11/21/2005

Mayor sees developing problem in Ventnor: The Press of Atlantic City (NJ), 11/21/05

By Michael Pritchard

Ventnor Mayor Tim Kreischer has only to look to neighboring Atlantic City's Southeast Inlet to see his biggest fear for his city. Or rather, it's what he doesn't see - a big shiny casino with the MGM Grand logo on it.

Kreischer sees a parallel between the nonexistent casino - which was proposed, but never built because MGM-Mirage could not acquire the land - and Ventnor's redevelopment plans. Last week, the principal developer in the city's plan to redevelop its northeast section, Pulte Homes, backed off from the project, citing the high cost of land acquisition and a reluctance to turn to eminent domain, which has become increasingly unpopular in the country.

Suddenly, Kreischer is seeing the same "what might have been" in Ventnor as he sees in the Inlet.

"There's a lot of people who feel that MGM would be in the Southeast Inlet right now if they hadn't had the problems they had with acquisition," Kreischer said. "Dealing with land speculators who drive up prices is one of the reasons that you have eminent domain involved with these types of redevelopments. Without it, it's going to be very difficult for any municipality to put forward a redevelopment plan."

And for right now, Ventnor is without it.

Ever since the U.S. Supreme Court ruled in June that New London, Conn., was able to legally seize houses in a middle-class neighborhood through eminent domain and turn them over to a private developer, a backlash against eminent domain has swept the country. Several state legislatures, including New Jersey's, are working to curb municipality power to use eminent domain as have several bills in Congress.

In New Jersey, a proposal has been made to place a two-year moratorium on using eminent domain.

Ventnor is now faced with trying to salvage it's own redevelopment plans in that climate.

"One of the things people don't always realize is that I disagreed with the Supreme Court decision," Kreischer said. "Land shouldn't be taken just because you can find a better use. But I've always said that I don't think it applied to New Jersey. The state has a very stringent set of criteria for proving that an area is depressed and in need of redevelopment. And I think we met that standard every step of the way."

However, telling people that their homes are blighted, even if it meets court standards, is always going to be an emotional issue.

"I don't think politicians ever understand the passion they ignite when they try this," said Richard Gober, who led a legal challenge to Ventnor's redevelopment plan. Though the challenge failed in court, it delayed the project nearly four years, enough time for both land values to rise in the area and eminent domain to come under attack.

"These are people's homes," Gober said. "It doesn't matter if you have a $50,000 house or a $500,000 house. It's their home and people want to be safe in their homes. If you come in and try to just take them, people are going to get their backs up and fight.

"And that's what we did," Gober said. "It's just unfortunate that we had to wait until there was a national outcry against eminent domain to win, but it's wonderful that for the moment, people's homes are safe."

But eminent domain can still be a very instrumental part of redevelopment. Kreischer can point to projects in Atlantic City, where almost 2,000 properties have been acquired over more than 10 years for projects such as rebuilding the city's Northeast Inlet, The Walk and for infrastructure improvements for the Borgata Hotel Casino & Spa. Many of the properties were acquired through eminent domain.

Jim Whelan, who was mayor of Atlantic City during the beginning of many of those projects, understands the dual nature of using eminent domain. During his recent successful run for state Assembly, Republicans attacked him for using eminent domain. At the same time, Whelan could point to the success of those projects in the campaign.

In the end, Whelan won his seat, including winning the vote count in Ventnor.

"I've said all through the campaign that there is a lot of grandstanding going on," Whelan said. "Eminent domain isn't new. It's been around forever. And the New London decision didn't change anything. Politicians that are making an issue of this are just pandering. The state has put in sufficient safeguards to make sure it isn't used too broadly."

Whelan, who advised Ventnor on redevelopment issues, however, stressed that eminent domain will always be an issue that causes political divisions.

"There are always differing opinions on projects, but I think anyone who has ever considered using eminent domain has thought about using it only as a last resort," he said. "It's an emotional issue and it can throw people into turmoil. No one wants to use it lightly and move people out of their homes.

"But at the same time it's a necessary, if difficult, tool for redevelopment," Whelan said. "This is a political climate right now which could kill the redevelopment hopes of cities like Newark and Camden. We were lucky in Atlantic City to get a head start on this. But for officials in those towns, if this attitude continues, it could severely handicap any plans they have."

In the meantime, Ventnor officials are hoping that they can salvage some of their redevelopment project. Although Pulte Homes has backed out of a major redevelopment, Kreischer hopes they can still be involved in a smaller scale project.

However, whether the city will be able to look to eminent domain for an assist will depend on whether opposition to eminent domain remains high and the state Legislature approves the moratorium.

"Things could go two ways," Kreischer said. "This could stop any redevelopment project people are considering, including ours, and nothing gets done. Or communities could just go forward, but without eminent domain they are going to have to pay speculator's prices. Maybe they'll pay four times what a property is worth to put together these projects and it will just cost everybody a lot more money."


The Press of Atlantic City: www.pressofatlanticcity.com