade amid concerns of the health of its redevelopment adjacent to Red Bull Stadium.

Moody’s spokesman David Jacobsen was also quoted:  ”Enterprise risk for the project remains because the borough is dependent on the LumberYard sales for payment” . . . ”The borough still has a high-debt obligation. It needs capital markets to refinance the note. “That’s baked into the new rating. It’s something we’re very aware of.”

Mayor Maley is confident the redevelopment will move forward successfully with the new credit rating.

We’ll see if his confidence proves that it was justified, and will keep you posted.

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