A recent story by Romy Varghese of Bloomberg News questions the economics of the Harrison redevelopment project, which includes the Red Bulls soccer stadium, a new commuter parking deck adjacent to the Harrison PATH station, and one multi-family residential construction project which is now underway. 

The article, available here, reports that the Town of Harrison has experienced a recent downgrade in its bond rating, and a budget shortfall has caused local officials to slash workforces of local police and fire departments in an effort to save money.

Beginning in the mid-1990s, Harrison sought to transform its industrial center by declaring a large area adjacent to its PATH station – containing more than 250 acres – into a mixed use development.  Land for the Red Bulls soccer stadium was acquired approximately 5 years ago, allowing the stadium to be built, but much of the remainder of the project has stalled, likely due to a combination of market forces and delays occasioned by litigation involving challenges to the Town’s redevelopment process and use of eminent domain.  One of the larger parcels adjacent to the PATH station was formerly owned by the family of real estate attorney Steven Adler, who is interviewed in the Bloomberg News story, and recently obtained a $24 million arbitration award for the taking of his family’s properties, which included commuter parking lots and industrial buildings.  A Star-Ledger article by Steve Strunsky about the arbitration award and the redevelopment project is available here.

The Hudson County Improvement Agency now operates a parking structure on the former Adler property, and construction of residential apartments is also underway there.    According to the Bloomberg News article, municipal revenues have failed to meet projections, and the Red Bulls now are claiming exemption of the obligation to pay local property taxes.  These issues have complicated the Town’s fiscal picture and, absent renewed efforts to provide additional revenue sources, will remain at the forefront of its budget woes for the immediate future.

McKirdy & Riskin’s Ed McKirdy, Anthony Della Pelle and Richard DeAngelis served as special condemnation counsel to the Adler family and other property owners in the Harrison Redevelopment project.

 

 

Talk Show Host Highlights Property Owners’ Redevelopment Plight

 Talk show host Sean Hannity aired a segment titled “American Dream Becomes Eminent Domain Nightmare in New Jersey” on his nationally syndicated show.  The segment highlights how the threat of eminent domain has been used to acquire property in Mt. Holly, New Jersey, while leaving the remaining residents with damaged homes and without sidewalks.  A transcript of the segment can be found here.

 For more on the legal issues surrounding the Mt. Holly cases, please see the following:

 A copy of the Federal Court’s January 3, 2011, opinion can be found here.

 A copy of the New Jersey Appellate Division’s 2007 opinion can be found here.

 A copy of the New Jersey Public Advocate’s report “Evicted from the American Dream: The Redevelopment of Mount Holly Gardens”, please click here.

 For articles discussing Mount Holly’s Redevelopment of the Mount Holly Garden’s neighborhood, please see the following:

 NJ Town Revives Eminent Domain Abuse of 1950s, The Huffington Post

 Public Advocate: Redevelopment law needs to be revamped, The Star-Ledger

 For previous blog posts on this topic, please see the following:

 Federal Appeals Court Halts Mt. Holly Gardens Redevelopment Project

 Mt Holly Gardens Stay Pending Appeal Continues

 Mt. Holly Gardens Project Survives Discrimination Claim

 The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

The Daily Record recently reported on a Town Council candidates’ debate (read the article here) which included lively discussion on the future of the Speedwell Avenue Redevelopment Project.  Each candidate had his or her own take on the direction the redevelopment should follow.  Several of the candidates opined in favor of improvements to the Early/Spring/Speedwell roadway intersection.  Others were concerned about maintaining affordable housing within the area.  In the end, it seems that all candidates agreed that the project should start rolling.  Stay tuned for more as this redevelopment project unfolds.

The following articles provide additional background on the Speedwell Avenue Redevelopment project:

Morristown Greene.com

NJ.com

Daily Record – Great Opportunity

 Court-ordered arbitration hearings are scheduled to begin in early June under the supervision of retired U.S. District Court Judge Nicholas H. Politan.  At issue is whether Asbury Park’s designated redeveloper breached the terms of the redeveloper agreement and is now in default.  The original redeveloper, Asbury Partners, lost control of approximately 70 to 80 properties to its lender iStar Financial in 2010.  The City and iStar were then unable to agree on how to proceed with the redevelopment and Asbury Park filed suit.  The parties have been prohibited by court order from commenting on the case.

 The article covering this story can be found in the Asbury Park Press.

 To read more about this case, please see the following blog posts and newspaper articles:

 Asbury Park Asks Judge to Cancel Redevelopment Contract

 iStar Financial takes control of Asbury Park waterfront developmentStar-Ledger

 The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

 The City of Long Branch has asked its planning board to examine whether the Broadway Arts, Broadway- Gateway and Beachfront South redevelopment zones could be designated as rehabilitation zones.  According to Long Branch Mayor Adam Schneider “The ability to have enhanced zoning and planning and the benefits of it are enormous.”  Property owners who spoke at a May 10, 2011, Council meeting were concerned at a potential lack of transparency and harm to taxpayers.

