When [Hamilton NJ] township officials settled their eminent domain case against the owners of the 50-acre Klockner Woods tract earlier this year, agreeing to pay $4.1 million for the property, they justified their decision by saying they were unsure they could win the suit and didn't want to lose the land to development.
On Tuesday, a state appeals court indirectly gave them their answer - one that might have saved taxpayers about $3 million.
The court ruled in a Burlington County case that avoiding development was a legitimate reason to take land away from a developer through eminent domain.
"We conclude that a municipality's acquisition for open space of properties on which residential development is planned constitutes a proper use of eminent domain power," the three-judge panel said.
Township officials declined to comment on the court decision or how it would affect the Klockner Woods purchase other than to say they were aware of the ruling and would review it closely.
It is unclear if the ruling could change the terms of the purchase since the township has already agreed on a price and must close by Sept. 1 or pay an 8 percent yearly penalty.
The township had been reluctant to go to court in their case against Doylestown, Pa.-based developer Fieldstone Associates, saying at the time they might lose.
After filing the case in early 2004, officials received a letter from Fieldstone's attorney threatening to fight the township in court. Rather than continue the legal battle, officials repeatedly upped their offer for the property from $1.24 million, finally arriving at the $4.1 million figure.
Critics have said the price is far too high because of the amount of wetlands on the property.
No wetlands delineation was ever done on the property, and no formal plan was heard by the township zoning or planning board. But township officials agreed to pay Fieldstone $100,000 for each of the 41 homes the developer and the township agreed could be built on the site.
The state Department of Environmental Protection (DEP) has since agreed to investigate the purchase to determine if the price is fair. The DEP must certify the value of the land because it will provide the majority of the funding for the purchase in the form of a grant and a low-interest loan.
The case decided Tuesday involved Mount Laurel, a township famous for its disputes over affordable housing in the 1980s.
Burlington County developer Mipro Homes had received approval to build 23 single-family homes on a 16-acre tract of land. Township officials, however, tried to condemn the land and take it through its powers of eminent domain, citing preservation of open space as the public purpose behind the move.
A Superior Court judge ruled against the township, but on Tuesday the three-judge panel reversed the decision, paving the way for Mount Laurel to take the property.
Supporters and opponents of the court's decision have since weighed in on the effect on state developers and on the ruling's possible effect on the Klockner Woods purchase.
Local attorney Michael Magee, who frequently represents area developers, said the court's ruling is not a surprise but opens the door for a much broader use of eminent domain powers.
"You can always make the argument that at some point it is good for the public," Magee said. "Now they are saying if there is some government goal, we will allow it."
Magee said the ruling was not entirely a gift to municipalities since developers are still entitled to a fair price for the land, which will rise depending on how far along in the approval process they are.
"They will have to pay the developers based on the approvals and not based on the land's value as open space."
Jeff Tittel, executive director of the New Jersey chapter of the Sierra Club, said the decision was a huge step forward for open space advocates.
"The court ruled that open space is a higher and best use for a property than development," Tittel said.
He said the ruling would assist municipalities in avoiding the dilemma Hamilton officials faced when trying to find a fair price for the Klockner Woods tract.
"Instead of negotiating a price, as they did in Hamilton, the court sets the price," Tittel said. "It actually helps to protect the town because if the court sets the price, you don't have to worry about spending too much."
But not everyone is a fan of the court's ruling.
A representative for the Builders League of South Jersey, which was a defendant in the case, said the decision was a blow to local builders and consumers alike.
"Under this ruling, even though a builder has followed all of the rules and gotten all of the necessary approvals, the development can still be stopped," said Rick Van Osten, executive vice president of the league.
"We already have a housing crisis in New Jersey. The demand far outweighs supply, and here is another tool for municipalities to use to stop development."
Van Osten said he was meeting with the league's board to determine if a petition to the Supreme Court was appropriate.
"It is likely we will do that," he said.
The ruling comes on the heels of a recent U.S. Supreme Court decision that allows a municipality to use eminent domain to further its economic goals. Under that ruling, a municipality may take land from a private owner for use in a commercial development that brings in more tax revenue.
In an interview yesterday, Tittel said the appeals court's ruling allowed the opposite to occur.
"That ruling said you can condemn land to build a mall," he said. "This one says you can take land to stop the mall," he said.
The Times of Trenton: www.nj.com