New Jersey Eminent Domain Law Blog

A number of cities in New Jersey, including Irvington and Newark, are considering using the power of eminent domain to aid homeowners whose mortgages are underwater. A mortgage is underwater when its unpaid balance is greater than the property’s market value. The underlying mortgages, however, are not necessarily in default.

The concept of using eminent domain to assist homeowners in danger of foreclosure was first introduced in San Bernardino, California when the County explored the idea of addressing negative equity by using private equity to help current borrowers in foreclosure blighted neighborhoods. The controversial plan was for municipalities to use the power of eminent domain to circumvent mortgage contracts, acquire loans from bondholders, write them down, and give them back to the bondholders. The proposal was abandoned by the County and two of its cities because of the unquantifiable risk that it introduced to the market and the lack of public support. The level of risk involved, the possible cost of implementing such a plan, pushback from the mortgage industry, and the threat of serious litigation have proven significant impediments to cause a number of cities to reject the idea of using eminent domain as a cure-all to the woes of the housing market.

Officials of other cities still find the possibilities of the plan appealing in theory, if not in practice. 

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In 100 Paterson Realty LLC v. Hoboken, the Appellate Division addressed the standard for determining whether an inverse condemnation has taken place: whether the threat of condemnation has had such a substantial effect as to destroy all beneficial use and enjoyment of an individual’s property. Washington Mkt. Enters. v. City of Trenton, 68 N.J. 107,122 (1975).

In an inverse condemnation action, a property owner seeks compensation for a de facto taking of his or her property by a government entity with eminent domain powers. A claim of inverse condemnation may result from a direct, physical taking of or interference with property, or arise from a regulatory taking. A claim may also arise from accidental property damage or the abandonment of plans to condemn the property. However, not every impairment of value establishes a taking. To constitute a compensable taking, the property owner must be deprived of all beneficial use of the property. Government “plans” do not ordinarily constitute a taking of property. Danforth v. United States. The mere plotting and planning in anticipation of condemnation without any actual physical appropriations or interference also do not constitute a taking. Kingston East Realty Co. v. State, 133 N.J. Super. 234, 239 (App. Div. 1975).

The plaintiff alleged inverse condemnation and tortious interference with prospective economic advantage against the City of Hoboken. The plaintiff argued that the threatened acquisition of property for use as parkland by eminent domain during land use proceedings was a taking warranting payment of just compensation. The trial court held that a taking had not occurred and the Appellate Division affirmed.

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One year after Hurricane Sandy made landfall in New Jersey on October 29, 2012, demands by public officials for the voluntary surrender of property are strident. Local mayors and the governor seek the conveyance of beachfront easements without just compensation. Property owners who are unwilling to surrender their rights are called selfish, mean-spirited, and worse on television, radio, online, and in print. Most “holdouts,” the owners of beachfront properties, residences, and local businesses, want the government to exercise its power of eminent domain. They want the guarantee of justice provided by the Constitution.

The United States Constitution, Article 5 states, “No person shall be...deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” The New Jersey Constitution, Article 1, Section 20 states, “Private property shall not be taken for public use without just compensation. Individuals or private corporations shall not be authorized to take private property for public use without just compensation first made to the owners.” The process for awarding just compensation is set out in N.J.S.A. 20:3-1, et. seq. The statute requires the government to appraise the property to be taken and offer the owner fair market value plus any damages to the remaining parcel. The statute prescribes that any land taken be utilized for a public purpose.

The assurance of just compensation is crucial because private land owners in shore towns will forfeit all rights under perpetual easements. The individuals will retain title to the portion of the property taken subject to the easement. The land owners remain responsible for the land and must meet the typical obligations of landownership, including payment of property taxes, but they will have been deprived of virtually all beneficial use of the taken portion of their land.

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The Supreme Court of New Jersey, in a 3-2 opinion written by Justice Jaynee LaVecchia, reversed and remanded Borough of Saddle River v. 66 East Allendale, LLC, overturning a jury verdict for just compensation in the amount of $5,250,000. Justice Barry T. Albin, joined by Chief Justice Stuart Rabner, wrote the dissenting opinion. (Download the opinion).

When the state or a municipality exercises the power of eminent domain, the determination sought through court action is the amount of just compensation, the value of the property evaluated in light of its highest and best use, which is ordinarily calculated in accordance with current zoning ordinances. However, if there is a reasonable probability that a zoning change will be granted, valuation may include an assessment of a change in the permitted use of the property, or a premium. In State by Highway Commissioner v. Gorga and State by Commissioner of Transportation v. Caoili, the Court held that a determination of reasonable probability of a zoning change must be made by the judge before the evidence is presented to the jury. The Supreme Court reiterated the gatekeeping duty addressed in both Caoili and Gorga:

The court must act as a gatekeeper to assess whether there exists sufficient evidence of a reasonable probability of a zoning change to permit an alternate use for a property taken under eminent domain to be considered when valuing property for just compensation.

In this case, the Supreme Court found that the trial judge did not perform his gatekeeping function at the proper juncture. He did not consider the record or conduct a preliminary N.J.R.E. 104 hearing before allowing the jury to consider the reasonable probability of a zoning change. Instead he deferred any decision regarding the defendant’s experts’ opinions that a change in zoning was reasonably probable until the trial was in progress. The Supreme Court remanded the case after finding that the expert’s opinions lacked a proper basis, and were speculative and conclusory. It also specifically held that the court’s gatekeeping function is to be exercised prior to the jury’s deliberation on compensation.

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The New Jersey Supreme Court reversed and remanded Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan, thereby overturning a jury verdict, trial court and appellate decisions that awarded the Karans $375,000 for the taking of a beach replenishment easement and damages to the remainder. The partial taking amounted to 3,400 square feet, approximately one-fourth of the Karans’ oceanfront lot. The chief issue in the case was whether or not Harvey Cedars should have been permitted to present testimony concerning special benefits which protected the Karans’ property as a result of the construction of a 22 foot high dune between their home and the ocean. Karan argued that the dune partially obstructed his ocean views and diminished the market value of his property by approximately $500,000. Harvey Cedars sought to introduce testimony before the jury that these damages should have been offset by the benefit of having the home protected from future storms. The trial court rejected this testimony based on long standing case law in New Jersey: Projects such as this would be considered a general benefit to the entire island, and not a special benefit to Karans or any other beachfront owner. Today, the Supreme Court rejected the Karan argument and changed the long standing rule on benefits, which has been in effect for more than121 years:

We now conclude that when a public project requires the partial taking of property, `just compensation’ to the owner must be based on a consideration of all relevant, reasonably calculable, and non-conjectural factors that either decrease or increase the value of the remaining property. In a partial-takings case, homeowners are entitled to the fair market value of their loss, not to a windfall, not to a pay out that disregards the home’s enhanced value resulting from a public project. To calculate that loss, we must look to the difference between the fair market value of the property before the partial taking and after the taking. In determining damages, the trial court did not permit the jury to consider that the dune would likely spare the Karans’ home from total destruction in certain fierce storms and from other damage in lesser storms. A formula – as used by the trial court and Appellate Division – that does not permit consideration of the quantifiable benefits of a public project that increase the value of the remaining property in a partial-takings case will lead to a compensation award that does not reflect the owner’s true loss. Compensation in a partial takings case must be `just’ to both the landowner and the public. United States v. Commodities Trading Corp., 339 U.S. 121, 123, 70 S. Ct. 547, 549, 93 L. Ed. 707, 712 (1950). A fair market value approach best achieves that goal.

Because that approach was not followed in this case, we reverse the judgment of the Appellate Division and remand for a new trial.
 

 

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The New Jersey Supreme Court has granted Certification to the Borough of Harvey Cedars in the case of Harvey Cedars v. Karan (A. 120-11). At issue in the case is the longstanding policy in eminent domain cases that does not permit off-setting general benefits against damages that ensue from easement takings for dune replenishment and blocking ocean views from the beachfront homes. See Borough of Ridgewood v. Sreel Investment Co., 28 N.J. 121 (1958). In the Karan case, the Borough acquired an easement over one-third of Karans' property and constructed a 22-foot high dune which blocked the ocean views. The Borough, through its expert Donald Molliver, MAI, offered $300.00 as compensation for the taking and damages. Molliver opined that the damages were offset by the special benefit to the property for the project.

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New United Corporation v. Essex County Vocational-Technical School Board of Education [A-2014-10T2]

By William J. Ward and Winifred E. Campbell

Yesterday the Appellate Division unanimously dismissed a condemnation complaint filed by the Essex County Vocational-Technical Schools Board of Education (ECVS) for the acquisition by eminent domain of property owned by New United Corporation, consisting of 7.5 acres adjacent to Interstate 280, which was the former site of the United Hospital facility in Newark. Download New United Corporation v. Essex County Vocational-Technical School Board of Education.

The court ruling was based on the condemnor’s failure to engage in bona fide negotiations as required by N.J.S.A. 20:3-6, et al., of the Eminent Domain Act. The ECVS used its power of eminent domain with the intent to construct a county-wide regional school that would consolidate several existing technical and vocations schools in surrounding communities. In overturning the condemnation, the court stated, “[t]he record reveals nothing that remotely resembles bona fide negotiations by the Board of Education.”

The Eminent Domain Act requires the condemnor to engage in “bona fide negotiations” with a condemnee before commencing an eminent domain action. N.J.S.A. 20:3-6. This provision “encourage[s] public entities to acquire property without litigation…saving both the public and the condemnee the expense and delay of court action.” Township of W. Orange v. 769 Assocs., LLC, 198 N.J. 529 (2009).  A cornerstone to protecting the Constitutional rights of property owners is the requirement that government entities seeking to exercise their power of eminent domain deal “forthrightly and fairly” with property owners. Jersey City Redevelopment Agency v. Costello, 252 N.J. Super. 247, 257 (App. Dic.), certif.. den. 126 N.J. 332 (1991).

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Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan,
Superior Court of New Jersey Appellate Division - A-4555-10T3
Decided March 26, 2012

by Scott A. Heiart, Esq.

Yesterday the New Jersey Appellate Division affirmed a jury award in the amount of $375,000 for the acquisition of an easement in order to construct a dune in conjunction with a beach replenishment project.  Download the decision.

In 1973, Harvey and Phyllis Karan built their “dream house” on the New Jersey shore in Harvey Cedars. Their home was uniquely situated with sweeping views of the beach, shoreline, and ocean. The Borough of Harvey Cedars, as part of a large-scale beach replenishment project in 2008, used eminent domain to take numerous easements from beach-front property owners to construct an enormous dune.

Harvey Cedars offered the Karans $300 for the taking, arguing any loss of views was de minimus and that they would receive a “special benefit” due to the added protection against beach erosion and future storm damage. The Karans argued the loss of view was so significant it reduced the value of their property by $500,000.

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Ciaglia v. West Long Branch Zoning Board of Adjustment (A-0787-10T1)

In a rare example of a case meeting the stringent standard for inverse condemnation, the Appellate Division, in a ruling issued October 25, 2011, reversed the trial court and found the circumstances of that case constituted a taking in Ciaglia v. West Long Branch Zoning Board of Adjustment. The standard, which is a deprivation or substantially all of the beneficial use of the property, was met in this instance. The case was remanded to the trial court for the institution of an eminent domain case.

The court, in a per curiam unpublished opinion, discussed the detailed factual background of the property, which resulted in a conveyance to the plaintiff of a lot which did not meet current municipal standard. The judges called for a “heightened sensitivity on the part of local land use agents…in order to avoid regulatory takings that would be funded by the municipal treasury. “ (p. 18)

On two occasions, the plaintiff, Joseph Ciaglia, attempted to get approval of variances in order to build a single family home on the lot and was denied. In these circumstances, the court found that there had been a regulatory taking and that Ciaglia was entitled to compensation. The court followed and felt it was bound by the precedent set in the Moroney case. See Maroney v. Mayor and Council of Borough of Old Tappan, 268 NJ Super 458 (App. Div. 1993), cert denied, 136 NJ 295 (1994). In the Maroney case, the plaintiff had not exhausted his administrative rights to seek variance relief regarding the lot in question in that case. Here, Ciaglia had on two occasions sought variance approval and been denied; accordingly, the court remanded the case to the law division for the institution of condemnation proceedings.

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By Janice Dooner Lynch, Esq.

On February 11, 2011, the Fordham Urban Law Journal presented a continuing legal education conference at the Fordham University School of Law entitled, “Taking New York: The Opportunities, Challenges, and Dangers posed by the Use of Eminent Domain in New York.” Many attorneys and non-attorneys from the eminent domain field spoke about various aspects of the challenges which have arisen in this area of the law in recent years.

One of the key issues discussed during the conference was the differing definitions of “blight” in each state, which is a major factor in determining whether a government may appropriate property by way of its eminent domain powers. Professor Lynn Blais of the University of Texas School of Law pointed out that while most states have enacted legislation limiting the use of eminent domain to take property for economic development or to be transferred to a private entity, such legislation has, at the same time, provided for an exception to this limitation in the case of “blight.” In other words, an eminent domain taking of property for non-public purposes can take place if a showing can be made that such a taking is necessary for the eradication of “blight” on the property. The following questions then arise: how is the concept of “blight” to be defined by the state legislature or constitution, and how is much judicial review of that definition can be exercised by the courts? The varying approaches to this issue by different states can be seen in the New York State Court of Appeals in Kaur v. New York State Urban Dev. Corp., 933 N.E.2d 721, 892 N.Y.S.2d 8 (2010), and the New Jersey Supreme Court in Gallenthin v. Paulsboro, 191 N.J. 344, 924 A.2d 447 (2007).

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"After finally conceding, in 2005, that a taking occurred forty-three years earlier, the Borough now attempts to hide behind the six-year statute of limitations to claim that plaintiffs have no right to an inverse condemnation action....Although physical invasion and physical taking of real property by a governmental entity ought to be notice sufficient to awaken property owners to act to protect their interest in receiving compensation for the taking, government also should provide some other form of notice to affected property owners before, and surely after, a physical taking." - New Jersey Supreme Court Justice Jaynee LaVeccia

The New Jersey Supreme Court issued a unanimous 7-0 opinion written by Justice Jaynee LaVecchia remanding Klumpp v. Borough of Avalon  to the trial court to consider compensation for a beach replenishment taking which occurred first in 1965. Download the eminent domain decision here.

The Klumpps had built an ocean front home in 1961, which was destroyed by the famous nor’easter storm of 1962. After the home was destroyed, the Borough of Avalon appropriated the property for beach replenishment. No compensation was offered to the Klumpps. The Klumpps continued to be the record owner on the tax maps of Avalon and paid taxes. In 1995, the Klumpps sought permits to rebuild. By this time, Avalon no longer permitted access to the Klumpps property off the local road 75th Street. In addition, the Borough in 1995-96 denied Klumpp building permits and access permits thereby rendering the property useless. The Appellate Division found there had been both a physical taking in 1965 and a regulatory taking circa 1995 both denying the Klumpps all beneficial use and enjoyment of their property.  See our previous blog post of August 6, 2009,  Inverse condemnation at the beach. At no time did the Borough of Avalon offer any form of compensation to the Klumpps. The Supreme Court agreed with the Appellate Division and found there had been both a regulatory and physical taking of Klumpps property without compensation, contrary to the New Jersey Constitution, Article I ¶20 and the 5th and 14th amendments of the U.S. Constitution.

The critical ruling by the court in favor of Klumpp was the Supreme Court’s rejection of the statute of limitations argument set forth by the Borough of Avalon. The Court related the critical taking events to 1995-1996, when the Klumpps were denied building permits by Avalon. In remanding the matter to the trial court for consideration of inverse condemnation and just compensation, several interesting legal issues will come into play.

What is the date of valuation? N.J.S.A. 20:3-30(a)-(c) provides for a date of valuation to be the earliest of three events:

a) date of entry
b) date of interference with use and enjoyment of the property
c) date of the filing of the complaint

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Fox Five News, Good Day New York segment, Eminent Domain Battle with Rosanna Scotto (May 21, 2010).

"In recent years there has been an increase in legal challenges to the law when 'blight' is used as the primary reason by the state for a takeover...'The eminent domain process is subject to abuse. Where the controversy comes in is in redevelopment projects under the Local Redevelopment Housing Law (in NJ) that says certain areas of a city are blighted,' Ward told co-host Rosanna Scotto."

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The Appellate Division decided a group of eminent domain cases involving the Broadway Corridor in Long Branch: Cottage Emporium, Inc., t/a, Rainbow Liquors, Gopal Panday, Davita Panday, The Lighthouse Institute for Evangelism et al v. Broadway Arts Center, City of Long Branch v. Lighthouse Mission and City of Long Branch v. Gopal Panday, Davita Panday and Cottage Emporium (A-0048-07T2, A-4415-07T2, A-4416-07T2). The cases were argued March 15, 2010, before Judges Lisa, Baxter, and Alvarez, and a per curiam decision was issued on April 16, 2010.

The unanimous panel remanded the Broadway Corridor cases back to the trial judge, Monmouth County Assignment Judge Lawrence Lawson. Instead of dismissing the eminent domain complaints, the court is fashioning a remedy which is not supported by the law.

Here the court arrived at a conclusion similar to the decision in City of Long Branch v. Anzalone, and City of Long Branch v. Brower, which both involved the MTOTSA neighborhood. The appellate panel, led by one of the judges who heard the Anzalone case and two who did not, invited Long Branch to revisit the blight issue and attempt to meet “the substantial, credible evidence” standard for proof of blight. Here the court wrote in its opinion:

However, our courts have cautioned that the "substantial evidence" standard requires "a record that contains more than a bland recitation of applicable statutory criteria and a declaration that those criteria are met." Gallenthin, supra, 191 N.J. at 373. That standard similarly prohibits a municipality from exercising eminent domain on findings that are "supported by only the net opinion of an expert." Ibid. Instead of simply describing the physical and financial status of the properties to be taken, the municipality or its expert must perform "an analysis of the statutory criteria as [they] applied to each of the properties in the designated" redevelopment area, and of how each property's condition reflected or contributed to the area's blight. ERETC, supra, 381 N.J. Super. at 279-80.

 

The city will not be able to prove blight under this standard. Why not dismiss outright? That’s the law.
 

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Some say timing is everything. Would it have made a difference if Judge James M. Catterson published the opinion in Matter of Kaur v. New York State Urban Dev. Corp. prior to oral arguments before the Court of Appeals in the Atlantic Yards case, Goldstein v. New York State Urban Development Corporation, d/b/a Empire State Development Corporation? While many think Catterson’s strongly worded opinion could have persuaded the Court of Appeals on the blight issue, in reading the majority opinion in the Atlantic Yards case, it is unlikely that Kaur would have changed the outcome.

Nevertheless, these two cases create a muddle in New York Eminent Domain law regarding blight and its use to acquire properties. A recent poll conducted by Crane’s New York finds public opinion mixed on which of these two court decisions is better for New York City. A majority voted: “Neither. Until it becomes more transparent, the eminent domain process is bad for the city, no matter what project it affects.”

 

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Today the Supreme Court of the United States and the New Jersey Supreme Court heard oral arguments on similar issues in two different cases: Who has title to riparian land created by natural accretion of sand or a public works project to replenish beachfront property? In Stop the Beach Nourishment v. Florida, the issue is whether the legislation coupled with the Florida Supreme Court decision constitutes a judicial taking of private property without compensation; In City of Long Branch. v. Liu, property has already been taken, but the trial court ruled that Liu could not be compensated for the land created by beach replenishment. 

Beaches in many states are the recipients of oceanfront accretion as a result of beach replenishment projects. Most states, including Florida and New Jersey, set the property boundary at the mean high water line: The state owns the area between the mean high water line and the low water line. Up to this point, any natural or man-made accretion that changes the mean high water line belonged to the riparian owner. The state of Florida wants to make this additional land public land. The Florida Supreme Court, in a 5-2 decision, agreed. See SCOTUS Wiki for all the documents in this case and our prior blog post, "SCOTUS grants cert in beachfront renourishment case."

In order to rule in favor of the Florida property owners, at least 5 of the 8 justices hearing the case need to agree with the position of the property owners who are contesting the Forida legislation and the Florida Supreme Court decision. This would require an in depth review of Florida law in order to overrule the Florida Supreme Court -- a big step, considering the deference usually accorded state courts in interpreting state law. But the Florida property owners argue that the court below misinterpreted long standing Florida law with respect to the ownership of beachfront property. 

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The litigation over Beachfront North in Long Branch may be over, but eminent domain abuse will continue unless the New Jersey Legislature acts.

A comprehensive review and amendments to the statutes governing eminent domain in New Jersey are needed, including the Eminent Domain Act of 1971, the Local Redevelopment and Housing Law and the Relocation Assistance Act and regulations.

These laws form the statutory framework governing the acquisition of property by state agencies and local government. They also provide protections to the owners and occupants of real estate acquired for a public project.

On June 15, a draft eminent domain bill was voted out of the Senate Community and Urban Affairs Committee, three years after the Assembly passed its version. Five years after the U.S. Supreme Court's decision in Kelo v. City of New London, which called for the states to enact their own legislation, 43 states have passed eminent domain reform. New Jersey has not. Senate President Richard Codey needs to move the eminent domain reform bill to a vote.

Right now, the law stands as written, with piecemeal relief provided by judicial decisions in New Jersey courts. Case by case, property owners are forced to overcome the presumption of validity of the statutes and municipal actions taken in designating their properties in need of redevelopment. This is a difficult and expensive burden for the average residential or small business owner.

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"The Little Guy Wins' is a feature news segment by reporter Mary Murphy, who covered the Long Branch eminent domain story on WPIX Channel 11 last night. The video clip features Louis Anzalone, 92, who never gave up the fight to keep his home, even after his wife Lillian and other senior neighbors including Al Viviano, Mary LaConte, Anna DeFaria, and Carmen Vendetti passed away before their litigation ended. They were, to paraphrase Franklin Delano Roosevelt, a generation that had a rendevous with destiny. They fought for freedom, but they never imagined that they would fight to keep their homes. Through years of litigation, Anzalone, a World War II Navy veteran, epitomized the spirit of that greatest generation, living the words of Winston Churchill: "Never, never, never, never give up."

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Below is the Asbury Park Press video of the court hearing on September 15, featuring the signing of the 12-page settlement agreement in City of Long Branch v. Anzalone. Later that evening,  the Long Branch City Council voted 4-1 to adopt a resolution on the settlement agreement.

 

Also, see blog post of September 15, Settlement ends eminent domain saga for Long Branch MTOTSA homeowners
 

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"To the outside world, my home may have been just wood and concrete, but to me, it is my whole existence...a little piece of heaven with my wife..." - Louis Anzalone, Long Branch, N.J. 

One year and seven days after his wife, Lillian, quietly slipped away on the porch of their beachfront home, Louis Anzalone, 92, and his neighbors on Marine Terrace, Ocean Terrace, and Seaview Avenue - MTOTSA - in Long Branch, N.J., settled their long-standing eminent domain battle with the city. Today in open court, in Freehold, most of the property owners signed releases, and attorneys for the city, developer, and property owners finalized a consent order, bringing closure to the case. Download the final order.

City of Long Branch v. Anzalone, and its companion cases, were reversed and remanded to the trial court in part on August 7, 2008. Today's settlement, which resulted from lengthy negotiations and mediations with Judge Thomas W. Cavenagh, dismisses the eminent domain complaints against all defendants. In addition, the city of Long Branch and the developer are paying aproximately 60 percent of the legal fees and costs of the defendants. The property owners are now free to continue to live in their homes, or to rebuild in compliance with the amended redevelopment plan. If they choose to rebuild, they can be designated as redevelopers and receive the same tax benefits as the designated developers did for Phase I of the Beachfront North project. This is a big win for the property owners and property rights advocates.

