3/14/2005

Newark's game of give and take: Newark (NJ) Star Ledger, 3/11/05

Use of 'eminent domain' is a big piece of Newark's redevelopment

By George E Jordan

The latest hip-hop thumped in sync with music videos on a dozen flat-screen monitors, as the chef imported from Manhattan filled plates in the kitchen and three bartenders poured drinks as fast as they could.

And more importantly, just about every seat was filled on a recent Friday evening in the Arena Bar in downtown Newark.

"We're going to maybe open a lounge upstairs," Antonio Rodrigues, the neo-sports tavern's managing partner, said. This, he said, is what redevelopment in Newark is supposed to be about.

But there's a hitch.

In the next breath, Rodrigues ruefully retold how he overspent to open a business last month that was doomed from the start — because the city plans to use its powers of "eminent domain" to seize the joint, and other nearby properties, for condominiums. He said he never knew eminent domain was a possibility.

"A month and a half after the start of construction, I find out about the Mulberry Street project," Rodrigues said over the clamor of a dozen tables filled with customers — some of whom include principals of the condominium development company, as well as Newark Mayor Sharpe James' senior bureaucrats.

"They've been here, they've come in for lunch," he said. " I told them just don't hurt me."

The Arena Bar's sticky wicket is hardly an isolated case. The use — and critics say abuse — of eminent domain has become an increasingly pressing issue in New Jersey and elsewhere. Late last month, the U.S. Supreme Court heard its first eminent domain case in decades.

The resolution of that case, Kelo v. City of New London, Conn., could fundamentally change how, and whether, governments can seize private land for economic development.

Closer to home, eminent domain has been a vital tool in just about every New Jersey civic renewal for as long as anyone can remember.

Newark has aggressively uprooted property owners in the name of economic development. Since 1976, the state's largest city has displaced 300 families, 70 businesses and a dozen churches, according to city figures.

The Supreme Court decision, expected in summer, will be closely watched because of its potential impact on the $310 million Newark arena, the city's biggest development project in recent history, and an adjacent development of 2,000 condominium units.

Richard Monteilh, Newark's business administrator, said the Supreme Court case would probably not disrupt the June groundbreaking planned for the arena.

Eminent domain will be a small part of acquiring land for the city-owned facility, he said. The three major property owners — parking magnate Jerome Gottesman, restaurateur Jose Lopez and the First Presbyterian Church — have struck deals to sell, swap or develop their property in the arena zone, he said.

The Newark Housing Authority, meanwhile, has already bought out many small businesses and homeowners in the arena zone, bounded by McCarter Highway and Broad, Market and Lafayette streets.

"The project is being done with the greatest sensitivity to the property owners," Monteilh said. "Everybody is going to win financially. Nobody is going to get hurt."
Haydee Perez, a lifelong resident of Columbia Street in Newark's former Chinatown, voluntarily sold her house three years ago for $245,000 to the Newark Housing Authority and purchased an existing home in Belleville.

"We knew they were going to get us out sooner or later," she said. "Let me get out while the going is good."

Monteilh said the city and private builder of the proposed $500 million condominium development, Mulberry Street Urban Renewal, expect a spirited fight from a coalition of two dozen homeowners and businesses that have filed a lawsuit to stop the project.

In November, the Newark City Council declared as "blighted" 13 acres bounded by McCarter Highway and Oliver, Scott and Orchard streets. The designation authorized the use of eminent domain to seize homes and businesses, including the Arena Bar. Like the case heard by the Supreme Court, the properties would be transferred to a condominium developer.

George Mytrowitz, owner of Market Body Works, whose shop has operated from a quarter-acre on the west side of McCarter Highway since the early 1940s, said he would not leave without a fight. "We've got the best location in Newark," he said. "Where are they going to put us, in a back alley?"

In the Kelo case, New London condemned 90 acres for a private developer to build a waterfront hotel, high-tech research space, 80 upscale residences and retail shops. Connecticut's Supreme Court approved, maintaining such use of eminent domain constituted "public use."

Property owners in New London claimed it was wrong to transfer their land at discount prices to commercial builders.

John Buonocore, lawyer for property owners suing to stop the Mulberry Street condominium, said his clients would make the same argument.

"Whether or not it's a good idea, whether or not it's a nice project, or whether or not people are going to be paid, is besides the point," he said. "In this country, private property can only be taken for public use."

The Mulberry Street condominium's boosters said the upscale housing next to the arena would rejuvenate a long-neglected part of downtown and go a long way toward repairing the city's image.

Ironically, the Arena Bar is the type of business — it draws the suit-and-tie crowd on weekdays and fills with singles until the wee hours on weekends — city boosters said the condominiums and arena would draw.

"It's a beautiful place. It's a great job," said Emilio Farina, a principal in Mulberry Street Urban Renewal and former aide to Newark Councilwoman-at-Large Bessie Walker. He said he regularly eats and drinks at the Arena Bar.

"We're interested in anyone who wants to make downtown a better place to stay," said Farina, who sidestepped questions about relocating the bar and compensating its owners. "It's been our theme from the beginning. It's a goal to include everybody."

Rodrigues, a mid-sized real estate developer, insists he did not know about the Mulberry Street condominiums, publicly debated for two years. He claims it was not disclosed by the real estate broker, lawyers and seller of the Caverna Bar.
"I swear, I didn't know," he said, both palms turned upright in a plaintive gesture. "I'm not one to stand in the way of progress. If I had known, I would have spent a little less fixing up the place. I just don't want to get hurt."


Star Ledger: www.nj.com