Proposed Legislation Seeks to Amend New Jersey’s Redevelopment Law Limiting the Abuse of Eminent Domain

New Jersey has taken one step forward toward updating its redevelopment laws and enacting legislative protections for private property owners.  Earlier this month the New Jersey Senate Community and Urban Affairs Committee advanced legislation that would be the first update to the state’s eminent domain laws since the landmark U.S. Supreme Court decision Kelo v. City of New London, 545 U.S. 469 (2005), in which the Court ruled that the use of eminent domain for economic development is permitted under the “public use” provision of the 5th Amendment.

Since Kelo, 44 states have enacted legislative reform to protect private property ownership, curb the abuse of eminent domain and clarify the “public uses” for which property may be condemned.  Senate Bill 2447 (S2447) seeks to amend New Jersey’s Local Redevelopment and Housing Law (LRHL) by codifying certain property owner protections decided in NJ court decisions since Kelo and by providing a negotiation alternative to condemnation for local redevelopment projects.

If enacted this legislation would establish separate requirements for redevelopment projects involving condemnation versus those projects that would not involve eminent domain.  The bill provides additional protections for property owners who may be faced with condemnation due to a proposed redevelopment project while creating a streamlined process for local governments desiring to initiate redevelopment projects without employing condemnation powers.

S2447 codifies Gallenthin Realty Development Inc. v. Paulsboro, 191 N.J. 344 (2007), in which the New Jersey Supreme Court clarified one of the statutory criteria that must exist in order for an area to be determined in need of redevelopment and emphasized that the use of eminent domain cannot be justified to acquire property solely upon the basis that it is underutilized, unless the property otherwise meets the criteria for blight.

The bill also seeks to amend the LRHL by codifying Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), which addresses the issue of due process and adequate notice to property owners.  In DeRose an appeals court opined that a municipality must provide adequate written notice of condemnation for the purpose of redevelopment during the planning process.  S2447 would require municipalities to advise property owners within a proposed redevelopment area of the municipality’s intention to use or not use eminent domain to facilitate a redevelopment plan at the outset of the investigation and provide specific notice of such designation.

S2447 advanced to the Senate Budget and Appropriations Committee for consideration with amendments while a companion bill, A3615, was considered by and reported out of the Assembly Economic Development and Commerce Committee with similar amendments. The added amendments clarified that the legislation would not reach back retroactively to prohibit condemnation in an area determined to be in need of redevelopment prior to enactment and that the enhanced notification provision would not apply to designation made within 90 days of the bill’s passage.

We applaud OCA New Jersey Member Anthony Della Pelle for his participation with the committee that authored the initial version of the bill and worked to have it introduced in the legislature.

We’ll continue to track this legislation as it moves through both houses and report back as new developments arise.

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