Tonight in a Special Meeting of the Long Branch City Council, resolutions memorializing the settlement agreement are on the agenda. Download the Long Branch Agenda here.

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JOINT MEDIA ADVISORY

EVENT:
Tomorrow's court hearing could resolve long-standing eminent domain battle for homeowners in the MTOTSA neighborhood, Long Branch, N.J.  Pending resolution, homeowners and attorneys will speak to media after court hearing.

TIME/DATE:
1:30p.m./Tuesday, September 15, 2009

PLACE:
Courtroom of Hon. Thomas W. Cavanagh
Hall of Records
One East Main Street
Freehold, New Jersey 07728

PARTICIPANTS:
Scott Bullock, Senior Attorney, Institute for Justice
Jeff Rowes, Staff Attorney, Institute for Justice
Peter H. Wegener, Bathgate, Wegener & Wolf
William Ward, Carlin & Ward
Property Owners in the MTOTSA (Marine Terrace, Ocean Terrace, Seaview Avenue) neighborhood

SUMMARY:
On Tuesday, September 15, 2009, at 1:30 p.m., the long-running fight to protect the homes in the MTOTSA neighborhood of Long Branch, N.J., against eminent domain for private gain could come to end. An agreement will be discussed in the courtroom of Judge Thomas Cavenaugh, who has presided over discussions between the parties for the past several months.

The Institute for Justice—a public interest law firm based in Arlington, Va., that litigated the Kelo v. New London eminent domain case before the U.S. Supreme Court—represents the homeowners along with New Jersey eminent domain attorneys Peter Wegener of Bathgate Wegener & Wolf and William J. Ward of Carlin & Ward.

In August 2008, a three-judge panel of the New Jersey Appellate Division unanimously reversed and remanded the June 2006 decision of Superior Court Judge Lawrence Lawson, which had allowed Long Branch to condemn a charming seaside neighborhood known as MTOTSA for a luxury condominium development. (Read the opinion and our blog post of August 7, 2008, on City of Long Branch v. Anzalone. )

After the case was sent back to the trial court and the city announced that it was willing to drop the eminent domain actions, the parties began discussing how to resolve the remaining issues in the case. If the case resolves, attorneys along with MTOTSA property owners will speak with the media immediately after the hearing in the courtyard in front of the Hall of Records in downtown Freehold, New Jersey.

# # #

CONTACT:

To arrange interviews with William J. Ward  or property owner Louis Anzalone, please contact Susan Ward at 973-377-3350, ext. 106 or 973-464-5669, evening/weekends.

To arrange interviews with the Institute for Justice, call John Kramer, vice president for communications, at 703-682-9320 ext. 205 or in the evening/weekend at 703-587-1992.

BACKGROUND INFORMATION:
See links to relevant blog posts and court opinions.

 

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In an important eminent domain opinion, the Appellate Division of the Superior Court reversed Somerset County Assignment Judge Yolanda Ciccone's decision to permit Readington to condemn the Solberg Airport property, and remanded the matter to the trial court for a hearing on the public purpose. Read the opinion in Township of Reading v. Solberg Airport, Docket No. A-3083-07T3 A-1537-08T3, written by Judge Phillip Carchman, P.J.A.D., for a unanimous panel.

The property in question consists of 726 acres, located in Readington Township, Hunterdon County, and enjoys a farmland assessment. A portion of the property, approximately 100 acres, is devoted to the Solberg Airport, a local airport serving businesses and recreational clients. The airport is also famous for the annual hot air balloon festival held every summer. In 2006, the Township of Readington authorized acquisition for open space preservation, recreation and farmland preservation. The ordinance authorized fee acquisition of all the land outside the 100 acres devoted to airport use, as well as the development rights to the 100 acres. The trial court was presented with cross-motions for summary judgment. The trial judge, relying principally on the New Jersey Supeme Court decision in Mt. Laurel Twp. v. Mi Pro Homes , (see our blog post of December 8, 2006), ruled that the acquisition was valid as a means of preserving open space.
 

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Listen to last Thursday's Brian Lehrer Show at WNYC-FM, featuring a segment about halted development and eminent domain in Asbury Park with Paul McEvily, associate executive director of Interfaith Neighbors, and William J. Ward, eminent domain attorney and blog author.
 

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In the case of Klumpp vs. Borough of Avalon,  the Appellate Division unanimously affirmed the trial court decision of Judge Perskie. Judge Perskie had determined that, after the 1962 storm which destroyed plaintiff’s beachfront home, the defendant Borough of Avalon took functional physical possession of the property by including it in the dune system that it constructed after the storm. Judge Perski entered a judgment that the borough's conduct constituted a taking by way of inverse condemnation. Judge Perskie also found that the 1979 rezoning of the property to open space by the Borough deprived plaintiffs of all functional use of the property and therefore constituted a regulatory taking as well.

The Appellate Court agreed on both counts:

We find that Judge Perskie’s conclusions were supported by substantial and credible evidence in the record. Inverse condemnation occurred here by both the Borough’s physical occupation of plaintiffs’ property for public use and its adoption of the regulatory scheme to support the protection of the engineered sand dune. A regulatory taking of the property occurred as well. (Slip opinion, p. 14)

Download the per curiam opinion in Klumpp v. Borough of Avalon.

 

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The New Jersey Supreme Court has granted certification to a second eminent domain case for the 2009-2010 term. The case is City of Long Branch v. Jui Yung Liu (A-0237-06T2). At the heart of this case is a question similar to those that are under consideration by the United States Supreme Court in the Florida case, Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, Docket No. 08-1151. See previous blog post, SCOTUS grants cert in beachfront renourishment case (June 22, 2009).

According to Peter Wegener of Bathgate Wegner, who represents the property owner, the New Jersey Supreme Court has certified two questions on two of the points decided adverse to Liu by the court below:

POINT I
WHETHER THE JURY'S DETERMINATION TO MAKE NO AWARD FOR THE ENHANCEMENT VALUE REPRESENTED BY THE FURNITURE, FIXTURES AND EQUIPMENT FUNCTIONALLY RELATED TO THE BUSINESS WAS AGAINST THE WEIGHT OF THE EVIDENCE AND WAS A MISCARRIAGE OF JUSTICE?
1. THE PROBLEM OF AUTHENTICATION UNDER N.J.R.E. 901
2. THE VIDEO SHOULD HAVE BEEN EXCLUDED UNDER RULE 403
3. THE ENTIRE LINE OF TESTIMONY RELATING TO RELOCATION SHOULD HAVE BEEN EXCLUDED FROM THE CASE [Slip opinion, at p.3)

POINT IV
WHETHER THE MOTION JUDGE ERRED IN FAILING TO REQUIRE THAT THE CITY'S VALUATION OF THE PROPERTY INCLUDE PROPERTY THAT CAME INTO EXISTENCE THROUGH THE BEACH REPLENISHMENT EFFORTS OF THE U.S. ARMY CORPS OF ENGINEERS?
1. The Lius' Property Extends to Mean High Water
2. The High Water Mark Delineates Ownership of Lands Along the Atlantic Ocean
4 [sic]. Artificial Changes to the Shoreline Inure to the Benefit of the
Littoral Owner Provided the Changes Were Not in Aid of Navigation and Were Not Implemented by the Littoral Owner Himself
5 [sic]. The Motion Judge Incorrectly Interpreted The Law To Determine That The State of New Jersey Owned The Artificially Created Property [Slip opinion, at p.4]
 

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On June 15, 2009, the United States Supreme Court granted certiorari in the case of Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, Docket No. 08-1151. This is the Court’s first sojourn into the takings issue since June 2005, when the court issued three opinions in the Kelo, Lingle and San Remo Hotel cases. See post in the  ABA Journal online, "Surprise! Supreme Court grants cert in beach taking case," and related links.

This is a regulatory takings case where the Florida Supreme Court, in a 5-2 decision, rejected the beachfront property owners’ challenge to a state law authorizing beach replenishment through creation of sand dunes and asserting public ownership to the created land area. The Florida Supreme Court concluded that the law did not constitute a compensable taking. See Robert H. Thomas' post at Inverse Condemnation blog:

In Walton County v. Stop the Beach Renourishment, Inc., 998 So.2d 1102 (Fla. Sep. 29, 2008), the Florida Supreme Court held that a state statute which prohibits "beach renourishment" without a permit did not effect a taking of littoral (beachfront) property, even though it altered the long-standing rights of the owners to accretion on their land and direct access to the ocean. The cert petition presents these questions:

The Florida Supreme Court invoked "nonexistent rules of state substantive law" to reverse 100 years of uniform holdings that littoral rights are constitutionally protected. In doing so, did the Florida Court's decision cause a "judicial taking" proscribed by the Fifth and Fourteenth Amendments to the United States Constitution?

Is the Florida Supreme Court's approval of a legislative scheme that eliminates constitutional littoral rights and replaces them with statutory rights a violation of the due process clauses of the Fifth and Fourteenth Amendments to the United States Constitution?

Is the Florida Supreme Court's approval of a legislative scheme that allows an executive agency to unilaterally modify a private landowner's property boundary without a judicial hearing or the payment of just compensation a violation of the due process clauses of the Fifth and Fourteenth Amendments to the United States Constitution?

The case has interesting implications in many states, and specifically New Jersey,  where the Army Corps of Engineers, operating through local municipalities, is seeking to accomplish beach replenishment along the entire length of Long Beach Island. See our January 29 post, "Eminent domain in Harvey Cedars."
 

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On May 21, the New Jersey Supreme Court granted certification to petitioner Iron Mountain Information Management, Inc. in a case which could be a precedent setting decision in eminent domain law. See the Appellate Division opinion in Iron Mountain Information Management, Inc. v. City of Newark et al (A6561-06) and discussion in our previous blog post, Notice to commercial tenants in eminent domain cases (March 23, 2009). The Supreme Court will consider the issue of notice to a commercial tenant within a redevelopment area under the Local Redevelopment Housing Law, as well as the underlying issue of blight. Below are the relevant documents that have been submitted to the Court and the order granting certification:

Order granting Petition for Certification

Petition for Certification

City of Newark Opposition Brief

Reply Brief in Support of Petition for Certification

 

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West Orange v. 769 Associates  (A-113-07)

Today the New Jersey Supreme Court unanimously decided that a condemnee may recover counsel fees and costs upon abandonment of a condemnation proceeding, pursuant to N.J.S.A. 20:3-26 (b), from the point at which the property is formally targeted for condemnation through the filing of the condemnation complaint and ensuing litigation. The court held that calculation of fees, as in all other cases, is governed by the reasonableness principles of RPC 1.5. Significantly, the Court held that, in the context of abandonment,  the right to recover costs and fees is not contingent to any degree on the success of the property owner’s defense strategy and, therefore, was not subject to modification by the application of RPC 1.5(a)(4) regarding the amount involved or the results obtained. Justice Virginia Long wrote for the Court. Download the opinion.

However, fees associated with the filing a prerogative writ, such as fighting a blight designation, are not recoverable. The tolling point in pre-litigation begins once the property owner receives notice that the property will be formally targeted for condemnation, such as receipt of an offer letter based on an appraisal. In the pre-litigation period,  any fees incurred in order to participate in bona fide negotiations per N.J.S.A 20:3-6, such as the costs of attorneys, appraisers, engineers and other experts, apply.  A condemnation complaint must be filed, and it must be either abandoned - no longer required for the project, or dismissed due to defenses raised by propery owner. The trial court has the discretion to mitigate the fees.

Listen to the N.J. Supreme Court oral arguments in West Orange v. 769 Associates LLC.

See prior blog post on the on the appellate division decision, "Recovering litigation costs when condemnation is abandoned" (December 28, 2007).

 

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 Iron Mountain Information Management, Inc. v. City of Newark et al (A6561-06).
Download the case here.

Commercial tenants are not entitled to notice provisions of the Local Redevelopment Housing Law according to a recent decision of the New Jersey Appellate Division. In a unanimous decision approved for publication, the court affirmed Summary Judgment granted by the trial court to the City of Newark. The tenant, Iron Mountain Document Systems, Inc., has a long-term lease of a 350,000 square foot building, located at the corner of McCarter Highway and Edison Place. In addition to its lease, Iron Mountain negotiated an option to purchase and maintains a right of first refusal with the landlord.

Plaintiff, the sole tenant in the building, has occupied the property since August 28, 1996, when it entered into a long-term lease with the owner, the Berkowitz Company, to rent the property until August 31, 2014, with the option to extend the term of the lease for two successive five year periods.

The lease also afforded plaintiff the option to purchase the property "at a fixed formula during the period from September 1, 2006 [to] December 31, 2008," and provided plaintiff a right of first refusal if another party offered to purchase it. Finally, the lease entitles plaintiff to share, according to a fixed formula, in any proceeds realized by Berkowitz if the property is taken by eminent domain, but only if the taking occurred prior to September 1, 2007. [Slip Opinion at 4]

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Matter of Do Not Destroy Brooklyn v. Urban Dev. Corp. (2009 NY Slip Op 01395). On February 26, the New York Appellate Division, First Part, upheld a lower court ruling by Justice Joan Madden dismissing a lawsuit filed by a group of plaintiffs opposing the Atlantic Yards project. The project would be the largest redevelopment project ever undertaken in New York City. It would include a new 18,000 seat arena for the New Jersey Nets basketball team owned by developer Bruce Ratner. The arena is window dressing for a massive real estate development of 16 towers and 6000 residential units on a 22 acre site located at Flatbush and Atlantic Avenues in downtown Brooklyn. Although the developer won this legal round,  Ratner was negotiating with the MTA about cutting costs as recently as January. And, of course, financing for a project of this size in the current economic climate remains as questionable now as it was in September when Goldman Sachs refused to comment in the Newark Star-Ledger on the financing of the $950 million arena. 

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Can one Bergen County municipality, Cliffside Park, use the power of eminent domain to condemn a property for a public works garage (DPW) in Fairview, an adjacent town? This unique issue is before Assignment Judge Peter Doyne, and his opinion on whether Cliffside Park  has standing to move forward to trial is slated for March 16. Borough of Cliffside Park v. Pedigree Holding Group (Ber-8236). 

Cliffside Park lost its own municipal garage site when the municipality chose to redevelop the site (it was in an “area in need of redevelopment”) as part of a large redevelopment project.  Fairview property owner Bridget Tapkas leased her property to Cliffside Park, but Cliffside Park wants to own it outright and has threatened to condemn if they cannot acquire it through negotiation. Cliffside Park offered $1.3 million for the property. Tapkas won’t sell because she wants to save it for future expansion. Her family’s truck dealership is located on an adjoining parcel.

Fairview initially backed Tapkas in her dispute with Cliffside Park. "They are using, or misusing, the power of eminent domain outside the borders of Cliffside Park in the furtherance of the redevelopment plan," Fairview's Special Counsel Carmine Alampi told the Bergen Record in late January. Two weeks later, Alampi made a 180 degree turn and spoke out about teaming up with Cliffside Park to create a joint DPW garage facility on the Tapkas property. According to Alampi, Fairview would "reconsider our opposition to the condemnation." This latest twist presents a thornier problem for Judge Doyne. The case is already a nest of municipal intrigue.  

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After 22 years in Newark, Multicolor Corp.'s building was condemned for the Prudential Center arena and the property owner was forced to move out of the building pictured above in April 2007. The property owner, Jorge Aguayo, is still waiting for relocation assistance.

Denial of Relocation Benefits by the City of Newark, Newark Housing Authority and their developer, the New Jersey Devils

A disturbing trend has occurred with the downturn of the redevelopment market. The taking agencies and their developers are refusing to comply with the Relocation Assistance Act N.J.S.A. 20:4-1 and the Regulations N.J.A.C. 5:11:1. This Act and the Regulations obligate the taking agency to pay any owner occupant displaced by a public project relocation benefits. Relocation benefits vary according to the size and complexity of the displaced operation. Generally, they include the cost of moving all furniture fixtures and equipment to the relocation site. They also include the cost of reestablishing the business – new phones, computer hook ups, etc. Where there is production equipment requiring reinstallation and debugging, relocation will pay the costs of installing the equipment and modifying the new building to accommodate the equipment being moved. N.J.A.C. 5:11-39 (a) (1-5). See blog post “Relocation Assistance: The step-child of eminent domain.” (January 11, 2007)

The Newark Housing Authority (NHA) has taken the extraordinary position that they will not pay multiple tenants dislocated for the Prudential Arena project for the New Jersey Devils. This forces these tenants to litigate for payments to which they are entitled by statute. All relocation litigation is before the Office of Administrative Law (OAL). There is no provision in the statute or regulations to reimburse the dislocated tenant for attorneys’ fees and costs. Beyond that, the refusal to pay puts the businesses in jeopardy. Some businesses have temporarily moved equipment into storage. However, their business equipment is captive until the moving and the storage fees are paid. Multicolor Corporation was condemned and the company was forced to move their plant to Coplay, Pennsylvania, in April 2007. See "Fuzzy Math," Star-Ledger (March 20, 2007). The company’s equipment remains in storage. No payments have been made for the move and the storage, and the new building requires substantial modifications to accommodate the large, heavy equipment required to manufacture their product.

The only option available to aggrieved property owners is the OAL route which routinely takes 6-8 months and is not final as the head of the agency – in these cases, the Division of Community Affairs can accept, modify or reverse the OAL judge.
 

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A new and insidious attack on property owner rights is being undertaken by the Borough of Harvey Cedars on Long Beach Island. In December 2008, Harvey Cedars filed eminent domain complaints against beach front property owners. The borough seeks the right to acquire an easement across the width of ocean frontage. The stated purpose: Protect the oceanfront properties from beach erosion by constructing a 25-foot high sand dune.The easement is permanent, with the right to come on to the property and replenish the dune as required. The easement is assignable – to whom we don’t know. The easement area will be planted with vegetation – dune grass or pine trees? They’re not saying.
 

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Union Township business owner Raul Rodriguez was one of 22 property owners who successfully fought the blight designation and the use of eminent domain in Union Township, New Jersey.

This Friday, December 5, attorneys for Union Township will move before the Hon. Walter R. Barisonek for reconsideration of the court's rejection of the township's redevelopment plan. The township will present their alternative theory for rehabilitation, in place of redevelopment. This theory is equally without merit, as was the township's original argument in support of redevelopment, based on the findings of fact and conclusions of law issued by Union County Assignment Judge Walter R. Barisonek issued on October 18, 2008. Judge Barisonek's 55-page oral opinion rejected Union Township’s attempt to blight its downtown area. Download the transcript of Judge Barisonek's opinion here.

Judge Barisonek's opinion is significant for two reasons. The court rejected Union’s attempt to find this area located at the intersection of Stuyvesant and Morris Avenues to be an area in need of redevelopment. The Planning Board had adopted the opinion of its planning expert, The Metro Company, that the properties within the study area were blighted under the Local Redevelopment Housing Laws (LRHL). N.J.S.A. 40A:12-5c, d and e. The court first identified a misapplication of the law by the Planning Board based on the erroneous advice of counsel, Planning Board Attorney, Daniel McCarthy and Special Redevelopment Counsel Jennifer Credidio of McManimon & Scotland, Newark, New Jersey. The court found that the advice of counsel was misleading involving the use of the term “blighted area”. N.J. Constitution, Article 8, Sec. 3, paragraph 1 and “area in need of redevelopment” as found and defined in the LRHL N.J.S.A. 40a:12-5. It should be noted that the New Jersey courts have found these phrases to be synonymous. See N.J.S.A. 40A:12A-6(c) and Concerned Citizens of Princeton, Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007). The court also cited the recent Appellate Division case of City of Long Branch v. Anzalone, Docket No. A-0067-06T2, which was decided on August 7, 2008, and reiterated that the blighted areas clause of the New Jersey Constitution controls when redevelopment is the sole public purpose for a taking. Anzalone, supra. at p. 16.

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Monmouth County Assignment Judge Lawrence M. Lawson rejected two motions to stay two eminent domain jury trials in the cases City of Long Branch v. DeLuca and City of Long Branch v. Angelides yesterday. Long Branch filed a motion seeking an indefinite stay of these condemnation trials, scheduled respectively for November 3 and December 8, 2008.

Attorney Paul Fernicola argued on behalf of Long Branch that the DeLuca and Angelides trials should be stayed because of the pending certification before the New Jersey Supreme Court in the City of Long Branch v. Anzalone and companion cases. Judge Lawson agreed with the property owners, and noted there was no nexus between the DeLuca and Angelides cases and the pending Anzalone case.

Both the DeLuca and Angelides properties are part of what is known as the MTOTSA (Marine Terrace, Ocean Terrace, Seaview Avenue) neighborhood. The DeLuca family has a long history in Long Branch. The DeLucas had objected to the right to take their house on Ocean Terrace pictured above, but decided not to go forward with an appeal after Judge Lawson affirmed the city's right to take in his June 22, 2006, opinion. Judge Lawson's opinion was appealed by the other MTOTSA property owners, and reversed and remanded by the Appellate Division on August 7, 2008. Angelides never contested the right to take.

The DeLuca and Angelides properties are now owned by the city of Long Branch and its developer by virtue of the filing of the declarations of taking and the deposit of the estimated compensation in the Superior Court Trust Fund. N.J.S.A. 20:3-19. The only remaining issue for DeLuca and Angelides is the jury trial, which will establish the just compensation due them under the New Jersey Constitution, Article 1, paragraph 20.

"That ship has sailed," said Judge Lawson to attorney Fernicola, noting that the takings cannot be abandoned without the consent of the respective property owners once title has passed to the condemning authority. N.J.S.A. 20:3-35.

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A Hudson County jury awarded $18.6 million on September 22 to property owners Ronald, Katherine, and Lynn Kerrigan for 3.41 acres acquired by the Jersey City Redevelopment Agency (JCRA). The unanimous verdict was reached by 8 jurors, concluding the 10-day eminent domain trial before Judge Mark J. Baber.

The property, with 500 feet of frontage on the tidewater basin opposite Liberty State Park, is located at the lower end of Jersey Avenue and has unobstructed panoramic views south and east of lower Manhattan, Ellis Island, and the Statue of Liberty. The property was zoned R4, high rise residential, by Jersey City in 1974, 30 years prior to the filing of the condemnation complaint and date of valuation on August 26, 2004. N.J.S.A. 20:3-30(b). The initial offer of JCRA was $1.25 million based on the appraisal of Robert VonEnken, MAI, of the firm of Grubb & Ellis, New York. Mr. Von Enken valued the property as industrial land based on its current use as an industrial facility leased to the Warren George Co., a geotechnical drilling operation, which utilized the property’s waterfront for its tugboats, barges, and drill rigs which were used for test borings in the Hudson River and elsewhere.

In April 2008, Judge Baber ruled the 1974 R4 zoning was applicable to the acquisition. This resulted in new appraisals from JCRA increasing the value to $3.8 million. Mr. Von Enken hypothesized a 10 year interim industrial use, followed by the residential use in 2014. The residential value was estimated to be $6 million, discounted by 10 years to the date of valuation. To this he added the interim industrial use value, based on capitalization of income from the Warren George lease. The legal validity of this theory is questionable. Discounted cash flow analysis has been criticized and rejected by the New Jersey Tax Court. See University Plaza Realty Corp. v. Hackensack, 12 NJ Tax 354, 366-367 (1992), affirmed 264 NJ Super 355 (App. Div 1993).

The property owners presented values of $25 million and $31 million respectively from appraisal experts Maurice Stack of Stack, Coolahan & Stack of Hoboken, and Louis Izenberg, MAI, of Parsippany. The jury also heard engineering and planning experts testify. Richard Price, P.P., of Phillips Price Shapiro, New York, testified for JCRA as did Fred Worstel, P.E. from Dresdner Robin, Jersey City. Peter Steck, P.P., presented planning testimony for the Kerrigans, and Michael Spillane, P.E., Rockaway, New Jersey, testified as the Kerrigan’s engineer. Both Mr. Stack and Mr. Izenberg adopted planner Peter Steck’s opinion that 420 residential units could be constructed on the property. The appraisers valued the residential units at $70,000 and $75,000 per unit respectively. 

