New Jersey's eminent domain abuses and remedies

"Eminent domain reform would allow good redevelopment to continue while protecting tenants and property owners against the abuses that are undermining redevelopment across the state."  - Public Advocate Ronald Chen

Lillian and Lou Anzalone

 "I don't want their money. I want my house. From my back porch, I have a panorama of the whole ocean. It's heaven on earth." - Louis Anzalone, Long Branch property owner

To move heaven and earth and the New Jersey Legislature, it will take more than Public Advocate Ronald K. Chen and a few good citizens. But the report issued yesterday by the Office of the Public Advocate may well be the tipping point.

In Need of Redevelopment: Repairing New Jersey’s Eminent Domain Laws, Abuses and Remedies, is a follow up to the Public Advocate’s report issued in May 2006 concerning local redevelopment projects and eminent domain abuse. To access the new report, click here. (The PDF is 6.71 MB)

The new report focuses on widely reported cases involving eminent domain abuse in Long Branch, Lodi, Paulsboro, Edison, and Perth Amboy. The Public Advocate filed amicus briefs in the City of Long Branch v. Brower and City of Long Branch v. AnzaloneGallenthin Realty Development, Inc. v. Borough of Paulsboro, and LBK Associates v. Borough of Lodi cases. The Long Branch and Lodi cases are pending oral argument in the Appellate Division, and the Gallenthin case was argued last month before the New Jersey Supreme Court. Three of the cases referenced in the report were or are being handled by our firm, including City of Long Branch v. Anzalone, City of Bloomfield v. 110 Washington Street, and City of Long Branch v. Strahlendorf.

The Public Advocate has been widely criticized by the Leagues of Municipalities, and the Builder’s Association, and Mayor Schneider of Long Branch for weighing in on the eminent domain issue on the side of the property owners. According to today’s Asbury Park Press, Mayor Schneider said, "I don't really care what Mr. Chen thinks…. I really haven't found him to be intellectually honest since his entry into the Long Branch case. . . . So far, the court has found we followed the rules, that we've done (redevelopment) the right way. Their opinions matter. Mr. Chen's does not.”

Senator Bernard Kenny (D-Hudson) recently took the opportunity at a public hearing regarding the Public Advocate's budget, to chastise Chen for his advocacy. Many of the Public Advocate's critics think Chen is against redevelopment entirely. He is not. He’s against the abuse that frequently occurs in municipalities where the politicians are in lock-step with the developers to the detriment of the property owner. The Public Advocate is doing his job, and he builds his case for reform in this report. The forms of abuse he would like to correct include those listed on page 4 of his report:

Bogus blight designations, based on scant or superficial evidence,
such as chipping paint, loose gutters or weedy patches;
Due process deprivations, in which towns fail to provide clear
notice to residents that their property may be condemned and do
not hold fair hearings, leading owners to seek review in court,
where the rules are also stacked against them;
Inadequate compensation and relocation assistance, leaving people uncertain where and how they will find a new home or launch a new business; and
Potential conflicts of interest, raising questions about whether— in either appearance or reality— public officials stand to benefit personally from the redevelopment
projects they approve.

The Public Advocate has testified in favor of eminent domain reform for the past two years. Reform efforts have resulted in the New Jersey Assembly passing the A-3257 (Burzichelli Bill) on June 22, 2006. Since that time, the Senate Community and Urban Affairs chaired by Senator Rice has held numerous hearings and produced various iterations of S-1975, a bill which has never been voted out of committee. Governor Corzine said on several occasions that he expects to sign an eminent domain reform bill this year. The Democrats control the process from the Governor's chair through the Senate and Assembly. They talk the talk, but don’t walk the walk. Two years is more than enough time to pass eminent domain reform, especially when more than 64 municipalities throughout the state are currently pushing through redevelopment studies.

The current Local Redevelopment Housing Law (LRHL) is flawed with regard to the broad definition of blight, the notice provisions to property owners, the burden of proof, and compensation issues. Property owners do not receive any the benefits from any of the proposed changes in the bill while the legislature fiddles. "The Legislature will do what it wants," Long Branch Mayor Schneider reportedly told the Asbury Park Press. "Right now, the issue has been before them for the better part of three years, and they haven't been able to come up with a decision. I learned a long time ago this isn't a case I'm going to fight in the court of public opinion or the editorial pages of the local newspaper. The courts will decide." Mayor Schneider will get his answer in the Anzalone and Brower cases when they are decided by the Appellate Division.

According to the today’s Star Ledger, Edward McManimon III, an attorney whose Newark law firm represents many municipalities in the redevelopment process, also criticized the Public Advocate's report saying, "With a broad brush, this indicts the process as if it were cavalier… It doesn't show enough respect for what the local officials go through. They make those decisions, and they're not easy and they're held accountable for them."

The presumption of validity which the courts give to local municipal action is misplaced. The municipalities should have to prove blight by clear and convincing evidence before any property can be condemned. In “Anemic Judicial Review,” on page 15 of his report, the Public Advocate states:

Although condemnation deprives a person of property, and although property ownership is protected under the federal and state constitutions, current state law establishes a low standard of proof—lower than in any of the instances described above.The Local Redevelopment and Housing Law states that a blight designation must be supported by “substantial evidence.” This means a town can win an eminent domain case even if the property owner presents more evidence disproving blight than the town presents to support its blight designation.

To make matters worse, the New Jersey courts have interpreted the “substantial evidence” test in a way that robs it of what little force it might have. A recent Appellate Division decision upholding the use of eminent domain in Asbury Park articulated the standard this way: “Like other legislative enactments, [takings] are presumed valid and will be upheld where ‘any state of facts may reasonably be conceived to justify [them].’” Under this formulation, property owners will lose their homes or businesses unless they can prove that the taking is irrational or tainted by misconduct.

The notice provision is another of the important changes contemplated in the reform bill. What is not addressed and happens frequently, is the fact that property owners and tenants do not receive proper notice. When they do get notice and appear at a meeting, that agenda item can be tabled and carried to another meeting, thereby frustrating and dissipating potential opposition to a project. Only the property owners and their private attorneys who attend the initial scheduled meeting will be informed of the time and place of the postponed meeting.

Property owners typically do not know their rights, do not understand the impact of being declared “an area in need of redevelopment.” In almost every case, the municipal officials attempt to mollify property owners by saying, “We don’t intend to use eminent domain” or “the use of eminent domain would be a last resort.” The fact of the matter is, the municipality has the right to condemn once the area is designated as “in need of redevelopment” under the LRHL. This finding, if unchallenged within 45 days, gives the municipality and its favored developer the club of eminent domain which they will wield to their advantage during negotiations with the property owners.

Eminent domain in many instances can occur years after an area has been found in need of redevelopment; thus, property owners within the area will have to live with the cloud of condemnation affecting their property. The current law provides no cap on a blight declaration. Asbury Park since 1984, Jersey City since 1987...The never-ending blight story continues, and the plight of New Jersey citizens goes with it.