Opinion: ‘Abuse Lite’ — Just When You Thought You Were Safe From Eminent Domain

R. William Potter | June 7, 2012 | Opinion
Municipalities are finding a new way to take control of properties, without paying a dime

There they go again.

Just when you thought the courts had saved private property in New Jersey from the worst abuses of eminent domain, along comes “abuse lite” — a clever way for municipal politicos to take nearly total control of your property without paying a dime for the privilege.

Here’s how it works:

Let’s say you own a small business in Nice City, renting out space to a mix of commercial tenants, and you hear that the city council is considering a resolution to declare your buildings — plus a lot of others — part of an “area in need of rehabilitation” (ANR).

What do you do? Not knowing what this ANR is all about you call City Hall and a friendly aide to the Mayor tells you: “There’s nothing for you to worry about. ANR means you qualify for a 5-year tax abatement on any improvements made to your property.”

“But what about eminent domain?” — the taking of private property — you ask. “Doesn’t ANR open the doors to losing my property so you can transfer it to someone else, like happened to Suzette Kelo?”

(In Kelo v. City of New London, the U.S. Supreme Court held that a private property may be “taken” and handed to a corporation based on its promise to increase economic growth. But three years later in 2007 the New Jersey Supreme Court in Gallenthin v. Paulsboro held that under this state’s constitution, private property is not “blighted” and can’t be taken simply because the municipality has what it believes is a “better use” planned for it.)

(Disclosure: This law firm represented Gallenthin, the winning side, in that landmark case which has spawned many a lower court holding preventing “blighted area abuse.”)

“No way,” you are told. “Eminent domain is possible only if the city declares your buildings an ‘area in need of redevelopment.’ This is ‘area in need of rehabilitation.’ So, not to worry. In fact, you should be supportive.”

(“Area in need of redevelopment” is the euphemism for “blighted area” allowed in a 1992 law that put a friendly face on the negative “blighted area” term — thereby misleading many a homeowner and business into not protesting, until it was too late to sue in court.)

So, feeling relieved, you don’t call a lawyer or attend the council meeting where the ANR designation is voted without so much as a public hearing, there being no statutory right to a hearing for a “mere” ANR resolution.

Then some weeks later, comes a notice in the mail that — based on that ANR resolution — the City intends to adopt a Redevelopment Plan for your property and the details of that plan include such pronouncements as these:

  • Any future uses of your property must abide by the Redevelopment Plan, never mind the Nice City zoning code, which is “superceded.” That means the zoning code no longer applies and you can’t even apply to the Zoning Board for a variance.
  • The City will decide who gets to be the “redeveloper” of your own property and it may not be you, the taxpaying owner, but not to worry, as you get to “apply” for that honor.
  • The City mandates certain “improvements” that must be made to your property, at your expense, such as installing all new HVAC equipment.
  • All future uses of your property are specified in detail, never mind what you had planned and thought you were permitted to do under the zoning code.
  • You have to pay the “relocation” expenses of any current tenant who must “relocate.”
  • In short, it looks like “Eminent Domain Abuse Lite,” as Nice City is taking away most of the rights you assumed were yours and all without “just compensation” or indeed any compensation — based solely on an ANR designation that was supposed to be ever so benign and helpful.

    Does this nightmare scenario sound far-fetched, maybe even paranoid? Think again. This is happening even now in the City of Hoboken to one property owner — R. Neumann & Co, owner of an old industrial complex with an eclectic mix of tenants — and it’s about to happen to plenty more owners in the southwest corner of Hoboken, bordering Jersey City.

    (Second disclosure: I am the lawyer for Neumann and a property in the threatened southwest area.)

    What’s to be done to keep these Orwellian tactics from spreading from Hoboken to the rest of New Jersey? Rest assured the same consultants who in Hoboken dreamed up the ANR approach as a way around the Gallenthin case are talking it up in city halls state wide.

    First, our state courts may need to be as aggressive in stopping “ANR abuse” as they have been in preventing Kelo-type eminent domain abuses.

    Second, the Legislature has to amend if not repeal the 1992 law that makes these abuses seem possible, at least until a court steps in to call a halt.

    And, third, to persuade reluctant legislators to revisit these loaded topics — such as property rights versus urban planning (not really in conflict as proper zoning solves most of redevelopment problems) – Gov. Chris Christie may have to reach for his handy microphone and call for urgent legislative action.

    In the meantime, watch your city council website, and be prepared to speak out if an ANR designation is coming your way. What’s happening now in Hoboken could be speeding down the Turnpike in your direction as you read this.