NJ Supreme Court Agrees to Hear “Bizarre” Condemnation Case

The New Jersey Supreme Court recently granted a petition for certification filed by the property owners who alleged unsuccessfully before the Law Division, and the Appellate Division, that the municipality was required by law to provide them access to “their property.”

The case has been described by Henry Gottlieb of the New Jersey Law Journal as a “bizarre” condemnation because the appellate court’s ruling essentially provides that the government, not the property owner can assert inverse condemnation in order to take property without compensation.  Read more from the New Jersey Law Journal here.

The property owners constructed a house on their property in Avalon in 1960, and it was destroyed (like many others) in a 1962 ‘Nor-Easter’.  Thereafter, the municipality actively sought to replenish the dune areas , which was accomplished by 1965.  The municipality continued to maintain the dune areas since that time, but also continued to tax the private property owners along the shoreline.

In 1997, that the property owners contacted the municipality to complain about the regulations that “made it impossible for [them] to rebuild their summer home.”  And, “[b]y construction of the dune and adoption of the various related ordinances, the Borough exercised exclusive possession and control over the property.”  The trial court found that “that inverse condemnation has occurred, and that the Borough is the true owner of the property.”  The Appellate Division agreed with this finding.

However, the appellate court affirmed the trial judge’s dismissal of the plaintiff’s claims “for access, damages for trespass, and ejectment because plaintiffs’ bare legal title alone could not “support” those claims.”

In sum, although the owner’s property was taken without just compensation, both courts found that they were not entitled to a remedy for the taking probably because the property owner was trying to force the municipality to provide them access to “their ‘duned’ property”, which the law would not require since the court found that the municipality owned the property.

Oral argument has not yet been scheduled by the New Jersey Supreme Court.  Stay tuned.

More information about this case is available on the Inverse Condemnation Blog, which can be accessed here.

 

Kelo Update — Lessons Learned?

Read this excellent Op-Ed piece from the New York Times about the questions recently revisited as a result of the decision of Pfizer to close its New Lodon facility before “redevelopment” occurred and leaving behind vacant land which victimized Suzette Kelo and her neighbors.

For another article in the New York Times on Pfizer’s departure from New London and its anticipated impacts upon the community, click here.

Pfizer’s abandonment of New London, and the questions it raises about the efficacy of using eminent domain powers in support of municipal redevelopment projects was also the subject of an editorial in the Star Ledger calling for eminent domain legislative reform in New Jersey.  Read the editorial.

 

The Aftermath of Kelo – Pfizer Leaving New London

From the Wall Street Journal

November 11, 2009, Page A20

“The Supreme Court’s 2005 decision in Kelo v. City of New London stands as one of the worst in recent years, handing local governments carte blanche to seize private property in the name of economic development. Now, four years after that decision gave Susette Kelo’s land to private developers for a project including a hotel and offices intended to enhance Pfizer Inc.’s nearby corporate facility, the pharmaceutical giant has announced it will close its research and development headquarters in New London, Connecticut.

The aftermath of Kelo is the latest example of the futility of using eminent domain as corporate welfare…”

Read more from the Wall Street  Journal article here

Further information is available from the Institue for Justice website here

 

Asbuy Park Redeveloper’s Claim Against City Revived

A redeveloper’s claim against the City of Asbury Park was remanded to trial by a recent New Jersey appellate court decision.  Asbury Shores, Inc. v. City of Asbury Park, Docket No. A-2158-08T1 (November 10, 2009) (unpublished).

Plaintiff Asbury Shores is the designated redeveloper for the Springwood Avenue Redevelopment Area in Asbury Park.  Asbury Shores sought the City’s consent to assignment of its redevelopment contract with the City to a third party developer (Somerset Development, LLC).  The City refused to consent, and Asbury Shores filed suit.  The trial court ruled in favor of the City, finding that the City could withhold its consent to assignment of a redeveloper’s agreement “for whatever reason it deems worthy.”  Somerset Development appealed, and the appellate division reversed. 

 The appellate court ruled that the “law implies a covenant of good faith and fair dealing which would preclude the City from unreasonably withholding consent” to the assignment of the redevelopment agreement.  The case was remanded to the trial court for adjudication of whether the City’s refusal to consent was reasonable.

Read more about this case in the Asbury Park Press here

 

Pfizer abandons site of infamous Kelo eminent domain taking | Washington Examiner

Pfizer abandons site of infamous Kelo eminent domain taking | Washington Examiner.

