A new report entitled “No Work In Newark: City Must Free Entrepreneurs” by the Washington, D.C. based Institute for Justice, as part of its City Study Series, repeatedly cites fear of eminent domain abuse as a major reason for Newark’s lack of new small businesses.  The report suggests that Newark should discontinue the use of eminent domain as a series of steps the City can take to make it more entrepreneur-friendly. 

 

A copy of the report can be found here.

 

Media coverage on this story and eminent domain in Newark is available in the The Star-LedgerNewark, make way for entrepreneurs .

 

Read more about the Newark redevelopment cases, in which the Mulberry Street Coalition property owners were represented by McKirdy & Riskin’s John H. Buonocore, Jr.:

 The New York Times:  Redevelopment; A heated dispute in Newark ;

  The New York Times:  Diminished Eminence in a Changed Domain ;

  The New York Times:  Judge Stops Newark Redevelopment Project  

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

 The Mayor of Spring Lake Heights plans to veto two ordinances adopted by the Borough Council because she claims they were unnecessary as there are no blighted areas in the Borough, and there was no reason to spend money publishing laws that were not needed.  The ordinances would prohibit pay-to-play for redevelopment projects, and the use of eminent domain when private property is being used for the purpose of privately funded economic development.  One councilman agrees with the Mayor and denounced the ordinances as political grandstanding in an election year.  The councilwoman who introduced the ordinances recognized that the current council may be trustworthy, but cited the need to protect against future abuses as the reason for the ordinances.

 For more on this story in the Asbury Park Press, click here.

For our previous discussion of the Spring Lake ordinances on this blog, click here.

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

 

 Bloomfield’s Township Council  approved an “area in need of redevelopment”  designation which will permit the Township to move forward with redevelopment in the downtown area assuming the designation is not challenged in the courts.  Potential plans to redevelop the area have described it as a transit hub with a mix of retail and residential uses.  The designation comes on the heels of the Township settling extended litigation with a property owner over the acquisition of a key parcel in the downtown area.  Challenges to the designation must be filed within 45 days under New Jersey law.

 For more media coverage on this story, please read the following articles:

 Council approves redevelopment designation, Bloomfield Life

The Star-LedgerAfter nine years, Bloomfield redevelopment inches forward   

Baristanet.com:  Bloomfield Redevelopment Advances — With Rancor   

The Star-Ledger:  Bloomfield mayor wants council to back redevelopment   

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

 

 A Spring Lake Heights  councilwoman has introduced two ordinances which would have an impact on redevelopment projects and eminent domain in that Monmouth County Borough.  One ordinance would prohibit pay-to-play  for redevelopment projects, while the second would prohibit the use of eminent domain when private property is being used for the purpose of privately funded economic development.  One councilman voted against introducing the ordinances as “a waste of time” because Spring Lake Heights would have to be designated as a redevelopment zone for the ordinances to come into play.  The Mayor said she would consider striking down the ordinances if they were passed.  The remainder of the council voted to introduce the ordinances, and a public hearing on all three ordinances is scheduled to take place on October 25th.

 Similar measures have been adopted recently by other New Jersey municipalities, including the Township of Old Bridge:

 Old Bridge Adopts Ordinance Restricting Eminent Domain  

For more on this story about Spring Lake Heights in the Asbury Park Press, click here

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

 A recent article in the LA Times  highlights how redevelopment agencies in California have operated with little or no oversight for years and, as a result, redevelopment projects are stalled or failing.  The article is endemic of eminent domain abuse that has occurred across the country as highlighted in the following:

 St. Louis Business Journal: Hadley developers are no-show at Richmond Heights council meeting;

 The CW Pittsburgh: Brownsville To Take Control Of Downtown Properties ;

 Seized, Stalled, and Scrapped (Video)

 As the future unfolds, and market forces change, it will be interesting to see whether closer scrutiny is applied to redevelopment projects which commence, or are renewed, around the country.

