Appeals panel backs landowner in eminent domain case: Asbury Park (NJ) Press, 6/15/06

Long Branch deemed area blighted

By Carol Gorga Williams

A state appellate panel ruled against the city [of Long Branch] Wednesday in an eminent domain case involving a former landowner who appealed a 2005 decision on properties in Beachfront North.

That means the case will be sent back to Freehold so a new "just compensation" figure can be set by a jury.

"It is significant to Mr. (Dennis) Spanos because he gets to have his day in court," said Kenneth D. McPherson Jr., who argued the case on appeal. The city's attorney, Paul V. Fernicola, could not be reached.

The case began in 1982 when Dennis S. Spanos and his wife, Theonie, purchased adjacent vacant lots identified as 32 Ocean Ave. North that they hoped to use as a retirement investment.

In 1984, the city deemed as blighted the area in a redevelopment project — not the one currently under way — and the lawsuit said the Spanoses "put their future plans of building and operating a restaurant on the property on hold."

In early 1987, the Spanoses received a letter from the lawyer from the Long Branch Redevelopment Agency offering to buy their property for $127,000, but they declined. Soon afterward, a nearby property owner offered to buy their property for $650,000, but the deal fell through, the lawsuit says.

In December 1988, the city revalued the property, assessing the lots at $414,800.

Then, on Jan. 9, 1996, the city enacted an ordinance increasing the maximum permitted development density in some zones from 18 units an acre to 30 units an acre.

On Jan. 23, 1996, the city adopted a resolution designating much of the city's oceanfront, including the Spanos property, as an area in need of redevelopment. On Jan. 23, 2001, the city authorized the use of eminent domain to acquire the property, appraising it at $152,600.

In arriving at the assessed value, the ap-praiser, Hugh A. McGuire of McGuire Associates, did not mention the less restrictive 1996 zoning ordinance, which the appellate panel said would have undoubtedly increased the value of the property.

A condemnation commissioners' hearing was held Nov. 25, 2002, in which McGuire was the only witness. The commissioners fixed compensation at $294,000.

On Dec. 6, 2002, the city appealed that award, but the Spanoses never filed a cross-appeal. Meanwhile, after receiving the city's notice of appeal, the Spanoses' lawyer contacted Jon Brody of the Appraisal Consultants Corp., who determined the market value of the Spanoses' property was $1,070,000.

The trial judge agreed with the city, granting its motion to fix the final compensation at $294,000. But the appellate panel disagreed, saying the failure to file a cross-appeal was not fatal to the case, and that Long Branch's failure to reveal the less restrictive zoning ordinance was problematic.

". . . The city cannot claim prejudice due to (the Spanoses') attempt to receive full fair market value for their property in light of the applicable zoning regulations," the appellate panel wrote. The Spanoses' "right to receive "every reasonable consideration' before the invasive power of eminent domain may be exercised warrants a remand so that their land may be properly valued."

Asbury Park Press: www.app.com