Delaying New Jersey's Eminent Domain Reform

“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.

The last iteration of Senator Rice’s bill included new sections for the creation of a Land Use Court. Senator Rice’s objective is to expedite the process so that eminent domain cases and prerogative writs cases do not linger in the court system to the detriment of the property owners. At the legislative hearing before the Senate Community and Urban Affairs Committee last Monday, two representatives from the Administrative Office of the Court (AOC) testified against the establishment of a Land Use Court. Dan Phillips said, “The creation of a separate court would not expedite these cases. We move these cases pretty quickly. We don’t have backlogs.” He reasoned that there are not enough eminent domain and land use cases to justify a new court; that the framers of the New Jersey Constitution created one Superior Court to eliminate specialized courts. On a fiscal note, Phillips estimated the cost to fund the Land Use Court at $9-10 million per year. There is no money in the state budget for this.

Senator Rice said he never intended to create bureaucracy but instead wants to assure people that there will be an expedited process for their cases. “Six months is a long time,” he said. “I need the time factor to be cut down…You think 6-8 months is reasonable; I don’t.”

This objective can be achieved administratively by the AOC and the respective county assignment judges through the tracking of these cases in the court system once they are filed. Rice requested a case flow analysis of 250 cases processed by the AOC.

The eminent domain reform bill must be voted out of committee and considered expeditiously by the full Senate. The effective date for the bill should be the date of the bill’s enactment and not 90 or 120 days later and, most importantly, it should apply to all pending eminent domain matters.

Senator Rice’s Community and Urban Affairs Committee will meet Thursday March 15 at 10 a.m. in Committee Room 6, 1st Floor, State House Annex, Trenton. If another version of S-1975 is made available prior to the hearing, we will post a copy as soon as it is available. All interested parties should give comments.