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Organizations Claim National City, CA Now Attacking Businesses through Rezoning Rather than Eminent Domain

Following a successful challenge by the Community Youth Athletic Center – a club where teenagers train in boxing and receive tutoring for school classes – to a blight designation, National City, California, has decided instead to rezone the redevelopment area.  However, according to a press release by the Institute for Justice, National City’s overhaul of its zoning codes will convert the existing properties into non-conforming uses which it will then acquire through “affirmative termination by amortization.”  According to the Institute, this works by converting the properties to a use which is prohibited and is then shut down after a prescribed period of time.  National City insists that “it allows the current buildings to stay. . . .  But if you’re going to rebuild, then you have to rebuild into a modern downtown framework.” 

 A video of Fox News Channel’s coverage of this story, titled “War on Small Business” can be found here.  (The story begins after 45 seconds)


 The following is a press releases from the Institute for Justice:

 Major California Property Rights Victory for Landowners in Eminent Domain Abuse Fight; National City Violated  Federal Constitution and State Laws

 For articles discussing the topic, please see the following:

 National City Declares War on Small Business – The Moral Liberal

 National City Leaders To Discuss Downtown’s Future – KGTV San Diego

 Calif. youth center wins eminent domain battle – Seattle Times

 For previous blog posts on eminent domain in California, please see the following:

 Taking from the Takers? California Budget Would Eliminate Redevelopment Agencies

 Mobile Home Rent Control Ordinance Upheld by California Federal Appeals Court

 National Media Highlights Lack of Oversight and Failure of Redevelopment Projects

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

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


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.


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