On June 13, 2007, we reported on the New Jersey Supreme Court’s decision in Gallenthin v. Borough of Paulsboro, a case that analyzed the standard for determining whether an area is “in need of redevelopment” under N.J.S.A. 40A:12A-5(e) and cautioned municipalities that a court will defer to a municipal redevelopment designation only where the conclusions are supported by “substantial evidence” in the record. The Appellate Division has now had an opportunity to further clarify the law. Citizens in Action v. Township of Mt. Holly, (App. Div. July 5, 2007) (“Mt. Holly Gardens”).
The property at issue, the Mt.Holly Gardens, is a 31-acre garden apartment complex (327 housing units) built in the 1950s. The majority of the residents in the Gardens consist of minorities, and the Gardens accounts for 28% of the crime reported in Mt. Holly.
In 2002, the Mt. Holly Township Council determined that the Mt. Holly Gardens was an “area in need of redevelopment” pursuant to N.J.S.A. 40A:12A-1 et seq. This decision was based on the fact that Mt. Holly Township is in an Urban Enterprise Zone, and on several characteristics of the area– i.e., overcrowding in the residential units (with resulting parking problems and crime), the presence of abandoned units, the lack of any common area, improper drainage of surface runoff due to lack of planning, 18% vacancy rate, and poor maintenance of buildings and yards. The planner’s report concluded that the area met the redevelopment criteria under N.J.S.A. 40A:12A-5(a), (d), (e) and (g) . Mt. Holly subsequently proposed a redevelopment plan that contemplated the demolition of 379 homes and constructing 180 new homes that were not affordable to the residents of the Gardens. Several residents of the Mt. Holly Gardens community challenged the decision as, among other things, arbitrary and capricious and discriminatory.
The Appellate Division held that there was substantial credible evidence to support the Township’s conclusion that the Gardens was an “area in need of redevelopment” under N.J.S.A. 40A:12A-5(a) and (d). The Appellate Division was persuaded by the detailed expert testimony of the Township’s planner who presented a report to the Planning Board and testified as to (1) unhealthy and unwholesome conditions at the Gardens that adversely impact the whole complex (accumulated trash; broken windows, fences, steps and roofs); and (2) the unproductive use of the property and features of the Gardens that are detrimental to the health, safety, morals or welfare of the community and (e.g., the adverse affects of diversity of ownership and absentee landlords; decay of the buildings, streetscape and lighting; poor land utilization and concentration of crime). The Court also seemed persuaded by a photographic record of the dilapidated conditions at the Gardens.
The Supreme Court’s decision in Gallenthin suggested that the courts would carefully scrutinize municipal redevelopment determinations and hold municipalities to a high standard. Indeed, the Appellate Division in the Mt. Holly Gardens case did just that and concluded that the municipality’s determination had met that standard. Based on the Mt. Holly Gardens decision, New Jersey municipalities have further guidance on how to create redevelopment designations and plans that will “stick” – i.e., factual details are paramount. Municipalities that are grappling with overpopulated, dilapidated apartment complexes ought to be pleased with the Mt. Holly Gardens decision because this decision provides a helpful roadmap for advancing a redevelopment strategy. By: Jane Kozinski, Esq. Ms. Kozinski is Vice-Chair of Saul’s Environmental Department and Chair of Saul’s Brownfields Practice Group.
