New Jersey Future’s 2011 Redevelopment Forum Set for March 4 in New Brunswick

New Jersey Future’s 2011 Redevelopment Forum will be held on Friday, March 4 at the Hyatt Hotel and Conference Center in New Brunswick, New Jersey. To register at the early-bird rate of $85 for New Jersey Future members and $125 for non-members click here (NJF also accepts purchase orders).  After Feb. 18, admission is $100 for New Jersey Future members and $140 for non-members. NJF has also applied for 5.5 AICP Certification Maintenance (CM) credits and will be applying for CLE Credits. If you have any questions, please contact Marianne Jann at 609/393-0008, ext. 101.

Florio Perrucci partners Governor James J. Florio, and Philip J. Morin III will each be serving as panelists at the Forum and the firm will be a co-sponsor of the cocktail reception following the Forum.  Details of the panels are below:

Renewables and Redevelopment? Balancing Redevelopment with Green Energy Production  –  Should spaces like brownfields and landfills be used as solar panel “fields”? Or should they be redeveloped with offices, housing, and transit? Is there a way to make both possible? This panel will highlight recent case studies in Trenton and Jersey City, and look at the types of ordinances communities are putting in place to allow these projects.

Panelists:

• Michele N. Siekerka, Esq., Assistant Commissioner for Economic Growth and Green Energy, New Jersey Department of Environmental Protection (Moderator)
• Governor James J. Florio, Founding Partner, Florio, Perrucci, Steinhardt & Fader
• Alfred Matos, Vice President – Renewables and Energy Solutions, PSE&G
• George Vallone, President, Hoboken Brownstone Company

Areas in Need of Rehabilitation: Exploring the Potential and Limitations  – The successful redevelopment of an area does not always have to involve the acquisition, clearance and assemblage of multiple properties for new buildings and uses. In many cases, the designation of an “area in need of rehabilitation” may be the a better option. In this session, speakers will explore the tools available to towns with this designation, its limitations as well as strategies for using the area- in-need-of rehabilitation designation as part of a broader revitalization strategy.

Panelists:

• Philip J. Morin III, Esq., Partner, Florio Perrucci Steinhardt & Fader (Moderator)
• Anne Babineau, Esq., Partner, Wilentz, Goldman & Spitzer, P.A
• Marta Lefsky, Director of Planning & Development, Woodbridge Township
• Raymond McCarthy, Mayor, Town of Bloomfield
• David G. Roberts, AICP, PP, LLA, RLA, LEED-AP, Department Manager, Maser Consulting PA

Eminent Domain Compromise Bill Getting Traction in Senate

According to a report at NJBIZ.com and Trenton sources, a compromise bill on eminent domain reform is making its way through the State Senate and may clear the upper house this week:

From NJBIZ:

State Senate majority leader Steve Sweeney (D-West Deptford) and state Sen. Ronald Rice (D-Newark) last week unveiled amendments to their merged eminent domain legislation, SCS-559/757. The proposed amendments would establish tougher eminent domain standards by limiting the use of eminent domain and tightening the definition of a property in need of redevelopment — such as adding a 20 percent cap on nonblighted areas within designated redevelopment areas.

The changes would improve notice provisions for property owners and tenants affected by eminent domain, and significantly increase the financial compensation to parties displaced during the process. Businesses, for example, would receive payment for the loss of a location with heavy foot traffic and for capital improvements that were done at the site.

The revised bill also would demand more transparency during the redevelopment process, and require that a municipality or redevelopment agency exercise the power of eminent domain within five years of adopting a redevelopment plan.

For the full article, click here.

Appellate Division Declines to Require Redevelopment Area Notice Be Served Upon Commercial Tenants

Municipalities withstood another attack on their broad powers under the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -49 et seq. (“LRHL”), last week while the rights of commercial tenants remained status quo. In Iron Mountain Information Management Inc. v. City of Newark, the Appellate Division held that a commercial tenant is not generally entitled to advance notice of a municipality’s consideration of a building as part of an area in need of redevelopment – unless its unit is noted in the tax assessor’s records pursuant to N.J.S.A. 40A:12A-6(b)(3).

The court specifically noted that the increased constitutional protections and explicit notice of potential use of eminent domain by a government agency mandated in Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), does not apply to commercial tenants and remains limited to property owners or others specifically entited to statutory notice under the LRHL. The court also found that the forty-five day period for bringing a timely appeal applies to commercial tenants of properties in designated redevelopment areas notwithstanding that the tenant did not receive individualized written notice of the redevelopment designation or the hearings leading up to the designation.

Appellate Division: Long Branch Did Not Provide Substantial Evidence to Support Redevelopment Designation

In one of the battlegrounds over redevelopment and the use of eminent domain in the state, the Appellate Division has ruled that the City of Long Branch failed to establish sufficient evidence that certain residential properties in the Beachfront North redevelopment zone met the criteria for an area in need of redevelopment. The court also dismissed other contentions of the homeowners, including claims of conflict of interest of the City Attorney and upheld the City’s delegation of authority to commence condemnation proceedings to the designated redeveloper. Long Branch v. Anzalone, A-0067-06T2 et als. (N.J. App. Div. August 7, 2008).

