New Jersey Law

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New Jersey Appellate Division Issues Important Decision Related to Local Redevelopment and Housing Law

The New Jersey Appellate Division has recently issued an important published decision related to a municipalitys’ ability to condemn property under the Local Redevelopment and Housing Law (“LRHL”), N.J.S.A. 40A:12A-1 to -49. The decision, Borough of Glassboro v. Jack Grossman, addresses what a municipality must demonstrate to to justify land condemnation.

The facts of the case are straightforward. The Borough of Glassboro sought to condemn a small parcel that was within a designated redevelopment area. The property, which was a block away from an ongoing redevelopment project, was sought by the Borough for use as a parking area. However, the Borough did not provide any documentation, expert reports or analysis supporting the need the proposed use. The property owner, believing that the property was under appraised, challenged the condemnation.

The legal touchstone of this case is the provision of LRHL that states once a municipality adopts a redevelopment plan the municipality is empowered, among other things, to:

Acquire, by condemnation, any land or building which is necessary for the redevelopment project, pursuant to . . . the "Eminent Domain Act of 1971," [N.J.S.A. 20:3-1 to -50], provided that the land or building is located within (1) an area that was determined to be in need of redevelopment prior to the effective date of P.L. 2013, c. 159, or (2) a Condemnation Redevelopment Area.[2]. [Emphasis Added] N.J.S.A. 40A:12A-8(c)

At trial, the Borough argued successfully that its stated need to use the property for parking was enough to justify condemnation. The Appellate Division looked more closely at the legislative history behind the LRHL. Ultimately, the court held that the statute should be read to mean “reasonably necessary for the redevelopment project.” In effect, this interpretation of the statute puts the onus on municipalities to, as an initial matter, prove why a particular piece of property is needed. In other words, towns can no longer condemn property to “land bank” it.

The court set forth how this new interpretation would work as a practical matter. The court stated that the “burden of coming forward with evidence of reasonable necessity, in cases where necessity is contested, rests upon the municipality.” Slip. Op. at 25. Once a municipality presents such evidence, “the defendant landowner bears the ultimate burden of disproving that showing of necessity…by a preponderance of the evidence.” Id.

Going forward, this Appellate Division decision will impact how municipalities go about showing the necessity for condemning property. Cursory conclusions will no longer be enough. Rather, expert opinions backed up by facts and figures will be a necessary precondition for condemning property under the LRHL.

For additional information about the matters in this bulletin or in the firm’s Redevelopment practice, please contact Jeffrey B. Lehrer, Esq

DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum PC (http://www.dbnjlawblog.com) is a full service law firm in New Jersey which provides a broad range of legal services.

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