 

Tenants’ Rights Scrutinized in Kearny Redevelopment Taking

A New Jersey appellate court recently analyzed the rights of a tenant who challenged a town’s right to use eminent domain to extinguish its leasehold interest in a municipal redevelopment project.  Town of Kearny v. Discount City of Old Bridge, et als, Docket No. A-6220-07T3. 

In this case, two commercial tenants appealed from trial court rulings upholding the Town of Kearny’s right to condemn and terminating their leaseholds.    The tenants occupied their properties under leases entered into with the same landlord in 1994 and 1995.  They were located in a riverfront area designated by Kearny as the “Passaic Avenue Redevelopment Area” in 2001.  In 2007, the tenants’ landlord was designated by Kearny as the redeveloper for the project under New Jersey’s Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-8.  Under the Redeveloper Agreement, Kearny agreed to use its eminent domain powers to acquire property needed to advance and complete the redevelopment project.  While the landlord/redeveloper was required to attempt to terminate the leases through negotiation, the Redeveloper Agreement provided that the redeveloper could request that Kearny take the leaseholds by eminent domain, which occurred in 2008.

The tenants opposed the condemnation, claiming that it could not proceed because the Town had not negotiated with them before instituting suit, and that notice of the planned redevelopment activities was not provided.  They also asserted that the landlord/redeveloper’s construction plans were not consistent with the uses specified in the Town’s redevelopment plan.   These arguments were rejected by the trial judge, who upheld Kearny’s exercise of eminent domain.

The appellate panel held:  (1) under New Jersey’s Local Redevelopment and Housing Law (“LRHL”), a municipality has the authority to condemn a tenant’s leasehold interest separate from the landlord’s fee simple interest; (2) there was no separate obligation of the condemning agency to negotiate because the landlord/redeveloper’s attempt to negotiate the termination of the tenant’s leasehold before the town filed the condemnation complaint was sufficient to meet the negotiation obligation under the Eminent Domain Act, N.J.S.A. 20:3-6; and (3) a tenant has no right to individual notice of a proposed blight designation as the LRHL only requires notice to property owners.   However, the court also held that the matter should be remanded in order to determine whether the landlord/redeveloper’s proposed project is consistent with the redevelopment plan, and also whether the leases’ condemnation clause precludes the tenants’ right to just compensation where the landlord/redeveloper’s property interest was not being condemned.

A copy of the appellate court’s slip opinion is available here.

 

Atlantic Yards Arguments Made to Court of Appeals

The New York Court of Appeals is hearing arguments today about the Atlantic Yards project, where challenges to the right to condemn were filed by several owners and interest groups.  Lower courts upheld the condemning agency’s right to condemn.  If the project proceeds, it would result in the development of a large mixed use project which would include a professional sports arena to be used as the new home of New Jersey Nets basketball team.

Read more from the Wall Street Journal here.

 

Kelo Update: Eminent Domain in New London — Poetic Justice or Sour Economy?

 

What is happening in New London, Connecticut now, more than four years after the United States Supreme Court’s opinion in the Kelo v. New London matter?

Source: Associated Press

“There are a few signs of life: Feral cats glare at visitors from a miniature jungle of Queen Anne’s lace, thistle and goldenrod. Gulls swoop between the lot’s towering trees and the adjacent sewage treatment plant.

But what of the promised building boom that was supposed to come wrapped and ribboned with up to 3,169 new jobs and $1.2 million a year in tax revenues? They are noticeably missing.

Proponents of the ambitious plan blame the sour economy. Opponents call it a “poetic justice.”

Read more from the Associated Press here.

 

Gloucester County Officials Consider Eminent Domain

Candidates for Gloucester County Freeholder were recently interviewed and asked about their opinions regarding the use of eminent domain.  Read their answers in a recent Gloucester County Times article here.

 

Eatontown Adopts Ordinance Limiting Eminent Domain — Critics Question Its Effectiveness

The Borough of Eatontown has adopted an ordinance limiting its eminent domain powers, but the ordinance is subject to criticism by both borough residents and Mayor Gerald Tarantolo, who say the measure does not do enough to protect property owners.   The ordinance, which was passed by a unamimous vote at the Borough Council’s Sept. 9 meeting, restricts the Boruogh’s ability to use its power of eminent domain to take a private, occupied residence for the financial gain of a third party.  However, while borough residents approved the intent behind the ordinance, some are worried that the wording is insufficient to  protect homeowners.

Read more about the newly-adopted Eatontown ordinance in a recent article from the Atlanticville newspaper here.