407 West State Street, Trenton, NJ 08618  (609)695-3481
 NJLM logo 

William G. Dressel Jr, Executive Director - Michael J. Darcey, CAE, Asst Executive Director

Edward McManimon

Local Governments Need the
Power of Eminent Domain


Edward McManimon
League Associate Counsel

 

Court House
When the Kelo case became common knowledge and began being reported in the print media as the case was being considered by the United States Supreme Court, various state and local officials in New Jersey began to wonder if it had any application or relevance to New Jersey and if it would make it more difficult to solve community problems.

When the Kelo v. New London, Connecticut case was decided by the United States Supreme Court on June 23, 2005, there was a collective sigh of relief throughout a large part of the local government community throughout New Jersey.

Redevelopment itself has long been a vital part of the New Jersey local government community, particularly in urban New Jersey.  More recently, suburban New Jersey began to experience the same issues that many urban cities have been experiencing for years, just in different forms.  Over the past 15 years, a significant amount of redevelopment activities have appeared all over New Jersey as local officials became more aware of the land use powers available to them to deal with blighted, deteriorated or stagnant properties.  These properties not only affect the economic and financial conditions but the social and neighborhood stability of such communities.
 
When the Kelo case became common knowledge and began being reported in the print media as the case was being considered by the United States Supreme Court, various state and local officials in New Jersey began to wonder if it had any application or relevance to New Jersey and if it would make it more difficult to solve community problems.

Essentially, the Supreme Court ruled in the Kelo case that state and local governments may use eminent domain to take private property and convey it to a private developer for the purpose of economic development.  The City of New London, Connecticut had approved an integrated development plan to revitalize its ailing economy.  The city had acquired most of the properties in the deteriorated area from willing sellers; however, through a designated agent, initiated condemnation proceeding against other property owners in the area who refused to sell.  The Supreme Court held that this purpose satisfies the public use requirement set forth in the Fifth Amendment to the United States Constitution concluding that local officials, not Federal judges, know best in deciding whether a particular development project serves a public purpose and benefits a community.

In contrast, New Jersey law in and of itself does not provide that “economic development” is a public purpose.  In fact, both the New Jersey Constitution and the Local Redevelopment and Housing Law, discussed later, specifically require a substantially higher standard of “blight” before a local government can involve itself in the development of private property.  While “blight” is broadly defined by the New Jersey Legislature and has been replaced by the term “redevelopment,” it is a standard that requires substantial investigation and findings about the condition of the property being considered before any action can be taken by the local government.

It’s interesting that there has been almost universal criticism of this decision at all levels of government, except from the local officials who are the ones who actually face the issue on the front lines.  This adverse reaction to Kelo particularly in New Jersey is surprising in light of the long and clear history of the use of both redevelopment and eminent domain in revitalizing and remediating blighted properties, in many cases producing dramatic results.


To simply react to Kelo and suggest that redevelopment is a “second class” public purpose particularly in a state like New Jersey and propose to simply legislate away the local government right to use eminent domain in the redevelopment of blighted areas if it involves residential properties ignores very real problems


Both the Legislature and Judiciary, as well as the voters of New Jersey, have long treated the circumstances involving blight and redevelopment as not only fundamental rights and responsibilities of local governments but also significant enough to embody in the New Jersey Constitution. Article VIII §3 of the Constitution states the following:

“The clearance, replanning, development or redevelopment of blighted areas shall be a public purpose and public use, for which private property may be taken or acquired.  Municipal, public or private corporations may be authorized by law to undertake such clearance, replanning, development or redevelopment; and improvements made for these purposes and uses, or for any of them, may be exempted from taxation, in whole or in part, for a limited period of time during which the profits of and dividends payable by any private corporation enjoying such tax exemption shall be limited by law.  The conditions of use, ownership, management and control of such improvements shall be regulated by law....”.

The Local Redevelopment and Housing Law was recodified in 1992 after years of analysis of the prior laws governing the subject.  This recodified law sets forth specific areas in which local governments can exercise the redevelopment powers.  There are specific criteria which must be met and, only if such criteria are met, are local governments authorized to “[a]cquire, by condemnation, any land or building which is necessary for the redevelopment project, pursuant to the provisions of the Eminent Domain Act of 1971....” for such purposes.  The criteria are broad but specific and have been tested against a public purpose standard in many cases over many years at all levels of the New Jersey Judiciary, including the Supreme Court.

It should also be kept in mind that the redevelopment law requires substantial public input and process before an area can even be determined to constitute an area in need of redevelopment or rehabilitation.  This is a significantly more cumbersome and comprehensive requirement than existed in Connecticut.  (Interestingly there is a lesser criteria for the determination that an area is in need of “rehabilitation” as opposed to being in need of redevelopment.  While granting local governments the right to use redevelopment power in such rehabilitation areas, eminent domain is prohibited.) An investigation must be undertaken and a report prepared and reviewed by the Planning Board.  The Planning Board must conduct a public hearing and make a written recommendation to the municipal governing body.  The municipal governing body must consider the information in the report and the recommendations publicly and make its findings publicly.  A comprehensive redevelopment plan must then be prepared or considered by the Planning Board and a public report and recommendation made to the municipal governing body.  The municipal governing body must then conduct a public hearing and adopt the redevelopment plan by ordinance.  If any property is being considered for condemnation, it must be specifically identified in the redevelopment plan being considered and made public at that point.  Any redevelopment agreement between the local government and a redeveloper must be presented and approved publicly.  All these actions are subject to challenge politically, socially and legally. Specific standards of review have long been established by the courts throughout the state, including the New Jersey Supreme Court.

