Eminent Domain - NY Times - Long Branch Outcome Awaited

Published in the New York Times, Sunday, July 29, 2007

[Eminent Domain]
Now You Own It, Soon You Don't?

By RUSS BUETTNER

IT'S not so much the modest bungalow's spacious second-floor addition or the expansive side yard that gets to Lori Ann Vendetti.

The thing that keeps her fighting is the misty ocean air that floats through her doorway when she lets her dog out in the morning. The salty aroma can transport her back to childhood weekends spent playing on the beach with her two brothers, long since dead and gone.

Neither Ms. Vendetti, 46, nor her parents across the street believe they can afford another place within a sniff of the ocean if the City of Long Branch, N.J., wins its 12-year effort to turn their homes over to a private developer who wants to build luxury condominiums.

''We always feel like things are stacked against us,'' said Ms. Vendetti, who has lived in her home for 12 years. ''But if they're going to take it from me, they're going to take it with a fight.''

During the last two years, homeowners and property-rights advocates across the country have echoed that sentiment, and state lawmakers have answered. A controversial United States Supreme Court decision in June 2005, which upheld the power of local governments to seize private property for the benefit of private businesses, inspired an uprising that led 40 states to pass laws that rein in, to varying degrees, that authority.

But legislatures in the three states in the New York metropolitan area, long seen by property-rights advocates as home to some of the worst abuses of eminent domain, have done little to change the status quo.

''New Jersey and New York are among the worst states in the country for eminent domain abuses -- New Jersey is really awful,'' said Dana Berliner, a senior lawyer at the Institute for Justice in Arlington, Va., which represents residential and business owners facing condemnation. ''What's interesting is that New York, New Jersey and Connecticut are some of the few states that have not managed to pass any decent legislation.''

In Connecticut, where the United States Supreme Court case originated, Gov. M. Jodi Rell late last month quietly signed a law that includes a prohibition on taking property ''primarily'' to increase local tax revenues, leaving open that reasoning as a secondary cause.

New York, which already allowed the taking of property for private use, saw its lawmakers introduce 17 related bills in 2006. But the Legislature passed only those laws seeking to ban two specific projects.

Similarly, New Jersey legislators have been unable to pass any bill. The State Supreme Court recently stepped into the breach, arguing that cities and towns cannot condemn properties simply because another use could be more productive. That ruling, in Gallenthin Realty Development v. Borough of Paulsboro, has already had an impact on several projects, including a plan to build 2,000 condominiums in downtown Newark.

Other states have instituted more precise definitions of blight, set minimum compensation levels above market value for the owners of seized properties and restricted eminent domain to more traditional public projects like schools and roads. The legislative changes have been driven by an unusual alliance of conservative Republican property-rights advocates and liberals interested in the rights of lower-income people.

Not everyone believes such measures are needed. It remains to be seen if the new laws will protect property owners without chilling redevelopment projects. ''You had this huge uproar,'' said Larry Morandi, who has tracked the new laws at the National Conference of State Legislatures, ''and an incredibly fast legislative response. The effect of that legislation will be seen in how it is implemented, and that takes time.''

While supporters of the current laws say a reasoned analysis would show that eminent domain is most often employed as a last resort and without major conflict, what has driven the push for change and has led to so many lawsuits is anger at the potential loss of control over such a fundamental aspect of life.

The lead plaintiff in the United States Supreme Court case, Susette Kelo, a nurse who lived in a pink Victorian cottage in New London, Conn., opposed the town's condemnation of her neighborhood to make way for a private development of offices, condominiums and a hotel. The 5-to-4 majority opinion held that promoting economic development met the ''public use'' clause of the Fifth Amendment that allows condemnations. In a dissenting opinion in the case, Justice Sandra Day O'Connor gave voice to the fear that started a revolt: ''Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded.''

IN Norwalk, Conn., Nancy Esposito doesn't want to be uprooted or upgraded. Her family has owned and run Casey's Sheet Metal Service in Norwalk for 15 years. Five years ago, a developer showed up offering to buy their building as part of a plan to remake several blocks. Ms. Esposito has resisted, and watched as the developer bought most of the buildings and land around her.

