Redevelopment - Ledger - Newark's Mulberry Street Plan Overturned

Published in the Star-Ledger, Friday, July 20,2007

Setback for Newark condo project
Judge rules city failed to prove that the 14-acre site
on Mulberry Street is 'blighted'

BY KATIE WANG
Star-Ledger Staff

A Superior Court judge in Essex County has dealt a major blow to a plan to build 2,000 condominiums in downtown Newark, saying the city failed to prove the area in question is deteriorating and in need of redevelopment.

The 71-page decision, issued yesterday, cites the watershed state Supreme Court decision, Gallenthin Realty Development Inc. vs. Borough of Paulsboro, handed down earlier this year that limits the government's power to seize land.

In the Newark case, Judge Marie P. Simonelli said the city cannot designate the 14-acre Mulberry Street area "blighted" simply because the property could be used for better purposes. Property owners fought the designation, saying the area was still thriving and that they did not want their land to be seized through eminent domain.

"The court finds that the city declared the entire Mulberry Street area as an area in need of redevelopment solely because it is not properly utilized and fully productive," Simonelli said in her decision. "Under the Gallenthin holding, this declaration does not meet the constitutional requirement of blight and must be invalidated and set aside."

The decision puts the future of the condo project in jeopardy, though all parties involved disagreed on whether the project is dead or viable in an amended form. The Mulberry Street condo project, which was to be developed by the Newark Redevelopment Corp., is slated for a prime tract one block from the Prudential Center arena, scheduled to open in October.

Stefan Pryor, the deputy mayor in charge of economic development, said the Booker administration is analyzing the judge's decision and refused to say whether it will appeal.

"The outcome of the case will not affect the arena project," he said.

John Buonocore, the attorney representing the plaintiffs, declared the condo project dead.

"We are delighted that the court saw through this pre-arranged land grab on behalf of politically favored developers," Buonocore said. "The ruling sends a message to politicians across the state that the courts will not sustain economic development takings under the guise of the redevelopment laws."

Bruce J. Wishnia, one of the principals of Newark Redevelopment Corp., said the decision is a sad day for the city and the state. He said he is not sure what this means for the overall project.

"If the Mulberry Street area is not in need of redevelopment, then the court needs to tell us what kind of area would be," Wishnia said. "If this decision if not reversed, it will effectively shut the door on urban redevelopment in our state."

The Mulberry decision comes at a time when land and redevelopment issues are under intense public scrutiny in a city that has struggled for decades to rebuild itself.

One week ago, Sharpe James, who served as mayor for two decades, was indicted on charges he steered lucrative land deals to companion Tamika Riley. The property owners in the Mulberry case have long alleged political contributions from the developers swayed council members to vote in favor of declaring the area in need of redevelopment.

The judge concluded her opinion with a tart reference to James' criminal charges.

"This evidence certainly provides cause to question the results and validity of the redevelopment investigation," she said. "However, the court mentions it for historical purposes only and makes no determination of the merits of plaintiff's corruption claim. It appears that such a determination may be made in the recently initiated criminal proceedings involving former Mayor James."

The Mulberry Street Redevelopment project made its debut five years ago during James' administration. In November 2002, Wishnia and his partner, Emile Farina, a former aide to then Councilwoman Bessie Walker, pitched the idea to Nathan Allen, director of the city's Department of Economic and Housing Development.

Plans called for the Newark Redevelopment Corp. to negotiate with property owners for their land. If negotiations failed, the developers planned to ask the city to use its condemnation powers to seize those properties.

According to Simonelli's ruling, there is no evidence any negotiations took place.

Instead, she said, the city pursued an investigation into declaring the area in need of redevelopment, paving the way for condemnation.

In her decision, Simonelli leveled stinging criticism at the snug relationship between developers and officials in the city. Attorneys, relatives and consultants affiliated with Wishnia and Farina donated an additional $53,325 to some council members when they were making critical decisions about the project, according to the plaintiffs.

"There is evidence in the present case that the Mulberry Street Redevelopment project and NRC's role as its developer was "a done deal," a fait accompli, before the required statutory redevelopment process began," Simonelli said.

City-hired planner David Roberts issued a report in April 2004 declaring the area in need of redevelopment because the parking lots, storage yards and businesses in the area "consumes land that could otherwise be available for much more productive uses."

But Simonelli faulted Roberts' report, saying it lacked empirical evidence to support his conclusions.

On Oct. 14, 2004, the planning board passed a resolution recommending the city declare the Mulberry Street area in need of redevelopment. The city council agreed and on Nov. 3, 2004, it passed a resolution declaring the area in need of redevelopment.

Katie Wang may be reached at kwang@starledger.com or (973) 392-1504.

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