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Stahl v. Board of Finance

Decided: July 27, 1960.


Kolovsky, J.s.c.


This matter is before the court for decision after trial of an action in lieu of prerogative writs instituted by plaintiffs, owners or tenants of 11 properties lying within an area which has been referred to by the parties as the "Bunker Hill Renewal Area," to review determinations of the Planning Board, the Board of Finance, and Board of Public Works of the City of Paterson that the Bunker Hill Renewal Area is a "blighted area" within the meaning of N.J.S.A. 40:55-21.1.

Community planning and redevelopment has been, for a number of years, a matter of concern in the City of Paterson. Paterson has a planning board, originally created in 1930, and a housing authority, originally created in 1942, which is the urban renewal agency of the city.

Among the powers granted to planning boards by the Municipal Planning Act (1953), N.J.S.A. 40:55-1.1 to 40:55-1.29, was the power to

"* * * prepare, and after public hearing, adopt, and from time to time amend, a master plan for the physical development of the municipality which generally shall comprise land use, circulation, and a report presenting the objectives, assumptions, standards and principals which are embodied in the various interlocking portions of the master plan. The master plan shall be a composite of the one or more mapped and written proposals recommending the physical development of the municipality which the planning board shall have adopted either as a whole or severally after public hearing. Such master plan may include proposals for various stages in the future development of the municipality." N.J.S.A. 40:55-1.10.

Pursuant to the power thus granted, the Paterson Planning Board, after causing a study to be made, adopted a master plan for the City of Paterson. The plan, entitled "Master Reference Plan," was adopted by the planning board on December 29, 1955, after a series of nine public hearings.

Among other things discussed in the master plan was the prospect for redevelopment of the Bunker Hill Area for industrial purposes. Page 27 of the "Master Reference Plan" reads as follows:

"The lack of suitable industrial sites presents a critical situation in Paterson. With most of the industrial buildings in the City in a state of obsolescence, with much of the area intended for industry invaded by residential development, and with most of the area open to industry cut up into small ownerships, there is need for an aggressive attack on the problem. Redevelopment offers the most promising avenue of attack.

Title I of the U.S. Housing Act makes it possible to include commercial as well as residential redevelopment. The development agency, with powers of condemnation as an aid, acquires, clears, replans, and sells the land for new development. Two-thirds of the financial deficit in the whole operation is paid by the Federal Government and one-third by the City. The City's contribution may be in the form of needed public facilities in the area such as sewers, parks, playgrounds, and schools.

As an example of the possibilities of large scale redevelopment for industry, a sketch study was made of the Bunker Hill area located between River Street and the Passaic River. Possible development compared with existing conditions appears in the illustration above. (Reference is to sketches at the top of the page.)

Principal features of the suggested layout consist of:

1. Elimination of residence hopelessly surrounded by industry.

2. Revision of street system creating sites suitable for industry.

3. Reduction of land coverage, affording space for off-street parking.

4. Building set-backs to facilitate off-street loading and to provide landscaping possibilities."

As the maps forming part of the "Master Reference Plan" and the evidence before me disclose, the Bunker Hill area, which comprises a little less than 36 acres, is a "residential island" -- although it contains some commercial and industrial structures -- in the large industrial area, semi-circular in shape, which is bounded on the north, the west and the southwest by the curving Passaic River, and on the southeast by the tracks of the Erie Railroad. The Bunker Hill Renewal Area is an irregular area bounded by Branch Street and the rear lot lines of the property on the north side of Sixth Avenue on the north, by Wait Street and the Erie Railroad tracks on the east, by Rye Street on the south, and by the Passaic River and Shady Street on the west.

In February, 1957 the housing authority made application to the Federal Government for monies with which to conduct a survey to determine whether the Bunker Hill area would qualify for redevelopment with financial aid from the Federal Government pursuant to Title I of the U.S. Housing Act of 1949, as amended. In January 1958 the federal agency authorized, and in February 1958 the housing authority accepted, a grant of $58,000 to make the survey.

The state legislation authorizing the action initiated by the housing authority is L. 1949, c. 300, as amended (N.J.S.A. 55:14 A -31 et seq.) whose purpose, in the language of its title, is, inter alia:

"* * * to authorize housing authorities to clear blighted areas and prevent blight; to acquire real property and make it available for redevelopment by private enterprise or by public agencies in accordance with approved redevelopment plans; and to confer necessary powers on housing authorities, cities and other public bodies, and to make obligations issued by housing authorities in connection with redevelopment projects legal investments and security for deposits; to enable the advance preparation of projects so they can provide jobs and stimulate industry when necessary in the period of reconversion * * *."