''They keep saying they want to make this area a destination,'' Ms. Esposito said. ''I say that it is a destination. It's my destination.''

The developer, Stanley M. Seligson, a Norwalk native, envisions a pedestrian-friendly neighborhood spanning several blocks, with more than 500,000 square feet of stores, restaurants and theaters, 350 apartments and a large medical center. His project would be contiguous with other large developments.

Mr. Seligson said he has so far acquired 75 percent of the property and was determined to acquire the remaining properties without the town invoking eminent domain. Town officials see the neighborhood as part an old urban core that has not responded to less sweeping redevelopment incentives. Four contiguous redevelopment projects are in the works, all of which have involved or could involve taking property through eminent domain if negotiations between the developer and property owners fail, said Susan Sweitzer, a senior project manager for the Norwalk Redevelopment Agency.

''The impetus is on the private developer to make this a nonissue,'' she said.

Ms. Esposito said she believed the cards were already stacked against her.

''They keep saying they will use eminent domain as a last resort,'' she said. ''But when they have the ultimate power to take your property, it's a done deal. There is no such thing as private property anymore.''

Governor Rell responded to the United States Supreme Court ruling involving the Kelo case by asking local governments to observe a voluntary moratorium on condemnations for private development until the state legislature could act. This year, she introduced legislation.

''It is time to clarify our eminent domain laws and make it absolutely clear when and why governments can -- and cannot -- take private property for public purposes,'' Mrs. Rell said in a statement in March.

The law that Mrs. Rell signed requires municipal legislative bodies to approve eminent domain seizures by a two-thirds majority and build in other protective measures for property owners. But property-rights advocates say the law's ban on citing increased tax revenues as a primary reason for condemnation will do little to clarify concerns about when property can be taken.

The new law also didn't include a provision that had been proposed by the governor to reimburse property owners at 125 percent of fair market value. Still, a spokesman for the governor said Mrs. Rell was pleased.

''Did it achieve everything that she wanted in one fell stroke? No,'' said Rich Harris, the spokesman. ''But certainly this is a considerable step forward from where the state was.''

James S. Alesi, a state senator from the Rochester area, held a series of hearings across the state on eminent domain after the Kelo decision. He said he was repeatedly told that New York didn't need a handful of hastily drafted bills, but rather a commission to study the issue.

''I thought it was beneficial to learn one key thing: We don't really have to do a lot in New York State,'' he said. ''As compared to other areas around the country, New York's laws are pretty strong.''

The New York State Bar Association has been the most prominent supporter of that position. Patricia E. Salkin, chairwoman of the association's eminent domain task force, said state laws might need tweaking, including a passage to increase public involvement in redevelopment plans and to extend the 30-day period allowed for owners of condemned property to file appeals. But she said states that passed more sweeping laws risked losing vital projects.

''We shouldn't throw the baby out with the bath water,'' said Ms. Salkin, director of the Government Law Center of Albany Law School. ''We should make sure that it's a fair playing field for everybody.''

State Assemblyman Richard L. Brodsky, a Democrat from Greenburgh in Westchester, said the choice was not black and white. ''The bottom line is we can fix the law so it protects average people and still maintain it as a tool,'' Mr. Brodsky said. ''The bar is entrenched on this one, and they're wrong.''

In 2004, Mr. Brodsky pushed through a bill that required that towns notify by mail property owners facing condemnation.

It followed a controversy in Port Chester, in which a local business owner hadn't seen the Westchester village's notice in a local newspaper that his property was facing condemnation to make way for a Stop & Shop supermarket.

The 30 days that the state law allows for appeals passed before the businessman, Bill Brody, had even heard about the plan. A federal judge this month ruled that Mr. Brody's due process rights had been violated.

''I think it's obvious that people are upset by what eminent domain is being used for,'' Mr. Brody said, ''and I think things are going to change.''

Not all redevelopment projects engender large controversy. On Long Island, the Village of Hempstead is moving forward with a $2 billion plan to replace 26 acres in the village's downtrodden center with a mix of 2,500 housing units, 600,000 square feet of retail space and a performing arts center. The city has agreed to sell 21 properties it owns to the developer and seize up to 58 privately owned properties if the developer cannot come to terms with the owners. Most of the concerns voiced so far, including at a packed meeting last week, have involved ensuring that the plan includes a significant amount of affordable housing and that current residents receive enough compensation to find new homes.