The jury deliberated more than 5 hours and reviewed hundreds of exhibits in evidence before rendering its verdict. Predictably, Robert Antonicello, executive director of JCRA, indicated that JCRA would appeal the verdict. Liberty Harbor North developer, Peter Mocco, had no comment for the Jersey Journal. (See "Jury says Jersey City must pay owners $18.6 million for land it seized," by Ken Thorbourne.)

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Lillian Anzalone died at home this morning. She was 91. Mrs. Anzalone was born in Newark on February 10, 1917. She was a buyer of women’s clothes in New York before she married Louis Anzalone in 1954.

Together, the Anzalones and their son, Thomas, lived at 32 Ocean Terrace, Long Branch.Their house stands at the epicenter of the MTOTSA neighborhood’s eminent domain fight. It was the first home the Anzalones bought and the only one they ever owned. Mrs. Anzalone, who suffered from congestive heart failure and other health problems, attended the oral arguments in the appellate division in May. The family was elated when the court reversed the blight determination last month. See the Star Ledger video filmed on August 8.

Mrs. Anzalone is the third elderly home owner who protested, fought and advocated for property rights, but ultimately succumbed to illness before obtaining closure in the Long Branch eminent domain cases. The other MTOTSA neighbors who died were Al Viviano and Anna DeFaria. Mrs. Anzalone will be missed by her husband of 54 years, her son, and all her neighbors, who were united in the battle to keep their homes. The home owners are in the process of petitioning the New Jersey Supreme Court to dismiss the condemnation complaints.

Viewing will take place from 2-4 p.m. and 7-9 p.m. on Friday September 12 at Megaro Memorial Home at 503 Union Avenue, Belleville. A funeral mass will be held Saturday morning, September 13, at St. Lucy's R.C. Church in Newark.

 

 

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William J. Ward, Esq. of Carlin & Ward; Peter H. Wegener of Bathgate Wegener & Wolf and Scott Bullock of the Institute of Justice, representing the Long Branch property owners, have cross-petitioned the New Jersey Supreme Court today in the City of Long Branch v. Anzalone and its companion case, City of Long Branch v. Brower et al. Long Branch petitioned the New Jersey Supreme Court to grant certification to review the August 7 decision of the Appellate Division. The city's notice of petition was served on the defendants on August 26.

The cross petition is for the limited purpose of affirming the Appellate Division’s finding that “there was not substantial evidence of blight," and dismissing the condemnation complaints outright. See R. 2:12-3(b). The theory for dismissal of the complaints is simple: Since there is no evidence of blight under Article VIII, Section III, paragraph 1 of the New Jersey Constitution and the Local Redevelopment Housing Law, N.J.S.A. 40A:12A-5, there can be no eminent domain action sustained. There simply is no support in the statute or redevelopment law for the trial court to conduct additional hearings on blight in these cases.

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In a unanimous 85-page opinion, the Appellate Division today reversed the decision of Judge Lawson and remanded the controversial eminent domain case, City of Long Branch v. Anzalone, for a plenary hearing. The court agreed with the arguments made by the appellants that the record was devoid of the requisite substantial evidence of blight required by N.J.S.A. 40A:12A-5 and the New Jersey Constitution, Article 8, paragraph 3:

We agree with appellants that, in light of the principles laid down in Gallenthin, the City did not find actual blight under any subsection of N.J.S.A. 40A:12A-5, that the record lacked substantial evidence that could have supported the New Jersey Constitution's standard for finding blight, and that the absence of substantial evidence of blight compels reversal.

Although the Appellate Division left the door open for the city to supplement the record to prove blight, this will be highly problematic, and it is doubtful they will be able to produce a qualified planning expert who will reach that conclusion. An additional problem for Long Branch will be the recent decision of Judge Lawson in the prerogative writ suit, Park Steel v. Borough of Neptune City, in which he relied substantially on the Gallenthin v. Borough of Paulsboro, 191 N.J. 344 (2007) case and the ERETC v. City of Perth Amboy, 381 N.J. Super. 268 (App. Div. 2005) case. In the Park Steel case, which was decided on May 7 and released July 7, 2008, Judge Lawson found that Neptune did not meet the test to provide substantial credible evidence of blight.  Download the Appellate opinion in City of Long Branch v Anzalone.

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In a unanimous per curiam opinion issued yesterday, July 15, 2008, the Appellate Division affirmed a lower court decision by Chancery Court Judge Vincent J. Grasso denying an injunction to the New Jersey Department of Environmental Protection (NJDEP) to compel beach front property owners on Long Beach Island to grant easements for beachfront replenishment. NJDEP requested easements from the property owners in order to construct a 21-foot sand dune on the affected properties along the oceanfront. The court held that NJDEP was improperly relying on N.J.S.A. 12:6A-1 which deals with access for emergent situations.

In this case, Milgram v. Ginaldi, NJDEP sought to acquire a permanent easement to construct and maintain the sand dunes. In order to do this, the court ruled, NJDEP must comply with the Eminent Domain Act, N.J.S.A. 20:3-1, et seq. and its provisions regarding acquisitions of land for a public purpose. Specifically, N.J.S.A. 20-:3-6 requires that

Whenever any condemnor shall have determined to acquire property pursuant to law, including public property already devoted to public purpose, but cannot acquire title thereto or possession thereof by agreement with a prospective condemnee, whether by reason of disagreement concerning the compensation to be paid or for any other cause, the condemnation of such property and the compensation to be paid therefor, and to whom payable, and all matters incidental thereto and arising therefrom shall be governed, ascertained and paid by and in the manner provided by this act.

The court concludes:

...the trial court correctly dismissed NJDEP's cause of action, because, under these circumstances, a demand for a perpetual easement from these defendants amounted to a taking of private property without just compensation. To accomplish this apparently legitimate public purpose, NJDEP was required to comply with the procedural requirements of the Eminent Domain Act.

This case is precedent for other municipalities on Long Beach Island seeking to acquire similar easements. The township of Harvey Cedars, for example, is about to engage in such an effort, and they clearly will have to comply with the Eminent Domain Act of 1971 and all of its requirements regarding land acquisitions.  Download the opinion in Milgrim v. Ginaldi.

Also see today's Star-Ledger article, "Court sides with residents in beach battle."

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Last Thursday’s meeting of the Senate Community and Urban Affairs Committee ended shortly after it began. With no quorum and two of the Democrats missing, Senator Rice withheld the eminent domain reform bills until the next meeting which, he said, the would be in a few days. “This legislation will continue to come up until we can determine what the real problem is with Democrats -- in terms of not appearing…or in terms of the vote. This bill has been compromised so much, and every issue that was raised by Senator Sweeney and Assemblyman Burzichelli in their communications to me, dated May 12, has been addressed one way and another, most of them ended up in compromises, so I know that everyone had every opportunity to read all the changes, the amendments, etc.”

The previous Thursday, June 8, the committee was supposed to discuss the most recent iteration of S-757. That hearing was postponed.  Here is the June 1, 2008 version of S-757. The bill proposes changes to the Local Redevelopment Housing Law, the Eminent Domain Act of 1971 and the Relocation Assistance Act. Continue Reading Posted In State of New Jersey
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The Halper family has had a long, tortuous history with the township of Piscataway regarding the acquisition of their farm. The township condemned the 75-acre farm for open space on December 10, 1999. Piscataway offered $4.326 million as its estimate of just compensation pursuant to N.J.S.A. 20:3-6. The jury awarded awarded $17.9 million as of September 3, 2004  -  the date of the filing of the declaration of taking and the deposit with the Superior Court Trust Fund. The initial deposit of $4.326 was withdrawn immediately.

On May 14, 2008, Appellate Division Judge Donald S. Coburn issued an opinion, approved for publication, affirming the jury verdict in the Township of Piscataway v. South Washington Avenue LLC; Ruth Halper, Lawrence Halper, et al. Download the opinion here. There are two important issues in this case: first, the Halpers appeal regarding their objection to the right to take their property; and second, the date of valuation per N.J.S.A. 20:3-30.

As to the first issue, the court ruled in favor of Piscataway, noting that once the deposit is withdrawn, the condemnee waives any rights other than those related to the amount of compensation:

We are satisfied that Piscataway's interpretation of N.J.S.A. 20:3-27 is sound, particularly when it is construed in light of the fundamental common law rule that "a litigant who voluntarily accepts the benefits of a judgment is estopped from attacking it on appeal." Tassie v. Tassie, 140 N.J. Super. 517, 524 (App. Div. 1976) (citations omitted). We also noted in Tassie, that

[t]he rule that a litigant cannot seek appellate review of a judgment under which he has accepted a benefit is but a corollary to the established principle that any act upon the part of a litigant by which he expressly or impliedly recognizes the validity of a judgment operates as a waiver or surrender of his right to appeal therefrom.
[Id. at 525 (citations omitted).]

I would note that this holding seems to be at odds with the recent decisions of the Appellate Division in the Harrison cases. All three cases were reversed and sent back to Hudson County Assignment Judge Maurice Gallipoli for further action. There are serious complications in one of the companion cases, Harrison Redevelopment Agency v. Amaral: Mr. Amaral withdrew the deposit, the buildings on the property have been demolished, and he has relocated his business to Lyndhurst, New Jersey. If Judge Gallipoli follows the courts reasoning in the Halper case, Mr. Amaral has achieved a pyrrhic victory and the only issue remaining for him is the argument over compensation.

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The Appellate Division heard three hours of arguments from the assembled attorneys representing Long Branch property owners and the city of Long Branch. The argument before the media and a standing room crowd of spectators included the property owners, their families, and interested parties to the eminent domain issues. This case is the most important eminent domain case in the appellate pipeline, and could very well go to the New Jersey Supreme Court, depending on the outcome of the Appellate decision, which is expected in the early fall.

Download today's coverage in The Asbury Park Press and The Star-Ledger. 

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MEDIA ADVISORY: City of Long Branch v. Anzalone

The Appellate Division of the Superior Court will hear oral arguments tomorrow in two eminent domain cases, City of Long Branch v. Anzalone and City of Long Branch v. Brower, on the 5th floor of the Richard J. Hughes Justice Complex, 25 Market Street, Trenton, New Jersey. The arguments are before Judges Joseph Lisa, Richard Newman, and Paulette Sapp-Peterson (Panel G). The Appellate Division has issued a revised media advisory.

Louis and Lillian Anzalone, who in their nineties are the eldest residents of the MTOTSA (Marine Terrace, Ocean Terrace, Seaview Avenue) neighborhood, are represented by William J. Ward of the law firm of Carlin & Ward in Florham Park and Brian Weeks of the Office of the Public Advocate, amicus in the case. The bulk of the MTOTSA residents are represented by Peter Wegener of Bathgate, Wegener, & Wolf in Lakewood and Scott Bullock and Jeff Rowes, attorneys with the Institute for Justice in Arlington, Virginia. The IJ argued the Kelo case before the U.S. Supreme Court.

The homeowners appealed the June 22, 2006 decision of Monmouth County Assignment Judge Lawrence Lawson, who ruled that the property owners were not entitled to a hearing or discovery on the “right to take” and dismissed the owners objections to the appointment of condemnation commissioners -- a final judgment on the right to take issue. This decision, issued a day before the first anniversary of the Kelo case, would allow the condemnation suits regarding the various properties to go forward. The Anzalones obtained a stay at the inception of the appeal.

The chief issues to be addressed by the court will be:
I. Conflicts of Interest and the Local Government Ethics Law as it applies to municipal officials and their legal representatives
II. Blight and its definition in light of the New Jersey Supreme Court’s decision in Gallenthin v. Borough of Paulsboro
III. Notice and Due Process regarding the redevelopment plan where the status of the properties in the neighborhood was changed from residential infill to properties to be acquired by condemnation.

The property owners seek a reversal of Judge Lawson's 2006 decision. In light of recent case law, attorneys representing the property owners will ask the court to dismiss the condemnation cases outright. At the very least, the matter should be remanded to the trial court for discovery and a full evidentiary hearing.

The Anzalones will be in court tomorrow for the proceedings. Louis Anzalone, a veteran of World War II and a former engineer with Lionel Trains, has always maintained that he wanted to stay in his home. "I don't want their money," he told the Public Advocate. "I want my house. From my back porch, I have a panorama of the whole ocean. It's heaven on earth."  

A rally is scheduled for 8:20 a.m. in front of the Hughes Justice Complex. 

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Tomorrow May 5 at 10 a.m., the Senate Community and Urban Affairs Committee will take up S-757, the latest version of eminent domain reform, sponsored by Senator Ronald Rice. To read the most recent amendments, download bill S-757. The meeting  will take place in Committee Room 7 on the second floor of State House Annex, Trenton, New Jersey.

Rice is desperate for a second to move the bill, and committee affirmation, so that the bill can be put before the full Senate for action. This belies a critical question: How will this bill be reconciled with other pending bills - A1492, S559, and S1020, by Assemblyman Burzichelli, Senators Sweeney and Weinberg respectively – which also propose reform to the current version of the New Jersey Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq. Burzichelli’s bill passed the assembly in June 2006, ironically on the same day that Judge Lawrence Lawson issued his decision in the MTOTSA cases - City of Long Branch v. Brower and Anzalone.

Once again, the forces of eminent domain reform have been summoned to Trenton to testify and demonstrate for change. We expect the League of Municipalities to reiterate what they have said before: The courts have clarified the existing law in the Gallenthin and DeRose cases regarding the requisite substantial evidence required for blight determination and all-important notice provisions to affected property owners. Simply put, their position will be that the recent case law is all that needs to be memorialized in the statutes. We have yet to hear from Senate President Codey or Governor Corzine regarding the progress of eminent domain reform.

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NOTICE: YOUR PROPERTY MAY BE CONDEMNED.  If you own a property in an "area in need of redevelopment," (a.k.a blighted area") you would expect to see those exact words at the top of the notice you receive from a municipality. The notice issue was first discussed on this blog in a commentary about the Shennett case, when the Passaic Redevelopment Agency justified taking Charlie Shennett's land and said they did what they were legally required to do. I wrote then: This is not enough. The notice requirement does not spell out in the text what the ultimate outcome will be: in this case, condemnation and acquisition of the property through eminent domain proceedings. How is this due process?

Yesterday the Appellate Division of the New Jersey Superior Court decided the due process issue in three cases. Writing for the court, Judge Jack Sabatino issued an 88-page opinion, approved for publication, in Harrison Redevelopment Agency  v. De Rose v. Town of Harrison, et al. The companion cases are Harrison Redevelopment Agency  v. Amaral and Harrison Redevelopment Agency  v. Harrison Eagle.

The court ruled that the 45-day limit to file suit against a municipality's effort to blight property for redevelopment is constitutional only if the owner received notice that the action contemplated by the redevelopment may result in the condemnation of their property. The court said:

We hold that, unless a municipality provides the property owner with contemporaneous written notice that fairly alerts the owner that (1) his or her property has been designated for redevelopment, (2) the designation operates as a finding of public purpose and authorizes the municipality to acquire the property against the owner's will, and (3) informs the owner of the time limits within which the owner may take legal action to challenge that designation, an owner constitutionally preserves the right to contest the designation, by way of affirmative defense to an ensuing condemnation action. Absent such adequate notice, the owner's right to raise such defenses is preserved, even beyond forty-five days after the designation is adopted.

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Three's a charm.  New Jersey's promised eminent domain reform enters its third year after many iterations of the bill, passed by the Assembly in 2006, failed in the Senate Community and Urban Affairs Committee in 2007, and reintroduced and referred on January 8 to the Assembly Commerce and Economic Development Committee as A1492.  The new eminent domain reform legislation (download the PDF) is the latest attempt by New Jersey legislators (sponsors John J. Burzichelli, Nilsa Cruz-Perez, Douglas H. Fisher,  and Pamela R. Lampitt) to amend the Local Redevelopment Housing Law (LRHL, N.J.S.A. 40A:12A-1 et seq.). The companion bill introduced to the Senate Community and Urban Affairs Committee is S559, sponsored by Senators Steven M. Sweeney, Barbara Buono, and Loretta Weinberg.

The public hearings, drafts of legislation, and testimony for interested parties on all sides of this contentious issue have continued without resolution.  Governor Corzine promised voters during his gubernatorial campaign in 2005 that eminent domain reform would be accomplished early in his administration.  Last year, at one of his public forums in Union Township, the governor said he would sign a bill by the fall of 2007.  The public is still waiting.

Note: Kevin Moore of Sills Cummis and William J. Ward of Carlin & Ward will discuss the current bill, its merits and shortcomings, and the status of eminent reform at the Eminent Domain in New Jersey  Lorman Education Seminar on April 17, 2008, in North Brunswick. For more information about the agenda, faculty, and continuing education credit, click here.

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SAVE THE DATE...William J. Ward, Esq., author of the New Jersey Eminent Domain Law Blog, will moderate the Lorman Education seminar Eminent Domain in New Jersey for the third consecutive year on Thursday, April 17, 2008, in North Brunswick, New Jersey.  The seminar is an opportunity for attorneys, real estate appraisers, planners, and other professionals involved in real estate development, land use, and eminent domain practice to participate in a dynamic exploration of current legal issues and obtain continuing education credit. Download the brochure.

This year, in addition to an emphasis on recent case law and eminent domain reform legislation, the agenda will include fair housing, RLUIPA (Religious Land Use and Institutionalized Persons Act), zoning and its effects on highest and best use, contesting the right to acquire property, and the ethics of redevelopment and eminent domain practice. The faculty includes many attorneys and real estate professionals who have been active on the frontlines of eminent domain litigation and legislative reform.

Last year, more than 75 people registered for this seminar. Interested parties can register online beginning Monday, January 28, 2008, at Lorman Education Services, Seminar ID: 377876. There will be a limited number of press credentials available. Interested publications should contact Susan Ward at 973-377-3350.

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The New Jersey Institute for Continuing Legal Education will hold its 2008 Redevelopment Law Institute on Friday January 25 in New Brunswick featuring The Impact of Gallenthin v. Paulsboro and Other Recent Cases. Several cases following the Gallenthin decision have affected municipalities' use of eminent domain in redevelopment efforts. The morning panel, comprised of Mitchell Abrahams, Anne S. Babineau, Robert Beckelman, the Hon. Peter Buchsbaum, and James M. Turteltaub, will discuss the impact of Gallenthin on redevelopment.

Turteltaub represented Suydam Investors in the Housing Authority of New Brunswick v. Suydam Investors, LLC, 177 N.J.2 (N.J. Supreme Court, 2003). He also successfully argued on behalf of the property owners in 110 Washington Street v. Township of Bloomfield (L-2318-05) and Carolyn Evans and Rivco Group, LLC v. Township of Maplewood (L-6910-06). The Bloomfield case was instrumental in laying the groundwork for subsequent cases contesting the right to take in New Jersey and discussed on this blog here and here. The opinion in the Maplewood case is a thorough application of the Gallenthin case, which has been discussed here.

Reference materials submitted for the seminar include the following resources:

1. "Clarifying Blight Criteria for Redevelopment in New Jersey,"  by James M. Turteltaub, written for the NJ ICLE seminar
2. "Defining Blight," by William J. Ward, reprinted here with permission of the New Jersey Law Journal
3. "Reversal of Blight," by William J. Ward, reprinted here with permission from the New Jersey Law Journal

To reserve a space for the NJICLE seminar, click here.

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There was one eminent domain bill passed in New Jersey -- on January 13, 2008, to be exact. No, it was not a reform of the Local Redevelopment Housing Law, long considered by the Legislature, passed by the Assembly, and never voted out of the Senate Community and Urban Affairs Committee. Instead, two Hudson County Democrats, former Senator Joseph Doria and former Assemblyman Louis Manzo have given us P.L. 2007, c.290 (Bills S-2743 and A-4625 respectively), which amend P.L. 1962, c.198, N.J.S.A. 48:12-35.1, concerning procedures to be followed by railroad authorities seeking to expand their right of way and condemnation of property.. The bill was co-sponsored by Assemblyman Patrick J. Diegnan of South Plainfield.

Under the new bill, railroads seeking to use eminent domain must demonstrate to the Department of Transportation:

...that alternative property suitable for the specific proposed use of the property to be taken is unavailable, either through on-site accommodation or through voluntary sale of alternative, reasonably situated property, and that the interest in the property to be taken does not exceed what is necessary for the proposed use, and shall also demonstrate to the Department of Transportation at an informal hearing the specific use to be made of the land or other property or interest to be acquired and that such proposed use is necessary and consistent with the purposes enumerated for such railroad utility and with the extent of the land or other property or interest to be condemned; and (c) any land and property necessary to comply with any order, determination, rule or regulation of the Department of Transportation.

The law provides for an administrative hearing before the Office of Administrative Law (OAL) where the railroad seeking to use eminent domain must demonstrate compliance with the new act and bears the burden of proof. Interestingly, the bill provides for notice to the fee-owner as well as tenants, and easement holders whose interest may be affected by the taking. This was a stealth bill which received little or no comment in the press and was not the focus of any of the eminent domain activist groups or those who oppose reform. The new law, signed by Governor Corzine on January 14, was among a number of bills pushed through during the lame duck session of the Legislature.  See the statement and reprint of S-2743 here and here.

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Pay-to-play remains at the heart of the problem in New Jersey redevelopment and the authorization of eminent domain. Simply put, developers contribute to the campaigns of mayors and council members; and, in turn, the mayor and council designate the developer for the project and use the municipal power of eminent domain to acquire properties needed to assemble the project area. Although New Jersey recently adopted pay-to-play legislation, the piece that would apply specifically to eminent domain has been notably missing in any of the iterations of the proposed eminent domain reform bills to date. See my paper and power point (PDF-2MB) presented last October at  the CLE International seminar on Ethics and Redevelopment in New Jersey.

Yesterday the Appellate Divison of the New Jersey Superior Court issued an important public policy decision in the case People for Open Government v. David Roberts (A-4926-05T1). The opinion of the court was delivered by Judge Harvey Weissbard and approved for publication. The case involves litigation instituted by former residents of Hoboken seeking to compel the Mayor and Council to enforce a municipal ordinance designed to curtail “pay-to-play” where individuals and corporations are awarded municipal contracts as a reward for political contributions. The issue involves a Hoboken ordinance passed on November 2, 2004, which had been placed on the ballot through voter initiative. Among other things, the ordinance restricts political contributors from negotiating or entering into contracts with the city. The Law Division dismissed plaintiffs’ suit based on a conclusion that the plaintiffs lacked standing. The Appellate Division reversed and remanded, concluding that the plaintiffs have a sufficient particularized interest in the enforcement of the ordinance beyond their status as “mere taxpayers.” Download the case here.

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West Orange v. 769 Associates LLC (A-5677-05)

In an unanimous decision of the Appellate Division issued on December 24, 2007, and approved for publication, Judge Jose Fuentes writing for the panel, ruled that a property owner can recover litigation costs under the provision in the Eminent Domain Act, N.J.S.A. 20:3-26(b). At issue in the litigation was whether the property owner’s legal contest of the right to take was the cause for the abandonment of the condemnation case. In a ruling reversing the trial court, which had trimmed the litigation fees sought by the property owner, the appellate court said:

“in the context of an abandonment of condemnation action, the right to recover costs and counsel fees is not contingent upon the success of the property owner’s defense strategy.…[S]tated differently, to recover costs and professional fees in an abandonment setting, a property owner does not have to show a causal link between its legal efforts resisting the condemnation and the condemning authority’s decision to abandon the taking.”

