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December 8, 2010

RE: S-1451, Jeopardizes Economic Recovery and Redevelopment

Dear Mayor:

S-1451, sponsored by Senator Ron Rice, was approved in early October by the Senate Community and Urban Affairs Committee.  We now expect that this bill may be considered by the full Senate, perhaps as soon as December 13. The League strongly opposes this legislation because it will have a negative impact on redevelopment, and severely hinder local governments’ tools to promote economic growth.

Since the United States Supreme Court issued its decision on Kelo v. New London, on June 23, 2005, there have been  several decisions by the courts in New Jersey in the Trial, Appellate and  Supreme Courts that have significantly changed the implications of various local actions and processes under the redevelopment law.  Where there were abuses, the Courts stepped in and corrected it.  The system worked and resolved particular issues.  

Many of these Court decisions, however, also had an unintended consequence on the ongoing redevelopment plans and projects, slowing the rate of investment in some of the State’s urban areas, while also diminishing the local tools needed to encourage state sponsored smart growth and transit oriented development patterns.  Couple this with a recession, and the results have been devastating for our urban areas and their efforts to promote redevelopment, growth and jobs.

For instance, S-1451 distinguishes between redevelopment that requires condemnation and redevelopment which does not.  But in doing so, S-1451 makes non-condemnation redevelopment areas more difficult and condemnation redevelopment areas almost impossible to designate.  

S-1451 would sunset a redevelopment designation after seven years unless a redevelopment plan is adopted and significant progress is made in implementing the plan. The recent economic downturn demonstrates the flaw in this approach, and this type of lapsing provision will severely impact the financing of any such project. 

S-1451 also requires enhanced notification, “clear and understandable notices,” informational meetings, notice to tenants, internet notices, internet postings, posted notices in a designated areas, an unwieldy negotiation process before condemnation can begin, an alternative analysis in the redevelopment plan and the requirement that condemnation begin within 5 years of the redevelopment plan. Individually, any of these requirements might seem reasonable or manageable, but combined they make the provisions of the bill cumbersome while providing little benefit to either the municipality or to residents. 

It is not that the League does not recognize the controversy created by the Kelo decision or over redevelopment requiring condemnation.  Immediately after the Kelo decision, the League took an active role in developing a legislative response in New Jersey.   This included the issuing of a white paper outlining what positive changes could be made to the redevelopment law, including enhanced notification, alternate measures for compensation, greater certainties for all parties and greater relocation assistance.  Additionally, the League worked with legislative leaders in both Houses to craft an appropriate legislative response.  While we applaud these leaders for their work, all these efforts preceded the New Jersey Courts weighing in.  These court decisions have dramatically changed the legal landscape and how we believe the Legislature should approach this issue.   Generally, the Courts have defined the process in a way that is in many cases different than the specific statutory language of the Local Redevelopment and Housing Act and have essentially added the requirements of the separate Eminent Domain Law into the process.   

We believe that S-1451 does not address the new challenges faced by local government leaders, and we would recommend that any new legislation in this area should not only take into account these cases, which have shifted the protections to property owners, but balancing the ability of local government to engage in redevelopment and revitalization of their communities. 

We suggest that you contact and ask your State Senator to oppose S-1451.  Questions on this letter can be directed to Mike Cerra at mcerra@njslom.com or 609-695-3481 x120.

Very Truly Yours,

 

William G. Dressel,
Executive Director

 

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