According to the Asbury Park Press:

The Appellate Division of Superior Court, relying on the 2007 decision in the Gallenthin Realty Development Inc. v. the Borough of Paulsboro case, found that Long Branch’s 1996 report did not meet the heightened standard for blight and so it reversed Lawson’s decision appointing condemnation commissioners for the affected parcels.

“We agree with appellants that material facts are in dispute regarding not only whether substantial evidence supports a finding of a need for redevelopment,” but also regarding other issues such as whether taking that neighborhood is integral to the overall redevelopment plan and whether its inclusion is necessary in the redevelopment plan.

Also, Lawson will determine whether taking the properties represented a change to the redevelopment plan that would have required it to be readopted, and thus require a new series of public notices and hearings.

MTOTSA maintains it was always told that its neighborhood was safe and would be redeveloped as “infill,” which it took to mean as development on existing or available properties. Absent a definition, however, Lawson will have to define that term as well, the appellate panel said.

“We agree with appellants that . . . the city did not find actual blight‚ under any part of the law, ‚that the record lacked substantial evidence that could have supported the New Jersey Constitution’s standard for finding blight and that the absence of substantial evidence of blight compels reversal,” the appellate panel found.

For the full Asbury Park Press article, click here.

For the Star Ledger article, click here.

Morin to Moderate Seminar on NJ Land Development Approval Process

On Wednesday, July 16, 2008, Philip J. Morin III will be on the faculty for this one-day Lorman Educational Services Seminar that will discuss land use law, environmental issues and the development approval process in New Jersey. Panelists will also address the status of the third-round affordable housing regulations, potential amendments to the redevelopment laws, and review recent court decisions impacting development issues.

Mr. Morin will present several lectures throughout the day, including “Overview of Development and Land Use Law,” “Land Use Procedures and the Public Hearing,” “Ethical Considerations” and “Recent Trends and Municipal Government Perspectives.” Also on the faculty are Mary Elizabeth Warner, Esq., Real Estate Counsel for Quick Chek Corporation; Brian McMorrow, P.E. of Bohler Engineering, PC and Paul Grygiel, AICP, P.P., of Phillips Preiss Shapiro Associates, Inc.

The seminar will take place in the Holiday Inn Cherry Hill-Philadelphia in Cherry Hill, New Jersey from 8:30 a.m. to 4:30 p.m. NY and PA CLE credit is available.

For for information and to register for this event, please click here.

Rice Redevelopment/Eminent Domain Bill Voted Down in Committee

According to a timely e-mail update from Conor Fennessey of the New Jersey Apartment Association, S-757 was not voted out of committee on Monday.  The vote of the Senate Community and Urban Affairs Committee was 1-3-1, with Senator Rice casting the only affirmative vote.  Senator Rice advised during the public session that the bill will be back in some form on the Committee’s May 15 agenda.

For a copy of the draft committee statement on the bill, including comments on the proposed amendments to the bill, click here: S-757 Draft Committee Statement.

For more of the background regarding the bill, Gregory Volpe has an excellent story in today’s Courier Post.   A different version of the article with more commentary about the behind-the-scenes battle over competing versions of redevelopment reform appears in the Asbury Park Press.

Amendments to Rice Bill on Redevelopment/Eminent Domain

As promised, here are the proposed amendments to Sen. Ronald Rice’s bill on redevelopment and eminent domain. See Amendments to S-757.  This bill is scheduled to be discussed by the Senate Community and Urban Affairs Committee on Monday, May 5.

Rice Bill on Redevelopment and Eminent Domain Scheduled for Hearing on Monday, May 5

The Senate Community and Urban Affairs Committee will take up Senator Ronald Rice’s bill on redevelopment and eminent domain reform on Monday, May 5.  According to sources in Trenton, the bill will include amendments to the version that died in the last legislative session.   It is expected that the amended version of the bill will be available prior to the Monday hearing. 

Senator Rice, who chairs the Committee, is the only member of the Committee who is returning from the 2006-2007 legislative session.  The other four members are freshman senators.

For the pre-filed version of S-757, click here.

Change In NY Governor Could Determine Future for NJ . . . Nets?

Editor’s Note/Update:  The March 16, 2008 Sunday Daily News reports that Governor Paterson will continue support of the Atlantic Yards/basketball arena in Brooklyn…. 

An interesting sideline to the change in the governorship in New York State is the strong anti-eminent domain policy that Lt. Governor David Paterson adopted as a member of the state legislature.  As a result, several economic development projects across the Hudson, including the Atlantic Yards project in Brooklyn, which is slated to be the home of the New Jersey Nets in 2011, “could be derailed or delayed,” according to the New York Sun. 

