5/07/2007

Eminent Domain in Paulsboro, NJ: Could your dog be bought off? New Jersey Eminent Domain Blog, 4/28/07

I see trees of green....... clouds of white ....Nothing’s goin’ on….so, this must be blight…
And I think to myself.... what a wonderful world...

By Bill Ward

Oral argument was held before the New Jersey Supreme Court in the matter of Gallenthin Realty Inc. v. Borough of Paulsboro on April 26, 2007. This case is the appeal of a prerogative writs suit filed by Lt. Col. George Gallenthin contesting Paulsboro’s actions blighting his property as part of a deepwater port development project on the Delaware river. The land in question totals 63 acres, 20 of which are uplands and the balance is considered wetlands. The property is currently under a farmland assessment and is considered vacant and unproductive, and therefore “blighted” by the Borough of Paulsboro.

At the heart of the appeal, as discussed in the colloquy between Gallenthin’s attorney Peter Dickson, Public Advocate Ronald Chen, and Justices James Zazzali and Barry Albin, is whether a portion of the Local Redevelopment Housing Law, N.J.S.A. 40A:12A-5 (e) comports with the 1947 New Jersey Constitution Article VIII, Section 3, Paragraph 1, regarding the definition of blight:
State Public Advocate Ronald K. Chen argued that the current state law defines "blight" so broadly that it could apply to virtually any property in New Jersey.

"It has become a wild-card definition of blight that can expand and contract to apply to any set of circumstances," he told the justices, urging them to narrow the definition to protect the rights of property owners.

Justice Rivera-Soto asked, “Can land in its natural state ever be blighted?”

One of the major themes in the oral argument focused on just this issue. Attorney Dickson argued in the abstract that farming and open space wetlands were “uses” recognized by the state as valid in other statutes. This really begs the question and seems contradictory to Gallenthin’s own testimony before Paulsboro: that he intended to use the property as a dredge-spoil site. Farmland and farming were barely in the picture, either from the property owner’s or borough's perspectives. Farmland assessment often comes into play as a device to keep taxes down while property is being held until it can be converted to a higher use.

Since Paulsboro could only articulate the need for a small portion of the property for an access roadway, their blight and future condemnation of the entire 63-acres has to rise or fall on the compliance and constitutionality of the aforesaid statute. This was noted by Justice Long in her question to Paulsboro attorney M. James Maley: “So this case is a win or lose on the issue of the declaration of blight because there is no plan?”

A number of Justices, including Justice Barry A. Albin, expressed concern that there was no specific plan involving Gallenthin’s property. Albin questioned why municipalities should not have to "clearly articulate how the piece of property fits into the total picture in terms of making out a case for blight." This is not unusual since, in many instances, the blight declaration occurs years before there is a plan for redevelopment. It is unusual for a municipality to have a specific plan contemporaneous with the blighting of the property. In fact, we’ve seen blight declarations remain effective for 10-20 years in Long Branch, Asbury Park, and Jersey City. The practical effect of blight is to put properties under the cloud of eminent domain, making them unsaleable except at a discount, and in most cases, incapable of being financed since banks are reluctant to lend money on properties that may be condemned. These conditions lead to a lack of owner-investment and further exacerbate the “blight” conditions which were complained of in the first instance.

The Justices seemed reluctant to declare the statute unconstitutional as argued by Public Advocate Ronald Chen. Chief Justice Zazzali asked if there was an alternative rather than address the Constitution, or did Chen want them to address the Constitution head-on?

Chen answered that there was a public benefit in addressing the Constitution.

Justice Albin said, "Tell us what we need."

Chen wanted the language in subsection "e" to read "stagnant and unproductive" rather than the more inclusive "stagnant or unproductive."

But even as Chen stated his case, the Court demonstrated reluctance to find the statute unconstitutional. Perhaps this is attributable in part to the Court’s awareness of the Legislature’s pending efforts to amend the Local Redevelopment Housing Law in its entirety. Ironically, the Assembly version of this bill was sponsored by Assemblyman John Burzichelli ,who is also the mayor of Paulsboro. He sees no conflict in his various positions in this controversy, but Burzichelli’s version of the eminent reform bill does not change subsection (e).

Justice Rivera-Soto asked “To what extent is your dog in this fight? Could your dog be bought off?” To this, Attorney Dickson replied that they could negotiate, but not under the blight statute. This means that the blight statute makes the entire property subject to condemnation. Instead, I see a much simpler solution to the problem: Paulsboro could use its power of eminent domain to acquire the necessary right of way for the access road and compensate the owner accordingly for a partial taking.

If the Court is reluctant to declare the statute unconstitutional in this case, they could avoid that decision by reversing the decisions of the trial court and appellate divsion, and throw out the blight designation for the property. Then Paulsboro could proceed with a condemnation case as referenced above in order to access the other properties which will be part of the port facility.

There are other cases in the appellate system, such as the City of Long Branch v. Anzalone and Lonch Branch v. Brower which will present a full panoply of issues regarding the Local Redevelopment Housing Law and its implications for private residential property owners.


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