 To designate an area as “in need of redevelopment” the City was required to prove properties were blighted under the Local Redevelopment and Housing Law.  To designate an area in need of rehabilitation, there must be proof that a significant portion of structures are in a deteriorated or substandard condition; a continuing pattern of vacancy, abandonment or under-utilization of properties; a pattern of arrears on property tax payments.  A program of rehabilitation could be expected to prevent further deterioration and promote the overall development of the community. 

Rehabilitation areas do provide local government agencies with certain zoning and financing incentives but, significantly, do not authorize the use of eminent domain.  Stay tuned for the outcome of the planning study in Long Branch – the future of these areas may be dictated in the foreseeable future by these efforts.

 For more on this story, please see the following:

 City mulls change to rehabilitation zones, Atlanticville News

 Goodbye To Eminent Domain In Long Branch?, Word on the Shore

 For more on eminent domain in Long Branch, please see the following blog posts:

 Long Branch Owners Win on Appeal

 Rehearing Ordered on Interest Rate Decision in Long Branch Taking

 Long Branch Settlement Spares Homeowners

 The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

On May 10, 2011, the United States Court of Appeals denied an application by the Township of Mt. Holly requesting a modification of lifting of a stay pending appeal which had been imposed imposed by the Court back in March of this year.  (Check our prior blog post on the stay by clicking here).

The Court of Appeals also declared that the appeal would be expedited, and ordered briefing to be completed by June 3, 2011.

Olga Pomar of South Jersey Legal Services was happy with the decision and interprets the ruling to mean that the prior stay applies to all residents of Mt Holly Gardens as indicated in a news account here.  South Jersey Legal Services is representing several residents of the Gardens and filed this lawsuit seeking to prevent the municipalities exercise of eminent domain by arguing that such violates the residents constitutional and fair housing rights.

We will continue to monitor the case and look forward to a decision by the Third Circuit.  For additional facts on the back-story, check out our blog postings here and here.

Redeveloped shops along the Asbury Park Boardwalk

Image via Wikipedia

City’s Misconstrued Settlement to Property Owners’ Not Enforceable

 A New Jersey appeals court recently held that a settlement allegedly reached with a property owner in the Asbury Park oceanfront redevelopment area was not enforceable.  Asbury Partners, as the master redeveloper of Asbury Park’s waterfront redevelopment area, had requested that the City condemn certain properties which it was unable to acquire through negotiations.  The redeveloper agreed to repay the City for the cost of acquiring the condemned properties, including property owned by the Estate of Pasquale N. Vaccaro.  The condemnation complaint against the Vaccaro Estate, as well as a second and separate complaint, alleged environmental contamination and sought funds to remediate the property upwards of $2 million at the Estate’s expense.  While the actions were pending, the City extended an offer to the Estate believing the offer was authorized by Asbury Partners.  Under the offer, the City would not seek remediation costs and the Estate could retain the $675,000 held on deposit by the courts as the City’s estimate of just compensation providing the Estate would not seek additional just compensation.  The Estate accepted the offer, but the City quickly changed its position and rescinded the offer.  The correct offer — according to the City and Asbury Partners — required the Estate to waive its rights to the deposited funds in exchange for a nominal sum and being released from any remediation liability.

 The Estate sought to have the original settlement offer enforced, which the trial court did by applying the four-part test in Conduit & Foundation Corp. v. City of Atlantic City, 2 N.J. Super. 433 (Ch. Div. 1949) (test cited here).  Partners, the redeveloper, appealed from the order enforcing the settlement and argued that the settlement was void because City was never authorized to enter into the agreement.  The Appellate Division agreed because it found material factual disputes which required an evidentiary hearing.  The Appellate Division reversed the order enforcing the settlement, and remanded the matter to the Law Division for an evidentiary hearing.

 This case reinforces the need for parties to eminent domain cases and, in particular, redevelopment takings, to ensure that any negotiations regarding a potential resolution involve all interested parties.  Here, while the City had apparently believed that it could amicably resolve the Vaccaro case, any settlement would have required input from the redeveloper who was paying for the property, and also required approval from the governing body.  A copy of the Appellate Division’s opinion in City of Asbury Park v. Estate of Pasquale N. Vaccaro, A-6233-09T4 (May 6, 2011) can be found here.

 For more on redevelopment in Asbury Park, please see the following blog posts and newspaper articles:

 Asbury Park Property Owner Wins Opportunity to Seek Amendment to Redevelopment Plan

 Eminent Domain Moves from Front Page to Big Screen

 iStar Financial takes control of Asbury Park waterfront development – Star-Ledger (12/16/2009)

 The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

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