New Jersey Eminent Domain Law Blog

This post publishes my comments submitted to Senator Ronald Rice and the Senate Community and Urban Affairs Committee addressing bill S-1975, which seeks to amend the Local Redevelopment Housing Law (LHRL) and portions of the Eminent Domain Act of 1971.  Please note that [bracketed] text in the legislation signifies proposed deletions and underlined text signifies proposed new language.

The key points I raise are as follows:

1. The definition of blight should be clearly defined and related to a current characteristic of decay and deterioration. The definition of blight should not exceed the consitutional limitation.
2. Environmental clean up plans initiated with the DEP should supercede subsection (i); furthermore, the aggregate of parcels should not lead to the "Berman-ization" of New Jersey.
3. Transparency of process affects both property owners and tenants.  Both property owners and tenants should receive notice of all proposed action by the muncipality.
4. Time restrictions of blight designations are required to prevent abuse; the determination should remain in effect for a period of five years from the date of the adoption of the ordinance declaring a property  in an area in need of redevelopment.
5. The relationships between municipal government and their attorneys, developers, contractors and consultants should be called to the highest ethical standards and there should be prohibitions against "pay to play" and other conflicts of interest.
6. The legislation should be effective and be applicable to ongoing condemnation cases within one month of signing into law by the Governor and should apply to all pending condemnation cases.
7. There should be the following additional changes to the Eminent Domain Act of 1971:

a. Section 3-25 of the Act should be amended to require the condemning authority in Local Redevelopment Housing cases to file the Declaration of Taking and deposit in Superior Court Trust Funds within 30 days of the filing of the eminent domain complaint.

b. A provision should be added to the Eminent Domain Act to mandate the Civil Assignment Judge to give priority scheduling to all eminent domain cases.

c. The date of declaration of blight as a value date should be deleted. N.J.S.A. 20:3-30 (a)-(d) should be amended. The (d) subsection should be removed. It is now being used to force a lower value on property owners condemned within a blighted area.

The entire body of comments with deletions and insertions follows.

1. The definition of blight should be clearly defined.

While my testimony at the hearing was not focused on the blight issue due to time constraints, it is abundantly clear that the definition of blight is the linchpin to many of the flaws in the redevelopment process. Generally, Section 5 should be taken back to the original concept of blight as it was used in the state Constitution adopted in 1947. Blight has a specific meaning. Both current and proposed legislation take blight well beyond the intentions of those who drafted the 1947 Constitution and included the “elimination of blight” as a public purpose. See N.J. Constitution Article VIII, § III:

The clearance, replanning, development or redevelopment of blighted areas shall be a public purpose and public use, for which private property may be taken or acquired.

See also the Appendix (page viii) of the Public Advocate Report, May 18, 2006:

PROCEEDINGS OF THE NEW JERSEY CONSTITUTIONAL CONVENTION OF 1947, Vol. I, at 742. See also id. at 743 (Ms. Barus stating that a “blighted area … cannot turn the tide of deterioration”). The Constitutional delegates approved Ms. Barus’s “blighted area” proposal, id. at 745. Thus, although they did not adopt a specific textual definition of “blighted area,” the framers of the 1947 New Jersey Constitution were in agreement with scholars and urban planners that blight, when applied to land redevelopment, necessarily included a current characteristic of decay and deterioration.

The definition of blight, therefore, must be related to a current characteristic of decay and deterioration. Anything other than this would be subject to criticism as exceeding the constitutional limitation of blight. The current ambiguity in the statute allows much abuse. Pundits have said that any property could be blighted under the expanded criteria in Section 5 of the statute. Recent decisions on cases in the law division in Bloomfield, Lodi, and Perth Amboy, suggest that courts are taking a closer look at blight and municipal actions related to the blight declaration.[1] The precise language of the statute effects the implementation of the law and its interpretation by the courts. Thus, the definition of blight must be clarified and consistent in all statutes.

2. Environmental clean up plans initiated with the DEP should supersede subsection (i); furthermore, the aggregate of parcels should not lead to the “Berman-ization” of New Jersey.

Ref. S-1975 on page 9, lines 28-42: Proposed language changes and insertions:

i. Parcels, either vacant or developed, which historically have 28

been used in an industrial or commercial manner and which have 29

remained vacant or substantially underutilized for a period of 24 30

consecutive months due to environmental issues associated with 31

such parcels’ historic use[.] , and which are not the subject of an ongoing environmental clean up plan undertaken by the owner in conjunction with the New Jersey Department of Environmental Protection. 32

In addition to parcels included in a delineated area under this 33

section, an area in need of redevelopment may include other parcels 34

containing lands, buildings, or improvements which of themselves 35

are not detrimental to the safety, health, or welfare of the 36

community, but the inclusion of which is found necessary, with or 37

without change in their condition, for the effective redevelopment 38

of the area of which they are a part; provided, however that such 39

parcels, in the aggregate, shall not comprise in excess of [20% ] five percent of the 40

land mass of such area to be designated as available for private 41

ownership. 42

(cf: P.L.2003, c.125, s.3) 43

Rationale:

My concern is that municipalities and/or their designated developers will manipulate the delineated area in order to acquire properties that are not blighted but which are deemed necessary for the effective redevelopment of the delineated area. The MTOTSA neighborhood in Long Branch, originally planned as residential infill, would be a prime example of eminent domain abuse made possible by the “20 percent aggregate.” The current language in this section, if adopted, will codify the U.S. Supreme Court decision in Berman v. Parker, 348 U.S. 26 (1954) wherein the acquisition of non-blighted properties was permitted by the Court in order to complete the project area. If you are going to include this paragraph, I suggest changing 20 percent to five percent.

