When Can a Municipality or Local Redevelopment Agency Condemn Property as “Necessary for [a] Redevelopment Project”?

Borough of Glassboro v. Grossman, 457 N.J. Super. 416 (App. Div. 2019).  The Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -49 (“LRHL”) allows municipalities or redevelopment agencies to acquire by condemnation lands or buildings “necessary for the redevelopment project.”  But what makes property “necessary” for such a project, and what sort of showing must be made, and by whom, regarding that issue.  Judge Sabatino’s opinion for the Appellate Division today provided answers to these questions.

Plaintiff Borough had designated a redevelopment area in 2000.  That area included land owned by two of the defendants, which was under contract for purchase, for $125,000, by a third defendant.  The Borough sought to condemn the property and offered the same $125,000 purchase price to which defendants had agreed in connection with their proposed transaction.  When defendants rejected that offer, the Borough adopted an ordinance that authorized the acquisition of the property but did not “specify with any particularity why the property needs to be acquired.”

The Borough then filed a condemnation complaint in the Law Division.  That pleading alleged that the property was needed “for the public purpose of [r]edevelopment … and for the specific purpose of increasing the availability of public parking in the Borough of Glassboro.”  But at oral argument before the Law Division, the Borough said that public parking was “only a possible use, and that the property might be used for some other purpose related to redevelopment.”  Despite that, the Law Division ruled that the Borough had established an adequate public purpose to establish the necessity of the taking.

Today, however, the Appellate Division reversed that decision. After a detailed discussion of the LHRL, Judge Sabatino stated that “necessary” under the LHRL means “reasonably necessary.”  He also ruled that the condemning agency “need not articulate all of its reasons [for condemnation], or prove them up front.”  But he rejected the Borough’s “extreme position” that necessity may be shown solely by virtue of the fact that property is located in a redevelopment zone.  That would read “necessity” out of the LHRL.  Nor does a desire to “stockpile a parcel for some possible future need in the redevelopment area” suffice.  A “take first, decide later” approach contravenes both the language and the intent of the LHRL.

To satisfy the LHRL, “there must be a particular redevelopment project identified and tied to the proposed acquisition.”  And a claim of necessity “must be justified by a reasonable presentation of supporting proof.”  Judge Sabatino emphasized that there are many things that would satisfy this test, and he identified a number of them.  The burden of coming forward with evidence of reasonable necessity, in contested cases, is on the agency.  But then the onus shifts to the opponent of condemnation to “disprov[e] that showing of necessity” by a preponderance of the evidence.

Applying this analysis, and acting under a de novo standard of review, the panel reversed the decision below.  The ordinance authorizing the taking did not identify parking or any other specific purpose.  More importantly, Judge Sabatino said, there was no record evidence that the Borough “reasonably needs defendants’ property for an identified purpose tied to a redevelopment project.”  And the Borough’s statement that the land might or might not be used for parking suggested “stockpiling” or “land assemblage,” which cannot suffice for necessity.

Though the panel reversed the Law Division, it was without prejudice to the Borough renewing its effort to acquire the property in a manner consonant with the LHRL.  Judge Sabatino tersely rejected two other arguments that defendants had offered against condemnation, which would appear to preclude those arguments if the Borough tries again to acquire the land.