By N.J.S.A. 55:14 A -33 a determination that an area is a "blighted area" is one to be made by the municipality after investigation, notice and hearing in accordance with the provisions of the "Blighted Area Act," L. 1949, c. 187, as amended (N.J.S.A. 40:55-21.1 et seq.), entitled,

"An Act defining 'blighted area,' authorizing municipalities to determine that areas are blighted areas, and to undertake the clearance, replanning, development and redevelopment of such areas."

The policy considerations underlying the state legislation, and the federal legislation providing federal financial aid for slum clearance and redevelopment, were thus stated by Mr. Justice Francis in Wilson v. City of Long Branch , 27 N.J. 360, 370-372 (1958), certiorari denied 358 U.S. 873, 79 S. Ct. 113, 3 L. Ed. 2 d 104:

"Community redevelopment is a modern facet of municipal government. Soundly planned redevelopment can make the difference between continued stagnation and decline and resurgence of healthy growth. It provides the means of removing the decadent affect of slums and blight on neighboring property values, of opening up new areas for residence and industry. In recent years, recognition has grown that governing bodies must either plan for the development or redevelopment of urban areas or permit them to become more congested, deteriorated, obsolescent, unhealthy, stagnant, inefficient and costly. As a result, at least 38 states now have remedial legislation similar to that of New Jersey. Jacobs & Levine, 'Redevelopment: Making Misused and Disused Land Available and Usable ,' 8 Hastings L.J. 241 (1957). Even if there were no express constitutional sanction for redevelopment of the type described in our statute, ample authority to do so might be found in the well of police power. Manifestly, the purposes to be served are intimately related to the public health, welfare and safety and so are consonant with both Federal and State Constitutions. * * *." (27 N.J. , at pp. 370-371.)

"Moreover, if there were any doubt at the state level of the compatibility of the statute in question with our organic law, it would be dispelled by the 1947 Constitution , which contains specific approval and authorization of redevelopment projects. Art. VIII, Sec. III, par. 1 declares:

'1. 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, * * *.'" (At p. 372.)

A field survey of the Bunker Hill area was made by the housing authority, which in May 1958 filed with the federal agency a report of its survey indicating that the area was a blighted area and eligible for redevelopment assistance under the federal legislation.

On February 10, 1959 the housing authority adopted a resolution reciting, inter alia , that it had completed survey and planning work for a "Redevelopment Project" in the Bunker Hill area; that it was preparing an application for a federal loan and grant, the application including an "Urban Renewal Plan" for the area as required by both the state and federal legislation; that under the applicable legislation the authority could not acquire any real property for redevelopment projects in the area unless the governing body of the City of Paterson -- which the resolution indicated included both the board of finance and board of public works of the city -- first determined that the project area was blighted in accordance with the "Blighted Area Act," had approved the urban renewal plan and had determined that it conformed to the duly approved master plan of the city; "that it is essential that a Cooperation Agreement of the redevelopment of the project area be entered into between the City and the Authority"; and that it was necessary that the action be taken prior to the execution by the authority and the federal agency of a loan and grant contract for the project area. The resolution approved the acquisition of the project area as a site for a slum clearance and redevelopment project and requested the board of finance and board of public works to proceed to make a determination as to whether the project area is a "blighted area," and for that purpose to require the planning board to make an investigation and hold a public hearing as provided for in the Blighted Area Act, and to take the other steps required by both the state and the federal legislation.

The "Urban Renewal Plan" was submitted to and approved by the housing authority at its meeting of April 22, 1959. Contemporaneously, the housing authority filed a loan and grant application with the federal agency. Thereafter, and on May 5 and May 14, 1959, respectively, identical resolutions were adopted by the board of public works and the board of finance, which, after reciting the action theretofore taken and the resolution theretofore adopted by the housing authority, determined:

1. That the planning board should in accordance with the state acts "proceed to make an investigation, hold a public hearing, and make a determination as to whether the project area or any part thereof is or is not a blighted area."

2. That notice of the hearing be published and mailed.

3. That the notice should include a statement that pursuant to the Federal Act a public hearing must be held before any land for an urban renewal project can be acquired by the authority.

4. "That the City Engineer of the City of Paterson shall cause to be prepared a map of the project area showing the boundaries to be investigated and the location of the various parcels of property included therein, to which map shall be appended a statement setting forth the basis of the investigation to be prepared by the planning board."

5. "That the planning board shall, upon completion of its investigation, and after holding a public hearing, make a determination and submit a report thereon" to the board which adopted the resolution for its approval, disapproval or modification.

6. That the planning board be requested to review the urban renewal plan prepared by the authority for the project area and submit its recommendation concerning such plan.

At its meeting of May 19, 1959 the planning board received a letter dated May 8, 1959, written by the director of the urban renewal of the housing authority, enclosing a copy of the resolution adopted by the board of public works, and asking for speedy action because the federal agency's review of the authority's application was "progressing very rapidly." At that meeting, the planning board, by motion, designated June 8, 1959, at 8 P.M., as the time, and "Public School No. 12 as the place, for the public hearing on the Bunker Hill Urban Renewal Industrial Project." Notice of the proposed hearing was published on May 25 and June 1, 1959.