This decision is a corollary to the Supreme Court’s decision in West Orange v. 769 Associates, LLC, 172 NJ 564 (2002) where the court ruled that the taking contemplated by West Orange was a legitimate public purpose. Thereafter, West Orange and the property owner entered into a Consent Agreement whereby West Orange formally abandoned the condemnation action. This resulted in the property owner seeking legal fees and costs under N.J.S.A. 20:3-26(b) which provides:

 “...if the court renders final judgment that the condemnor cannot acquire the real property by condemnation or, if the condemnation action is abandoned by the condemnor, then the court shall award the owner any right or title to or interest to such real property, such sum that will reimburse such owner for his reasonable costs, disbursements and expenses actually incurred, including reasonable attorney, appraisal and engineering fees.”

The Appellate Court concluded that the trial judge properly excluded pre-litigation expenses and those arising from a prerogative writ suit that challenged a related municipal planning board decision, since those fees and costs did not arise from the “four corners” of a condemnation action. The Appellate Court also affirmed the trial court’s disallowance of counsel fees incurred in attending municipal hearings, reproducing municipal records and obtaining transcripts of the sessions of the municipal governing body.  Download the opinion here.

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"Asbury Partners is very sad that the current financing and real estate market has caused Metro to suspend construction on the Esperanza." -- Larry Fishman

In 2006, the demolition of the C-8 steel skeleton, a symbol of redevelopment failure, gave hope to Esperanza, the high-rise residential tower undertaken by developer Dean Geibel and  president of Metro Homes. The Hoboken developer halted construction and temporarily closed its sales office as reported in the Asbury Park Press.

Portions of the oceanfront in Asbury Park were blighted in 1984. Development never reached fruition due to a corrupt admininstration and a developer, Carabetta, who went bankrupt. In the 20 years that ensued, the city became a ghost-town. When Asbury Partners purchased Carabetta’s interest from the bankruptcy court in 2002,  it seemed that redevelopment finally arrived. This is why Geibel’s announcement that he was halting construction was a blow to those involved in Asbury Park's redevelopment.  Geibel’s efforts missed the market, and if action is not taken by Asbury Park and its designated developer Asbury Partners, the city will again experience a period of non-activity and further decline in its most desirable section – the oceanfront.

These events point to one of the most pressing issues for eminent domain reform – the capping of the effective time for blight. We have suggested 5-7 years is sufficient. In the case of Asbury Park, 25 years puts a tremendous burden on the property owners, who would develop their own properties if allowed to.  In D&M Asbury Realty LLC v. City of Asbury Park (N.J. Super.A.D.2006), property owners sought to develop their properties in conformity with the redevelopment plan. This position was rejected by Judge Lawrence Lawson in the Monmouth County Superior Court and affirmed by the appellate division in an unanimous decision. Download the opinion here. Instead, these properties lie fallow, captive to the exclusive pre-emptive rights of Asbury Partners to develop the entire waterfront. They will only release portions of their development rights upon payment of exhorbitatnt fees to the potential developers. This scenario must be addressed by the New Jersey Legislature in 2008.  

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United States District Court Judge Peter G. Sheridan issued an opinion on November 29 on a motion to amend the complaint in Albanian Associated Fund v. Township of Wayne. This case involves eminent domain, open space, and land use regulations in the context of proposed religious use, the building of a Muslim mosque on 11 acres in Wayne Township, New Jersey. Therefore, the Religious Land Use and Institutionalized Persons Act  of 2000 (RLUIPA) plays into the dispute as well. See 42 USC § 2000 cc (a) (1):

No government shall impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly, or institution (A) is in furtherance of a compelling governmental interest; and (B) is the least restrictive means of furthering that compelling governmental interest.

There is a real fear among religious organizations that RLUIPA may not apply because it does not specifically mention the words “eminent domain.” Download the decisions in  St. Johns United Church of Christ v. City of Chicago  (U.S. Court of Appeals for the Seventh Circuit,2007) and Faith Temple Church v. Town of Brighton, 405 F. Supp. 250 (W.D.N.Y. 2005).

In Judge Sheridan's November 29 opinion, the court permitted the plaintiff to amend its complaint on eight counts and denied amendment on a new ninth count. The ninth count alleged violations of New Jersey’s Municipal Land Use Law (MLUL) which is the comprehensive statute governing land use applications and proceedings before zoning boards and boards of adjustment in the state (N.J.S.A. 40:55 D-1 et seq). The court barred the amendment based on the comprehensive system established under the MLUL and the N.J. Court Rules 4:69-1, which established a comprehensive non-jury procedure for plaintiffs contesting a municipal action.

The procedure established in the law and the court rules is consistent with the New Jersey Constitution Article IV § 6, Paragraph 2, which mandates uniform policies and procedures that any municipality must follow. Therefore, the court held the proper venue for plaintiff’s count 9 claim was before the New Jersey Superior Court in an action in lieu of prerogative writ.

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The decision in Lighthouse Institute for Evangelism v. City of Long Branch, rendered by the United States Court of Appeals for the Third Circuit on November 27, has national implications for religious use, zoning regulations, and eminent domain. In its precedent setting 96-page opinion, the Third Circuit ruled 2-1 in favor of the City of Long Branch against Reverend Kevin Brown and the Lighthouse Institute for Evangelism in their attempt to establish a church at 162 Broadway within the Broadway Corridor Redevelopment area. However, the court remanded the case to Judge William Walls in the U.S. District Court for further findings on the plaintiff's challenge to the C-1 ordinance, the zoning for the subject property prior to the adoption of the redevelopment ordinance and plan, under RLUIPA's Equal Terms provision. The court was unanimous that the C-1 ordinance violated RLUIPA. This will entitle the plaintiffs to damages, counsel fees, and costs. Read the opinion here.

The federal statute at the heart of the question is the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), the most recent congressional effort to protect religious exercise from discrimination through land use regulations. The Equal Terms provision states:

No government shall impose or implement a land use regulation in a manner that treats a religious assembly or institution on less than equal terms with a nonreligious assembly or institution.

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Mark Twain said, “There are two things you should never watch being made: sausage and legislation.” Heeding that advice, I saved myself a trip to Trenton and listened to yesterday’s Senate Community and Urban Affairs Committee hearing on eminent domain reform on my computer. Twain’s admonition should offer an additional caveat: Don’t listen to legislation being made, especially when lame duck is on the menu. It’s lame because the legislation never reaches fruition; Duck when the people in power dodge their responsibility to improve the state's eminent domain laws.

Yesterday’s hearing on S-1975 and its companion bills were at least the fifth iteration of the proposed changes to the Local Redevelopment Housing Law (LRHL) and portions of the Eminent Domain Act of 1971. Keeping up with the latest version can be a challenge: the penultimate version was issued Friday, November 23 (the Friday after Thanksgiving, which was not a state holiday). The text was amended prior to the hearing. It is always a moving target in Trenton; one arrives prepared to testify to one bill, only to find that it has been changed while you were on the N.J. Turnpike.

To cut to the chase, the Senate Community and Urban Affairs Committee adjourned once more without taking action. It appears that eminent domain reform in New Jersey will not take place in 2007. There is no push from the Democratic leadership, Governor Corzine, Senate President Codey or Assembly Speaker Roberts to do anything further this year.

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While she waited for the next round in the eminent domain fight against the City of Long Branch, Anna DeFaria, 82, lost her battle with ovarian cancer. Last Wednesday, she died at home.

Home was the modest, oceanfront cottage that DeFaria and her husband, Antone, owned since 1960. Her husband died in 1996, the same year that Long Branch declared its oceanfront in need of redevelopment. As the city blighted and condemned whole neighborhoods under the Local Redevelopment Housing Law to make way for new high rise condominiums along the beachfront, one group of neighbors banded together to fight for their homes on Marine Terrace, Ocean Terrace and Seaview Avenue (MTOTSA). Anna DeFaria was a champion among them.

Yesterday DeFaria's neighbors, who are spokeswomen in their own right, praised her activism. As quoted in Asbury Park Press, Denise Hoagland said, “I think she was a phenomenal woman who had integrity like none I’ve ever seen.”

Lori Vendetti told the Star-Ledger, “Her face is MTOTSA. We’re going to keep the fight going for her, as well as for everybody else.”

DeFaria was a retired preschool teacher. She walked two miles a day on the boardwalk, went to church, visited the senior center, and tended her vegetable and flower garden. In recent years, she frequented city council meetings and marched in eminent domain rallies. She became a familiar face in the mainstream press, appearing in television clips, magazine and newspaper articles that brought national attention to the Long Branch case. Her advocacy against eminent domain abuse is her legacy:

Where do you go if they take your home away? It was my first home, and my family loved it here…I feel safe and secure here. I thought I would stay here until I died. Atlanticville, (October 13, 2005)

I'll never buy a piece of property by [the] ocean again. How much do you need? A million dollars? You can't buy it, for God's sakes, anymore. And my husband fought for what? Freedom? For liberty? For everybody, or the few selected people that are coming from New York to buy there? CNN, (October 13, 2005)

We thought this was going to be our home forever…Now they want to take it away. It's unfair, it's criminal, it's unconstitutional…They're taking my home away -- not my house. My home. My life. The Boston Globe (February 6, 2006)

We worked very, very hard to have this little house…If they had to build a hospital or a road or something, you know, we wouldn't feel as bad as taking my house, knocking my house down to put a million dollar house on mine. That's what hurts me the most. PBS – NOW (February 10, 2006)

I'm 80 years old. My husband's gone nine years already. The Lord took him. And I have a problem with the eminent domain abuse. I think it's criminal. I think it's unfair, unjust and I don't know where I'm going to go. Fox News, Hannity & Colmes (February 17, 2006)

I can’t get anything in Long Branch for three and a quarter [$325,000], let alone an ocean view.  Parade Magazine (August 6, 2006)

We thought we'd stay here for the rest of our lives. Now, they think they can come and take what's ours. They can't. We're going to win this. Atlanticville (September 7, 2006) 

Read the profile of Anna DeFaria in the report of the N.J. Public Advocate.

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The New Jersey Turnpike is the fifth busiest road in the nation and the proposed widening between exits 6 and 9 will be one of the biggest public works projects ever undertaken in the state. Preliminary plans, displayed at four public hearings last month, call for the six lane highway to be expanded to 12 lanes from Mansfield to Cranbury and for an expansion of toll plazas at exits 7, 7A, 8, and 8A.  Eminent domain will be used as required to acquire the necessary land for the widening as well as the toll plaza improvements. More than 100 properties may be affected by the project. Most of the acquistions contemplated in the project will be partial takings. Of the 381 acres to be acquired, the NJTPA anticipates only 10-20 will be total takings.

According to a report in today's Star-Ledger, preliminary engineering and property acquisition was paid for with reallocated funds ($175 million) from a now defunct project, Route 92, that was meant to provide a link between Route 1 and the Turnpike. But the funding for the entire widening project is estimated at $2 billion - so the state needs to find an additional $1.825 billion to make it happen. This will be the costliest widening project in Turnpike history.

The Tri-State Transportation Campaign has expressed reservations about the prioritization of the Turnpike widening in light of the imminent need for bridge repair and current deficit in the state's Transportation Trust Fund. While the options for funding appear limited, In the past, the Turnpike issued bonds to pay for roadway improvements. The debt service on the bonds would be paid from toll revenues. This still seems to be the most likely scenario for funding this project. However, it would require a large increase in tolls for Turnpike riders.  The monetization of the Turnpike discussed by the Corzine administration does not  provide a vehicle for funding the widening project. Instead, it is a quick fix to state budgetary issues, which may or may not be approved by the Legislature.

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September 2007 will go down in history as a month of infamy for New Jersey. The headlines in the state’s major newspapers featured the sentencing of former Ocean Township Mayor and Asbury Park Manager Terrence Weldon for accepting $64,000 in bribes from developers; the federal indictment of 11 municipal officials from Passaic, Paterson, Newark, Orange and Pleasantville on bribery charges in a sting operation. Finally, Governor Jon Corzine signed four ethics bills into law, includingA-4326 (sponsored by Michael Panter, D-Monmouth and Linda Greenstein, D-Middlesex) which forbids dual office holding, but grandfathered the 19 legislators who currently hold additional posts as long as they are re-elected or until they retire. At the bill signing ceremony, as reported in The Star-Ledger, the governor said, “It’s not the bill I wanted… It gets us down the road."

The road to hell is paved with good intentions. Earlier in the year, Harry Pozycki, chairman of the Citizen’s Campaign, gave the governor an “incomplete” in the area of pay-to-play reform, and in particular, for not taking on the culture of corruption. In an op-ed piece in the Asbury Park Press, Pozycki noted that the governor supported the ethics programs developed by Senate President Richard Codey, which were palliative at best, and did not delve far enough into the root causes of corruption. Most importantly, Pozycki said that pay-to-play must be addressed in the context of redevelopment:

Government’s powers in areas designated for redevelopment are nearly unfettered and include the power of eminent domain. It is important that redevelopment decisions are made in the broad public interest and not as a reward to large campaign contributors.

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On the face of it, you may be wondering what eminent domain, demographics, and immigration policy have to do with each other. A disturbing trend is developing – the prime example is in Morristown, New Jersey, where Mayor Cresitello has been banging the drum to have local police deputized to enforce immigration laws. He blames “illegal immigrants” for crime, quality of life issues (vagrancy, loitering) – all of which adversely affect Morristown in the opinion of the mayor. As reported on August 18, 2006, in the Daily Record:

• On illegal immigrants in town: "I want tomorrow morning a bill passed that provides a pathway to legalization, but not citizenship, since they did jump the borders."
• On redevelopment in town: "It is about future tax needs. It's about rebirth. We need to revitalize the area. We need sources of revenue."
• On empowering some town police to enforce federal immigration laws: "It's intended to deal with felons. ... It absolutely would have prevented the murder of those three children (recently murdered in Newark)."

But this mayor is also aggressively pursuing blighting areas like Speedwell Avenue and Early Street. He is pushing to relocate (at no cost) the residents of these properties to make way for new residential and retail development. As reported in the July 23 issue of the Morris Daily Record:

While the town has several redevelopment projects in the works, the Speedwell Avenue
project is the largest and has the largest number of residents, Cresitello said.

The town is not responsible for relocating residents because there is no local, state or federal money in the project, the mayor said.

The mayor is dead wrong legally on the relocation issue. The law - The Relocation Assistance Act, N.J.S.A. 20:4-1 and the Regulations N.J.A.C. 5:11-1 et seq. - provide relocation assistance to any occupant dislocated as a result of a public project. There are roughly 90 residents in the 12-acre redevelopment area.

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Today at the Statehouse Annex in Trenton, New Jersey high school students, who participated in the New Jersey Symposium on Leadership and Politics hosted by the Junior Statesmen Foundation and Princeton University, heard a lecture on eminent domain among other topics.

The symposium is a unique forum where students hear speakers at the highest level of state government and have the opportunity to ask questions of these officials in an informal setting. The students heard from members of Governor Corzine's cabinet and the Honorable William Pascrell III from the U.S. House of Representatives. It was an honor for me to participate as a guest lecturer and to have the opportunity to address a group of elite students, all of whom will be starting their senior year in the fall. Some of the group indicated interest in pursuing a career in law and most were interested in politics and governance at the state level. 

The students posed questions that demonstrate their awareness of the eminent domain issue and the controversy surrounding it. They were especially interested in the Kelo case and eminent domain reform and the pending changes to the current statutes that are under consideration by the Legislature. They asked questions about the eminent domain process and were concerned about property owner rights to compensation and relocation assistance. Democracy is not a spectator sport  -  that's the tagline on the Junior Statesmen Foundation web site. This calls to mind another quotation: "The price of democracy is eternal vigilance."  Those are the words of one of our founding fathers, Thomas Jefferson.  Based on my experience with this group of young people today, our participatory democracy is in good hands.

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In a 35-page opinion issued Friday, August 10, 2007, and approved for publication, the Appellate Division of the New Jersey Superior Court upheld the validity of the Highlands Water Protection and Planning Act., N.J.S.A. 13:20-1 et seq. , and its impact on a 93-acre tract of land in Washington Township in Morris County.

The Highlands Act was signed into law in August 2004 by former Governor James E. McGreevey.  The law supercedes local municipalities with regard to land use planning in the Highlands region of northwest New Jersey, covering aproximately 800,000 acres in portions of Morris, Sussex, Passaic, Bergen, Warren, Hunterdon and Somerset Counties.

The case, OFP, LLC v. State of New Jersey, concerned a 93-acre tract of undeveloped land owned by OFP, LLC, located in Washington Township, Morris County. The land is located within the preservation area of the Highlands region (N.J.S.A. 13:20-7(b), (c)). In December 1999, the Washington Township planning board granted OFP's predecesor in title preliminary major subdivision approval to subdivide the property into 26 residential lots.  One critical permit, needed by OFP for potable water supply to the development tract, was pending and incomplete as of the date the Highlands Act was introduced in the Legislature, March 29, 2004. The permit was issued May 14, 2004, and afterward, the Legislature enacted the Highlands Act and the Governor signed the bill into law on August 10, 2004. A provision in the Highlands Act, N.J.S.A. 13:28, required all approvals from DEP to be in place before the Act was introduced. Since this was not the case, OFP's proposed subdivision was subject to the Highlands Act permitting review program, pursuant to N.J.S.A. 13:20-33.

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Yesterday Essex County Superior Court Judge Donald Goldman vacated Maplewood’s blight declaration for two properties, one owned by Carolyn Evans and the other owned by Richard Rio of the Rivco Group LLC. The case was an action in lieu of prerogative writs where the plaintiffs contested the inclusion of their properties in an “area in need of redevelopment” under the Local Redevelopment Housing Law (LRHL), N.J.S.A. 40a:12A-1 et seq. The plaintiffs argued that the action of the defendant township was arbitrary and capricious and not based on substantial, credible evidence as required by the law. Download the PDF opinion in Carolyn Evans and Rivco Group, LLC v. Township of Maplewood (L-6910-06).

The court relied heavily on the recent case of Gallenthin Realty v. Borough of Paulsboro, 191 NJ 344 (2007). The court rejected Maplewood’s argument that the suit was premature because no plan for redevelopment has been adopted and no condemnation was imminent. Maplewood’s argument is typical of the disingenuous blather presented to property owners who oppose a blight designation under the 45-day time constraints. Municipalities are cavalier but deliberate when they ignore the impact of a declaration of blight or area in need of redevelopment: that designation, left unchallenged, is the foundation for subsequent eminent domain action by the municipality. The court noted:

Maplewood and its Planning Board also oppose this lawsuit on grounds of ripeness and standing. They argue that the case is not ripe for review because no development plan is yet in place. Evans and Rivco respond that the designation of an area in need of redevelopment is binding and permanent, and therefore can be challenged by anyone subject to its effects. This Court finds that Evans and Rivco have standing to challenge the designation. Gallenthin is itself evidence that a designation as an area in need of redevelopment is justiciable and that an attack on it is not premature. However, other relief sought by Evans and Rivco will be denied because such relief is premature. No attempt at taking their property is planned or suggested. Moreover, even an erroneous designation as being part of an area in need of redevelopment would not immunize the Evans and Rivco properties from being acquired for a truly public use. (Slip Opinion at page 3.)  

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In a reported case, Cramer Hill Residents Association v. Primas (PDF),  brought by the South Jersey Legal Services involving the Cramer Hill Neighborhood of Camden, the Appellate Division unanimously reversed the trial court regarding Camden’s attempt to use eminent domain to acquire several parcels of land under the Fair Housing Act, N.J.S.A. 52:27D-325. Camden sought to use this act rather than the Local Redevelopment Housing Law (LRHL) after the trial court threw out Camden’s redevelopment plan. The Courier Post reported that the city decided to redo the Cramer Hill redevelopment plan prior to the court’s ruling on July 17.

The basis for the city’s eminent domain action was that the acquisitions would increase the number of affordable housing units in Camden. In reversing the trial court, the Appellate Division agreed with plaintiffs that a hearing was required at the trial level to establish that the proposed acquisitions would in fact increase the number of afford housing units. The court noted:

We are nevertheless compelled to remand this matter for the trial court to conduct a fact-finding hearing to determine if the ordinance passed under N.J.S.A. 52:27D-325 will assist the City in meeting its fair share housing obligation under the FHA. Stated differently, the trial court must determine whether the proposed land acquisition plan authorized by the ordinance actually increases the number of affordable housing units in the City.

In going about this task, the trial court should be guided by the overarching public policy supporting the City's authority to take private property by eminent domain under N.J.S.A.
52:27D-325: the exercise of the power of eminent domain granted to municipalities under section 325 is expressly predicated upon a finding that the proposed land acquisition is "necessary or useful for the construction or rehabilitation of low or moderate income housing." Ibid. Absent such a finding, the City lacks the legal authority to proceed under N.J.S.A. 52:27D-325 (Slip Opinion, page 7)

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"Now we know that you can't simply say that you can redevelop on the basis that you're not getting the highest return on your land." - Michael Kates, Esq., as reported in the Star-Ledger (July 25, 2007)

Lodi's attempt to blight and ultimately condemn two trailer parks, comprising aproximately 20 acres in the vicinity of Route 46, has come to an end. In a unanimous per curiam opinion by New Jersey Appellate Judges Kestin, Payne, and Lihotz, the court affirmed the decision of Superior Court Judge Richard Donohue throwing out the resolutions of the Lodi Planning Board, Mayor and Council that blighted the subject properties. Download PDF of the opinion:  LBK Associates, LLC and Save Our Homes v. Borough of Lodi and Costa Realty v. Mayor and Council of the Borough of Lodi (A-1829-05T2)

Last week we reported that the new Lodi Council had unanimously agreed to drop the suit. The decision of the Appellate Division is in line with several recent decisions reported in this blog (see blog entries about Belmar, and Mulberry Street) which follow the Gallenthin decision (PDF) in rejecting blight where the municipalities have not provided substantial, credible evidence supporting their findings.

In addition the court said (see Slip Opinion at pages 4-5)

We reject defendants' argument that plaintiffs failed to overcome the presumption of validity attending municipal actions generally. See Concerned Citizens of Princeton, Inc. v. Mayor and Council of the Borough of Princeton, 370 N.J. Super. 429, 452-53 (App. Div.), certif. denied, 182 N.J. 139 (2004). Once plaintiffs demonstrated the redevelopment designation was not supported by substantial evidence, that municipal action was no longer entitled to the deference normatively afforded. See, e.g., Gallenthin Realty Dev., Inc. v. Borough of Paulsboro, ___ N.J. ___, ___ (2007)(slip op. at 40-41); ERETC, L.L.C. v. City of Perth Amboy, 381 N.J. Super. 268, 281 (App. Div. 2005).

We also reject defendants' argument that the matter should have been remanded for further proceedings. The shortcomings in the determinations under review were too basic and too far at variance with current principles governing the redevelopment process to be amenable to repair through further hearings. Defendants are not precluded from beginning the process anew and evaluating the properties by the light of the holdings and underlying policies in cases cited by Judge Donohue and more recent judicial reflections in the subject matter area and cognate fields, especially those dealing with the concepts of obsolescence and underutilization stressed by defendants. See, e.g., Gallenthin Realty, supra, ___ N.J. ___. See also Kelo v. City of New London, 545 U.S. 469, 125 S. Ct. 2655, 162 L. Ed. 2d 439 (2005); Vineland Const. Co. v. Township of Pennsauken, ___ N.J. Super. ___ (App. Div. 2007).

In light of its findings concerning blight and the absence of substantial, credible evidence, the court did not address other important issues raised in the amicus briefs filed by the Office of the Public Advocate  (PDF) and the Northeast New Jersey Legal Services regarding the muncipality's constitutional obligation to make provisions for affordable housing and the effect of the exercise of eminent domain, which in these cases, would result in a net loss of affordable housing. This an important public policy issue which may be reached in the recent lawsuit filed by the Kaplan Companies of Highland Park seeking to overturn the Highland Preservation Act on the basis that it prevents the construction of senior and affordable housing in the Borough of Hackettstown.

