Eminent Domain: New Jersey School Construction Corporation
"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.
Virtually every political supporter fed at the public trough and benefited from NJSCC's largesse: architects, engineers, construction companies, consultants, and yes, even lawyers. All of this money was administered by an inept, inexperienced bureaucracy. The awarding of no bid contracts was rife with insider deals and political payoffs. Acting Governor Richard Codey effectively put a stop to the bleeding by ordering a report from newly installed Inspector General Mary Jane Cooper. On April 22, 2005 she issued a scathing report and put a freeze on all NJSCC's construction, acquisitions by eminent domain, and relocation spending. (See Scathing report sways planner of new schools in Star Ledger archives.)
This moratorium has caused severe hardship across the state. Entire neighborhoods such as Dewey Street, Newark are half acquired, half relocated, and totally devastated:
The Newark block, once a working-class enclave with manicured lawns, beckoning front porches, and residents who measured their longevity in decades, has been decimated since district and state officials decided to build a new University High School there. All but a few of the 28 houses on the block are empty, with plywood covering many windows and doors.
Yesterday the residents of Dewey Street found out, like many other neighborhoods in the state, that NJSCC ran out of funds, and they ran out of luck.
We now know some schools will be built and others put on hold. See Table C issued by the NJSCC. Download NJSCC News Release. We suspect the schools on hold await a new bond issue which will come after the November 2005 elections. Don't expect our challenged and risk-averse politicians to deal with this hot potato before November.
Meanwhile, despite the enormity of the scandal, New Jersey property owners would like to know what is being done to address the underlying problems? Cosmetic changes have been made at NJSCC regarding staffing and internal controls. It probably embarrasses too many Democrats and Republicans to dig deeper into one more scandal in the legacy of that "Great American," former Governor James E. McGreevey. Maybe the U.S. Attorney should look into it.
In order to preserve the status quo while they wait for more funding, NJSCC has gone into obfuscation and delay mode. Properties slated for acquisition, but not yet acquired by eminent domain, are on hold. The owners are in bureaucratic never-never land: they can't sell, they can't relocate, and the neighborhood around them has been acquired and boarded up. But the schools aren't going to be built! Dewey Street, Newark resident Annie Searcy said, "It's upsetting, disgusting really. How can something like this happen?:
What's next? Blight and redevelopment by the mayor's favorite developer? This is not as far-fetched as it sounds. After all, the Kelo decision appears to give municipalities carte blanche when it comes to takings for economic benefit.
We suspect the site selection process in many cities was skewed to direct the schools to locations preferred by the political powers while ignoring obvious sites which were slated for redevelopment. Union City is a good example of this. Why wasn't the Public Service bus garage owned by the city and taking up an entire city block on Palisades Avenue selected for a school site? This site would not have involved eminent domain, expenditure of public funds, and only minor relocation for the city equipment located within the garage. This site is big enough for several schools. Instead, NJSCC was directed to nine other sites spread throughout the city, all of which entailed massive eminent domain acquisitions and business and tenant relocations at great cost to NJSCC. The Roosevelt Stadium project is a $136 million structure containing 66 classrooms, an auditorium, and a parking garage, with a football stadium on its roof. Is school construction being used as a subterfuge for redevelopment purposes? Union City is especially problematic because every square inch of the city is improved, and it is the most densely populated city in New Jersey.
When our forefathers gave the sovereign the power to take private property for a public use, they intended this enormous power would be applied carefully with an emphasis on the public benefit to be derived from the exercise of eminent domain. Somehow, our public officials have been diverted from their charge; and this needs to be set straight so that the people have confidence that eminent domain will be used for its intended purpose, and not perverted for individual gain.
I am the co-founder of a community arts gallery at 115 East Kinney Street, Newark NJ. Aferro Gallery was housed in a 10,000 square foot warehouse space, and when we were forced out by the SCC we lost almost two years of donated labor and our entire monetary investment, as well as a future for the gallery. The building sits empty. The trailers at Oliver Street School down the block are still being used as classrooms for students. We lost, they lost.
As a tenant in property acquired for a public project, you're entitled to relocation assistance pursuant to the Relocation Assistance Act and regulations, N.J.S.A. 20:4-1. Depending on the language of the condemnation clause in your lease, you may have a claim in the eminent domain case for the value of tenant leasehold improvements. Your lawyer should have pursued both of these avenues on your behalf.