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A New Jersey appeals court on Monday found constitutional infirmities in the state statute that regulates takings of private property for redevelopment purposes, but the judges prescribed a remedy that may keep the law alive. The appeals panel, in Harrison Redevelopment Authority v. DeRose , A-0958-06/A-0382-07, ruled that a property owner who is not given adequate notice that his property is under consideration for redevelopment has an affirmative defense to an ensuing condemnation action. The judges found the Local Redevelopment and Housing Law’s violates due process by failing to require a municipality to give advance notice to an owner. Instead, the statute gives the owner 45 days, from the date a redevelopment designation is adopted, to mount a challenge. The judges held that the 45-day time limit is contestable unless a municipality provides the owner with contemporaneous written notice fairly alerting him that: � the property has been designated for redevelopment, � the designation operates as a finding of public purpose and authorizes the municipality to acquire the property against the owner’s will, and � informs the owner of the time limits within which the owner may take legal action to challenge that designation. If a municipality complies with those notice requirements, however, an owner challenging the designation must bring an action in lieu of prerogative writ within 45 days of the municipality’s adoption of the designation and can’t wait until a future condemnation action to raise objections. Judge Jack Sabatino , writing for the court, said the ruling was meant to achieve a “harmonized reading” of the Eminent Domain Act, the redevelopment act and applicable rules, “so that owners are not forced to go to court unless and until they receive fair and adequate notice of the municipality’s adverse determination and of its right to take their properties.” The ruling also conforms to last year’s state Supreme Court ruling in Gallenthin Realty Development Inc. v. Paulsboro, 191 N.J. 344. There, the Court said a town’s use of the statute did not square with the constitution’s requirement must be “blighted” in order to be taken for redevelopment purposes. Monday’s ruling allows garage owner Anthony DeRose to challenge Harrison’s decision to declare his property to be “in need of redevelopment,” even though he missed the 45-day deadline. In companion rulings, the court allowed two other Harrison property owners to do the same. All three properties are located within Harrison’s 250-acre redevelopment zone, a swath of former industrial property along the Passaic River that is being cleared for residential, commercial and office use as well as for a 25,000-seat major league soccer stadium. According to the court’s opinion, Harrison notified potentially affected owners in 1997 that their properties might be included in a redevelopment project. DeRose did not attend an August 1997 public hearing of the planning board on the issue and did not file a written opposition. By September, the town ahd designated DeRose’s property others as being “in need of redevelopment,” the redevelopment law’s euphemsim for “blighted.” No notices were sent to the affected owners after the first notice of public hearing. DeRose did not learn of the planned seizure until 2004 when an appraiser visited his property. By then, the 45-day deadline of the statute had long since expired, and DeRose’s action in lieu of prerogative writ was dismissed by a Hudson County judges. But the Appellate Division reversed, finding the judge erred in rejecting DeRose’s challenges to the blight designation as time-barred. “Given the Town’s failure to provide him with constitutionally-adequate notice, DeRose is entitled to contest the blight designation as a defense in the eminent domain action,” Sabatino wrote. The appeals judges found the redevelopment law’s notice scheme “spotty and incomplete.” The statute only requires that notices be sent to those who had provided written opposition and that “failure to mail any such notice shall not invalidate the [preliminary] investigation or determination thereon,” they said. Other affected property owners would have to depend on seeing notices placed in newspapers or to word of mouth in their communities. “The statute lacks � any individualized mechanism to assure that property owners are fairly informed that the blight designation, approved by the governing body, operates as a conclusive finding of public purpose that will authorize the government to condemn their properties,” Sabatino wrote. “The statute also fails to require that owners be apprised of any time limits for contesting a blight designation.” “Additionally, the statute omits any obligation to notify owners individually that the governing body has designated their premises as in need of redevelopment, except for those prescient owners who filed a written objection with the Planning Board,” he continued. “These many considerations persuade us that the LRHL’s notice provisions fall short of fundamental guarantees of due process, both under the Federal Constitution as well as the Constitution of this State.” Sabatino said there are numerous unreported cases that give differing interpretations of the constitutionality of the statute. “The time has come for the issue to be addressed in this reported decision, not only for the benefit of the litigants before us, but also for the guidance of the bench, the bar, municipal officials, and the public at large, unless or until our Supreme Court or the Legislature mandates a different approach that is consistent with the Federal and State Constitutions,” he wrote. Sabatino said municipalities should welcome the ruling, observing, “The better the notice to property owners, the better the municipality’s chances of achieving finality sooner.” Sabatino said the panel acknowledged that millions of dollars have already been spent on the Harrison project and that the ruling may have an impact on its progress. “Those expenditures cannot, however, justify the abnegation of a property owner’s statutory rights,” he said. Judges Anthony Parrillo and Carmen Alvarez joined in the ruling Public Advocate Ronald Chen, who argued amicus on behalf of the property owners in all three cases, said the ruling will require municipal governments to be “up front and honest” with property owners in condemnation cases. “The decision … makes clear that a property owner retains the right to challenge a blight designation until the last stages of the redevelopment process�” he said in a written statement. “The ruling applies to any challenge to eminent domain that is still active in the court system, and could lead to reopening disputes over blight designation in other pending cases.” Lee Moore, a spokesman for Attorney General Anne Milgram, says the decision is under review. The appeals court’s suggested guidelines follow closely those that Senior Deputy Attorney General Daniel Reynolds recommended during oral arguments early last month. DeRose’s lawyer, Richard De Angelis Jr. of Newark’s Stryker Tams & Dill, says, “We believe we will be successful in challenging the blight designation. Mr. DeRose’s property is not in a state of disrepair. It is a thriving business that has never been the subject of a code violation. � “He doesn’t want to move. The redevelopment can continue, but that property will stay.” Joseph Lauro, a spokesman for the Harrison Redevelopment Authority, says the authority is “comfortable” with the ruling and believes it will ultimately prevail in the condemnation. “Who could possibly say the area was not in need of redevelopment in 1997 and who could possibly say that today?” he says. “We are prepared to make our case in court.”

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