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Legal Q & A

 


Redevelopment Designation and Preferential Treatment for Local Businesses


Deborah M. Kole
League Staff Attorney
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Deborah M. Kole, League Staff Attorney

Q I own a commercial building in an older, built up community. The municipality is seeking to redevelop its “underutilized” areas, and included my building in the proposed redevelopment area. The building is 75 percent occupied by small businesses that employ several hundred people, almost all of them local residents. It was 100 percent occupied when I bought it, but some of the tenants have left because they do not want to stay under the threat that they may be asked to leave at any time because of the redevelopment. It is in excellent repair and no code violations or delinquent tax claims have been assessed against it. However, even though I attended the Planning Board Hearing and stated the reasons why I felt that my building did not fit within the criteria for redevelopment, the final report and recommendation of the Planning Board included my property, and the governing body passed a resolution accepting this recommendation. As far as I can tell, the final report does not give any real support as to why my property is appropriate for redevelopment. Is there any point to continuing to contest the inclusion of my property in this redevelopment, or is New Jersey law so broad in its criteria that I am doomed to failure?

A The criteria for redevelopment under the New Jersey Local Redevelopment and Housing Law, N.J.S.A. 40A:12-1 to -73, may be broad, but they still must be met by the presentation of credible evidence, the Appellate Division held in the recent case of ERETC v. City of Perth Amboy, 381 NJ Super 268 (2005). Despite the fact that, as the court noted, “…judicial review of a redevelopment designation is limited solely to whether the designation is supported by substantial credible evidence,” the designation in this case was struck down and remanded to the Planning Board because there was an absence of evidence supporting the board’s conclusion that the property fit within the statute. N.J.S.A. 40A:12A-5 authorizes redevelopment designation “if any of the conditions enumerated therein are found” the court said. However, it is not enough to quote the criteria of the statute, that a building is “substandard, unsafe, unsanitary, dilapidated, or obsolescent” (N.J.S.A. 40A:12A-5a) or underutilized (N.J.S.A. 40A:12A-5e) without giving sufficient supporting data and facts to show each property meets the statute’s requirements for redevelopment designation.

Therefore, the evidence that is presented to the Planning Board and Council must be sufficient to support the redevelopment designation of your property for the designation to be valid

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Q I am on the governing body of our municipality, and the owners of the two towing companies located in town asked me to introduce an amendment to our towing ordinance giving priority on the towing list to them, and relegating the three other towers on the list, all based in neighboring municipalities, to backup status, meaning that they would only be called upon if the primary towers could not respond. It seemed like a good idea to me, because these two companies have been located here for a long time, and contribute substantially to the municipal tax base and to the vitality of our business community, but one of my fellow council members says that doing this would be illegal. Is this true?

A Although your concern for the economic health of your municipality’s business community is certainly understandable, it is not an acceptable reason to give priority on a towing list to those businesses located in the municipality, according to a recent New Jersey case. In Defalco Instant Towing, Inc. v. New Providence, 380 NJ Super 152 (App. Div. 2005), the Court struck down an amendment to the municipal towing ordinance establishing such a priority. The amendment said ”Because the earliest possible response to a towing call is essential to the public health and safety, priority for on-call towing services shall be given to persons maintaining a place of business within the Borough of New Providence.”

The Court could find no evidence that supported the assertion in the amendment that local towers must be given this priority to ensure rapid response times. In fact, the towers from outside the borough had been complying with the ordinance’s requirement that towers respond within 20 minutes for years. Therefore, although the court found the stated purpose of the amended ordinance, to provide “the earliest possible response time,”appears rational and reasonable, no facts were presented showing that this purpose would be achieved by giving the local companies a preference. Without such proof, an ordinance giving priority to local towers violates the enabling statute for such ordinances, N.J.S.A. 40:48-2.49, which states that municipal towing ordinances must set forth “non-discriminatory and non-exclusionary regulations.”

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This column is for informational purposes only, and is not intended as legal advice.

 

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