Eminent Domain - Ledger- Supremes ruling limits towns

Published in the Star-Ledger, Thursday, June 14, 2007

Court limits towns' power to seize land
'Underused' designation deficient in S. Jersey eminent domain case

BY KATE COSCARELLI
Star-Ledger Staff

A unanimous state Supreme Court yesterday sought to rein in the controversial use of eminent domain by towns.

In a Gloucester County case, the court ruled unconstitutional a popular catchall phrase local officials use to declare property "in need of redevelopment," a first step toward seizing private homes and businesses to make way for large-scale developments.

Supporters argue the technique is critical for turning mothballed industrial areas into gleaming new condominium developments. But critics, including Gov. Jon Corzine, have argued the law is being abused to further enrich wealthy, often politically connected builders.

The court declared yesterday that towns must show properties are truly "blighted" to seize them and can no longer simply declare them underused.

"The New Jersey constitution does not permit government redevelopment of private property solely because the property is not used in an optimal manner," the court said in a decision written by Chief Justice James Zazzali. "If such an all-encompassing definition of 'blight' were adopted, most property in the state would be eligible for redevelopment."

The issue has roiled the nation for the past two years, since the U.S. Supreme Court ruled in a Connecticut case it wouldn't interfere with plans by New London to seize private property and hand it over to a developer. In New Jersey, the state Assembly approved a bill meant to restrict the use of eminent domain, but it stalled in the Senate.

In yesterday's decision, the court found tiny Paulsboro improperly designated a 63-acre property near the Delaware River blighted because it was "not fully productive." The town has not moved to seize the property, but the blight designation is a necessary first step toward turning the land into a port.

The court acknowledged that redevelopment, and the ability to take private property, is an important municipal tool, but that "authority is not unfettered." There must be a balance, it added in a 42-page decision, between the rights of private property owners and the desire of the town facing economic deterioration.

The decision could impact a bevy of cases pending in the court system on various aspects of eminent domain and redevelopment, including ones in Lodi and Long Branch. It also will be closely read in dozens of towns with large-scale projects on the drawing board or steaming forward.

Critics of eminent domain cheered the ruling as an important victory for property owners.

"It means that it's no longer open season on everybody's property," said William Potter, founder of Stop Eminent Domain Abuse and an attorney in the Paulsboro case. "It means a return to reality in terms of what is blighted and what is not. There is hope now for people facing the awesome powers of eminent domain."

He predicted the decision would have immediate impact on dozens of cities that are creating redevelopment plans like Hoboken and Camden.

Said State Public Advocate Ronald Chen, who has argued the redevelopment laws must be reformed:

"It's a pretty far-reaching (decision) that addresses a very, very real issue in modern redevelopment -- which is an overly expansive, bogus definition of blight. The court has made it quite clear it won't countenance that expression of blight. It's a very important statement."

Advocates for developers and municipalities had a different take, arguing the court had helpfully clarified how the redevelopment law should be applied. Most important, the court did not strike down New Jersey's sweeping, 15-year-old Local Redevelopment and Housing Law, said William Kearns, general counsel to the New Jersey State League of Municipalities.

Most towns provide more detailed support than just the "underused" category in declaring property blighted, said Edward McManimon, who represents developers. Towns might have to spend more time gathering information and evidence about property, he said, but projects will go forward.

"This is not going to have a chilling effect on redevelopment," he said.

In some ways, the decision "plugs the hole" in the statute. Now that blight is squarely defined, it should quiet criticism from people who claimed towns could declare almost any property blighted, said Paulsboro municipal attorney Jim Maley.

The case centers on a tear-shaped tract near the Delaware River that is part wetlands and part farm. The Gallenthin family has used the property since 1902 and has owned it outright for over 50 years, court papers state.

In 2003, the town designated the property in need of redevelopment based on reports that it was "not fully productive."

George and Cynthia Gallenthin sued claiming the town misused the law. A trial court and appeals court upheld the town's actions.

It was a happy conclusion to a difficult journey for the Gallenthins, said Peter Dickson, an attorney for the couple. The ruling makes it "pretty much impossible" for the town to take the property now or later.

Paulsboro officials said they were disappointed but vowed to press the port project, noting the court did not rule out the idea the town could revisit the redevelopment plan using other criteria.

"We're gonna build this port," said the town's mayor Assemblyman John Burzichelli.

Staff writer Mary Jo Patterson contributed to this report.

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