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A municipality can’t condemn a property simply by declaring it not fully productive and thus in need of development, the New Jersey Supreme Court ruled on June 13 in a decision that trims back use of eminent domain for redevelopment purposes. Gallenthin Realty Development Inc. v. Paulsboro, No. A-51-06. The justices held that a section of the Local Redevelopment and Housing Law, N.J. Stat. Ann. � 40A:12A-5(e), as applied in the case, did not square with the state constitution’s requirement that a property must be “blighted” in order to be taken for redevelopment purposes. “The New Jersey Constitution does not permit government redevelopment of private property solely because the property is not used in an optimal manner,” Chief Justice James Zazzali wrote for the unanimous court. Lawyers in the case say the ruling is the most significant for New Jersey since the U.S. Supreme Court, in Kelo v. New London, 545 U.S. 469 (2005), upheld the right of public entities to use eminent domain to further private redevelopment. The ruling blocks the borough of Paulsboro’s attempted seizure of 63 acres of undeveloped wetlands property along the Mantua Creek for use as a deepwater port in an industrial redevelopment area. Designation of the property as in need of development under the statute would have justified the exercise of eminent domain. Although a trial judge and an appeals panel found Paulsboro had met its statutory burden, the court found the borough’s interpretation of the statute too broad. “Under that approach, any property that is operated in a less than optimal manner is arguably ‘blighted.’ If such an all-encompassing definition of ‘blight’ were adopted, most property in the State would be eligible for redevelopment,” Zazzali said. The court noted that the blighted areas clause of N.J. Const., art. VIII, � 3, was aimed principally at slum clearance in older cities and that the framers meant to prevent a domino effect on surrounding properties by giving municipalities power “to intervene, stop further economic degradation, and provide incentives for private investment.” The court in 1958 upheld the constitutionality of the Blighted Areas Act, the predecessor of the Local Redevelopment and Housing Law, which expanded the definition of “blight” to include “a stagnant and unproductive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare.” In 1971, the court further expanded the definition to include redevelopment plans aimed at “suburban and rural” areas. However, Zazzali said, “At its core, ‘blight’ includes deterioration or stagnation that has a decadent effect on surrounding property.”

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