Eminent Domain: The Grinch Who Stole Long Branch
“In the months since this controversy erupted, the plight of the homeowners comprising MTOTSA (Marine and Ocean Terraces and Seaview Avenue) who stand to lose their properties has turned Long Branch into the national poster child for eminent domain abuse.” – Gregory Bean, executive editor, Greater Media Newspapers.
Seasons Greetings! At odds with the spirit of the holidays, the City of Long Branch filed eminent domain complaints on the first group of eleven property owners … eleven of the 36 parcels in the Beachfront North, Phase 2 redevelopment project.
“Rescue is on the way for the besieged homeowners, many of whom are seniors,” wrote “Senior Savvy” columnist Bernice Roberts in last week's Atlantics Highlands Herald:
“Like seniors everywhere they should not have to draw down their assets in a fight to protect their rights. In a country going from great wealth to unprecedented poverty with hardly any in-between, it is the least able in our society including seniors who are seen as easy prey. Are we really so powerless and so divest of resourcefulness? Perhaps not so powerless when we can learn the names of the ruthless and greedy. Well, we can be assured that discovery is about to be made.”
Bill Giordano, a member of MTOTSA, and speaking on behalf of his parents who are residents of Long Branch in the MTOTSA neighborhood, wrote an open letter to state senators and assemblymen published in the Atlanticville:
“Now we sit here this holiday season and await letters of condemnation! The properties in this neighborhood are not “condemnable” with regard to the condition of the dwellings; there are no safety hazards or public safety conditions. No crime, infestation or public health crises. So where is the justification for taking private property simply to give to another private owner?
It seems like every day city councils in the state of New Jersey are threatening more long time residents with the ultimate governmental power of eminent domain.
The activists fighting to stop this abuse have long said that this is an erosion of liberty, freedom and independence. All Americans need to wakeup and be cognizant of what is going on. Big time developers are making tremendous profits at the cost of property owners.”
Gregory Bean, editor in chief of Greater Media Newspapers, captured the unfairness of this process in the Atlanticville today. Consider his calculations for Beachfront North, Phase 2:
“Among the 11 defendants named in the suit, the highest appraised value from the city’s appraiser was $625,000. Three other properties were appraised at $448,000, $410,000 and $408,000. Six were appraised in the low- to mid-$300,000 range. The lowest appraised offer was $210,000.
The average sale price of properties in Long Branch the last three years was $464,507. And, according to William Giordano, a professional appraiser who lives on Ocean Terrace, of 103 active listings of properties for sale in Long Branch as of Dec. 1, the average asking price of properties in town was $658,773. Only nine listed below $300,000.
And few, if any, of those properties came with ocean views or easy access to the water.
The developer who wants their property, meanwhile, plans to replace the homes with 185 condominiums. While they have not revealed the sale price of those units, the new condominium units in the city’s other beachfront redevelopment projects have sold for between $400,000 and $2.2 million, except for one that sold for $200,000.
Assuming that all units sell in the lowest range of $400,000, that’s still $74 million. At a price of $500,000, it’s $92.5 million; at $750,000 it’s $138.75 million; at $1 million it’s $185 million. At $1.5 million it’s .… well, you get the picture.
The total offered to the 11 property owners named in the complaint is just south of $4.1 million.”
All the property owners will be contesting the right to take, and they will be contesting it based primarily on conflicts of interest between the city of Long Branch, its attorneys, and the chosen developers who are implementing this project.
On May 19, 2005 the Atlanticville broke the story that Arthur M. Greenbaum, senior partner in the Greenbaum Rowe law firm, sat on the board of directors of Hovnanian. Then, Long Branch city attorney James Aaron said, “The interest of the city and K. Hovnanian are the same. There is no conflict.”
Two months later, on July 20 and almost a month after the Kelo v. New London decision, Alan Davis, a partner at Greenbaum Rowe, wrote to Long Branch city attorney James Aaron, “reluctantly” withdrawing as eminent domain counsel for the area known as Beachfront North, Phase 2. “Our interpretation of the Court’s decision has led us to re-examine our role in handling condemnation cases for the City in Beachfront North, Phase 2,” wrote Davis as reported in the New Jersey Law Journal. “Indeed, that interpretation and our resulting conclusion is that our existing policy of recusal compels us to withdraw from the additional assignment as condemnation counsel in Beachfront North, Phase 2, upon which no work has been started.” Download "A Tainted Taking?" from the New Jersey Law Journal, November 28, 2005.
The Greenbaum firm was simultaneously acquiring properties which ultimately benefited Hovnanian. Arthur Greenbaum, the senior partner, benefits because he is a shareholder and a member of the board of directors of the very same company, K. Hovnanian, that stands to profit substantially from the redevelopment project. See blog entry of August 23, 2005, Eminent Domain: Conflicts of Interest.
Since 1996 through 2005, the Hovnanian stock increased in price from $3.31 per share to $50.26 cents per share and split once, two for one. Visit their site to calculate stock prices.
Profits from a hugely successful project like Beachfront North, Phase 1 contributed to this stock price increase, and Mr. Greenbaum benefited directly as the owner of 10,000 shares.
“We are now entitled to discovery on the relationship between Hovnanian and the city,” attorney Peter Wegener of Bathgate and Wegner told the New Jersey Law Journal. “You have to wonder whether the administration is acting in the best interest of the city.”