The recent decisions that follow the Gallenthin ruling indicate that cases in the pipeline, including the cases in Long Branch pending oral argument in the Appellate Division, City of Long Branch v. Anzalone and Brower, will receive similar scrutiny regarding the propriety of municipal actions declaring blight and instituting eminent domain proceedings.  

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Yesterday, Essex County Superior Court Judge Marie P. Simonelli issued a detailed 71-paged opinion in Mulberry Street Area Property Owner's Group v. City of Newark  (download PDF- 2 MB) and threw out Newark’s attempts to blight the Mulberry Street project area. The area consists of 14 acres of land improved with a mix of residential and commercial buildings and several parking lots. There are 166 lots, all but seven are owned by private businesses or individuals.

The area is located approximately one block east of the Newark Arena project presently under construction on Broad Street. The court devoted approximately 60-pages of the decision to a detailed, parcel by parcel analysis of the properties and concluded, after reviewing the reports and testimony of the respective planning experts, David Roberts of Schoor DePalma on behalf of the City and Peter Steck on behalf of the property owners, that the city had not provided substantial credible evidence of blight as required by the LRHL. The court relied heavily on the recent NJSC opinion in Gallenthin Realty v. Borough of Paulsboro (see Mulberry Street Area Property Owner's Group v. City of Newark excerpt at page 59-60.)

The court agrees that the City should be entitled to utilize the tools of redevelopment to allow it to once again take its place as the State’s most important and prominent City. However, it cannot do so in the manner in which it has done here. A unanimous New Jersey Supreme Court recently held in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, __N.J.__(2007), that the constitutional requirement of blight is not met where the sole basis for the redevelopment is that the property is “not fully productive.” Slip Op. at 3. The Supreme Court carved out no exceptions to this holding. Thus, regardless of whether the property is located in a small municipality, such as Paulsboro, or a large municipality, such as Newark, whether it is vacant or unimproved or a parking lot, gravel lot or storage yard, a municipality cannot take property for redevelopment solely under N.J.S. A. 40A:12A- 5(e) merely because it believes that the land is not fully productive and can be use for something more beneficial to the general welfare. Slip Op. at 29. … (page 59-60)


The court finds, therefore, that the City declared the entire Mulberry Street Area as an area in need of redevelopment solely under N.J.S. A. 40A:12A- 5(e) because it is not property utilized and fully productive. Under the Gallenthin holding, this declaration does not meet the constitutional requirement of blight and must be invalidated and set aside. (page 61)

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In a surprise development at a Monday night meeting in Lodi, the five members of the Borough Council voted unanimously to drop the appeal of a lower state court decision that found the borough had no grounds to blight land belonging to Brown's Trailer Park and Costa Trailer Court. More than 40 residents were affected by the town's attempt to seize the properties by eminent domain.

As reported in the Herald News, the president of Save Our Homes, the coalition of trailer park residents, Kendall Kardt said, " “I believe that a lot of people in town found this repugnant  on a lot of levels. They felt threatened themselves by the idea that eminent domain could be used to put people out of their homes.”

The decision in the case, issued by Bergen County Superior Court Judge Richard Donohue, was under appeal and pending at the time of the Borough Council's decision.  The Office of the Public Advocate submitted an amicus brief in this case on behalf of the property owners. Public Advocate Ronald Chen said, “In this matter, the trial court reached the correct ultimate conclusion – Lodi’s blight designation must fail."

The Council's decision now ends Lodi's attempts to seize these properties under the Local Redevelopment Housing Law. The decision by the Lodi Borough Council is further evidence that New Jersey municipalites are rethinking their redevelopment efforts in light of the N.J. Supreme Court's decision in Gallethin Realty v. Borough of Paulsboro.

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Two recent decisions of the Appellate Division show that the N.J. Supreme Court decision in Gallenthin Realty v. Borough of Paulsboro  will be followed in pending cases, but Gallenthin is not the panacea envisioned by some property rights activists.

In the case of Citizens in Action v. Township of Mt. Holly, a unanimous opinion of the Appellate Division  affirmed Mt. Holly's finding of blight. The plaintiffs were a group of home owners who resided in or owned property in a section of Mt. Holly known as Mt. Holly Gardens. The trial court, after affording plaintiffs a hearing and an expansion of the record, affirmed the designation of an area in need of redevelopment. The Appellate Division affirmed the trial court and found that the municipality had met the burden under the LRHL of providing sustantial, credible evidence to support a finding of blight.  This case was argued in October 2006 and decided July 5, 2007, after the Gallenthin decision. The court discusses Gallenthin in the text of its opinion:

Redevelopment designations, like all municipal actions, are vested with a presumption of validity. Gallenthin Realty Dev., Inc. v. Borough of Paulsboro, ___ N.J. ___, ___ (2007) (slip op. at 41); Levin v. Twp. Comm. of Bridgewater, 57 N.J. 506, 537-39, app. dismissed, 404 U.S. 803, 92 S. Ct. 58, 30 L. Ed. 2d 35 (1971); Hirth v. City of Hoboken, 337 N.J. Super. 149, 154, 161 (App. Div. 2001). Judicial review of a redevelopment designation is limited to whether the designation is supported by substantial credible evidence. Gallenthin, supra, ___ N.J. at ___ (slip op. at 41). This heightened deference is codified in the LHRL, which provides that an "area in need of redevelopment" designation "if supported by substantial evidence . . . , shall be binding and conclusive upon all persons affected by the determination." N.J.S.A. 40A:12A-6b(5). Accordingly, it is not for the courts to "second guess" a municipal redevelopment action, "which bears with it a presumption of regularity."
Forbes v. Bd. of Trs. of S. Orange Vill., 312 N.J. Super. 519, 532 (App. Div.) certif. denied, 156 N.J. 411 (1998).

It is clear from the text of the opinion that the substantial credible evidence standard will be strictly enforced. It is equally clear in this case, that Mt. Holly's expert met the test. The presumption of the validity of the municipal action remains intact and it is a difficult issue for the objecting property owners to overcome. Neither the Courts nor the Legislature will deny a municipality the tool of eminent domain where they seek to redevelop clearly blighted properties.

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Recent case law suggests that more than a few municipalities declare blight based on reports that cite statutory language without analysis of the property and the categories selected, and most importantly, without linking the criteria to the health, safety and welfare of the community. Many experts presented by the municipalities do not provide substantial, credible evidence to support a conclusion that the study area is in need of redevelopment.  These cases and others are discussed in my recent article Defining Blight: First Steps in the Redevelopment Process published in the New Jersey Law Journal.

• Prior to the Kelo case, Camden County Assignment Judge Francis J. Orlando, Jr. set aside a municipal decision designating an apartment complex as an area in need of redevelopment in Spruce Manor Enterprises v. Borough of Bellmawr 315 N.J. Super 286 (Law Div. 1998). No evidence was presented to show how obsolescence, faulty design, excessive land coverage or obsolete layout was detrimental to the safety, health, morals, or welfare of the community.
• In Winters v. Township. of Voorhees 320 NJ Super 150 (Law Div 1998), Judge Orlando reversed a blight designation on an 18-acre municipal-owned tract that the township intended for construction of an ice rink. Voorhees argued that the revision of the statute in 1992 created two categories of land eligible to be designated as in need of redevelopment: land that is used by public entities and unimproved land that is not likely to be developed by private capital. The township argued that municipal ownership is all that is needed in order to declare the site a redevelopment area. Judge Orlando disagreed, concluding that ownership of a tract of land by a municipality is not, standing alone, sufficient to support a redevelopment designation; it additionally requires substantial evidence that the land is not likely to be developed through the instrumentality of private capital in order to declare a site a redevelopment area. 320 N.J. Super at 156.

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Greetings from Asbury Park, a 93-minute film documentary, was shown Friday evening, June 22, as part of the “Kelo Day” anniversary activities at the Jersey Shore Arts Center.  There’s one heart-rending scene after another in a film about a senior citizen who finds out the city is condemning her property. There’s the title theme - postcards from Asbury Park. You vacation or you live at the shore; you buy postcards and send them home. Or in this case, you send them back to the relatives in Greece. Independent filmmaker Christina Eliopoulos documents the immigrant’s story, her family’s story, starring her 'great auntie,' Angie Hampilos. 

You have to admire the sheer gumption of this 92-year old woman, as she faces the condemnation of her home to make way for oceanfront redevelopment. Angie’s mad as hell, and she’s not going to take it sitting down. She’s going to visit the Mayor, but she mentions stoically that her lawyer told her to go see the Mayor on her own. Her niece Christina grabs a camera, any camera will have to do, because it’s important to document the moment her aunt finds out the mayor isn’t in. Angie’s disappointment is palpable. It’s so palpable, there’s hardly a dry eye in the house. Except for the group of people in the theatre from Long Branch – they’re mad as hell, too. 

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In a unanimous decision which invalidated Paulsboro’s redevelopment classification of the Gallenthin property, the New Jersey Supreme Court analyzes the meaning of blight as it pertains to the New Jersey Constitution and the Local Redevelopment Housing Law (LRHL) in Gallenthin Realty Development, Inc. v. Borough of Paulsboro (A-51-2006):

The Constitution expressly authorizes municipalities to engage in redevelopment of “blighted areas.” The State may take private property only for a “public use.” Under the Blighted Areas Clause of the New Jersey Constitution, 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. The LRHL empowers municipalities to designate property as “in need of redevelopment” and thus subject to the State’s eminent domain power.

In the Court’s final analysis, Paulsboro’s view of blight was incongruent with both the statutes and the Constitution. Paulsboro interpreted subsection 5(e) of the LRHL to permit redevelopment of any and all properties that were stagnant, or not fully productive. Any property which is underutilized could be deemed blighted under this flawed approach and, had the Court's interpretation adopted such an expanded definition of blight, most properties would be eligible for redevelopment. Instead, the Court held:

Because the New Jersey Constitution authorizes government redevelopment of only “blighted” areas, the Legislature did not intend N.J.S.A. 40A:12A-5(e) to apply in circumstances where the sole basis for redevelopment is that the property is “not fully productive.” Rather, subsection 5(e) applies only to areas that, as a whole, are stagnant and unproductive because of issues of title, diversity of ownership, or other similar conditions. Therefore, the Borough of Paulsboro’s redevelopment classification in respect of the Gallenthin property is invalidated.

However, the Court also said that its holding does not prejudice any future inquiry by the Borough regarding whether the property is “in need of redevelopment” based on any other legitimate grounds.

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The long, contentious three-year litigation over Bloomfield’s redevelopment and its attempts to secure properties by eminent domain is over. The New Jersey Superior Court entered an order approved by Essex County Assignment Judge Patricia Costello dismissing Lardieri et al v. Township of Bloomfield (ESX-L-8929-06) on the express condition that Bloomfield would not use its power of eminent domain to acquire the five plaintiffs’ properties.

The order was approved in a resolution by the Bloomfield Township Planning Board, the Mayor and Council. Both the resolution and the order establish that Bloomfield, when it selects a new developer, cannot use eminent domain to acquire private properties for the project, and the developer can acquire properties only through arms length negotiations. Most importantly, eminent domain has been removed from the developer’s arsenal.  

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"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

 "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. Anzalone,  Gallenthin 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.

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Public Advocate Ronald Chen has been pilloried for his support of eminent domain reform. The latest blast came from Senate Majority leader Bernard Kenny, Jr. (D-Hudson.), chairman of the Budget Committee, who took the opportunity during recent budget hearings to criticize not just the Public Advocate's budget, but Chen's eminent domain activism.  The Public advocate has filed amicus briefs in four eminent domain cases: two in Long Branch, one in Lodi, and the other case, Gallenthin Realty v. Paulsboro which the N.J. Supreme Court heard last month. Kenny accused Chen of trying to change the law through the courts instead of the legislature. But Chen spoke to the press after the meeting saying, "When the Supreme Court decides it's going to take a case on the definition of blight...if you don't get on that train, it's leaving without you."

Chen used his office properly to speak out on behalf of the people of New Jersey on this issue. Don't forget the "Average Joe" who is usually the victim in these cases does not have the money or the the lobbying force to match the municipalities, the builders, and the developers.

Kenny equates the use of eminent domain in connection with redevelopment as the "economic engine" for beneficial change, mostly in the form of increased tax revenue. Kenny conviently ignores the abuse of eminent domain that goes with the process. According to the Asbury Park Press (May 8), Kenny said, "Changing the burden of proof will paralyze the state and municipalities in being able to develop their properties in accordance with the economic conditions at the time."

Changing the burden of proof to the municipality to justify blight will level the playing field in light of the overwhelming presumption in the case law which favors the validity of municipal action. See Concerned Citizens of Princeton, Inc. v. Mayor and Council of the Borough of Princeton, 370 N.J. Super 429, 851A.2d 685 (App. Div. 2004),

"My feeling is that if the evidence is there and the area is blighted, this really should not be much of a burden on the municipality at all," Chen said. He also doesn't agree that property can be blighted just because the state believes it can come up with a more beneficial and productive use.

Chen has testified before the legislature on numerous times, suggesting reform of current eminent domain legislation where the process is transparent, compensation is made fair, and relocation in the same community is required.  But nearly two years after the Kelo decision, the New Jersey legislative process remains stalled.

The public has Ronald Chen as their advocate, and he's doing an excellent job under difficult circumstances, testifying before the legislature and presenting his arguments in the courts. He should be applauded for his efforts.  

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"Our goal is really quite simple: to keep the power flowing to all Americans with sufficient reliability. And so, each draft Corridor was designed to include both areas where significant congestion problems or constraints exist and areas where there is a substantial amount of existing underutilized capacity as well as the potential for development of renewable energy generation – a so-called “source-and-sink” approach. In other words, these Corridors are meant to facilitate the process of connecting places that need relief with places that have the potential to supply more power. And this work cannot happen soon enough." -- Remarks as Prepared for Energy Secretary Samuel Bodman, First Annual Grid Week Conference, Washington, D.C.

Looking at the map above, it's clear that all of New Jersey falls into a "power bottleneck" where the Department of Energy (DOE) claims new electrical lines are critical to support the current grid. And significant portions of Southern California  are also part of the "National Interest Electric Transmission Corridor" -- areas the federal government deem stressed. The DOE can use eminent domain for its energy projects according to the Energy Policy Act of 2005. According to a DOE press release:

Within a National Corridor, transmission proposals could potentially be reviewed by the Federal Energy Regulatory Commission (FERC), which would have siting authority supplementing existing state authority. This would mean if an applicant does not receive approval from a State to site a proposed new transmission project within a National Corridor, the FERC may consider whether to issue a permit and to authorize construction. In the event of a FERC siting proceeding, the FERC must conduct a review under the National Environmental Policy Act, which would include analysis of alternative routes for that project, including route realignments necessary to avoid adverse effects on the environment, landowners, and local communities.A federal permit could empower a permit holder to exercise the right of eminent domain to acquire necessary property rights to build a transmission project. That authority could only be exercised if the developer could not acquire the property by negotiation, and even then, the authority would not apply to property owned by the United States or a State, such as national or state parks.

The DOE issued a draft proposal which designated the 21 counties that comprise New Jersey as part of the plan. In addition, the Mid-Atlantic National Corridor, pictured above, consists of Delaware, the District of Columbia, some parts of Ohio, West Virginia, Virginia, Maryland, Pennsylvania, and New York. A public hearing to discuss the Mid-Atlantic Corridor is scheduled for May 23, 2007, in New York City.

Update - May 8, 2007

DOE Announces Additional Public Comment Meetings for Draft National Corridor Designations WASHINGTON, DC – The U.S. Department of Energy (DOE) today announced that it will hold four additional public meetings for the two draft National Interest Electric Transmission Corridors (National Corridors) during the 60-day public comment period, which will close on July 6, 2007. The four additional meetings will be held in June in: Phoenix, Arizona; Las Vegas, Nevada; Pittsburgh, Pennsylvania; and Rochester, New York. Dates and locations will be published in the Federal Register in the coming days. DOE previously announced it would host three public meetings at the following locations: Arlington, Virginia on May 15, 2007; San Diego, California on May 17, 2007; and New York, New York on May 23, 2007.

To stay informed and comment on the plans, go the link at the  National Interest Electric Transmission Corridors and Congestion Study.

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I see trees of green....... clouds of white ....Nothing’s goin’ on….so, this must be blight…
And I think to myself.... what a wonderful world...

Oral argument was held before the New Jersey Supreme Court in the matter of Gallenthin Realty Inc. v. Borough of Paulsboro on April 26, 2007. This case is the appeal of a prerogative writs suit filed by Lt. Col. George Gallenthin contesting Paulsboro’s actions blighting his property as part of a deepwater port development project on the Delaware river. The land in question totals 63 acres, 20 of which are uplands and the balance is considered wetlands. The property is currently under a farmland assessment and is considered vacant and unproductive, and therefore “blighted” by the Borough of Paulsboro. See blog post of April 24, 2007.

At the heart of the appeal, as discussed in the colloquy between Gallenthin’s attorney Peter Dickson, Public Advocate Ronald Chen, and Justices James Zazzali and Barry Albin, is whether a portion of the Local Redevelopment Housing Law, N.J.S.A. 40A:12A-5 (e) comports with the 1947 New Jersey Constitution Article VIII, Section 3, Paragraph 1, regarding the definition of blight:

State Public Advocate Ronald K. Chen argued that the current state law defines "blight" so broadly that it could apply to virtually any property in New Jersey.

"It has become a wild-card definition of blight that can expand and contract to apply to any set of circumstances," he told the justices, urging them to narrow the definition to protect the rights of property owners. - The Star-Ledger (Friday, April 27, 2007)

(Refererence my blog post of May 21, 2006 discussing the genesis of the blight, the 1947 New Jersey Constitution, and relevant sections of the Public Advocate's report of May 2006) 

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On Thurday, April 26, 2007, at 9:30 a.m., the New Jersey Supreme Court will hear oral argument on the case of Gallenthin Realty Development Inc v. Borough of Paulsboro. This case has been characterized on the front page of the New Jersey Lawyer (April 23, 2007) as “perhaps the most significant eminent domain case to reach the high court in decades.” (See New Jersey Lawyer, "Eminent Domain: Showdown at the Court" by Robert Seidenstein.)

This case come to the Court through a petition for certification granted by the Court in October 26, 2006. Gallenthin Realty Development is represented by Peter Dickson of the firm of Potter & Dickson in Princeton.  Dickson alleges in his brief that the case raises questions regarding the abuse occurring under the 15-year old Local Redevelopment Housing Law, where land is taken that is not blighted as that term is used in the New Jersey Constitution of 1947, Article VIII, Paragraph III. Dickson further alleges that the legislature has gone beyond the state constitution in enacting the LRHL in 1992 and in its definition of blight (NJSA 40A:12A-5 a-h).

In a unanimous opinion decided on July 14, 2006, the Appellate Division of the New Jersey Superior Court rejected all of Gallenthin’s arguments regarding the propriety of the blight declaration and the underlying action of the planning board and the governing body of the Borough of Paulsboro. Continue Reading Posted In State of New Jersey
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The Eminent Domain in New Jersey Lorman Education seminar scheduled for tomorrow will proceed as planned.

If you are a faculty member or attendee, please check traffic advisories or contact the Hyatt Regency New Brunswick at 732-873-1234 if you need alternate directions.  As of 5 p.m., the hotel suggests:

1. Take 287 to Exit 10 (Easton Avenue)
2. Take Easton Avenue to the end
3. Go under railroad tracks and make a left onto Albany Street
4. Go two blocks and make a right onto Neilson Street
5. The hotel is on the corner; enter on the left

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It's not too late to join William J. Ward, author of the New Jersey Eminent Domain Law Blog and moderater of the Lorman Education seminar, Eminent Domain in New Jersey, next Tuesday, April 17, 2007, at the Hyatt Regency in New Brunswick.

Senator Ronald Rice, chair of the Senate Urban and Community Affairs Committee and sponsor of proposed legislation to address eminent domain reform, and Senator Ellen Karcher, sponsor of pay-to-play reform legislation, will be featured speakers. Eminent domain reform and pay-to-play are critical components of any effort to change the manner in which eminent domain acquisitions occur in New Jersey. See "Pay-to-play's poster child" at northjersey.com (The Record, April 9, 2007.)

Eminent domain decisions are occurring weekly at the trial and appellate court levels. These recent case law and legislative developments, environmental, valuation, planning and relocation assistance issues are the subjects that will be discussed by the speakers. The full-day program will conclude with a panel discussion, The Ethics of Redevelopment and Pay-to-Play with Senator Ellen Karcher, Paula Franzese, chair of the New Jersey State Ethics Commission, Paul P. Josephson of Hill Wallack, and William J. Ward, managing partner of Carlin & Ward.

Other speakers include Deputy Attorney General Maureen Hinchliffe Bonney, attorneys Edward McKirdy and John Buonocore of McKirdy & Riskin; Timothy P. Duggan of Stark & Stark; Anne L.H. Studholme of Hill Wallack; James M. Turteltaub and Arthur G. Warden III of Carlin & Ward; appraiser William H. Steinhart, vice-president of Appraisal Consultants Corp.; Robert Cunningham of the New Jersey Department of Transportation; and Peter G. Steck, planner.

The seminar provides continuing education credit for attorneys (NY and PA) , appraisers, and planners. Download a copy of the brochure with the agenda and biographies of the panelists. Advance registration is preferred. There are a limited number of media passes available to publications that cover eminent domain news. Please contact Susan L. Ward at 973-377-3350.

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“There’s no such thing as a perfect bill…Everyday when you make a change, another fax rolls in.” – Senator Ronald Rice, Chair of the Community and Urban Affairs Committee

The vote was tabled and, since the last hearing of the Senate Community and Urban Affairs committee, much ado has been made about tensions among committee members and problems in the process of merging the Senate and Assembly bills. Near the conclusion of Thursday’s hearing, Senator Madden (D-Gloucester) complained that he received the 63-page bill late Wednesday afternoon. He didn’t have enough time to read it.

But some Long Branch residents did. Here are some highlights from their testimony. (To listen to the full recording of the March 15 meeting of the Senate Community and Urban Affairs Committee, log on to the New Jersey Legislature web site. )  

“I want to remind you that this is Sunshine Week,” Michele Bobrow said. “A lot of things in eminent domain are going on behind closed doors: arrangements, contracts are all behind closed doors. The balance of power is remaining with developers and municipalities….We don’t want valuation: we want to be able to stay in our homes and businesses.”

“I read every single word of this bill,” Harold Bobrow said. “I think there are certain things that need to be addressed. For instance, individuals who need affordable housing: if they’re dwelling in the redevelopment zone, are they going to have the ability to pay the taxes in the redevelopment zone? "
   

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S-1975 and A-3257 have been merged and amended.  The latest version of the bill issued today is linked here. A hearing on the merged bill is scheduled for tomorrow at 10 a.m. before the Senate Community and Urban Affairs Committee.