This process does not happen casually or behind a wall of secrecy as is being suggested. Certainly abuses occur, but they are not “common” as suggested in the latest overwhelming reaction to justify the proposed universal prohibition of eminent domain.  A multitude of New Jersey judicial decisions have universally reconfirmed these powers in virtually every circumstance, largely deferring to the determination and discretion of government officials in addressing the circumstances affecting their communities.

The recent reaction to the Kelo ruling may lead to a healthy exercise, since the case deals with equally fundamental property rights of the state's residents.  The reaction, however, needs reflection and as much thought as went into the establishment of these rights and responsibilities regarding redevelopment and eminent domain in the New Jersey Constitution, statutes and court decisions. 

A look at the positive results that take place when these responsibilities as exercised by local governments and what circumstances require the need to condemn property for redevelopment will shed light on the importance of maintaining the powers of eminent domain in the redevelopment process.

The Kelo case provides an opportunity to look more deeply at what is happening to the infrastructure and financial and economic base and mix of residential, commercial and industrial properties in the communities throughout New Jersey. This mix is related to the increasing reliance on property taxes to cover the rising cost of local government.  The state and the local residents are becoming more and more demanding of local officials to solve their own problems with their own resources and to become less reliant on state resources.  To simply react to Kelo and suggest that redevelopment is a “second class” public purpose particularly in a state like New Jersey and propose to simply legislate away the local government right to use eminent domain in the redevelopment of blighted areas if it involves residential properties ignores very real problems developing throughout a large part of the state. Such thinking insults the many local officials who face these issues regularly as they meet their responsibilities to those who elected them to build and maintain a viable, stable, vibrant and self-reliant community.

Significant thought and reflection are needed.  Some real history should also help define the debate.  Local elected officials should make sure that the Legislature undertakes this debate with an awareness and understanding of the many circumstances that exist today their communities. A significant and fundamental long-standing right should not be revised in a way that prevents local officials from exercising their responsibilities to their citizens.

 

NJLM - Local Governments Need Eminent Domain

407 West State Street, Trenton, NJ 08618  (609)695-3481
 NJLM logo 

William G. Dressel Jr, Executive Director - Michael J. Darcey, CAE, Asst Executive Director

Edward McManimon

Local Governments Need the
Power of Eminent Domain


Edward McManimon
League Associate Counsel

 

Court House
When the Kelo case became common knowledge and began being reported in the print media as the case was being considered by the United States Supreme Court, various state and local officials in New Jersey began to wonder if it had any application or relevance to New Jersey and if it would make it more difficult to solve community problems.

When the Kelo v. New London, Connecticut case was decided by the United States Supreme Court on June 23, 2005, there was a collective sigh of relief throughout a large part of the local government community throughout New Jersey.

Redevelopment itself has long been a vital part of the New Jersey local government community, particularly in urban New Jersey.  More recently, suburban New Jersey began to experience the same issues that many urban cities have been experiencing for years, just in different forms.  Over the past 15 years, a significant amount of redevelopment activities have appeared all over New Jersey as local officials became more aware of the land use powers available to them to deal with blighted, deteriorated or stagnant properties.  These properties not only affect the economic and financial conditions but the social and neighborhood stability of such communities.
 
When the Kelo case became common knowledge and began being reported in the print media as the case was being considered by the United States Supreme Court, various state and local officials in New Jersey began to wonder if it had any application or relevance to New Jersey and if it would make it more difficult to solve community problems.

Essentially, the Supreme Court ruled in the Kelo case that state and local governments may use eminent domain to take private property and convey it to a private developer for the purpose of economic development.  The City of New London, Connecticut had approved an integrated development plan to revitalize its ailing economy.  The city had acquired most of the properties in the deteriorated area from willing sellers; however, through a designated agent, initiated condemnation proceeding against other property owners in the area who refused to sell.  The Supreme Court held that this purpose satisfies the public use requirement set forth in the Fifth Amendment to the United States Constitution concluding that local officials, not Federal judges, know best in deciding whether a particular development project serves a public purpose and benefits a community.

In contrast, New Jersey law in and of itself does not provide that “economic development” is a public purpose.  In fact, both the New Jersey Constitution and the Local Redevelopment and Housing Law, discussed later, specifically require a substantially higher standard of “blight” before a local government can involve itself in the development of private property.  While “blight” is broadly defined by the New Jersey Legislature and has been replaced by the term “redevelopment,” it is a standard that requires substantial investigation and findings about the condition of the property being considered before any action can be taken by the local government.

