Friday, August 7, 2015

NJ's top court clarifies 'blight' that justifies redevelopment

What level of 'blight' authorizes a town to exercise its eminent domain power to redevelop
a rundown property? Not as much as before, according to a March 23 decision of the New Jersey Supreme Court.

Writing in the Gibbons law firm's Development/Redevelopment Law Alert, attorney Andrew J. Camelotto explains:

 "The New Jersey Supreme Court determined that property does not need to have a negative effect on surrounding properties in order to be deemed “blighted.” Prior to the Court’s decision in this case, it was unclear whether a negative effect on surrounding properties was a prerequisite to a finding of blight, or simply one way to establish it. Because the New Jersey constitution allows municipalities to exercise their powers of eminent domain to redevelop blighted property, the Court’s decision could encourage more municipalities to move forward with the condemnation of property for private redevelopment.

Andrew J. Camelotto
In 62-64 Main Street, plaintiffs owned five lots in the City of Hackensack consisting of two dilapidated buildings and several poorly maintained parking lots. In accordance with New Jersey’s Local Redevelopment and Housing Law (LRHL), the City designated a two-block area that included plaintiffs’ property as “in need of redevelopment.” In doing so, the City made findings of fact that the lots met the statutory definition of blight, but did not specifically find a negative effect on surrounding properties.
Plaintiffs challenged the City’s determination, arguing that Gallenthin Realty Development, Inc. v. Borough of Paulsboro, a 2007 Supreme Court decision, established a constitutional prerequisite to any blight determination, namely that the subject property must have a negative effect on surrounding properties. The trial court disagreed, holding that substantial evidence supported the City’s findings of blight. The Appellate Division reversed, finding Gallenthin did indeed establish a heightened constitutional standard requiring such a finding under all subsections of the LRHL, thus precluding compelled condemnation and redevelopment without a negative effect on neighboring properties.
In a 3-2 decision, the Supreme Court reversed the Appellate Division, holding that property does not necessarily need to have a negative effect on surrounding properties in order to be deemed blighted.

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