The bill is a moving target. The section creating a special Land Use Court has been deleted. Pay-to-play provisions have been included. Of particular concern is the provision regarding the effective date of the act, which would be 121 days from the date the act is adopted:

1[15.] 2[23.1 This] 38. Except as provided below, this2 act shall take effect on the first day of the fourth month next following enactment. Any final action taken by a municipality or redevelopment entity with respect to: a determination that an area is in need of redevelopment or in need of rehabilitation; enactment of a redevelopment plan; or designation of a redeveloper, 2or approval of a redevelopment agreement,2 prior to the effective date of this act shall have full force and effect, but any subsequent official action by the municipality or redevelopment entity after the effective date of this act shall be subject to its provisions. 2Sections 21, 34, 35, 36 and 37 shall remain inoperative until the first day of January following adoption of an amendment to Article VIII, Section 1, paragraph 6 of the New Jersey Constitution extending the period for short-term tax exemptions and abatements from up to five year to up to 15 years. Upon the adoption of that constitutional amendment, sections 4, 5, 6, 7, 25, 26, and 27 shall expire.2  [pages 61-62 of revision]

It also seems that provisions have been added which directly benefit developers. In particular, the adoption of strict notice requirements for redevelopment areas has been made contingent upon the passage of an amendment to Article VIII, Section 1, Paragraph 6 of the New Jersey Constitution. The proposed constitutional amendment would allow property tax-exemptions and abatements for periods longer than 5 years up to 15 years:

2i. The Legislature also declares that the use of the redevelopment process and the taking of property by eminent domain would be reduced, especially in urban areas, if municipalities could provide owners and developers greater incentives for making improvements in rehabilitation areas, specifically in the form of tax exemptions and abatements longer than five years. In anticipation of an amendment to Article VIII, Section 1, paragraph 6, the Legislature believes that it is appropriate to delay the implementation of strict notice requirements for redevelopment areas until a constitutional amendment is adopted to allow for property tax exemptions and abatements of longer than five years in rehabilitation areas, and to provide for transitional provisions that only impose strict notice requirements on those properties intended to be acquired through the use of eminent domain within a redevelopment area.2 [page 3 of the bill]

These tax abatements create other problems in municipalities because taxpayers who are paying the full amount will subsidize developers for the period of the abatement. A conjecture one can easily infer about the influence on these most recent amendments to the bill is that developers, who see increased cost of acquisition in other amendments to the statute, are looking for other benefits in the legislation. There is always a quid-pro-quo, but the legislators should draw the line and not give in to pressures being put on them by the League of Municipalities, New Jersey Builders Association, New Jersey Futures, et al.

New Jersey Public Advocate Ronald Chen gave his testimony at the last hearing of the Community and Urban Affairs Committee. He is one of the few voices in this process seeking to protect the people - the smal business owners, residential property owners, and tenants. The participation by lawyers and lobbyists on behalf of municipalities and developers has overwhelmed the process and the stated objectives of Senator Rice and his committee members in changing this statute. This is problematic because many muncipalities, such as Union Township, are pushing through large redevelopment studies and ordinances in order to get ahead of the pending amendments to the Local Redevlopment Housing Law.

You can listen to tomorrow's session live on your computer by logging on to the New Jersey Legislature web site and following the prompts to access the live broadcast at 10 a.m.

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Eminent Domain in New Jersey will be presented by Lorman Education Services on April 17, 2007, at the Hyatt Regency New Brunswick. The seminar, moderated by William J. Ward, Esq., is designed for attorneys, real estate professionals, project managers, planners, developers, appraisers, and land specialists.  Critical issues on the agenda include case law developments, legislative reform, planning, environmental and valuation issues, relocation assistance, and the ethics of redevelopment and pay-to-play. 

The faculty includes: Senator Ronald Rice, Senator Ellen Karcher, Paula A. Franzese, Maureen Hinchliffe Bonney,  Robert Cunningham, John H. Buonocore, Edward D. McKirdy, Timothy Duggan, Christopher Gibson, Paul P. Josephson, Anne L.H. Studholme, Peter G. Steck, William H. Steinhart, James M. Turteltaub, and Arthur G. Warden, III.  Read the faculty bios.

Continue reading for continuing education credits and seminar benefits.

To obtain the brochure click here. 

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“Don’t cripple eminent domain”  in the New Jersey section of the New York Times (March 11, 2007) is a misleading opinion. The headline is consistent with arguments expressed by Joseph Maraziti, Jr., Chairman of the New Jersey State Planning Commission; Anne Babineau, real estate development attorney; and William Dressel, executive director of the League of Municipalities. These advocates for developers and redevelopment projects harp on one theme: that the power of eminent domain given to municipalities is under threat by the bills proposed before the New Jersey Legislature. This is simply not true: neither the bill sponsored by Assemblyman Burzichelli and passed by the Assembly, nor the Senate bill S-1975 sponsored by Senator Ronald Rice, diminish the power of eminent domain.

The bills seek to tighten the definition of blight, provide better notice to effected property owners and tenants, expand the time within which to contest municipal action, and shift the burden of proof regarding blight to the municipality. Although many activists against eminent domain abuse have called for a moratorium on the use of eminent domain, there is no support for this in either the Assembly, Senate or the Governor’s office. The bills do not address eminent domain abuse per se: they simply tighten procedures for declaring property blighted and bestow additional benefits on the affected property owners.

In addition to the expressed fear regarding the curtailment of eminent domain, the advocates for development groups raise the specter of increased costs for acquisition, benefits to speculators who own property in the redevelopment area, and benefits to property owners who own contaminated sites:

But one section of the bill is especially troublesome. It would base payments to owners on a combination of fair market value and estimates of the income that the redeveloped property would generate. While that approach might have merit in the case of long-term owners and residents, it would be an outrageously high price to pay slumlords, speculators and owners who leave toxic waste on their property.  (New York Times)

These objections are exaggerated and can be dealt with effectively if they arise in a particular eminent domain case. Most of the property owners affected by redevelopment projects are single family residential, small business owners, and tenants who have businesses or residences within a designated area: they are not speculators or slum lords, trying to get rich on eminent domain proceedings. That’s simply not the pattern of ownership we see in the many projects with which we are involved. But we do see developers trying to acquire properties for much less than market value in order to maximize the profits in their development. It’s disingenuous for the developers to argue that a revised statute will inure to the benefit of the “wrong” people.

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Municipal attorneys routinely oppose any prerogative writ action filed beyond the 45 days permitted in the Local Redevelopment Housing Law (LRHL) 40A:20-1 et seq. In order to challenge a municipal action, a property owner must file a prerogative writ suit within 45 days of the action of the municipality declaring the property to be within “an area in need of redevelopment.”

This presupposes the property owner has received appropriate notice pursuant to the Local
Redevelopment Housing Law. As the law presently exists, those notice requirements are
deficient: There is no requirement, for instance, to alert the property owner that the action by the municipality could result in condemnation by eminent domain. If the words condemnation or eminent domain were in the notice, they would surely get the property owner’s undivided attention in the post-Kelo environment.

Download the PDF of Eminent Domain: Getting Noticed which appeared in New Jersey Lawyer InRe Magazine last week.

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Senator Ronald Rice (D-Essex), Chair of the New Jersey Senate Community and Urban Affairs Committee  will introduce the latest version of S-1975 on Monday February 26. Senator Rice's bill differs significantly from the New Jersey Assembly's eminent domain reform bill  ("Burzichelli Bill") which passed in June 2006 by a wide margin. The most significant change is that this bill proposes a Land Use Court which would be staffed by judges appointed by the Governor. All cases involving eminent domain, zoning, and planning issues would be referred to the Land Use Court.  Presently, zoning and related issues are considered in prerogative writ suits which are heard without a jury by the assignment judge in the county where the action is filed.

Eminent domain cases are venued in the Superior Court and valuation is a two-step process. The first is the hearing before condemnation commissioners, a panel which typically consists of two lawyers and a realtor appointed by the assignment judge. If either side is dissatisfied by the award of commissioners, an appeal can be made within 20 days. The final step in the valuation of the property is a Superior Court jury trial de novo. It is not clear, in the present version of S-1975, whether property owners in eminent domain case would continue to have the benefit of a jury trial. This is of paramount importance to property owners, as the jury as seen as the last hope of the owner to get a fair price for the property taken. The municipalities, developers, and other condemning authorities would love to do away with jury trials, as it would lessen their exposure considerably in the litigation.  This bill, if adopted, must state clearly and unequivocably, that the right to a jury trial is protected.

All interested parties are urged to attend Senator Rice's committee meeting on Monday, or to submit written comments to the Senator's staff. As another New Jersey senator once paraphrased, " The price of democracy is vigiliance."  As further revisions become available, there will be additional commentary published here.

Read the new sections of the bill proposing the Land Use Court.

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"I just praised the Lord.” – Charles Shennett, land owner

The opinion of the Appellate Division in the City of Passaic v. Charles Shennett is a victory for the “little guy.” See today’s Star-Ledger article, “From victim to victor.” Charles Shennett fought and defeated the misuse of eminent domain by the City of Passaic and the transfer of his property to a former Passaic councilman with a checkered past, who allegedly tried to purchase the property for years before condemnation.

In a unanimous opinion delivered by Judge Lorraine C. Parker and issued on Feb 9, 2007, the Appellate Division reversed Passaic County Assignment Judge Robert J. Passero’s ruling regarding the propriety of the procedures used by the City of Passaic to acquire the property of Charlie Shennett.  

Download a PDF of the opinion in City of Passaic v. Charles Shennett.   For background information on this case, see our blog post of 07 | 13 | 2005, An Eminent Domain Euphemism: An Area in Need of Redevelopment.  In that post, specific remedies to the notice requirements under the existing statute N.J.S.A. 40A:12A-1 et seq. were recommended. It should be noted that these recommendations and others are under consideration by the New Jersey legislature in bill S-1975.

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"Redevelopment will bring a new demographic to Union Center." - Stuart Portnoy, President of Metro Company

"I own this little building, I don't think they should take it...I want to keep working. That's my prerogative; this is America." - Allen Hodapp, Perkins Pharmacy

"I thought this happens in countries like Cuba. When you are here, you think you are in the safest place in the world." - Raul Rodriguez, Computer Doctor

Two lawsuits were filed today against Union Township in Superior Court at the Union County Courthouse on behalf of 20 property owners. The lawsuits contest the action of the planning board, mayor, and council declaring the properties “in need of redevelopment.” The planning board met on December 19, 2006, and the mayor and council approved the resolution of the planning board declaring all the properties in the study area “in need of redevelopment” on December 26, 2006. The action taken by the mayor and council give the municipality the right to condemn all the properties by eminent domain. The property owners vigorously contest the conclusions of the planning board. The two prerogative writ suits had to be filed within 45 days of the township’s resolution in order to contest the determination of blight or “an area in need of redevelopment.”

This Saturday, New Jersey Governor Jon Corzine will be present at Union Township between 1:00 and 2:30 p.m. to address residents on property tax reform and other issues. It is expected that citizens opposed to eminent domain will appear and rally in support of the property owners in Union Township who are threatened with eminent domain by virtue of the blighting of their properties in December by the township planning board, mayor, and council. The Governor will be asked where he stands on his campaign promise to halt eminent domain abuse and reform the eminent domain laws in New Jersey.

The reform of the Local Redevelopment Housing Law, Bill S-1975, is presently languishing in Senator Rice's Community and Urban Affairs Committee while the property tax issues dominate the agenda. This bill will only be acted upon if the Democratic leadership - Governor Corzine, Senate President Codey and Assembly Speaker Roberts decide to vote it out of committee and onto the Senate floor for action.

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"After five years, it's a parting of the ways... We are still committed to doing the downtown; we still will do the downtown." - Mayor Raymond McCarthy  in Local Source Breaking News 

The buzz about Forest City and Bloomfield is confirmed. Forest City is out.  The important question is: Who's in? According to Baristanet, McCarthy says the council has not selected another developer.

The removal of Forest City is a positive sign for the small business property owners fighting eminent domain. It doesn't mean the legal battle is over. It doesn't mean that Bloomfield has abandoned the blight designation or the threat to acquire the properties by eminent domain.

As reported on Local Source, the six property owners are skeptical, but optimistic. After all, they've been running their businesses under the threat of condemnation by Forest City for several years. As Bloomfield property owner Victor Lewis said, "Until the next - whatever they want to call it, 'uprising' - is, I'm assuming I'm not going to even hear from them."  

 

 

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Louis and Lillian Anzalone filed a petition this week asking the New Jersey Supreme Court to hear their appeal of Judge Lawson’s decision. The Anzalone case is fully briefed and pending oral argument in the Appellate Division, including an amicus brief filed by New Jersey’s Public Advocate Ronald Chen, who supports the conflicts of interest argument (see Section D p. 34 of PDF):

Appellants alleged that three members of the Long Branch City Council had potentially disqualifying conflicts of interest between their official positions and their status as shareholders, officer, and employees of the former Monmouth Community Bank, N.A. (“the Bank”), which helped to finance the redevelopment. In addition, the homeowners alleged potential conflicts involving two of the law firms that have represented the City and other actors in the redevelopment process. The trial court did not have before it a complete factual record relative to these potential conflicts, such as a full chronology of all material events, the terms of the Bank’s loans to the redevelopers, and the scope and timing of the law firms’ relationships with the City, the redevelopers, and the Bank. Without these critical facts, the trial court erred when it denied Appellants discovery and ruled that the potential conflicts were “tenuous” or not “realistic.”

The New Jersey Court Rules R2:12-2a permit a party to petition the Supreme Court directly within 10 days of the filing of the last brief:

a) Filing and Service of Motion. A motion for certification of an appeal pending unheard in the Appellate Division shall be served and filed with the Supreme Court and the Appellate Division within 10 days after the filing of all briefs with the Appellate Division. Within 5 days after service of the motion an opposing party may serve and file a statement in opposition. The motion and statement shall not exceed 5 pages. Nine copies thereof shall be filed with the Supreme Court.

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After almost three years of litigation, good news for two property owners arrived in yesterday's mail. Bloomfield's redevelopment counsel, Catherine Tamasik, informed us that Al Lardieri's building at 622 Bloomfield Avenue and Lewis Santus' building at 77-79 Washington Street will not be acquired as part of the "Parcel 2"  Redevelopment Project for Bloomfield Center by the township and their designated redeveloper, Forest City. This is a great victory for the property owners and a tribute to their perserverance.

But the legal battle is not over. Other plaintiffs in the Lardieri  et al v. Bloomfield Township lawsuit remain at risk, and they will pursue a prerogative writ case to overturn the blight designation of their properties. The township has requested an additional 30 days to file their answer, and the case has been assigned for trial to Essex County Assignment Judge Patricia Costello. Judge Costello issued an opinion in 110 Washington Street v. Township of Bloomfield. This decision has been upheld unanimously by the Appellate Division and the New Jersey Supreme Court denied certification on November 17, 2006.

In order for the property owners to be assured that their properties will not be acquired for redevelopment, it will be necessary for the mayor and council to adopt a resolution de-designating these properties as "in need of redevelopment" and removing them from the plan.

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In Jersey City School District v. Marathon Enterprises,  the Appellate Division issued a comprehensive 22-page per curiam opinion and unanimously affirmed a $2 million award made by the Office of Administrative Law (“OAL”) in favor of Marathon Enterprises, Inc., a Jersey City property owner who had been displaced by a school construction project.  

Marathon used the condemned facility to manufacture hotdogs. Marathon moved its product production operation to a new facility in the Bronx, New York. The issue in the case was the interpretation of the relocation regulations. N.J.A.C. 5:11-3.9 et seq. The specific issue resolved by the court involved whether the modifications made to the Bronx facility were improvements to the real estate, and therefore not reimbursable, as opposed to modifications to the facility in order to accommodate the relocated equipment. The Appellate Division affirmed all of Marathon’s claims based on the comprehensive opinion issued by Administrative Law Judge Leslie Z. Celentano. Marathon cross-appealed for interest on the amount awarded by the court in the relocation case. This claim was rejected by the A.L.J. and affirmed by the Appellate Division.      

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When property owners contest a condemning authority’s right to take, a stay is automatic under the Eminent Domain Act of 1971. The stay dissipates once the trial court issues findings of fact and conclusions of law upholding the right to take the properties.

In the eminent domain proceedings against property owners of Long Branch’s MTOTSA neighborhood, Monmouth County Assignment Judge Lawrence Lawson indicated there would be no stay in his June 22 opinion:

N.J.S.A. 20:3-11 states in part, “When the authority to condemn is denied, all further steps in the action shall be stayed until that issue has been finally determined.”

No stay is warranted here as this court has made a definitive ruling that the taking is authorized by law.

Upon publication of Judge Lawson’s opinion, Long Branch and its developers, Matzel & Mumford (K. Hovnanian) and Applied Management of Hoboken, could have proceeded with acquisition, demolition of the improvements and relocation of the property owners.

The obvious reason they did not is that the residential real estate market changed. The market could change again. This factor, and not the supposed “good faith” of the city of Long Branch, is what is driving the status of the project, despite the fact that the developer has obtained title to more than a half-dozen properties in the MTOTSA neighborhood since Judge Lawson’s decision.

If a stay is not issued by the trial court, a property owner must seek relief from the Appellate Division of the Superior Court. The standard for issuing a stay in the Appellate Division is difficult to meet and rarely given.

The standard for injunctive relief was established by the New Jersey Supreme Court in Crowe v. DiGioia in 1982.

In order to meet the standards, the applicant must demonstrate:

1. That in the absence of such a stay, the claimant will suffer irreparable injury;

2. The legal right underlying the plaintiff’s claim is settled;

3. A reasonable probability of ultimate success on the merits; and

4. The probability of harm to other persons will not be greater than the harm the claimant will suffer in the absence of such relief.

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"This is a monumental decision for builders. This is a death knell. It is going to create a tremendous chilling effect." - Jeffrey Baron, Esq. (The Star Ledger, Dec. 8, 2006)

In a 6-1 per curiam decision published on December 7, 2006, the New Jersey Supreme Court affirmed the Appellate Division opinion in Mount Laurel v. MiPro Homes, L.L.C., 379 NJ Super 359 (App Div 2005) written by Judge Skillman. The appellate decision confirmed the authority of the municipality, Mt. Laurel Township, to condemn property owned by a builder, MiPro Homes,  for open space preservation. Eminent domain was used, in this instance, despite Mt. Laurel Township having previously approved the 16.3 acre farm for development as a 23 lot, single-family subdivision.

The appellate decision reversed the trial court, which dismissed the eminent domain complaint based on its finding that the “open space” acquisition was merely a subterfuge for the real objective: To prevent further residential development in Mt Laurel Township. One ironic aspect of this case was that it pitted the League of Municipalities against the Builders League of South Jersey, two organizations that are usually on the same side of eminent domain issues, especially where it is applied to takings under the Local Redevelopment Housing Law. In redevelopment projects undertaken by municipalities, builders groups and the League both back the use of eminent domain to acquire private property for what is essentially a private purpose – redevelopment by builder.

In the MiPro Homes case, the Builders League of South Jersey argued against the use of eminent domain in this instance:

“Whether you are a farmer, homeowner, school, private foundation, builder or any other business owner, if you own property in New Jersey you are not immune from having the ownership of your land taken by force to preserve open space, whether there is a true plan for it or not and whether you are willing to sell it or not. This decision strips your right to own your own property. This should be a concern for every citizen in New Jersey. We can’t plan our future on the ownership of our own property.” - Richard S. Van Osten, executive vice president of the Builders League of South Jersey.

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The New Jersey Supreme Court denied certification to the Township of Bloomfield in its effort to advance an appeal in the 110 Washington Street case. The Appellate Division of the Superior Court unanimously upheld the decision of Essex County Assignment Judge Patricia Costello, who dismissed the condemnation suit. Bloomfield has now exhausted the appeal process in New Jersey.

This case is over, but the other Bloomfield litigants in the matter of Lardieri et al v.Township of Bloomfield continue to fight the township's efforts to blight and acquire the small business owners' properties by eminent domain proceedings. This matter has been assigned to Judge Patricia Costello, the same judge who decided the 110 Washington Street case.

In the past year, we have seen Toll Brothers, a national builder of residential units, pull out of the Bloomfield project. Forest City Ratner remains the designated developer for Bloomfield and continues to bear the litigation costs, which are reported by the Independent Press to exceed $410,000 to date. Judge Costello will schedule a case management conference on the Lardieri matter shortly.

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The Appellate Division of the New Jersey Superior Court granted the request of property owners Louis and Lillian Anzalone for a stay of the eminent domain action threatened against their home located at 32 Ocean Avenue, Long Branch, New Jersey. The Order for Stay, signed by presiding judge Jack L. Lintner, will prevent Long Branch from seizing the Anzalone property while the appeal is pending. The City of Long Branch also filed a motion to accelerate the appeal. That motion was denied.

Superior Court Assignment Judge Lawrence Lawson previously denied a stay to the property owners in the MTOTSA neighborhood in his 60-page opinion issued on June 22, 2005. The decision of the Appellate Division is significant because the property owners had to demonstrate a probability of success in the merits of the appeal in order to meet the standard for obtaining a stay. Stays are not automatically or routinely granted in condemnation matters.

This is a significant victory for the property owners and bodes well for a favorable decision on the merits of the case. Attached are both orders of the court.

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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.

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“Unfortunately, eminent domain happens to be a necessary evil, like affirmative action….We recognize the major issue is one of equity and fairness.” – Senator Ronald Rice, Chair of the Senate Community and Urban Affairs Committee

On Thursday evening October 26, eminent domain reform took center stage as New Jersey Senator Ronald Rice (D-Essex) held the first of several hearings on S-1975, the bill that has evolved from Assemblyman Burzichelli’s version (A-3257). Burzichelli’s bill was passed by the Assembly on June 22, 2006, and referred immediately to Senator Rice’s committee. Thursday’s meeting was held at the Irvington Senior Citizen Community Center on Springfield Avenue.

The next committee hearing is scheduled for Monday October 30 at 4:30 p.m. at the Lakewood Municipal Complex in Lakewood, New Jersey. Citizens and other interested parties should appear at the hearing to testify and/or submit written comments to Senator Rice. Testimony is at the Senator’s discretion and not everyone desiring to testify will have an opportunity if there are time constraints. Arrive early and fill out the form provided.

Details of Thursday's testimony...

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Senator Ronald Rice (D-Newark), Chair of the New Jersey Senate Community and Urban Affairs Committee, has scheduled hearings on S-1975. This proposed legislation  is the senate version of the “Burzichelli” bill which passed the New Jersey Assembly in June 2006 and seeks to amend portions of the Local Redevelopment Housing Law and the Eminent Domain Act of 1971.

Senator Rice has scheduled meetings at the following times and places:

Thursday, October 26, 2006, at 6:00 p.m.
Irvington Senior Citizen Center
1077 Springfield Avenue
Irvington, New Jersey

Monday, October 30, 2006 at 4:30 p.m.
Lakewood Municipal Complex
Lakewood, NJ

Members of the public interested in proposed changed to these laws, impacting eminent domain cases undertaken as part of local redevelopment efforts in New Jersey, should attend and make their opinions known to the Senate Committee. In the event that you cannot attend, the committee will accept written statements, and suggested changes in the language of the law should be directed to Senator Rice by regular mail at the following address:

1044 South Orange Ave.
Newark, NJ 07106

Download a pdf of the latest version of the bill. Bear in mind that the text of the bill can be changed without notice. The text between [brackets] includes proposed deletions and that the underlined text comprises new changes to the bill. Continue reading for the HTML version.

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On October 11, 2006, the Honorable Patricia K. Costello, Essex County Assignment Judge,  issued an opinion in the matter of City of East Orange v Kason Associates, Inc.  Docket No.: ESX-L-8278-05. This seven page opinion addresses two issues:

1. Date of Valuation
2. The propriety of appraising the subject project as a “going concern.”

The Eminent Domain Act  N.J.S.A. 20:3-30 provides for the date of valuation to be the earliest of four possible dates:

a. The date of interference with the use and enjoinment of the property
b. The date of entry
c. The date of the filing of the complaint
d. The date of the declaration of blight

In the subject case, Judge Costello felt constrained to use subsection (d) of the statute, calling for the date of declaration of blight as the date of valuation. This is premised on the Court’s literal reading of the statute that the earliest of four possible dates should be the date utilized. The property owner argued that the aforementioned subsection of the statute should be read in conjunction with N.J.S.A. 20:3-38, which provides that “the value of any land or other property being acquired in connection with development or redevelopment of a blighted area shall be no less than the value as the date of the declaration of blight by the governing body upon a report by the planning board.” This section of the statute would provide a floor as to value protecting the property owner from a diminution of value caused by the declaration of blight.