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

A New Jersey appellate court has affirmed a trial judge’s dismissal of a citizen’s challenge to the Township of Neptune‘s designation of five acres as an “area in need of redevelopment “under the Local Redevelopment and Housing Law (“LRHL”).  The court also dismissed the objector’s challenge to the township’s subsequent adoption of a redevelopment plan.  The court held that the challenge to the redevelopment designation was not filed within 45 days after adoption of the resolution as required by Rule 4:69-6(b)(3), and did not show the type of substantial public interest that would warrant waiving the time limit.  The court found that the plaintiff was aware of the designation at the time it was approved by the township.  Moreover, the court found that the plaintiff did not own property in the area, and raised no claim of eminent domain abuse, lack of notice of condemnation or other constitutional issues regarding the designation.  As such, the court held that the due process concerns addressed in Harrison Redevelopment Agency v. DeRose, 196 N.J. Super. 361 (2008) were not implicated.  

 The court also addressed the merits of plaintiff’s claim and held that the challenge to the redevelopment plan was without merit.  Plaintiff alleged that the designation was based solely on the finding that the land was underutilized, under N.J.S.A. 40A:12A-5(e), a criterion disapproved by the State Supreme Court in Gallenthin Realty Dev., Inc. v. Bor. of Paulsboro, 191 N.J. 344 (2007).  The court disagreed and held that the township had substantiated valid reasons for the designation under other criteria set forth in the LRHL.  As to the challenge to the redevelopment plan, plaintiff alleged simply that it permits a large landowner within the redevelopment area to develop its property with higher density housing than the local zoning ordinance would allow.  The court found that the case presented a policy dispute between the plaintiff and the defendant-Township over the zoning for the area.  The court ruled that the plan was adopted in conformity with the LRHL.

 A copy of the Appellate Division’s opinion in Chambers v. Township of Neptune, Docket No. A-0981-09T2 can be found here.

The author wishes to acknowledge the assistance of McKirdy & Riskin’s Richard DeAngelis in submitting this post.  Mr. DeAngelis served as counsel Anthony DeRose in the DeRose opinion cited above.

Long Branch Property Owners Denied Compensation for Beach Expansion

The New Jersey Supreme Court ruled yesterday that beachfront land created by government replenishment projects is public property, and does not become part of the private property owned by adjacent property owners.

This ruling was made in an eminent domain case involving beachfront property in what has become the “Pier Village” section of Long Branch.   The property had formerly been owned by Jui Yung (Jimmy) Liu, and his wife Elizabeth, and consisted of commercial beachfront property which was included in the Oceanfront Broadway Redevelopment Area, designated as an “area in need of redevelopment” under New Jersey law in 1996.  The City seized the property via eminent domain in 2001.

Long Branch had initially offered the Lius approximately $900,000 for their property located on Ocean Avenue between the boardwalk and the beach, and which had contained an arcade, pizzeria, hot dog stand, and other commercial uses.  Liu’s appraiser valued the property at nearly $3 million, including value for nearly 2 acres of land which Liu claimed accrued to his private benefit prior to 2001 when the government had replenished and enlarged the beachfront along his property.  A jury awarded the Lius $1.45 million as just compensation, and the trial court held that no additional compensation was warranted for the sand which was deposited along Liu’s property line. 

Before yesterday’s ruling, New Jersey law held that beachfront which accrues naturally over long periods of time – through a process known as “accretion” – is considered to accrue to the benefit of adjacent private property owners.  However, where beachfront is added suddenly  – through a different process called “avulsion” – the new land is considered to be public property.

The Supreme Court agreed with the lower courts, holding in its unanimous decision that, under the “public trust doctrine“, the public was the beneficiary of the larger beach created by the government-funded program, and as a result, the adjacent private property owners could not be compensated for the taking of property they never owned.  Accordingly, the beach replenishment in the Liu case was considered to be akin to an avulsion, resulting in “new” public property.  A copy of the Supreme Court’s opinion is available here.

This ruling is consistent with the recent decision of the United States Supreme Court involving similar issues in the Florida panhandle.  The Florida “Stop the Beach Renourishment” case was the subject of our previous blog post in this New Jersey Condemnation Law Blog.

For more on this matter, read Mary Ann Spoto’s article in the Star-Ledger, Michelle Gladden’s story in the Asbury Park Press, or the article by Jacqueline Urgo in the Philadelphia Inquirer.

