Legislation that would make it harder but not onerous for local governments to use eminent domain for redevelopment purposes was voted out of committee in the state Senate on Monday.
The bill, S-2447, would more restrictively define "blight" — the 1947 constitution’s standard for allowing condemnation for development by private entities — but would provide a negotiation alternative to the rigors of condemnation proceedings.
The Senate Community and Urban Affairs Committee voted 5-0 for the bill, which is sponsored by committee chairman Jeff Van Drew, D-Cape May, and Sen. Ronald Rice, D-Essex.
It is a scaled-down version of an eminent domain reform bill, sponsored by Rice, that failed to win enough support for passage before the full Senate two years ago.
S-2447 codifies Gallenthin Realty Development Inc. v. Paulsboro, 191 N.J. 344 (2007), which said a blight determination requires a finding of a "deterioration or stagnation that has a decadent effect on surrounding property."
The Gallenthin court found the standard in the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-5(e) — a "stagnant or not fully productive condition" — unconstitutional as applied.
The revised bill would substitute the term "unproductive condition," which the sponsors say comports with Gallenthin‘s rationale.
S-2447 also codifies Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), which held that if a property owner is not given adequate written notice of condemnation for redevelopment, the 45-day deadline for filing a challenge can be waived.
Significantly, the revised bill would allow local governments to explore redevelopment efforts without having to designate and area as blighted. Rather, local governments could negotiate with property owners but would have to specifically state that the properties are not to be subject to condemnation.
"The bill says municipalities can go with Option A or Option B," says Michael Cerra, the senior legislative analyst with the New Jersey State League of Municipalities. He adds that allowing for redevelopment without condemnation is less likely to turn property owners against a project from the outset.
Cerra says municipalities could not argue with having Gallenthin and Harrison rulings being made part of the bill. "That’s the law now," he says.
Rice told the committee Monday that the new bill was the product of more than two years of negotiating with interested parties, and that it represented a compromise. "It’s like building a house," he said. "You start with a foundation."
Due in large part to opposition from local governments who feared the previous version would hamper redevelopment, Rice could only muster 13 of the required 21 votes needed for passage when it was brought up in January 2011.
The new bill eliminates earlier provisions, found objectionable by municipalities and developers, that would have:
• Required the condemning agency to provide a property owner with a copy of the appraisal being used to determine the amount that the agency is offering to purchase the property;
• Required the appraiser to consider the property owner’s information and issues when estimating the fair market value of the property;
• Required the appraiser to transmit the property owner’s information and issues, in writing, to the condemning agency;
• Required the appraisal to reflect value attributable to the location of the property;
• Allowed the property owner to provide information to and raise issues with the agency’s appraiser;
• Provided a property owner with a 45-day period to review the offer, extendable up to 70 days, with rights to request more information from the condemning agency, to meet with representatives of the agency and to obtain his or her own appraisal.
It is not clear when S-2447 will be considered by the full Senate. An identical measure, A-3615, is pending before the Assembly Commerce and Economic Development Committee, sponsored by Albert Coutinho, D-Essex.
The committee on Monday also recommended passage of S-2018, which would allow prevailing tenants in disputes with landlords to recover counsel fees and costs if their leases permit landlords to so recover.
The bill, sponsored by Sen. Brian Stack, D-Hudson, passed in a 5-0 vote.
"This puts the tenant on a level playing field with the landlord," Stack says.