Although the resolution of the board of public works had directed that a map of the area be prepared by the city engineer and filed with the city clerk, this was not done. Instead, a map in the form required, dated April 15, 1959, which had been prepared for the housing authority by Community House & Planning Associates of New York City was filed with the city clerk prior to the first publication.

A public hearing was held at Public School No. 12 on June 8, 1959. Representatives of the housing authority, as well as various objectors, including some of the plaintiffs herein, spoke. On June 16, 1959 the planning board adopted a resolution finding the area to be a blighted area and forwarded copies of the resolution to the board of public works and the board of finance. On the same day, June 16, 1959, the board of public works adopted a resolution determining that the area was a blighted area, and on June 25, 1959 a similar resolution was adopted by the board of finance. On July 15, 1959 plaintiffs filed a complaint in their first action, Docket No. L-15163-58 P.W., attacking the action taken by the governmental units on several grounds, including the fact that the last publication of notice of the hearing was less than ten days prior to the hearing, contrary to the notice provision of the Blighted Area Act.

The first action is still pending but has become moot and should be dismissed without prejudice and without costs because the municipal bodies concede that they do not rely on the determinations of blight made following the June 8 hearing. On August 11, 1959 the housing authority adopted a new resolution requesting the city boards to take steps to hold a new public hearing. No new resolutions were adopted by the board of public works or the board of finance. The hearing thereafter held on September 10, 1959 by the planning board was held under the authority of the May 1959 resolutions of the board of public works and the board of finance.

At its meeting of August 18, 1959 the planning board adopted a motion fixing "Public School No. 10 as the place and September 10, 1959, at 8 P.M., as the time for the

hearing in connection with the Bunker Hill Industrial Project." Due notice of that hearing was published on August 21 and 28, 1959, and mailed to property owners as required by the statute.

A stenographic transcript of the public hearing held on September 10, 1959 was marked into evidence and has been reviewed by the court. Ninety-eight written objections had been filed by Mr. Dobrin, attorney for the plaintiffs herein, on behalf of various property owners and tenants in the area. An opening statement was made by the executive director of the planning board, followed by an outline of the legal basis for the hearing by the secretary of the board. A lengthy statement was then read on behalf of the housing authority by Mr. Bentele, its director of urban renewal. The statement, after explaining the purpose of redevelopment and urban renewal and the proposed plan of redevelopment, set forth the reasons why the housing authority felt that the Bunker Hill area was a blighted area. Reference was made to two field surveys conducted by the housing authority in April 1958 and September 1959, to the percentages of dwellings found to be substandard and physically unsound, and to the additional criteria taken into consideration by the housing authority in determining that the area was a blighted area within the meaning of the state and federal laws. The report set forth the anticipated cost of the project, the contributions to be made by the Federal Government and municipality, the obligation of the housing authority to relocate displaced persons from the area, and that the federal agency had approved the various reports after submission of various reports and plans for the project submitted by the housing authority. Statements from objectors were then called for. John Malone, president of the Bunker Hill Citizens Association, a corporation not for pecuniary profit formed by a group of objectors to the project, introduced Mr. Dobrin to speak for his group.

After an opening statement in which he attacked the proceedings on various legal grounds and argued that the

"Master Reference Plan" did not indicate that the Bunker Hill area was a blighted area, Mr. Dobrin criticized the test used by the housing authority in its determination that the area was blighted. He then offered the testimony of four real estate men, each of whom had visited approximately one-fourth of the 163 dwellings in the area. Photographs of the dwellings, as well as written reports giving details of the physical condition of the buildings, were submitted by plaintiffs' witnesses and received into evidence by the planning board. In substance, these four witnesses stated that the area is not blighted and that the buildings, with perhaps a few exceptions, are not substandard, unsafe, unsanitary, dilapidated, or obsolete.

In addition, objection was voiced by the owner of a factory in the area, as well as by individual property owners, the latter objecting to the insufficiency of the proposed removal allowances and the alleged inadequacy of the proposed method for determining compensation for property to be taken. One landowner spoke in favor of the proposed redevelopment. Several days after the adjournment of the hearing of September 10, 1959 the planning board directed its executive staff to make a house-to-house field survey of the area; this, according to the testimony of the planning board members, because of the apparent discrepancy between the findings of the housing authority and those of the objectors' real estate experts. The executive staff of the planning board then proceeded to make the field survey which they had been directed to make. The exteriors of all 163 dwellings were inspected, as were the interiors of the 132 dwellings into which they were able to gain access. In addition, for purpose of comparison, an analysis was made of three prior field surveys of those dwellings: (1) That which ...

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