It’s interesting that there has been almost universal criticism of this decision at all levels of government, except from the local officials who are the ones who actually face the issue on the front lines.  This adverse reaction to Kelo particularly in New Jersey is surprising in light of the long and clear history of the use of both redevelopment and eminent domain in revitalizing and remediating blighted properties, in many cases producing dramatic results.


To simply react to Kelo and suggest that redevelopment is a “second class” public purpose particularly in a state like New Jersey and propose to simply legislate away the local government right to use eminent domain in the redevelopment of blighted areas if it involves residential properties ignores very real problems


Both the Legislature and Judiciary, as well as the voters of New Jersey, have long treated the circumstances involving blight and redevelopment as not only fundamental rights and responsibilities of local governments but also significant enough to embody in the New Jersey Constitution. Article VIII §3 of the Constitution states the following:

“The clearance, replanning, development or redevelopment of blighted areas shall be a public purpose and public use, for which private property may be taken or acquired.  Municipal, public or private corporations may be authorized by law to undertake such clearance, replanning, development or redevelopment; and improvements made for these purposes and uses, or for any of them, may be exempted from taxation, in whole or in part, for a limited period of time during which the profits of and dividends payable by any private corporation enjoying such tax exemption shall be limited by law.  The conditions of use, ownership, management and control of such improvements shall be regulated by law....”.

The Local Redevelopment and Housing Law was recodified in 1992 after years of analysis of the prior laws governing the subject.  This recodified law sets forth specific areas in which local governments can exercise the redevelopment powers.  There are specific criteria which must be met and, only if such criteria are met, are local governments authorized to “[a]cquire, by condemnation, any land or building which is necessary for the redevelopment project, pursuant to the provisions of the Eminent Domain Act of 1971....” for such purposes.  The criteria are broad but specific and have been tested against a public purpose standard in many cases over many years at all levels of the New Jersey Judiciary, including the Supreme Court.

It should also be kept in mind that the redevelopment law requires substantial public input and process before an area can even be determined to constitute an area in need of redevelopment or rehabilitation.  This is a significantly more cumbersome and comprehensive requirement than existed in Connecticut.  (Interestingly there is a lesser criteria for the determination that an area is in need of “rehabilitation” as opposed to being in need of redevelopment.  While granting local governments the right to use redevelopment power in such rehabilitation areas, eminent domain is prohibited.) An investigation must be undertaken and a report prepared and reviewed by the Planning Board.  The Planning Board must conduct a public hearing and make a written recommendation to the municipal governing body.  The municipal governing body must consider the information in the report and the recommendations publicly and make its findings publicly.  A comprehensive redevelopment plan must then be prepared or considered by the Planning Board and a public report and recommendation made to the municipal governing body.  The municipal governing body must then conduct a public hearing and adopt the redevelopment plan by ordinance.  If any property is being considered for condemnation, it must be specifically identified in the redevelopment plan being considered and made public at that point.  Any redevelopment agreement between the local government and a redeveloper must be presented and approved publicly.  All these actions are subject to challenge politically, socially and legally. Specific standards of review have long been established by the courts throughout the state, including the New Jersey Supreme Court.

This process does not happen casually or behind a wall of secrecy as is being suggested. Certainly abuses occur, but they are not “common” as suggested in the latest overwhelming reaction to justify the proposed universal prohibition of eminent domain.  A multitude of New Jersey judicial decisions have universally reconfirmed these powers in virtually every circumstance, largely deferring to the determination and discretion of government officials in addressing the circumstances affecting their communities.

The recent reaction to the Kelo ruling may lead to a healthy exercise, since the case deals with equally fundamental property rights of the state's residents.  The reaction, however, needs reflection and as much thought as went into the establishment of these rights and responsibilities regarding redevelopment and eminent domain in the New Jersey Constitution, statutes and court decisions. 

A look at the positive results that take place when these responsibilities as exercised by local governments and what circumstances require the need to condemn property for redevelopment will shed light on the importance of maintaining the powers of eminent domain in the redevelopment process.

The Kelo case provides an opportunity to look more deeply at what is happening to the infrastructure and financial and economic base and mix of residential, commercial and industrial properties in the communities throughout New Jersey. This mix is related to the increasing reliance on property taxes to cover the rising cost of local government.  The state and the local residents are becoming more and more demanding of local officials to solve their own problems with their own resources and to become less reliant on state resources.  To simply react to Kelo and suggest that redevelopment is a “second class” public purpose particularly in a state like New Jersey and propose to simply legislate away the local government right to use eminent domain in the redevelopment of blighted areas if it involves residential properties ignores very real problems developing throughout a large part of the state. Such thinking insults the many local officials who face these issues regularly as they meet their responsibilities to those who elected them to build and maintain a viable, stable, vibrant and self-reliant community.

Significant thought and reflection are needed.  Some real history should also help define the debate.  Local elected officials should make sure that the Legislature undertakes this debate with an awareness and understanding of the many circumstances that exist today their communities. A significant and fundamental long-standing right should not be revised in a way that prevents local officials from exercising their responsibilities to their citizens.

 

 

 

Article in October 2005, New Jersey Municipalities