9/07/2004

Residents in Limbo



Newark redevelopment stymies homeowners

By Jeffrey C Mays


Elly Martins says the six-family apartment house her family owns on Walnut Street in Newark needs a little work, and being good landlords, they want to do it.

"The stucco is chipping a bit around the sidewalk, the stucco on the stairs of the entrance is starting to deteriorate. I want to redo the fence because it's old. I wanted to give the place a face-lift," said Martins, whose family has owned the building for 27 years.

But for almost two years now, Martins says her family has been in limbo because the home is located within the Mulberry Street Redevelopment area, a 13-acre parcel of land the city wants to turn over to developers to build a $550 million, 2,000-condominium project.

City officials say the area is underutilized and could generate more property taxes while growing population by bringing in young, middle-class people to the planned condos, trendy stores and tree-lined boulevards. The plan is being called Newark's first "comprehensive urban downtown neighborhood development project."

The city's planning board is now determining whether the land should be declared an area in need of redevelopment, the first step in the condemnation process.

But this is the second time the planning board has started condemnation proceedings. The first was in 2003. Midway through the proceedings, the city council rescinded the planning board's authority to perform the investigation.

In January, the city council once again authorized the planning board to hold hearings to determine if the area was blighted.

Martins said the uncertainty has been maddening.

"I put new windows in two apartments, but what's the sense of doing the rest if the building is going to get knocked down?" she said. "My neighbors talk about this all the time. We just want to know. Should we or shouldn't we? None of us know."

City Business Administrator Richard Monteilh said he understands the residents' concerns, but he's thinking about the well-being of the entire city.

"There have been delays but it's worth it. In the end, this thing is going to be there for 70 to 80 years as a tax ratable to the city. It's frustrating not to have things move quicker, but it is better to do it this way," said Monteilh.

Current planning board hearings will continue on Sept. 27, but that's not much comfort to Elizabeth Rasteiro. She and her 72-year-old mother live in a seven-family apartment building on Cottage Street.

"Ever since this whole thing started, we have been debating outside work," said Rasteiro. "My fear is that I will lose the building and the property will be devalued. Throughout the years, a lot of money has been put into this house."

John Inglesino, an attorney who represents Metro Homes and Newark Redevelopment. Corp., the companies that will develop the project, says the Mulberry Street Coalition, a group of area property owners, and their attorney are prolonging the process by purposely delaying the blight hearings with unnecessary arguments.

"We empathize, but the reason they are in limbo is ... they are prolonging a process that need not duly be prolonged. We have been willing and able to meet with property owners and offer fair value for property," said Inglesino.

The 13-acre area is located near Route 21 and the federal courthouse. It is a mix of industrial businesses, small shops, parking lots and residential homes.

The city is arguing that the area is blighted because the abundance of surface parking is an underutilization of the space. In addition, the value of the structures compared to the value of the land is low enough level to be considered blight.

"There's the gross economic deprivation that the city suffers from the underutilization of this property," Inglesino said.

Lack of economic potential is one of the arguments governments have relied upon to use eminent domain to turn land over to developers for privately owned projects. Historically, eminent domain was used to take land for a public purpose, such as schools or roads. A few decades ago, cities and governments began arguing that taking blighted land so that more economically lucrative private developments could be built was a valid reason for condemnation.

But a recent decision by the Michigan Supreme Court reversing a case often cited to justify use of eminent domain for private development may help change that, said John Kramer, vice president of communications for the Institute for Justice in Washington, D.C.

The 1981 Poletown decision allowed Detroit to bulldoze a neighborhood so General Motors could build an automobile factory. The court's recent Hathcock decision overturned the Poletown ruling.

"Public use is now seen as a private use. Private use constitutes public use. Blight is in the eye of the developer and the government and not a useful term. It's a term of convenience," said Kramer.

The Institute for Justice found that from 1998 to 2002, there were more than 10,000 instances nationwide of government using eminent domain to take land for private use.

In Newark, eminent domain has been used to redevelop the city. The 24-acre Downtown Core Redevelopment plan includes an 18,000-seat arena for the Devils and plans for a hotel and office building. A plan to build an 11-acre Home Depot on Springfield Avenue is also the result of eminent domain. Residents of the area are being relocated.

Monteilh said the projects are necessary because Newark has no choice but to "grow or die."

"They are going to be better off than now. The residential projects and retail will make the quality of life better for those who stay. It doesn't take rocket science to see that the area is blighted," said Monteilh.

Residents of the area say it also easy to see that the deck is stacked against them.

The city already had developers in place before the area was declared in need of redevelopment. During James' last race for state Senate, the developers, their friends and families donated more than $10,000 to his campaign.

"How do I know it's a done deal? I know how tight developers are in City Hall," said George Mytrowitz, head of the Mulberry Street Coalition.

Inglesino said campaign contributions are not illegal. "It's not uncommon for people with stakes in issues to contribute to political folks," he said.

In addition, as a representative of property owners, Inglesino says he has a right to speak at the hearings and raise objections.

"This is an attempt by the opposition to divert attention from the issue before the city, and that's whether the area is in need of redevelopment," he added.

The Michigan Supreme Court case has given the Mulberry property owners more hope, said Mytrowitz.

When the condemnation hearings resume, the group's expert, planner Peter Steck will testify that the area is not blighted. If the area is blighted, Mytrowitz said his group may head to court.

On Cottage Street, Rasteiro said she felt the once-barren area her family moved to in 1975 had begun turning the corner.

"Everybody pours their heart and soul into this neighborhood," said Rasteiro. "These are working-class people who keep up with their homes and do the best they can."






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