A Superior Court judge held last week that the Gloucester County Improvement Authority properly exercised its power of eminent domain and may proceed with the taking of a portion of the Paulsboro property owned by members of the Gallenthin family — the same family that was  successful in stopping a previous effort to take their property for municipal redevelopment purposes in the New Jersey Supreme Court decision in Gallenthin Realty Development v. Borough of Paulsboro, 191 N.J. 344 (2007).

The 2007 decision involved the Borough of Paulsboro’s attempt to seize a 63 acre property owned by George Gallenthin and his family along the Delaware River, but the Borough was denied when the Supreme Court held that the area including the Gallenthin property did not qualify as an “area in need of redevelopment” under New Jersey law.

In the more recent case, the Gloucester County Improvement Authority has acquired a three acre portion of the larger parcel to use for a road and bridge in connection with a proposed port in Paulsboro, not muncipal redevelopment purposes.  The GCIA had offered Gallenthin $443,000 for the property, and Gallenthin responded by demanding nearly $5,000,000 for the parcel.  Because the parties were unable to agree upon a price, the GCIA initiated condemnation proceedings earlier this year in Superior Court.

In the current eminent domain case, Gallenthin sought a dismissal of the GCIA’s complaint, objecting to GCIA’s right to condemn on several grounds, including an allegation that the GCIA had acted improperly and had not engaged in bona fide negotiations with the owner, which are required under New Jersey’s Eminent Domain Act.  These objections were heard and rejected by the court, which entered a judgment affirming the GCIA’s taking, thereby referring the matter to court-appointed condemnation commissioners who will eventually conduct a valuation hearing on the issue of just compensation unless Gallenthin appeals the court’s decision on the right to condemn.

For more on this recent decision, read this article by Christina Paciolla in The Gloucester County Times.

Old Bridge Councilman-at-Large Brian Cahill and local resident Tony Piscetti successfully convinced the Old Bridge Township Council to adopt an ordinance prohibiting the use of eminent domain for tax revenue purposes that was previously discussed on this blog.  Following discussions on the ordinance at a June Council meeting, both Republicans and Democrats voted in favor of the bill.  The ordinance, citing the United State Supreme Court’s opinion in Kelo v. City of New London and the New Jersey Supreme Court’s opinion in Gallenthin Realty v. Borough of Plainsboro, would limit the use of eminent domain to public purposes or to remove blight.

For more on the story, read the recent article by Lauren Ciraulo in the Suburban newspaper, as well as her previous article

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

A Newark property owner, CD Development, LLC, challenged a 2005 blight designation which led to its property being designated as an area in need of redevelopment.  The five acre property is used as an active trucking facility.  Newark’s planning expert concluded the property satisfied the Local Redevelopment and Housing Law (LRHL) criteria in N.J.S.A. 40A:12A-5(e), the only section relied upon by the expert, because the property was not being fully utilized to its maximum potential.  Another property owner’s expert discussed the property in his comprehensive report which countered that the property had never been cited for code violations or tax delinquencies, and that inspections of the property showed a thriving and active trucking operation.  Newark City Council adopted its Planning Board’s recommendation with providing any supporting findings of fact.

The property owner challenged the blight designation by the Newark City Council, and the trial court agreed that the designation was not supported by substantial evidence in the record, leading to the invalidation of the redevelopment designation.  Newark’s designated redeveloper then appealed, argued that the trial court should have considered sua sponte that the evidence supported a blight designation under other subsections of N.J.S.A. 40A:12A-5, and that the trial court should have given deference to the City Council’s determination.  The Appellate Division disagreed with the redeveloper, and affirmed the trial court’s decision substantially for the reasons given by the trial court in its oral opinion.  The Appellate Division noted that the Supreme Court’s decision in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007), which was decided during the pendency of this matter’s trial court action, prohibited a blight finding under subsection (e) unless the “stagnant and not fully productive” use of the property was related to title or ownership issues, and that no evidence was provided by any party to support such a finding.  Thus, the trial court had correctly decided that the property could not be included in the redevelopment area under the LRHL.

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

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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