Eminent Domain and the Dukes of Hazardous Waste
Middlesex County Democrats led by Senator Bob Smith and Assemblyman John S. Wisniewski are at it again. See our posts of June 17 2005, Proposed Changes to N.J. Eminent Domain Act of 1971: Assembly Bill 4089 and Senate Bill 2621 After Suydam Decision and June 7, 2005, Eminent Domain Proposed Legislature: N.J. Assembly Bill 4089 threatens property owners.
The Senate Environment Committee will meet at 10 a.m. on Monday, December 5 in Committee Room 10 on the third floor of the State House Annex in Trenton to consider S-2851, another attempt by local government to grab land through eminent domain and take over ongoing cleanup of contaminated sites. And on Thursday, December 8 the Assembly Environment and Solid Waste Committee meets at 2 p.m. in Committee Room 9, on the third floor of the State House Annex to conduct hearings of the companion bill, A-4588. Both S-2851, sponsored by Senator Smith and Senator Joseph V. Doria (D-Hudson), and its companion bill A-4588, sponsored by Assemblymen John S. Wisniewski (D-Middlesex) and John F. McKeon (D-Essex) seek to authorize "DEP to replace the persons responsible for remediation on condemned property with condemnor under certain circumstances." Download S-2851 file
Make no mistake about the intent here: The Middlesex team has their tail in a twist about the National Lead (NL) site in Sayreville. NL and their attorneys, Christopher Gibson and Jeff Gordon of Haddonfield's Archer & Greiner soundly thrashed Sayreville Redevelopment Authority (SERA) in two major cases. In SERA v. National Lead, the Appellate Division affirmed Middlesex County Assignment Judge Robert Lunghi and implemented the Supreme Court's decision in Housing Authority of New Brunswick v. Suydam Investors, Inc. ordered SERA to deposit into Superior Court Trust Funds the full amount of its appraisal ($32 million). SERA sought to deposit $4 million, the amount of its appraisal less its estimated cost of the remaining cleanup on the property.
The case involves SERA's acquisition of three-hundred and ninety-two acres owned by NL located next to the Garden State Parkway (GSP) and adjacent to the Raritan River. Those of you who have traveled the GSP over the years will recall the Dutch Boy paint sign on the site, next to the green lagoon. Yes, the site is contaminated, but NL has a cleanup plan in place, approved by NJDEP, and is actively implementing the cleanup. This apparently isn't progressing fast enough for Sayreville Mayor Kennedy O'Brien, who wants SERA to take over not only the property via eminent domain, but also the cleanup. Attorney Gibson was successful in defeating this second attack. Download the decision of the Chancery Division in National Lead.
So what's going on now?
The condemnation bar appeared en masse in June 2005 and testified before both the Assembly Environment and Solid Waste Committee and the Senate Environment Committee regarding the first iteration of these bills (S-2621 and A-4089). But the Dukes of Hazardous Waste conspired, revised, and delivered the latest iteration of bill S-2851 on Thursday, December 1, 2005. The text of the newest version of the bill was not available online until Friday, December 2. We recall Senator Smith's parting words as he tabled the bill last June: "The price of democracy is vigilance." We will appear again before the Senate Committee to speak against this bill, in person and with lobbyist Paul Bontempo of Trenton's MBI Gluck Shaw.
To understand why this is important, let's go back to discuss the Suydam case and what preceeded it. Prior to the Suydam decision, there were, as reported by the Attorney General's office, approximately 20 trial and appellate court decisions regarding the proper handling of environmental contamination issues within the context of eminent domain cases. Suydam established procedures that are acceptable to everyone, both the condemning authorities, as represented by the Attorney General's office, and the condemnation bar who, for the most part, represent property owners. The essential procedure states that the acquired property is appraised "as if remediated." And the full value, representing the condemning authority's estimate for the acquisition, is deposited into Superior Court Trust Funds. When the property owner applies to the court to withdraw money from the fund, the court will reserve out of that fund an amount equal to the condemning authority's estimated cleanup cost. Thus, there are monies available which can be used to clean up the property from the condemnation proceeding.
If this procedure is changed, and both redevelopment project funding and cleanup are taken over by the municipality, there will be a great potential for manipulation by the condemning authority. We have found that government estimates for cleanup costs are routinely much greater than the actual cost incurred if the property owner elects to do the cleanup himself. Not every property owner has the expertise and wherewithal to address these environmental issues; however, oil companies and large manufacturers, like National Lead, deal with these issues all the time on multiple sites. They prefer to do the cleanup themselves. If this right is taken away from them, they not only will lose their property, they will also lose control of the cleanup and be held captive by the municipality and its environmental consultants, who routinely inflate estimates for cleaning up contaminated property. The real hazard is that property owners will pay twice: first in the loss of property, and second, in lost control of the cleanup process, leading to decreased compensation.
The power of eminent domain implemented by municipalities in redevelopment projects has been roundly criticized as unfair and unconstitutional. In some instances, it is the unholy alliance of municipal officials and designated developers, where pay-to-play is rife within the process, and where developers, acting in lock-step with the municipalities, seek maximum advantage over the property owners. The legislature and our new governor must take a hard look at bills which are blatantly designed to benefit political insiders at the expense of the property owners. Justice Sandra Day O'Connor, dissenting in the Kelo case, warned:
"Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result."