On February 4, the Appellate Decision issued an unpublished decision finding that the Borough of Belmar did not properly support the designation of “an area in need of redevelopment” based upon the Gallenthin v. Paulsboro decision. BMIA, LLC v. Planning Board of the Borough of Belmar, Docket No. A-5974-05T5 (App. Div. Feb. 4, 2008). Additionally, a separate panel of the Appellate Division heard oral argument yesterday, led by Public Advocate Ronald Chen, involving a redevelopment area in Harrison in which he argued that the 45-day statute of limitations for challenging a redevelopment designation violates constitutional requirements of due process.
In BMIA, LLC, the court found that the proper standard “involved a narrow legal construction of the LRHL,” which required that the designation be set aside. The court noted that while the consultant’s report on which the defendant Borough had relied might have established that the area could be “better utilized” and that ”redevelopment would be beneficial,” there was no evidence that the existing conditions were “detrimental to the health, safety, morals or welfare of the community” as required by N.J.S.A. 40A:12A-5d, or were due to “issue of title” or “diversity of ownership” as required by N.J.S.A. 40A:12A-5e. Having decided that the redevelopment designation did not follow the strict requirements of the Local Redevelopment and Housing Law, the court declined to address the issue of whether the LRHL permits a municipality or redevelopment agency to enter into a redevelopment agreement with a redeveloper before a redevelopment plan has been prepared.
In the Harrison case, the Star Ledger reported that the Public Advocate is challenging the time period in which a legal challenge may be brought against a redevelopment designation. In challenges to a redevelopment designation, the statute of limitations is 45 days from the establishment of the redevelopment area by the governing body, subject to limited exceptions. Here, none of the the affected property owners objected to the underlying designation, but six years later, several were faced with condemnation proceedings. According to the Star Ledger article:
State Public Advocate Ronald Chen and lawyers for three present and past property owners argued that the state’s redevelopment law does not give property owners enough time to challenge a town’s plans to take their property. They said the owners may not know their property is actually targeted for condemnation until years after the deadline for legal action has expired.
In 1997, the Harrison Planning Board determined a portion of the town south of Route 280 was blighted and designated it as an “area in need of redevelopment” by Hoboken-based Harrison Commons Inc. Chen and supporting lawyers said when the planning board conducted a required public hearing, officials provided property owners only positive information about the benefits of redevelopment and told them it would not affect their property rights.
A year later, the Harrison council adopted the planning board’s redevelopment recommendation. Property owners had only 45 days under the law to initiate legal action opposing the blight designation, but the town did not identify any specific properties it intended to take through eminent domain.
Another six years passed before property owners were notified the town planned to condemn their properties. By then, Chen said, the 45-day period to take legal action had long passed.
“Under our current law, New Jersey residents can lose their property without adequate notice that their property will be taken and without a hearing,” Chen said. “This case demonstrates why the current law fails to satisfy the due process requirements of the federal and state constitutions.”
Chen argued that any government notice of condemnation procedures must include notice of a property owner’s right to challenge in court.
Gregory Castano, counsel for the planning board, said the 45-day rule is intended to prevent last- minute challenges that can be expensive and time-consuming to a government.
We will be keeping a close eye on this case as if the court strikes down the limitations period, it will potentially open up the door to challenges to redevelopment areas created years ago, well before the Gallenthin Court’s strict reading of N.J.S.A. 40A:12A-5e. Thus, both the BMIA case and the Harrison case are reminders of the necessity of thorough due diligence as to the underpinnings of a redevelopment designation by a prospective purchaser or redeveloper of property within a redevelopment zone.
P.S. The Star Ledger also reported on the positives associated with new residential and commercial development in Harrison, as well as the ongoing construction of a new soccer stadium, in the area of the Harrison Path station. For the full article entitled “On the Path to a Boom,” click here.