Mr. Brodsky introduced a bill last year calling for the appointment of an eminent domain ombudsman, compensating displaced homeowners at 150 percent of fair market value, and requiring that all condemnations for economic development be part of a comprehensive plan.

THE bill gained no traction in the State Assembly. ''This is an area where there's a lot of comfort with a bad law, and that's unfortunate,'' Mr. Brodsky said.

Mr. Alesi, the state senator from Rochester, maintains that state laws need only to be ''buffed up'' and that the laws may not offer enough protections. Courts are relied on to catch abuses, but average people don't have the resources for a legal fight with the government, he said. ''No one should have the American dream turned into their own personal nightmare because of the government,'' he said.

Last month, the New Jersey Supreme Court ruled that the Town of Paulsboro had overreached in relying on a consultant's determination that an undeveloped 63-acre parcel could be condemned because it was ''not fully productive.''

''Under that approach, any property that is operated in less than optimal manner is arguably 'blighted,' '' wrote Chief Justice James R. Zazzali in the court's unanimous opinion. ''If such an all-encompassing definition were adopted, most property in the state would be eligible for redevelopment.''

Citing the Supreme Court ruling, an Essex County Superior Court judge ruled this month that Newark could not designate as blighted a 14-acre area on and around Mulberry Street so the land could be used to build condominiums. Several property owners had fought the city's efforts to take the land by eminent domain, arguing to the court that the area was still productive. A spokeswoman for Mayor Cory A. Booker said the city had not yet decided whether to appeal the ruling.

And an appellate panel last week rejected Lodi officials' efforts to replace two trailer parks with housing and shops. A newly elected Borough Council had dropped the plan earlier this month.

A bill that would more narrowly define blight passed the New Jersey State Assembly last year but has been tied up in a State Senate committee since.

The New Jersey League of Municipalities opposes limiting the power of municipalities in using eminent domain. Its opinion carries weight in a state with 566 municipalities, a strong tradition of home rule, and one in which many legislators are also mayors of their hometowns.

William G. Dressel, executive director of the league, said that with little undeveloped land left in the state, and with towns increasingly relying on property taxes to provide services, responsible town leaders must look for ways to redevelop unproductive land. ''We were quite frankly relieved that the court did not unravel the eminent domain statutes as it relates to the use of that tool for economic development purposes,'' he said. ''We feel very strongly that eminent domain is a viable economic development tool in New Jersey that is used sparingly.''

The state's public advocate, Ronald K. Chen, said a 1992 revision of the state statute created the ''not fully productive'' justification that ''opened up the floodgates'' for the improper use of eminent domain.

Mr. Chen's office recently issued a report that listed the plan in Long Branch, where Ms. Vendetti lives near the beach, under the heading ''Bogus Blight.'' It said the town based its conclusion on ''superficial'' exterior inspections that noted deteriorating paint or chipped masonry.

Nothing appears to be decrepit about the Vendettis' homes.

Carmen Vendetti, 80, had saved his money driving a truck to buy his family, in 1960, a modest respite from the harsher environs of their home in Newark. He and his wife, Josephine, moved there full time after he retired. Ms. Vendetti saved her money from a job with Amtrak and bought a house across the street from her parents in 1995. Two months later, she attended a town meeting where a developer's model of the neighborhood showed luxury buildings all along the oceanfront.

''They had a house on my lot,'' she said. ''I just laughed and thought, 'How are they going to do that?' No one ever used the words 'eminent domain.' ''

But Adam Schneider, the mayor of Long Branch for 17 years, said some in the area ignored the redevelopment plan, thinking it would fail, as had many before. Some homeowners have accepted offers of units made affordable to them in the new development, he said. He said that with just 20 percent of the construction completed, the beachfront has been transformed from a dangerous area of boarded-up storefronts to an upscale, year-round destination that includes packed restaurants and a popular park.

He said he thought the recent emotional backlash may dissuade officials in other areas from even trying such a sweeping turnaround using eminent domain.

''Politically it won't work anymore,'' he said. ''I think the time has come and gone.'' "

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