At Wednesday’s City Council meeting, city officials and I had a discussion about the Local Redevelopment and Housing Law and the difference between condemnation area in need of redevelopment vs. a non-condemnation area in need of redevelopment in relationship to the powers of eminent domain.
I started this discussion in an attempt to help educate the public on their rights under the state’s Local Redevelopment and Housing Law.
City officials and myself agreed that a condemnation area in need of redevelopment allows for the powers of eminent domain- the ability of the government to seize private property.
However, city officials and I disagreed whether or not the powers of eminent domain can ever be authorized in a non-condemnation area in need of redevelopment or redevelopment process.
In 2013, Governor Chris Christie signed into law A-3615 (the “Act”), which codifies recent New Jersey court decisions providing the state’s property owners with greater procedural protections from eminent domain under the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq.
Since the Kelo decision, the New Jersey Supreme Court in Gallenthin Realty Development, Inc. v. Paulsboro and the New Jersey Appellate Division in Harrison Redevelopment Agency v. DeRose have expanded upon certain procedural protections for property owners facing a condemnation action as part of a redevelopment project.
The Act primarily served to codify these two decisions. In addition, it established a new designation for “Non-Condemnation Redevelopment Areas,” which allows developers to access certain subsidies that may attach to a redevelopment designation without authorizing acquisition of such properties through the power of eminent domain.
When the governing body directs the local Planning Board to conduct a redevelopment study they must indicate in the authorizing resolution whether the area to be studied will be a “condemnation” or “non-condemnation” area.
If the study area is found to meet the statutory criteria to be declared an “Area in Need of Redevelopment”, the Act requires the municipality to adopt a binding resolution again stating whether the municipality is authorized to use its powers of eminent domain (a “Condemnation Redevelopment Area”) or not (a “Non-Condemnation Redevelopment Area”).
If the resolution designates a redevelopment area as a Non-Condemnation Redevelopment Area, the municipality may not use its power of eminent domain to acquire properties within the redevelopment area.
However, if the designated developer is unable to acquire all property within a Non-Condemnation Redevelopment Area, the municipality is able to reconsider whether the redevelopment area could be classified as a Condemnation Redevelopment Area and acquire the properties under its eminent domain powers.
In Layman’s terms, the process could start all over again under a condemnation area in need of redevelopment.
This is where the city Law Director as well as the Business Administrator seemingly don’t quite understand the law or are intentionally misleading the public.
Specifically with the Silk Lofts expansion redevelopment plan, which was up for discussion that evening, there were 12 properties in total.
One has been acquired prior to the designation and redevelopment plan. Several residents including a commercial business owner stated they will not sell.
Understanding the fact that the city always has the right under the law to utilize eminent domain it’s important for people to know their rights.
While the municipality would still have to define public use or public purpose and restart the process again under a condemnation area in need of redevelopment, a judge would ultimately determine the outcome.
Ultimately the Act, puts the property owners who didn’t sell in a potential battle with the developer and the city.
Again, I’m not suggesting this will happen but under the law it certainly could.
If 11 out of the 12 properties in the Silk Lofts Expansion plan or any non-condemnation plan for that matter are acquired by the developer, the city has the power to reconsider eminent domain and a condemnation area in need of redevelopment.
The concern I expressed before council is if majority of the properties are acquired by the developer under non-condemnation that a developer or a city administration might bully someone out of their home by reconsidering condemnation.
Under the law this power absolutely exists.
I do not intend to scare anyone and as I mentioned in the first paragraph my intention is to inform the public rather seeing them mislead. I am also not suggesting in any way that this developer or the city intends to use the power of eminent domain, however, the law isn’t as protective as some may want you to believe.
It’s imperative that while our city officials may not understand the law, that you as property owners do so in order to prevent unfair acquisition of your property and avoid unnecessary legal battles to defend your property against developers and local government authority.
Of course, in order to actually be declared an “Area in Need of Redevelopment”, the area being considered would have to meet at least one of the criteria set forth in the LRHL which are:
1. Substandard Building Conditions
2. Abandonment of Commercial and Industrial Buildings
3. Public Land and Privately Owned Vacant Land
4. Deleterious Land Use, Faulty Design, Obsolete Layout with Detrimental Impact
5. A growing lack or total lack of proper utilization of areas caused by the condition of title, diverse ownership of the real properties therein or other similar conditions
6. Natural Disasters
7. Urban Enterprise Zone (tax exemptions only)
8. Consistency with Smart Growth Policies per Law or Regulation
I’m not convinced that the Silk Lofts Expansion area does.
In closing, it is important to note that a property owner who has received a redevelopment area notice as required under the new provisions has 45 days to challenge.
Under the 2013 Act, those who have not filed a challenge within 45 days of receipt of such notice are barred from challenging the notice. Anyone who receives a redevelopment notice should contact a qualified attorney for advice.