Move eminent domain reform in New Jersey

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.

The Eminent Domain Act of 1971 needs a comprehensive review after 38 years. The review must address such issues as date of value, interest on the award and pre-complaint procedures to be followed by the condemning authority, and rules developed in case law, such as the project influence rule.

The Local Redevelopment Law must address the definition of blight, the notice given to the property owners including tenants, and the time frame for filing a prerogative writ case contesting the blight designation. The Legislature must cap blight designations — seven years is sufficient to implement a project. A municipality should be able to develop plans, designate developers, acquire properties necessary for redevelopment and start construction within that time frame.

Blight designations that linger create the very conditions the municipality seeks to address. Asbury Park is a perfect example: blighted in 1984, two redevelopers have missed the market in 25 years. This must not be repeated.

Property owners under a blight designation remain under the threat of condemnation. They are reluctant to invest in their real estate and often are prohibited from redeveloping their own properties by the plan and the exclusive designation of one redeveloper. Property owners have difficulty obtaining loans, and sell at a discount because of the threat of eminent domain.

The Relocation Assistance Act and regulations are administered by the same agency displacing the owners and occupants. The same agency has full say over any decision by the Office of Administrative Law and can reverse an administrative law judge who finds the displaced owner is entitled to benefits. This is a blatant conflict of interest. Instead, the decision of the judge should be final and appealed in the courts. Owners forced to litigate to obtain benefits should be awarded reasonable counsel fees and costs if they are successful. Otherwise, the legal costs necessary to obtain statutory rights can exceed the benefits being sought.

Displaced residential owners are given many benefits — rental supplements, reimbursement of closing costs and attorneys' fees, which are not provided to businesses. Businesses need equal benefits. The business discontinuance allowance is capped at $10,000. This is a miniscule amount for most businesses, which may be put out of business after acquisition or relocation to another community. Business discontinuance allowance should be expanded to compensate the dislocated owner adequately for a business that becomes defunct.

Ed. Note: The op-ed, Time to act on eminent domain reform was published in the opinion section of the  Asbury Park Press on September 23, 2009 and can be found online at this link