6/03/2006

Eminent Domain — New Jersey's Public Advocate reports: New Jersey Eminent Domain Law Blog, 5/21/06

By William Ward

On Thursday, May 18, 2006, New Jersey Public Advocate Ronald Chen issued his report to the governor and Legislature on eminent domain. The report addresses the Local Redevelopment Housing Law (LRHL, N.J.S.A. 40A 12-1 et seq.) In so doing, Chen goes right to the epicenter of the eminent domain controversy: most of the debate surrounding eminent domain abuse arises in the context of redevelopment projects undertaken by municipalities pursuant to the LRHL.

Chen gives the history of blight in New Jersey from its inclusion in the 1947 Constitution to its metamorphosis into an “area in need of redevelopment” as contained in the present version of the LRHL, N.J.S.A. 40A: 12-5 (a.-h.).

A constitutional understanding of the term 'blighted area' can also be derived from statements made by delegates to the 1947 Constitutional Convention. The language that became the 'blighted area' clause in the Constitution was sponsored by Delegate Jane Barus, who introduced an amendment to Committee Proposal No. 5-1. Ms. Barus’s amendment, which was approved without change and which ultimately became Article VIII, § III, ¶ 1 of the Constitution, stated:

‘The clearance, replanning, development or redevelopment of blighted areas shall be a public purpose and public use, for which private property may be taken or acquired. Municipal, public or private corporations may be authorized by law to undertake such clearance, replanning, development or redevelopment, and improvements made for these purposes and uses, or for any of them, may be exempted from taxation, in whole or in part, for a limited period of time during which the profits of and dividends payable by any private corporation enjoying such tax exemption shall be limited by law. The conditions of use, ownership, management and control of such improvements shall be regulated by law.’

The Local Redevelopment Housing Law was enacted in 1992 by the Legislature and revised in 2003. There are eight criteria that define an area in need of redevelopment. These criteria are supposed to comport with the constitutional “blighted area” clause, even if the word “blight” was left out of the LRHL. In Chen's opinion, criteria (e) and (h) are unconstitutional. This analysis is contrary to two Appellate Division decisions, Concerned Citizens of Princeton and Forbes v. South Orange, which affirm the constitutionality of the statutory provisions.

The Blighted Area Act of 1951, which was repealed in 1992, stated that blight could be found in an area with a "...growing or total lack of proper utilization of areas caused by the condition of the title, diverse ownership of the real property therein and other conditions, resulting in a stagnant and unproductive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare."

Then, in 1992, the Local Redevelopment Housing Law was enacted. It replaced the language in the above passage “stagnant and unproductive condition” with “stagnant or not fully productive.” Chen states that under the current criteria (e), “stagnancy is no longer a requirement, in direct contravention of the deep-rooted understanding and definition of blight.... Furthermore, an area need not be ‘unproductive’ either. Instead, under criterion (e), an area can be deemed blighted if it simply is ‘not fully productive,’ which by definition must focus on alternative, future uses of the land.... Simply put, if the criterion only requires that an area be ‘not fully productive,’ then eminent domain can be used to seize non-blighted areas, in direct violation of the limitation the New Jersey Constitution places on eminent domain for private redevelopment purposes.”

Criterion (h) addresses “smart growth planning.” (Smart growth areas in New Jersey are identified as Areas 1 and 2, excluding the Highlands and the Pinelands.) This also does not comport to the constitutional definition of blight. Under criterion (h) an area is blighted if “[t]he designation of the delineated area is consistent with smart growth planning principles adopted pursuant to law or regulation.” N.J.S.A. § 40A:12A-5.h. Chen argues that this criterion violates the constitutional limitation. Smart growth looks to future change and alternative uses for land. Blighted area, historically, focuses on the present use of the land and not possible future uses. Blight, by its plain meaning, implies that the deleterious condition has already occurred. Thus, Chen argues, there is no logical connection between an area designated for smart growth and a blighted area, leading to the conclusion that criterion (h) is unconstitutional. An area designated for smart growth, therefore, could be automatically declared blighted by this criteria, and significant swaths of New Jersey could be “in need of redevelopment” as this category is interpreted.

The framers of the Constitution never envisioned the Legislature having full power to determine the redevelopment boundaries of any area. One proposal presented to the Constitutional Convention of 1947 read:
The acquisition of real property for development or redevelopment of any area in accordance with a plan duly adopted in a manner prescribed by the Legislature, whether the uses to which such area is to be devoted be public or private uses or both, is hereby declared to be a public use. The Legislature shall make laws governing acquisition, use and disposal of such property by an agency of the State or a political subdivision thereof.

One of the delegates noted that because the proposal did not provide guidelines for determining whether an area needed redevelopment, it could “lead to a great deal of possible abuse.” - PROCEEDINGS OF THE NEW JERSEY CONSTITUTIONAL CONVENTION OF 1947, Vol. III, at 544.

The framers did not adopt that proposal. Instead, Chen tells us, they gave us the “blighted area” clause to restrict the use of eminent domain in redevelopment and to limit the ability of the Legislature to broadly define the scope of the takings power.

It is clear from Chen’s review of the history, starting with the Constitution and leading up to the latest version of the LRHL, that the New Jersey Legislature has impermissibly expanded the concept of blight. Hopefully, this will be rectified with changes to the LRHL recommended by the Public Advocate and presently being considered by Assemblyman Burzichelli’s Commerce and Economic Development Committee. Absent a change from the Legislature, the New Jersey Supreme Court should revisit the concept with an eye toward reversing Forbes and Concerned Citizens of Princeton on the blight issue.

Download the report and read the appendix.

Listen to Public Advocate Ronald Chen present his findings at the May 18 meeting of the Assembly Commerce and Economic Development Committee.


New Jersey Eminent Domain Law Blog: http://www.njeminentdomain.com