10/30/2007

Takeover of Nelson House aim of Salem City lawsuit: Today's Sunbeam, Salem NJ, 10/30/07

By Randall Clark

The City of Salem has filed a lawsuit here to take over property rights of the Nelson House through eminent domain, vowing to turn around a building gutted by fire last year and stagnating in the city center ever since.

The city is seeking to acquire and redevelop the four-story, 8,250 square-foot parcel of land on East Broadway through litigation after several attempts to buy the Nelson House outright from current owner Len Straub have failed. According to the lawsuit, the city has offered to pay Straub $49,000, which has been assessed as the "fair market value."

If the judge rules in favor of the city, a fair market price will be determined by the court.

The lawsuit filed by eminent domain expert Jeffrey S. Beenstock comes on the heels of a unanimous vote by the city council in July to take legal action. The city's first step will be to put a roof on the building, which continues to incur water damage and is becoming unstable, according to Salem City Mayor Earl Gage. Some form of large scale development, possibly office space and condominiums, is expected to follow, Gage said.

"We don't want to see this building collapse, that's a major concern ... It's unfortunate it has come to this, this is absolutely the last resort," said Gage. "When the fire occurred we vowed to work together with (Straub) and help him through grant programs and in any way we legally could. That relationship has since deteriorated."

Straub, who represents Providence Property Management, closed the deal on the building just two weeks before he watched it burn, a fire confirmed by authorities to be the work of an arsonist.

Before the blaze, he had planned to revitalize the property himself, converting a large portion of the space into a sports bar and banquet hall.

Gage said the building was not insured for fire, a concern that was brought to his attention by Straub the day it occurred.

Gage also noted that other developers apparently approached Straub with offers to buy the property, but to no avail. In the beginning, Straub was optimistic about the future of the property even in the face of tragedy. On the day of the fire he told reporters "we're not going to let this slow us down ... This is a tough, up and coming town so we're not going to let this bother us." It is unclear what circumstances led to Straub's apparent about-face, though Gage said once the Nelson House burned he may not have had another asset to borrow against. Straub could not be reached for comment.

The use of eminent domain often stirs controversy and begs the question to critics of whether or not governing bodies are overstepping their bounds. A Paulsboro case received widespread attention earlier this year when the state Supreme Court overturned an eminent domain decision that took 63 acres along the Mantua Creek away from its owner, George Gallenthin, so the land could be better utilized for a deep water port.

Eminent domain establishes a legal means for municipalities and governing bodies to acquire land to be utilized for economic development, though it has been viewed as a forceful and unconstitutional method to wrest land away from private citizens. An area has to be considered blighted for it to be a potential candidate for eminent domain, meaning the land is deteriorating or stagnant in a way that has a negative affect on surrounding property.

Regarding the blighted condition of the Nelson House, Gage said that "there isn't much arguing against that."


Today's Sunbeam, Salem NJ: http://www.nj.com/news/sunbeam