Yesterday, the New Jersey State Senate approved a bill which codifies restrictions of local governments’ use of eminent domain for private redevelopment and creates an alternative to condemnation for future redevelopment projects.

The legislation, S-2447, passed on a vote of 36-1, affirms the protections afforded to property owners in redevelopment areas by New Jersey’s courts in Gallenthin Realty Developments v. Paulsboro, 191 N.J. 344 (2007), and Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008).

Significantly, the bill also provides local governments with an option to undertake redevelopment with, or without, the power of eminent domain.

The Assembly passed a companion bill, A-3615, without opposition last month.  It now goes to Governor Chris Christie for consideration.

Yesterday, the United States Supreme Court granted certiorari in Mt Holly Gardens v. Mt Holly Gardens Citizens. 

The case background is set forth in our prior blogs, but, the property owners (through counsel South Jersey Legal Services) argue that the redevelopment of the Mount Holly Gardens violates the Constitution because the government  relocation of residents after demolition of their garden apartments has a ‘disparate impact’ on minorities in violation of the Fair Housing Act and the Constitution.

We’ll keep you up to date on briefing and calendaring.

http://njcondemnationlaw.com/2012/10/24/mount-holly-residents-praying-for-supreme-relief/

http://njcondemnationlaw.com/2011/01/24/751/

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

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

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

The U.S. House judiciary subcommittee on Constitution and Civil Justice recently passed a bill (H.R. 1944) that is designed to protect private property from eminent domain takings by creating a federal bar to transfers from government to private entities for economic redevelopment. The press release is available here.

The bill is entitled the Private Property Rights Protection Act of 2013 and may be read in full here.  The primary provision of the Act reads:  “No State or political subdivision of a State shall exercise its power of eminent domain, or allow the exercise of such power by any person or entity to which such power has been delegated, over property to be used for economic development or over property that is used for economic development within 7 years after that exercise, if that State or political subdivision receives Federal economic development funds during any fiscal year in which the property is so used or intended to be used.”

The proposed legislation also creates a private right of action for alleged violations, bars sovereign immunity as a defense, permits award of attorneys’ fees and costs, and shifts the burden to the government to show that the taking was not for economic development by clear and convincing evidence.

The Judiciary Committee chair and the main sponsor of the bill lauded its merits:

Chairman Goodlatte: “Private ownership of property is vital to our freedom and prosperity, and is one of the most fundamental principles embedded in the U.S. Constitution; however, the 2005 Supreme Court decision issued in the Kelo vs. City of New London case jeopardizes the protection of private property from government seizure guaranteed by the Constitution. The Private Property Rights Protection Act will help to limit the negative impact of this damaging Supreme Court decision.

Congressman Sensenbrenner: “American citizens have a fundamental right to use their property for whatever lawful purpose they choose. Congress should protect private property rights and reform the use and abuse of eminent domain. As a result of Kelo v. City of New London, farmers in Wisconsin are particularly vulnerable because farmland is less valuable than residential or commercial property. This bill would restore the rights the Supreme Court took away and provide Americans with the means to protect their private property from inappropriate claims of eminent domain.”

As we all know from our Schoolhouse Rock days, this “Bill” has a long way to go before becoming a law – but, we’ll keep you posted.

Yesterday the Budget Committee of the New Jersey State Senate favorably reviewed and recommended approval of legislation that would codify important restrictions on the use of eminent domain in local redevelopment projects, and also would provide municipalities with the opportunity to undertake redevelopment projects without using eminent domain.

The bill, S-2447, mirrors companion legislation (A-3615) which was unanimously approved by the State Assembly last month.  Co-sponsored by State Senators Rice and Van Drew, S-2447 codifies the protections for property owners created by the New Jersey Supreme Court in Gallenthin Realty Development Inc. v. Paulsboro, 191 N.J. 344 (2007).  It also confirms the holding of a New Jersey appellate court in   Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), which held that 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.

This legislative action was reported in yesterday’s New Jersey Law Journal, and has also been the subject of our two recent blog posts, regarding the passage of the Assembly version, and also regarding earlier action in another State Senate Committee.

If the Senate legislation is approved by the full Senate, it will be presented to Governor Christie for approval and signature.

 

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.

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.

 

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.

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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.

 

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.

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.

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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