3. Transparency of process affects both property owners and tenants.

Ref. S-1975 on page 10, lines 16-17: [Proposed deletion]:

subsection b. of this section.  [, except that notice to individual 16

property owners and tenants shall not be required.   ]17

Rationale:

Transparency in the process demands that property owners and tenants receive notice of all proposed action by the municipality.

4. Time restrictions on blight designations are required to prevent abuse.

Ref. S-1975 on page 17, at line 43: Proposed insert new subsection (k)

(cf: P.L.1992, c.79, s.7) 43

k. The determination by the municipality of an area in need of redevelopment shall remain in effect for a period of five years from the date of the adoption of the ordinance.

Rationale:

We have seen open-ended blight declarations throughout the state. The declaration of blight has a severe detrimental effect on property owners within the area determined to be “in need of redevelopment.” Egregious examples can be found in Long Branch, blighted in 1996, partially acquired in 2001-2002 with the last parcels being acquired in 2005-2006; Asbury Park has been subject to blight designations for almost 20 years.[2] There are numerous additional examples throughout the state. The Legislature should impose a cap on how long a declaration of blight can remain effective without further action by the municipality.

5. The relationships between municipal government and their attorneys, developers, contractors and consultants should be called to the highest ethical standards.

Ref. S-1975 on page 19 at line 47, proposed insert new subsection (p):

(cf: P.L.1992, c.79, s.8) 47

p. No redeveloper shall be permitted to submit a proposal or bid on a redevelopment project where said developer has contributed campaign funds to the mayor and council responsible for the selection of developer, either directly or indirectly, through affiliated contractors, consultants or political action committees.

Rationale:

The adoption of amendments to the Local Redevelopment Housing Law must include prohibitions against “pay to play” and other conflicts of interest.[3]  Bill S-1975 should incorporate and be consistent with Senator Ellen Karcher’s proposed legislation, S-214.

6. The legislation should be effective and be applicable to ongoing condemnation cases within one month of signing into law by the Governor.

a. Ref. S-1975 on page 29, lines 42-43, proposed language change:

15. This act shall take effect on the first day of the [ fourth ] first month 42

next following enactment.43

b. Ref. S-1975 at page 30 line 2,  proposed insert:

This act shall apply to all pending eminent domain cases filed pursuant to the Local Redevelopment Housing Law and the Eminent Domain Act of 1971.

Rationale:

We see no valid reason to wait for four months to make the act to effective. Since the act does away with the project influence rule as it applies to condemnees, the provisions of the act should apply to all pending cases in order to give those condemnees the benefits intended by the revision to the Act.

7. Additional revisions to the Eminent Domain Act of 1971. N.J.S.A. 20:3-1 et seq.

a. Section 3-25 of the Act should be amended to require the condemning authority in Local Redevelopment Housing cases to file the Declaration of Taking and deposit in Superior Court Trust Funds within 30 days of the filing of the eminent domain complaint.

Rationale:

As the Act presently stands, a municipality/developer can file a complaint and not put up its money until six months after the appointment of condemnation commissioners. The municipality/developer can ask for an additional three months from the Court upon showing of good cause. This provision gives the municipality/developer a “free look” at the property by tying it up with the declaration of blight and the filing of the eminent domain complaint without any obligation to put up the good faith offer made to the condemnee in the case. This gives the municipality/developer enormous leverage over the property owner and should be corrected by your committee.

b. A provision should be added to the Eminent Domain Act to mandate the Civil Assignment Judge to give priority scheduling to all eminent domain cases.

Rationale:

This would avoid tragedies similar to the experience of Long Branch resident Bruce MacCloud, whose property was condemned in 2002. As of this date, MacCloud’s long awaited jury trial for just compensation is scheduled for December 4, 2006, after five adjournments, none of which were requested by MacCloud or his attorneys.

c. The date of declaration of blight as a value date should be deleted. N.J.S.A. 20:3-30 (a)-(d) should be amended. The (d) subsection should be removed. It is now being used to force a lower value on property owners condemned within a blighted area.

Rationale:

A recent decision by Judge Patricia Costello, A.J.S.C., Essex County, points out the problem with this subsection. See our blog “Eminent Domain: Date of Valuation, Blight Declaration and Constitutional Considerations” at http://www.njeminentdomain.com/state-of-new-jersey-eminent-domain-date-of-valuation-blight-declaration-and-constitutional-considerations.html

In 1998, N.J. local government condemned the town of Thompson's Beach in South Jersey due to flooding. The residents were given land value only with no consideration for their houses on the property or the cost of replacement housing. (Some of these people remain impoverished as a result of this action). If S-1975 had been in effect then, would it have applied to the determination of fair compensation? If this situation recurs in coastal communities in the future (especially considering global warming predictions) after the passage of S-1975, wouldn't this signficantly deter the ability of local govenment to condemn a flooded area?

Any insight is greatly appreciated.
Tony Novak

Bill,

You did a great job ! This will give New Jerseyans a more level playing field.
The "pay-to-play" section should be more heavily emphasized and defined since it is extremely difficult to prove unethical behaviour by the condemnors, even though we all know it exist in the majority of eminent domain cases. As we all know, most "Redevelopment Agencies" are quasi-government entities, and they are not held fully accountable to the public like regular government bodies.
They are sometimes called the "Invisible government."
If any experienced accountant ever reads the audit report of any of these agencies, which of course is "certified" by an independent auditor, it tells you very little about anything.
Anyway thanks again for your great efforts !