While Paterson was a state senator, he called for a statewide moratorium on the use of eminent domain. 

As reported in the Sun on March 14:

Mr. Paterson said a decision handed down by the Supreme Court in the Kelo v. City of New London case could lead to a “gold rush” of eminent domain use across the state, The New York Sun reported at the time. He said he would gather legislators and introduce legislation to impose a moratorium on its use.

“He stood with me and proposed some legislation and I am very hopeful that the lieutenant governor and soon-to-be governor will honor his commitment and will either issue a moratorium or review the abuse of eminent domain across New York City,” [City Council Member Letitia] James said yesterday in an interview.

Ms. James’s district is in Brooklyn, and she opposes developer Bruce Ratner’s $4 billion Atlantic Yards project near downtown Brooklyn, which would require use of eminent domain. 

Thus, there is the possibility that if Governor Paterson remains consistent with his prior position, that the Atlantic Yards project, already delayed by lawsuits, environmental reviews and other impediments, could be blocked.  In turn, the question must be asked, particularly in light of recent public debate over whether the Prudential Center in Newark and Izod Center in East Rutherford can co-exist, whether this will have any impact on future development at the Meadowlands Complex or raise the potential of the Nets moving to Newark if the Atlantic Yards project falls through.

Mr. Ratner is planning to build a basketball arena and 16 mostly residential towers on 22 acres in Prospect Heights. The plans would remake the low-rise neighborhood with 8 million square feet of development, including more than 6,000 apartments, “affordable” housing, and office and retail space in a complex designed by architect Frank Gehry.

Perhaps the new New York Governor can reconcile his prior views with the broader economic development goals of New York City Mayor Bloomberg and others in the city and the state, perhaps not.  One thing is certain; the impact of how New York approaches eminent domain will be felt in New Jersey, regardless.

Notice of Potential for Condemnation Required to Impose Strict 45-Day Limitations Period to Redevelopment Designations

In Harrison Redevelopment Agency v. Anthony J. DeRose,  decided February 25, 2008, the New Jersey Appellate Division ruled that due process concerns mandate that the notice provisions of the Local Redevelopment and Housing Law (“LRHL”), N.J.S.A. 40A:12A-6, will not pass constitutional muster unless a municipality provides a property owner with contemporaneous written notice that fairly alerts the owner that:

(1) his or her property has been designated for redevelopment,

(2) the designation operates as a finding of public purpose and authorizes the municipality to acquire the property against the owner’s will, and

(3) informs the owner of the time limits within which the owner may take legal action to challenge that designation.

Thus, an owner constitutionally preserves the right to contest the designation, by way of affirmative defense to an ensuing condemnation action.  Absent such constitutionally-adequate notice, the owner’s right to raise such defenses is preserved, even beyond the traditional forty-five day limitation period after the designation is adopted.

If the municipality’s notice does contain these constitutionally-essential components, an owner who wishes to challenge the designation must bring an action within the forty-five day period after a municipality has adopted the designation.  The owner who is provided with such adequate notice typically may not raise objections to the designation as a defense in a future condemnation action.  However, a court may apply the “interests of justice” standard to expand the forty-five day limitation period when circumstances require.

Additionally, in remanding the case to the trial court to consider the appellant’s challenges to the underlying redevelopment designation, the appellate court found that, while the issue of retroactivity in Gallenthin v. Borough of Paulsboro is ultimately an issue for the state Supreme Court, the court presumed that the holding has “pipeline retroactivity” to cases such as this, where the matter was pending in the court on June 13, 2007 when the Court decided Gallenthin.  As a result, the appellate court directed the trial court to allow all parties to supplement the record as to whether substantial evidence was present to designate the property in question as an area in need of redevelopment in accordance with the Gallenthin court’s interpretation of section N.J.S.A. 40A:12A-5(e) which limited redevelopment designations under this section to properties with diverse title and ownership issues, and not amorphous claims of “underutilization.” Gallenthin held that the expert testimony supporting a redevelopment designation must provide a substantive analysis of the facts surrounding the criteria for finding an area to be in need of redevelopment.

 The impact of the Harrison decision on existing redevelopment areas is clear, namely, if a municipality did not provide individual notice of the designation of a property as a redevelopment area and the potential for future condemnation as outlined in the Harrison opinion (which detail pertaining to notice is not required by the plain language of the LRHL or reported decisions prior to this opinion), a property owner would have standing to challenge the procedural or substantive facts underlying a redevelopment designation years down the road.  Thus, this opinion is a blaring warning to developers, municipal officials and property owners that the underlying strength of any redevelopment designation should be evaluated by a prospective developer, investor or landowner early on in the redevelopment process as, if condemnation is ultimately used, the original redevelopment designation could be voided, even if the designation was resolved years prior.

For a copy of our bulletin on this decision, click here.