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Attorneys William J. Ward and James M. Turteltaub of the law firm Carlin & Ward are faculty members who will speak about eminent domain issues at the CLE International Conference on October 12 at the Nassau Inn in Princeton, N.J.

Ward, author of the New Jersey Eminent Domain Law Blog, will speak on the topic Surveying New Jersey's Ethical Landscape  which encompasses such issues as contesting the right to take property post-Kelo, impermissible favoritism, and conflicts of interest. To download the report click here.

Turteltaub, who argued the Suydam case before the New Jersey Supreme Court, will be one of five panelists addressing Issues Confronted in the Taking/Redevelopment of Enrivonmentally Constrained Property.

The two-day conference meets the Pennsylvania Continuing Legal Education Board's requirements for up to 12 hours of credit including one hour of ethics. The course meets the requirements for planners and appraisers for up to 12 hours of credit. For more information, download the conference brochure here.

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In a Per Curiam decision released today, the Appellate Division of the Superior Court affirmed unanimously the August 3, 2005 decision of Essex County Assignment Judge Patricia Costello in the matter of Township of Bloomfield vs. 110 Washington Street.  Judge Costello dismissed the first eminent domain complaint filed by the Township of Bloomfield in furtherance of its flawed redevelopment project.See our blog of August 5, 2005.

The three-judge panel rejected the main argument of the Township of Bloomfield outright. The township argued that a previous decision by Judge Coleman, who dismissed 110 Washington Street’s prerogative writ suit on grounds of lack of timeliness, was dispositive of the merits of the case. The Appellate panel disagreed and refused to apply the doctrines of res judicata and collateral estoppel  to bar the challenge in this proceeding. The judges said that the defendants were entitled to a full and fair opportunity to litigate all the issues, since Judge Coleman only focused on the lack of timeliness ( i.e., it wasn’t filed within the 45-days required to contest municipal action) and not the merits of the case.

The Court deferred to Judge Costello as to the facts and background of the case developed in the record and concluded:

Given the trial court's view of the facts, however, our independent analysis of the legal arguments presented leads us to substantial agreement with many of the reasons for decision Judge Costello articulated in her letter decision of August 3, 2005.  

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The "Scope of the Project Rule" is an arcane fact of law which prevents property owners whose property is acquired from claiming benefit caused by the project of the condemning authority. There are enormous price differentials between appraisals on property as zoned compared to appraisals on the same property taking into consideration the zoning for the new project. Many people who lose a house, for instance, to a condominium project can’t understand why they cannot value their land for condos. The answer is the "Scope of the Project Rule." However, this may be about to change in New Jersey as it applies to redevelopment projects and property to be acquired under the Local Redevelopment Housing Law.

The following is a brief synopsis of the “Scope of the Project Rule” which is presently the law in the State of New Jersey:

The scope of the project doctrine only excludes value attributable to a governmental project from the date the government is "committed to the project". Jersey City Redevelopment Agency v. Kugler, 58 N.J. 374, 379 (1971).United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed 336, (1943); United States v. Reynolds, 397 U.S. 14, 90 S.Ct. 803, 25 L.Ed.2d 12(1970).   

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"The only thing you can't see on these people are their horns," said Mark Halper, Larry Halper's brother, of township officials. "They are evil personified."

The last chapter of Book One of the seven-year odyssey of the Halper family of Piscataway was played out late Thursday evening. Under the threat of a $4,000 per day fine from Superiour Court Judge James Hurley, the Halpers vacated their 75-acre farm peacefully. Videographer and Freestar producer Logan Darrow Clements, a blatant manipulator of this eminent domain tragedy, was hoping for a violent confrontation so he could videotape it for his documentary on the Halpers and eminent domain abuse.

What this fool doesn’t understand is that it is not necessary to manipulate events: i.e, the Lost Liberty Hotel, an attempt to use eminent domain to acquire Justice Souter’s farm in New Hampshire - another Clements production.

Where were the movie cameras when Bruce MacCloud was forceably evicted in November 2002 by armed police in Long Branch, New Jersey? These scenes may be played out in any of the communities where municipalities are strong-arming their constituents to benefit developers. These circumstances speak for themselves and are tragic in their own right. They need not be manipulated to make the point. Attempting to stage or provoke a violent confrontation between police and property owners does not serve the movement against eminent domain abuse. Mr. Clements sought out the Halpers and camped out at their farm for days, waiting for the sheriff’s officers to arrive to implement the court order and remove the Halper family. This didn’t happen and cooler heads prevailed.

“There are eminent domain disputes in which government is clearly the bully. And there are cases in which an obstinate citizen may genuinely be standing in the way of progress. The Halper farm battle falls somewhere in between those extremes, without the clear lines between good and evil that many would like there to be to help us know how to feel.” – Opinion - The Courier News – July 25, 2006   

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The Halper family of Piscataway seeks to stave off eminent domain.  Clara and Larry Halper are at the end of their rope as they seek a stay from the latest order from Middlesex County Superior Court. Judge James Hurley ordered that the Halpers must vacate their 75-acre farm, condemned by Piscataway township, on or before noon on July 17 or be forcibly evicted. Judge Hurley ordered the Somerset county sheriff to implement the Court’s order, because Middlesex County, where the property is located, has a conflict of interest.

The vision of an American family being forcibly evicted from their home as a result of eminent domain was predicted in this blog on September 25, 2005. This ugly reality will soon be played out for the Halper family in front of assembled media and numerous protesters who have been mobilized in support of the Halpers. It’s not too much of a stretch of the imagination to see this same scenario played out in Long Branch if the MTOTSA area property owners are unsuccessful in their appeal of the recent decision of Judge Lawrence Lawson denying their objection to the right to take these properties. 

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"The decision was supposed to be issued within 30 days�I'm rather shocked. I used to think this was America. The whole Jersey coast is finding out what America is." - George McKenna (Long Branch Marine Terrace resident) in the Asbury Park Press

"Tomorrow the people will be no safer. Worse still, the bill misleads the public�A Kelo taking will still be possible." - Richard A Merkt (R-District 25)

Today is the first anniversary of the Supreme Court's controversial decision in the matter of Kelo vs. City of New London. Two significant events occurred yesterday afternoon, ironically one day before numerous rallies scheduled across New Jersey and the United States protesting eminent domain abuse.

1. The Assembly of the State of New Jersey voted 52 to 18 (with 9 abstentions) approving Bill A-3257 which amends the Local Redevelopment Housing Law (LRHL) N.JSA 40A:12A-1 et seq.

2. Judge Lawrence Lawson issued his decision in favor of the City of Long Branch against the MTOTSA property owners who sought to save their beachfront homes from a redevelopment project, Beachfront North Phase II.

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New Eminent Domain Law Blog author William J. Ward, Esq. and Assemblyman John Burzichelli, chair of the Commerce and Economic Development Committee and sponsor of Assembly Bill A-3257, will join talk show host Maureen Nevin on Asbury Radio this evening, Thursday June 22 from 8-10 p.m. Calling in to "The Radio Voice of Asbury Park" will be New Jersey Public Advocate Ronald Chen, MTOTSA litigants Lori Vendetti and Bill Giordano, and Bill Potter, who leads the New Jersey Coalition against Eminent Domain Abuse. Public Advocate Ronald Chen will be on the air from 9:00 to 9:30 p.m.
88.1 FM
Listen Live or Later on Web at AsburyRadio
Talk - Call in 732-775-0821 and 775-6203

UPDATE - The New Jersey Assembly passed A-3257 this afternoon after considerable debate.
52 - Y
18 - N
9 - Abstentions

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Assemblyman John Burzichelli, Chairman of the Assembly Commerce and Economic Development Committee, will seek to move Bill A-3257 amending the Local Redevelopment Housing Law (LRHL) N.J.S.A. 40A:12A-1 et seq. out of committee today. A similar bill sponsored by Senator Ronald Rice, D-Newark, was discussed but no vote was taken by the Senate Committee of Community and Urban Affairs on Thursday June 15, 2006.

The latest version of Burzichelli's bill offers some help to property owners but does not go far enough. Here are some of the key changes - the good, the bad and the ugly.

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On Thursday, May 18, 2006, New Jersey Public Advocate Ronald Chen issued his report to the governor and Legislature on eminent domain. The report addresses the Local Redevelopment Housing Law (LRHL, N.J.S.A. 40A 12-1 et seq.) In so doing, Chen goes right to the epicenter of the eminent domain controversy: most of the debate surrounding eminent domain abuse arises in the context of redevelopment projects undertaken by municipalities pursuant to the LRHL.

Chen gives the history of blight in New Jersey from its inclusion in the 1947 Constitution to its metamorphosis into an "area in need of redevelopment" as contained in the present version of the LRHL, N.J.S.A. 40A: 12-5 (a.-h.).

A constitutional understanding of the term 'blighted area' can also be derived from statements made by delegates to the 1947 Constitutional Convention. The language that became the 'blighted area' clause in the Constitution was sponsored by Delegate Jane Barus, who introduced an amendment to Committee Proposal No. 5-1. Ms. Barus's amendment, which was approved without change and which ultimately became Article VIII, § III, � 1 of the Constitution, stated:

'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. Municipal, public or private corporations may be authorized by law to undertake such clearance, replanning, development or redevelopment, and improvements made for these purposes and uses, or for any of them, may be exempted from taxation, in whole or in part, for a limited period of time during which the profits of and dividends payable by any private corporation enjoying such tax exemption shall be limited by law. The conditions of use, ownership, management and control of such improvements shall be regulated by law.'

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"Our idea is that these ideas, plus others, will be assembled in a compromise bill....If we stall, we'll look for another alternative." -Asm. John Burzichelli

Assemblyman John Burzichelli, D-3, Chairman of the Commerce and Economic Development Committee, will recommend a consensus bill in June which will attempt to address eminent domain issues. Eminent domain has been the subject of two committee hearings held in the past few months. See The Daily Journal (Gannett newspapers) of 15 May.

Assemblyman Burzichelli and his committee will attempt to draft a bill which will be an amalgamation of eminent domain revisions suggested in over a dozen bills introduced by legislators in 2006. An outright ban on the use of eminent domain for economic development is not in the cards, nor is a moratorium on the use of eminent domain as has been suggested by several legislators.

What is unclear is how Assemblyman Burzichelli's efforts interplay with Public Advocate Ronald Chen, who has been charged by Governor Corzine to address the eminent domain issue and prepare a report to the governor and the Legislature, presumably recommending eminent domain revisions. The Public Advocate has been invited to brief the Assembly Commerce and Economic Development Committee on his fact finding regarding the use of eminent domain for economic development purposes at tomorrow's meeting.

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The following is an op ed piece which appeared in today's Asbury Park Press.
Eminent domain raw deal for property owners

BY WILLIAM J. WARD

The rusted beams of the C-8 building came down April 29 in Asbury Park. Henry Vaccaro built it; Henry Vaccaro detonated it. Between those markers, 20 years elapsed. The building was an icon of a redevelopment project gone wrong. Twenty years is too long to let a city wallow in a state of blight.

New Jersey has 1,000 redevelopment projects planned or under way. The deck is stacked against the residential property owner, the small business owner, and even industry. If our politicians are not serious about reform, we might as well change our license plates to read "The State of Eminent Domain."

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For background information read
Private Property/Public Gain, The Battle Over Eminent DomainAsbury Park Press interactive series April 30-May 2.

"It's not unusual� It's common. And until somebody makes it illegal, they're going to keep doing it." - Alan Marcus, Republican lobbyist, New York Times (January 1, 2006)

Adam Schneider, incumbent and three term mayor of Long Branch, is in the fight of his political life with two challengers who are against eminent domain abuse, Rev. Kevin Brown, and Alfie Lenkiewicz and the New Wave Team.

Schneider's hope is pinned on a split vote between the two opposition campaigns running against Long Branch's eminent domain policy. If the opposition vote is split, Schneider could sneak in. Remember "one-term Byrne" in 1974? Everyone thought Governor Byrne was through because of the income tax passage. In the Democratic primary of 1974, he came through because the opposition in his own party was split, and he went on to beat the Republican candidate. Both opposition candidates (Brown and Lenkiewicz) need to take a long hard look at their chances. One of them has to step aside in order to defeat Schnieder, and it should be done soon because the election is less than two weeks away.

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"In a state where news of public corruption seems to be never ending, can we ever make real the promise of ethics reform?" - Paula A. Franzese, Chair of the State Ethics Commission

Ethics issues involving eminent domain in municipal redevelopment projects undertaken under the Local Redevelopment Housing Law, N.J.S.A. 40A-12-1 et seq., are front and center in several cases contesting the right to take property in New Jersey. Paula Franzese's article in the op-ed pages of yesterday's Star-Ledger calls for a uniform code of ethics, a top-to-bottom ethics program building an ethical culture that "honors not only the letter, but also the spirit of the laws."

But at the same time Professor Franzese tells us that A Plain Language Ethics Guide clarifies a "bewildering array of rules," a disturbing development arrived on the front page of yesterday's New Jersey Law Journal. In 'Developer Rule' May Near Repeal, we read that an unnamed municipal attorney has made inquiry to the Advisory Committee on Professional Ethics for an opinion regarding municipal attorneys representing developers in another town, where the developer does business in the town which employs the attorney. The result is Opinion 702.

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The all-day continuing education seminar Eminent Domain in New Jersey was offered on March 28 in East Brunswick by Lorman Education Services. William J. Ward, author of the New Jersey Eminent Domain Law Blog, moderated the faculty, a diverse group of professionals who deal with eminent domain and property issues on a daily basis. The seminar's perspective focused on issues facing today's property owners and their advocates. Everything changed after the Kelo case, Ward stated in his opening remarks. "Up to that point," he reflected, "eminent domain was a specialty area that only the practitioners - maybe a dozen or so attorneys, engineers, and appraisers - were interested in." Since the Kelo backlash and increased public interest in eminent domain, Ward and many of his colleagues favor the review of New Jersey's eminent domain and redevelopment laws.

Starting with the trio of cases considered almost a year ago by the Supreme Court of the United States, Seton Hall Law Professor Paula Franzese traced how SCOTUS gave clues through decisions in Lingle and San Remo, how their decisions might effect Kelo. In Kelo, Courts must give a broad deference to a legislative judgment that a carefully considered development plan will serve a public purpose; therefore, a takings exercised pursuant a legislatively determined public purpose will satisfy the Fifth Amendment's "public use" requirement even if the condemned land will not be open to the public in its entirety.

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"This is a hot matter. It is a very contentious matter. Someone is going to win. Someone is going to lose. That is the way it is going to be." - Judge Lawrence Lawson

Friday, March 24, 2005 was the return date on the Orders to Show Cause for the MTOTSA area property owners. The Order to Show Cause requests that the court sign the Order of Judgment appointing condemnation commissioners, which is a final judgment on Long Branch's right to take the properties. State v. Orenstein, R.4:67-1. All of the property owners, with only two exceptions, filed answers and submitted briefs and certifications on the right to take issue. The hearing was held before the Honorable Lawrence M. Lawson A.J.S.C. at Monmouth County Court House, Freehold, New Jersey.

The court heard two and one-half hours of oral argument. First to proceed was James Aaron of the Ansell Aaron Grimm & Zaro firm representing the City of Long Branch. Aaron delivered a one-hour Chamber of Commerce-style production replete with charts, renderings, and blow-ups of portions of his 94-page brief. He was accompanied at the plaintiff's table by an entourage including his partner Lawrence Shapiro, Long Branch Mayor Adam Schnieder, City Administrator Howard Wooley, City Planner Carl Turner, and two attorneys from the Greenbaum Rowe firm, Michelle Gibson and Robert Beckelman.

That's right, the Greenbaum firm. The same firm that has recused itself on no less than two occasions related to the Long Branch redevelopment project was present and seated throughout the argument at the counsel table. And at the conclusion of the plaintiff's and defendants' arguments and rebuttal, Judge Lawson asked Ms. Gibson and Mr. Beckelman if they, too, wanted to speak their piece, which they did. One wonders if this was yet another billable event for the Greenbaum firm. And, at what point is a "recusal" a recusal? Or is it something along the lines of the definition of what "is" is? Perhaps the firm needs a Bill Clinton to parse this concept for them.

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The condemnation trial lasted 12 weeks in the City of Long Branch v. James Liu. The eminent domain case was concluded after weeks of intermittent testimony when a Monmouth County jury, sitting before Judge Robert Coogan in Freehold, awarded the family of the defendant property owner Jimmy Liu (deceased) $1.45 million for his oceanfront commercial properties. The New Jersey Constitution Article I, Paragraph 20 mandates that private property shall not be taken for a public use without just compensation.

A condemnation trial is essentially a battle of real estate experts. The experts value the property condemned as of the date of taking, which in this case was May 14, 2001. The property is valued in accordance with its highest and best use as determined by size, location, and zoning. Most experts will develop their value based on comparable sales of other similarly situated property. The sales will be adjusted for time, location, and physical characteristics. The experts will put all of the sales data on a grid, and based on the adjusted values, they will come up with an opinion of the value indicated to the subject property based on the comparable sales.

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When Louis Anzalone appeared on the Hannity & Colmes syndicated television show Friday, February 17, and Hannity's radio broadcast on WABC-770 Monday, February 20 and Tuesday, February 21, it was clear that Hannity is sympathetic to the plight of the Anzalones, other senior citizens, and neighbors threatened with the loss of their homes by eminent domain. CNN followed on Saturday, February 25, with a special report about eminent domain cases in Long Branch. MTOTSA area residents, including Frances DeLuca and William Giordano, spoke out against eminent domain. Bruce MacCloud, who once owned property in what is now Beachfront North Phase I of Long Branch's massive redevelopment project, had his sound bite, too. While viewers were shown a picture of his 17-room Victorian home, the voiceover stresses that he was given only $140,000 for the property. MacCloud's home was demolished in November 2002, but his valuation trial has been postponed by the courts on at least three occasions. That $140,000 is just the city's offer based on its approved appraisal. That number will vigorously contested.

But there's one important distinction the media is not communicating about the eminent domain process in regard to the MTOTSA-area property owners: It's not about the money! These property owners are currently fighting about whether the city has the right to take their property by eminent domain or not. Their homes are not for sale at any price. The majority of the Marine Terrace, Ocean Terrace, and Seaview Avenue neighborhood stands together against the Beachfront North Phase II project takings.

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"This generation of Americans has a rendezvous with destiny." - Franklin Delano Roosevelt

Arnold Giordano is 80. Rose La Rosa is 80. Anna DeFaria is 80 years. Lori Vendetti is 80. Louis and Lillian Anzalone are both 89. Al Viviano is 93. All of these senior citizens were originally from the City of Newark and now live in Long Branch, New Jersey.

Attorney Arthur Greenbaum, founder of the Greenbaum Rowe law firm, is 80 and his brother, Robert Greenbaum is 84 years of age. The Greenbaums were also born in Newark and, like Louis Anzalone of Ocean Terrace, they are veterans of World War II who served in the United States Navy.

Would the Greenbaums meet with their fellow senior citizens and explain why it is necessary to take their homes by eminent domain? After all, Louis Anzalone had the courage to go on Fox News and tell his story. Louis Anzalone, at 89, has the heart of the greatest generation.

Connect to the Hannity & Colmes Foxnews video file. The Long Branch eminent domain story is set to load.

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The dictionary defines goniff as a Yiddish word for a "thief." Having received an offer for their property from Asbury Partners LLC, the designated developer for the Asbury Park beachfront, Thomas and Donna Orlando now know the meaning of that term.

The Orlandos purchased a fully renovated three-family house located two blocks from the beach for $575,000 in September 2004. In December 2005, the Orlandos received the offer and appraisal from Asbury Partners in the amount of $330,000, premised on the appraisal of Donald Moliver. This offer is significantly less than the first mortgage on the property.

Under normal circumstances, we would expect Mr. Moliver and Asbury Partners would consider the sale of the subject property and the fact that the beachfront real estate has increased since 2004, not only in Asbury Park but in New Jersey in general. Therefore, a reasonable starting point would be at least ten percent over the purchase price or approximately $630,000.

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The legislature has spoken. Last week, Governor Codey signed into law one piece of eminent domain legislation - one from column A (4588) and one from column S (2851). The companion senate and assembly bills were selected from a menu of legislative solutions to perceived problems with eminent domain. Finally...eminent domain reform, you say. No such luck! This new law benefits condemnors only, and not property owners.

The sole bill passed is special legislation, designed and pushed through by Middlesex County Democrats, Senator Robert Smith and Assemblyman John Wisneiwski. A-4588 was so lame, the Assembly Environment and Solid Waste Committee voted the bill out of committee without recommendation. No-one testified in its favor; Moreover, the only testimony was offered by groups opposed to the bill, including the Sierra Club, the Environmental Federation, the New Jersey Chamber of Commerce, the New Jersey Business and Industry Association, and the New Jersey Builders Association, and a group of eminent domain attorneys representing both property owners and condemning authorities.

Let's look at the bill. It's instructive for the public to see the process which took place prior to the adoption of the law.

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William J. Ward, Esq. , managing partner of Carlin & Ward and author of the New Jersey Eminent Domain Law Blog, will moderate the Lorman Education Seminar, Eminent Domain in New Jersey, on March 28, 2006 at the Ramada Inn, 195 Route 18 South, East Brunswick, N.J.

This forum brings together New Jersey's deans of eminent domain law, real estate professionals, and noted authors who examine trends in redevelopment takings after Kelo, environmental contamination, and other factors that impact fair market value. People and neighborhoods are affected by eminent domain takings. Learn about recent case law, legislative developments, and the ethics of eminent domain practice in New Jersey.

Critical issues on the agenda include:
1. Overview and Recent Case Law Developments
2. 2005 SCOTUS Trio: Lingle, San Remo, Kelo
3. Proposed Federal and State Legislative Reform
4. Environmental Issues and Valuation
5. What's Fair about Fair Market Value?
6. Contesting the Right to Take in New Jersey
7. People and Neighborhoods
8. Ethical Considerations
9. Questions and Answers

The panelists include: William J. Ward, Esq. and James M. Turteltaub, Esq., Carlin & Ward, P.C.; Michael Patrick Carroll, Assemblyman (R), Legislative District 25 Offices; John J. Curley, Esq., John J. Curley, LLC; Paula A. Franzese, Esq. and Rachel D. Godsil, Esq., Seton Hall University School of Law; Mindy Thompson Fullilove, M.D., author of Root Shock Columbia University, New York State Psychiatric Institute; Louis S. Izenberg, MAI, SRA, Izenberg Appraisal Associates; Drew K. Kapur, Esq. and George J. Kroculick, Esq., Duane Morris LLP; Michael B. Kates, Esq., Nashel, Kates, Nussman, Rapone & Ellis LLP; Edward D. McKirdy, Esq. and Harry J. Riskin, Esq., McKirdy and Riskin, PA; and Peter G. Steck, P.P., Community Planning Consultant.

The one-day seminar is approved for continuing education and designed for attorneys, engineers, real estate professionals, appraisers, project managers, planners, architects, and property owners. For specific information about the agenda, benefits, and continuing education credit, cost and advance registration for the seminar please download and print the seminar brochure.

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"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."

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New Jersey court decisions have evidenced a heightened awareness by trial judges to eminent domain abuse. The abuse for the most part comes about in redevelopment projects implemented under the Local Redevelopment Housing Law (LRHL) 40A:12A-1 et seq. through the relationships between developers and local municipal officials.

