A few years ago, in Gallenthin Realty Development, Inc. v Borough of Paulsboro, 191 N.J. 344 (2007), the New Jersey Supreme Court held that in order to target property for redevelopment as "blighted," the government must show that it is in such condition that it "negatively affects surrounding areas" by promoting conditions that can develop into blight. In that case, the targeted property was mostly undeveloped wetlands, and the "blight" of which it stood accused was the owner's failure to put it to a more intensive economic use. But that was not sufficient to support a blight finding, and the court held that the government must have done more than simply recited the standards for blight redevelopment, and declare they were met.
We were going to do a complete write-up of the New Jersey court's latest foray into blight and redevelopment, 62-64 Main Street LLC v. City of Hackensack, No. A-19/20-13 (Mar. 23, 2015), but wanted to hold off until the "local knowledge" -- Anthony Della Pelle, our colleague at the New Jersey Condemnation Law blog -- weighed in. He now has, and in "Will the Latest New Jersey Supreme Court Property Rights Decision Revive the Redevelopment Market?," writes:
Last week, a divided New Jersey Supreme Court ruled that condemning agencies do not have to prove that properties within an area "in need of redevelopment" have a deleterious effect on the surrounding area in order for those properties to be taken via eminent domain. The 3-2 majority opinion, authored by Justice Barry Albin, concluded that, so long as there is substantial evidence in the record that the legislative definitions set forth in New Jersey’s Local Redevelopment and Housing Law ("LHRL") are met, a court is bound to affirm a local government’s redevelopment designation. The decision has stirred debate in the legal community as to whether the criteria for condemning property for redevelopment purposes has been eased, and whether it represents a departure from the Court’s landmark 2007 decision in Gallenthin Realty Development, Inc. v Borough of Paulsboro, 191 N.J. 344 (2007).
One big difference between this latest case and Gallenthin was that here, the properties declared blighted were actually "boarded up" and displayed "prominent signs of structural deterioration," and not simply economically underutilized. Moreover, according to the dissenting Chief Justice, the surrounding area is a "thriving, commercial area that is home to a newly built CVS, Auto Zone and branch of TD Bank." Slip op. at 37. So it seems that this is the reverse of the classic Berman situation, where the court held it was okay to blight the baby (well-maintained property) if the legislature says the bathwater (the surrounding area) was dirty. The Hackensack majority, however, based its decision in the fact that the blight designation in Gallenthin was based on the criteria in subsection (e) of New Jersey's Blighted Areas statute (the property negatively affects other areas), while Hackensack's designation was based on subsections (a), (b), and (d) (which relate to the conditions of the property itself).
Read Tony's post for more details on the case, and links to further analysis to make your own decision about whether you find that convincing. The dissenting Chief Justice didn't think so, and wrote:
Today, the majority takes a step backward from Gallenthin. In assessing different sections of the same law, N.J.S.A. 40A:12A-5(a), (b), and (d), the majority concludes that when the government designates an area to be “in need of redevelopment” -- a critical step in the takings process -- it need not affirmatively prove both elements set forth in Gallenthin to show that a property is “blighted.” Instead, the majority permits the designation of private land for redevelopment even when government officials have not shown a decadent effect on surrounding properties.
Dissent at 2-3.
62-64 Main Street, LLC v. City of Hackensack, No. A-19/20-13 (N.J. Mar. 23, 2015)