The New Jersey Constitution, Article VIII, paragraph 3, says takings for blight are a public purpose. The abuse has come about through the legislature's broad definition of blight, most recently in the amendments to the LRHL in 1992:

"Redevelopment area" or "area in need of redevelopment" means an area determined to be in need of redevelopment pursuant to sections 5 and 6 of P.L. 1992, c.79 (C.40A:12A-5 and 40A:12A-6) or determined heretofore to be a "blighted area" pursuant to P.L.1949, c.187 (C.40:55-21.1 et seq.) repealed by this act, both determinations as made pursuant to the authority of Article VIII, Section III, paragraph 1 of the Constitution. A redevelopment area may include lands, buildings, or improvements which of themselves are not detrimental to the public health, safety or welfare, but the inclusion of which is found necessary, with or without change in their condition, for the effective redevelopment of the area of which they are a part. An area determined to be in need of redevelopment pursuant to this section shall be deemed to be a "blighted area" for the purposes of Article VIII, Section III, paragraph 1 of the Constitution. If an area is determined to be a redevelopment area and a redevelopment plan is adopted for that area in accordance with the provisions of this act, the municipality is authorized to utilize all those powers provided in section 8 of P.L. 1992, c.79 (C.40A:12A-8).

New Jersey Eminent Domain

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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

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"New Jersey's whole economy is so dependent on having a functional infrastructure that if we don't invest in that economic engine, we're going to hurt ourselves and be worse off in the long run." -- Assemblyman John Wisniewski (D-Middlesex)

Eminent domain used for traditional public purpose takings, such as roads, bridges, and mass transit improvements is not something the public opposes. In fact, all of us use and benefit directly from public transportation improvements and acknowledge they are a bona fide use of public tax dollars. The funding source for public transportation improvements is the transportation trust fund.

The trust fund is an essential component to all New Jersey Department of Transportation and New Jersey Transit eminent domain projects. As has been reported in the Star Ledger and elsewhere, the fund will run dry in July 2006. The fund is being overwhelmed by debt reported to be $7 billion. Current revenue based on the 10.5 cent gas tax and other revenue sources such as sales tax on cars will be consumed by debt service on the bonds, leaving no revenue for new projects. The hard reality is that the legislature and the new governor must raise taxes to supplement the fund.

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"Excessive development and eminent domain abuse, bought and paid for with the corrupt cash of unscrupulous campaign donors, is a scourge on New Jersey, driving families from their homes to build the next strip mall. However, with strict campaign finance regulations, we can begin to turn the tide on the influence developers wield in the political realm." - Senator Ellen Karcher in the Asbury Park Press

State Senator Ellen Karcher (D-Monmouth, 12th District) is one of those rare politicians who is not afraid to take on the political establishment. Her bill, S1576, attacks "pay to play" which is at the root of no-bid deals, awarded by municipal government to developers who have funneled campaign cash to elected officials either directly or through donations to state or county organizations. Senator Karcher seeks to eliminate developer money and its pervasive influence on the political process.

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Eminent domain does not work as a device to rebuild our cities. If you are the owner/occupant of a low to moderate income housing unit that is going to be condemned under the Local Redevelopment Housing Law (LRHL), you are in grave danger. Consider the plight of thousands of Camden residents as described in today's Courier Post. Olga Pomar, attorney for South Jersey Legal Services representing low-income Camden residents in lawsuits challenging redevelopment plans, wrote:

"Given skyrocketing housing prices and the shortage of subsidized units, these people are at great risk of becoming homeless or living in overcrowded, unsafe and unaffordable housing....Residents of a redevelopment area have legitimate cause for concern because municipalities enjoy expansive powers under current redevelopment laws, while residents are afforded few rights and guaranteed only meager compensation. Once a redevelopment plan is properly adopted, a municipality can enter into agreements to turn land over to private developers without public bidding and with minimal public oversight. And it can acquire properties within the redevelopment area through eminent domain to effectuate these agreements.
The municipality can take title to a property by eminent domain and evict the resident in less than two months. The municipality must pay an owner only the fair-market value of the property in its current condition. Relocation laws provide that an owner also receive moving costs and an amount up to $15,000 for the purchase of a replacement home, which is usually not enough to purchase another property in the region. Renters who are displaced receive moving costs and up to $4,000 to cover a security deposit and a rent increase for a period up to four years, which covers an increase of about $100 per month.
Relocation laws do not require a municipality to create replacement units or guarantee housing will be available to the displaced household within the municipality.
Local governments often give assurances they will do more than what is legally required, making promises to build adequate affordable replacement housing to ensure residents can remain in their community. The problem is that if these promises fail to materialize, residents have little recourse."

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"I think about the atrocities and the abuse that eminent domain has caused the American people. It's unfair and it's a crime. It's time to abolish this abuse." -- Bruce MacCloud as reported in the Asbury Park Press

On Saturday October 15, more than 500 citizens assembled in Long Branch, New Jersey to protest eminent domain abuse. My wife and I were among them. After seven days of heavy rains and floods, we walked in brilliant sunshine from Denise Hoagland's house on Ocean Terrace, down the beachfront promenade, past the row of condos where Strahlendorf's house once stood, through Pier Village to Morris Street and back along Ocean Avenue. We walked with our client Bruce MacCloud who lost his home to eminent domain in 2002. Bruce's trial was scheduled for last week but will probably be listed again sometime in November.

Bruce MacCloud pointed to a block of tall, upscale condominiums that have been closing in on this community's modest neighborhood. "I am a victim; that's where my house sat," he said.

MacCloud said he was forced from his Victorian house one week before Thanksgiving in 2002. He was temporarily relocated to a local motel and was given $140,000 for his home.

"They think they offered me just compensation for $140,000. I feel that's unjust compensation. Do you know anywhere in Monmouth County where you can buy a house for $140,000?"

Is there anywhere in New Jersey where you could purchase property in the beach block four hundred feet from the ocean for that price?

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"In an era of economic policies that are producing an ever-larger group of the super-rich, those who are wealthier than the rest of us have a responsibility to manage their properties at least partly in the public interest." - Jonathan Weber, founder and editor of NewWest.Net

The New Jersey Supreme Court has reaffirmed its long standing support of the public trust doctrine guaranteeing the public access to the beach in Raleigh Avenue Beach Association v. Atlantic Beach Club, 185 NJ 40 (2005). Download the opinion. New Jersey was the first state to recognize and apply the public trust doctrine, which Justice Wallace described in his dissent:

"The public trust doctrine is the legal principal that the submerged lands and waters below mean highwater mark are owned by the state government in trust for public uses such as transportation and fishing. In 1821 the N.J. Supreme Court was the first in the United States to verify its application to the New World, in Arnold v. Mundy, 6 N.J.L. 1 (1821); in 1842 the U.S. Supreme Court reaffirmed that court's ruling in Martin v. Waddell, 41 U.S. 367 (1842).

Both came about because of conflicts over rights to oyster grounds in the Raritan River and Bay...The outcome was recognition of the state's ownership as trustee for the people of the state. Subsequently, the doctrine has played important roles in waterfront development, uses and management of wetlands, and public access to riverfronts and beaches." Raleigh Avenue Supra at page 63.

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"I just can't believe they're going to go ahead and tear down a building that the township has funded through the whole process. We were told when we bought it, that if we redid it, it would be a blessing and the best thing that ever happened, and then they're telling us to get lawyers." - Lester Goldberg, owner of Scrubber Doctor

West Lake Avenue is one section of Neptune Township located off Route 35 which is now threatened by eminent domain. The area is mostly single family residential, some commercial, and overwhelmingly African American. If these eminent domain cases are filed and the right to take is upheld, it will result in the wholesale displacement of an established and vibrant community.

Clara's Place is one of the businesses threatened. It is a busy restaurant serving breakfast, lunch, and dinner. It's been there on West Lake Avenue for many years. It is one of those places that is the focal point of a neighborhood. People come in, eat, and catch up on the news of the day.

Betty Gainey lives across the street from Clara's. Her single family residential house is as neat as a pin with roses growing along a fence in the front yard and lovely gardens in the back. Yet she too may have to leave if the political powers continue their redevelopment efforts and acquisition of properties through eminent domain proceedings.

These buildings are definitely not "blighted"-- but some expert hired by Neptune Township has said, and the township has agreed, that they are in an "area in need of redevelopment."

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"No one's home, or farm and ranch land, is safe from government seizure because of this ruling." - American Farm Bureau Federation President Bob Stallman, on the Kelo decision

When they closed on their 42-acre farm in Sandyston, New Jersey, on June 10, 2005, Rajesh Sinha and Jolene Plitt were looking forward to increasing the ranks of farmers in Sussex County. Red Gate Farm, as it was called years ago, was once a dairy farm owned by the Grosch family, friends of Sinha's parents.

The couple renamed their new farm "Liberty Farm," reflecting on the farm's history, which dates back to the Revolutionary War, and the 1790s house on the property. Fields of hay, bordered by the trout stream known as the Little Flatbrook and its tributaries, a stone's throw from Route 206, make the location ideal for the couple's plan - to raise horses, beef cattle, chickens, even lavender.

On Friday, August 8, less than two months after purchasing the farm, Sinha received a letter from Integra Realty Resources of Morristown, New Jersey, informing him that the Township of Sandyston was interested in acquiring his farm. The letter stated that an appraiser would be inspecting the property. Sinha's reaction was disbelief. "I thought it was a mistake," he said.

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"A court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit, though with the presumption that the government's actions were reasonable and intended to serve a public purpose." -Justice Anthony M. Kennedy, concurring with the majority in Kelo v. New London

In yesterday's Asbury Park Press, Dana Berliner of the Institute of Justice says, "Those who benefit from the virtually unrestricted use of eminent domain - local governments, developers and planners�will be frantically lobbying and trying to scotch any attempt to dimininish their power."

Other than the jury verdict of $500,000 plus interest in the City of Long Branch v. Strahlendorf, the developers have not had any great setbacks in that city's attempt to redevelop its beachfront through the power of eminent domain. All the property owner has left in a condemnation case is the argument over value. The prices offered in 2002 for the first phase of Beachfront North were obscene. Fred and Dorothy Strahlendorf's final offer from Long Branch was $179,500. Bruce McCloud's offer, for a seventeen room house 400 feet from the beach, was $140,000. The right to take on the 2002 cases is long gone - the properties have been condemned, the houses have been demolished, and the new condominiums have been constructed and sold at prices that range from $600,000 to $1,200,000.

Many property owner advocates are pinning their hopes on proposed changes by state legislators. But there is hope in the courts: Judge Costello recently threw out Bloomfield's eminent domain complaint in the case of Township of Bloomfield v. 110 Washington Street. She did it because of conflicts of interest in the township attorney representing both the planning board and the mayor and counsel during the approval of the blight study and she further found that the blight study was fatally flawed. Download the article in the New Jersey Law Journal.

Similar issues can be raised in Long Branch. The blight study is flawed and there is a conflict of interest.

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Essex County Assignment Judge Patricia K. Costello issued an order and opinion yesterday in Newark, N.J. dismissing the condemnation case filed by the Township of Bloomfield against 110 Washington Street Associates. Download the order and opinion

Today's Star Ledger reported that the ruling for the property owner jeopardizes Bloomfield's downtown redevelopment plan. This was the first condemnation case filed by the township in its redevelopment project for the downtown center. The decision of the court is a major setback for Bloomfield in its efforts to acquire property through eminent domain proceedings. The town's plan was a joint venture of Forest City Ratner (Bruce Ratner)and Toll Brothers and included 650 residential condominiums and a 65,000 square foot Stop and Shop with an elevated parking deck.

The court found that the underlying planning process was fatally flawed. The Heyer and Gruel Planning Report improperly designated 110 Washington Street as meeting the definitions of blighted property under the Local Redevelopment Housing Law. The court said, "The record in this case is devoid of any finding that the property is detrimental to the public health, safety or welfare."

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"Like any new start-up program, there are always growing pains - lessons to be learned and procedures that can be done better." - Jack Spencer, chief executive officer of the NJSCC as reported on the front page of the Star Ledger (April 22, 2005)

New Jersey School Construction Corporation (NJSCC)was formed in 2002 by order then Governor James E. McGreevey and charged with managing the site selection, acquisition by eminent domain, and construction of new schools in the Abbott Districts. These districts were named for the landmark cases of Abbott v. Burke, decided by the New Jersey Supreme Court over the last 20 years, which mandated equal spending by the state for inner city school districts.

NJSCC, in three years, has blown through $8.6 billion in school construction bond funds. $2.6 billion was allocated and spent on behalf of "suburban schools." In those districts, for the most part, the schools have been built and the improvements made. $6 billion was allocated for the so-called Abbott Districts, those challenged districts located in our urban centers. Newark, Jersey City, Union City, Plainfield, Camden, Paterson, Passaic, and other cities are being cheated. The abortive effort by NJSCC on behalf of the Abbott districts and their children is perhaps one of the biggest scandals in the history of the State of New Jersey. According to the report in today's Star Ledger:

New Jersey's $6 billion school construction program ran dry yesterday as state officials approved the last 59 projects they can bankroll, stalling plans for more than 200 other schools and leaving dozens of the state's neediest communities in limbo.

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It all began on the island of Manhattan nearly 400 hundred years ago. The old courthouse in Union County, (Elizabeth, New Jersey), has a beautiful mural behind the judge's bench in Assignment Judge Walter Barisonek's courtroom. When I tried several cases before then Assignment Judge Edward Beglin in this same courtroom, I would look at this mural and think, "That's the first taking." And, how can I work this picture of two Indians negotiating with two Dutchmen for the sale of Manhattan island for $24 worth of beads into my summation for this property owner! We've come a long way. Or have we?

Almost no one will argue that traditional public use takings (roads, schools, parklands, etc.) are necessary and promote the public good. Surely there will be arguments over just compensation, damages to the remainder, etc. But we have this in every condemnation case. Then, what's the controversy with eminent domain lately? It's always in redevelopment projects and the peculiar juxtaposition of politicians and developers. We all thought we understood public use and public purpose, and how these phrases were to be implemented when the sovereign (the state, municipality, state agency) sought to acquire private property for a public project through eminent domain proceedings.

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"When you have a location for 23 years, how do you replace that? How do you pick up and start over again? When you lose a location, you may never start up again." -- Alessandro Lardieri, plaintiff

The developer that would move the New Jersey Nets to Brooklyn, Forest City Ratner, plans to bring in Toll Brothers to build 600 residential units along with retail in the Township of Bloomfield redevelopment project. The anchor for the revitalization of downtown Bloomfield would be a Stop & Shop grocery store in a 65,000 square foot shopping center with three stories of parking on top. This project will take advantage of Manhattan Midtown Direct rail service, now available on the New Jersey Transit Montclair line, which has resulted in a real estate boom in Montclair and Glen Ridge.

Yesterday over 50 concerned citizens, tenants, owners, and friends dressed in "Stop Eminent Domain Abuse" tee-shirts and gathered at the Essex County Courthouse for the first skirmish of the battle with Bloomfield on the right to take these properties through eminent domain proceedings. As reported in today's Star Ledger, the group has been fighting the project, which they said would illegally take their land and businesses.

"They are trying to say my building is blighted, and there is no way it is blighted," said Alessandro Lardieri, who owns a building at Bloomfield Avenue and Ward Street.

But Judge Claude M. Coleman dismissed the action in lieu of Prerogative Writ brought by four property owners contesting the designation of their properties as blighted (a.k.a., an area in need of redevelopment). This was accomplished with no findings of fact and conclusion of law as required by R. 1:7-4. Judge Coleman simply said that the litigants were beyond the 45 days to contest municipal action.

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NOTICE - YOUR PROPERTY MAY BE CONDEMNED

If you own a property in an "area in need of redevelopment," (a.k.a "blighted area") you might expect to see those exact words at the top of the notice you receive from the municipality prior to passing the ordinance which declares your property will be included in the area of the redevelopment project.

Think again. What you are likely to receive is something that begins like this:

TO: ALL PROPERTY OWNERS WITHIN THE BOUNDRIES OF THE PROPOSED RICHLAND REDEVELOPMENT AREA; AND; TO: PROPERTY OWNERS AND PARTIES IN INTEREST WITHIN 200 FT. OF THE BOUNDRY OF THE RICHLAND REDEVELOPMENT AREA PLEASE TAKE NOTICE that on Monday July 18, 2005, at 8:00 p.m. a hearing will be held before the Buena Vista Township Committee at the Municipal Building, 890 Harding Highway, Buena, New Jersey, to determine whether certain property more fully described below, or any part thereof, should or should not be designated a "Redevelopment Area" in accordance with the New Jersey Local Redevelopment and Housing Law, N.J.S.A, 48:12A-1 et seq.

This notice is typical of the kind we have seen in Bloomfield, Long Branch, Jersey City, and other municipalities which have undertaken redevelopment projects. Many owners have not understood, ignored, or simply not been served personally with notice of the pending muncipal action. None of the notices alert the property owner to the prospect of condemnation through eminent domain proceedings after the ordinance is adopted.

The story in Monday's Star Ledger about Charlie Shennett in the City of Passaic happens all too often. His notice went to the right address, an apartment building, but without a designated apartment number on it. He never received the notice. The municipality subsequently condemned the property and sold it. Now Shennett and his lawyer are left wondering if they are players in a Kafka-esque redevelopment scenario. The fact that the "developer" is also a councilman with a checkered history only compounds the problem.

Shennett, who has lived in an apartment on Dayton Avenue in Passaic for decades, had dutifully paid taxes on the site of his childhood home since it burned down in 1987. At the tax collector's office, Shennett was surprised to learn that he no longer owned the property. Without his knowledge, the city had taken it several months earlier as part of a redevelopment effort. Later, he would discover the city set aside $14,730 as compensation for him, then turned around and sold the lot for $60,000 to developer Wayne Alston, a former city councilman who went to prison in the 1990s on corruption charges.

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"It's not a New London thing, it's a national thing. My great grandparents came to this country as immigrants, worked hard to buy their little houses. The dream is gone. They could take it from you now. The American dream is now shattered." - Kathleen Moroney, New York resident

In an odd way, the Supreme Court's eminent domain ruling in Kelo v. New London has turned the tide in favor of the property owner.

On the face of it, property owners were expressing doom and gloom when the 5-4 ruling allowing eminent domain takings for economic benefit was announced. But the public outcry was overwhelming against both the ruling and the Supreme Court. Last week in New London, Connecticut, more than a few New Jersey property owners joined the protest of hundreds on the steps of City Hall as reported in The Day:

Among them were brothers John and George Mytrowitz of the Mulberry Street Coalition of Newark, N.J., who said they are facing the loss of their family business, an auto body shop that's been in the city for 92 years, to eminent domain.

"They want to take it away and give it to a developer who's connected with city hall officials," George Mytrowitz said.

"A convicted drug felon, also," John added.

"They want to take it away and give it to him, and I guess they're all going to get rich off of everybody else's property," George said.

"We're here in support of Susette Kelo," John said, "and of anybody that's being abused by this plague of eminent domain across the country."

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"Well, suppose an economist or even the judge might say, well, it's very clear that if this economic depression continues for another five years we are going to have blight. Blight is in the eye of the beholder, I know that." Justice Kennedy, Feb. 22, 2005 during the oral argument in Kelo v. New London

What's the matter with Long Branch? The city designated whole neighborhoods along the oceanfront mile as blighted. "We lived under the cloud of eminent domain since 1983," said Fred Strahlendorf, whose house in Beachfront North was condemned in 2002. According to yesterday's Star Ledger, the remaining area, with its neat bungalows and ranch houses, comprises New Jersey's largest coastal development project. If a fair-minded person were to look at these homes which are owner-occupied, well maintained, and structurally sound, they would ask: "How is this blight?"

"Our particular case started ten years ago, and it's still not resolved," said Strahlendorf. City of Long Branch v. Strahlendorf, which our firm handled, resulted in a jury verdict of $500,000 on July 23, 2003. Long Branch initially offered Strahlendorf $134,000 prior to trial and testified to $179,000 at trial. See Atlanticville, July 25, 2003.The Strahlendorf verdict was appealed by Long Branch and the verdict was affirmed by the Appellate Division. The New Jersey Supreme Court denied Long Branch's petition for certiorari on April 5, 2005. The verdict was final; but as of Friday, June 23, almost two years since the verdict, the Strahlendorfs had not been paid their just compensation.

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"The price of democracy is vigilance." - Senator Bob Smith (D) Middlesex, Chairman of the N.J. State Senate Committee on the Environment

Assembly Bill No. 4089 was referred to the Assembly Housing and Local Government Committee on Monday June 13, 2005. The bill was first introduced on May 12, 2005 and referred to the Assembly Environment and Solid Waste Committee. The bill requires that contamination be considered in property valuation in condemnation proceeding and requires remediation be performed by the condemnor.
The stated purpose of the bill, and its companion N.J. Senate Bill No. S2621, is to overturn the New Jersey Supreme Court decision in Housing Authority of New Brunswick v. Suydam Investors, 177 N.J.2 (2003) and revise New Jersey's Eminent Domain Act of 1971.

A remarkable assembly occurred in Trenton in opposition to this bill: McKirdy & Riskin, Carlin & Ward, Bathgate & Weggener, Archer, Greiner & Reed, senior state Deputy Attorney General Kevin Rittenberry, and Deputy Attorney General Dale Lessne, all appeared and testified in opposition to this bill. These firms and the deputies Attorneys General represented all spectra of the condemnation bar, both condemnor and condemnee. Monday's hearing concluded with the bill reported out of the Assembly Committee with amendments, and referred to the Assembly Housing and Local Government Committee without recommendation. Listen to the Committee on Environment and Toxic Waste Hearing of June 13, 2005.

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The companion cases of Housing Authority of the City of New Brunswick v. Suydam Investors, 177 N.J. 2 (2003)
and NJ Transit Corp. v. Cat in the Hat 177 NJ 29 (2003) gave the N.J. Supreme Court's imprimatur to the New Jersey Department of Transportation's methodology for handling environmental issues in the context of condemnation matters.

The Cat in the Hat affirmed the use of the environmental clauses which DoT inserts in every condemnation complaint. Suydam addressed the more important issue as to how the property effected by environmental contaminants should be valued. The Court concluded, and condemning authorities have fallen into line, that the properties acquired should be valued as if remediated, and the condemnor reserves the right to maintain a separate action for remediation for cleanup costs. Suydam, a case handled by our firm, was approved for settlement on December 21 by Middlesex County Assignment Judge Robert Longhi for $2.05M. See SUITS & DEALS, January 17, 2005, reprinted with permission of the New Jersey Law Journal.

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Eminent domain, the right of a municipality to take private property for public use, is one of the most far-reaching powers of government. It has become extremely controversial in New Jersey and elsewhere in the country as towns have started exercising that power to facilitate projects by private developers. In a landmark case, Kelo v. City of New London, the U.S. Supreme Court will decide this June whether Susette Kelo and six other homeowners in a Connecticut neighborhood are forced to sell their homes.

For a look at local aspects of the issue, NJBIZ assembled five people representing different pieces of the eminent domain puzzle. Present were Richard Rosamilia, president of Amboy Aggregates, a sand-mining company in South Amboy that faces the threat of its property being taken; Arthur Burgess, a Woodbridge lawyer representing Amboy Aggregates; John Inglesino, mayor of ockaway Township from 1996 to2002 who is now a partner at the Roseland law firm of Stern & Kilcullen and represents developers; William Ward, partner at the law firm of Carlin & Ward in Florham Park who represents property owners; and Meryl Frank, mayor of Highland Park, who is about to launch a redevelopment plan in her city. NJBIZ senior writer William Quinn moderated. Reprinted with permission of NJBIZ.

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