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Ott v. Town of West New York

Decided: August 1, 1966.

GRACE OTT AND GEORGE SHASHOIAN, PLAINTIFFS,
v.
TOWN OF WEST NEW YORK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, AND JAMES CANINO, ALVIN RAPHAEL AND LAURENCE MARCHINI, A CO-PARTNERSHIP, TRADING AS OVERLOOK TERRACE CO., DEFENDANTS



Carton, J.s.c.

Carton

Plaintiffs Grace Ott and George Shashoian attack the validity of a contract between defendant Town of West New York, acting as the local public agency (agency), and defendants James Canino, Alvin Raphael and Laurence Marchini, a co-partnership, trading as Overlook Terrace Co. (Overlook) for the sale of land to the latter for private redevelopment.

On January 13, 1966 the agency sent invitations to 15 developers to submit proposals on or before February 15, 1966 for the purchase and acquisition of lands comprising the urban renewal area of the Boulevard East Project N.J.R. 101. The letter of invitation read in part as follows:

"If you are interested, will you please transmit your proposal setting forth the amount you offer to pay for the acquisition of said lands, which should be a minimum of $2.00 per square foot, or a total of $317,150.00. The said figure is to be used for negotiation purposes only, and subject to the approval of the Urban Renewal Administration and the Federal Housing Administrations' concurrence. Your proposal shall also set forth your experience and qualifications as a developer in detailed financial statement and other pertinent data."

The letter stated that proposals must be based on the urban renewal plan, and enclosed a copy thereof. Also enclosed were forms for the redeveloper's statement for public disclosure and statement of qualifications and financial responsibility.

The renewal plan referred to had been approved by the municipality by ordinance adopted January 17, 1964, as amended by ordinance of January 5, 1966.

The reuse plan for the project known as "Boulevard East" comprises four parcels of vacant land, consisting of 3.64 acres, to be developed for residential use with high-rise apartments. This property is bounded generally on the east by Kennedy Boulevard, on the south by 56th Street, on the north by 59th Street, and on the west by an irregular line west of Park Avenue. It is located in an area in which several new high-rise luxury apartments have been constructed. All of

these sites, including that of the project area, afford unobstructed views of the New York City skyline.

The cost of the facilities to be erected by the redeveloper is expected to be upwards of $9,000,000. The Federal Government has invested about $1,600,000 and the municipality about $300,000 in the project.

On February 16, 1966 three proposals were received, which offered price and proposed monthly rent schedules as follows:

Overlook -- $320,000

One room efficiency apartment $91 per month

One-bedroom apartment 110 per month

Two-bedroom apartment 131 per month

Three-bedroom apartment 151 per month

Inganamort -- La Sala -- $420,225

Studio apartment $100 -- $120

One-bedroom apartment 120 -- 140

Two-bedroom apartment 140 -- 165

Three-bedroom apartment 175 -- 200

Trimen Construction Corporation -- $506,550

One-bedroom apartment (jr.) $160

One-bedroom apartment (large) 195

Two-bedroom apartment 240

On February 17, February 23, February 28 and March 2, 1966 the agency held special meetings to review the proposals received. At these meetings members of the agency reviewed an analysis of the three proposals submitted and a report dated January 10, 1966 from Robert W. Hendricks, a real estate appraiser, recommending the utilization of the property for construction of an F H A 221-D-3 (middle income rental) project, rather than for high-rise luxury apartments. His report reads in part:

"Consideration should also be given to the fact that the disposition price of the subject land is one of the highest for an F H A 221-D-3 project to my knowledge. Any attempt by the community to force a higher price may defeat the very purpose for which the land is to be used. If too high a price is obtained for the land, it may not be economically feasible to develop the site under the F H A 221-D-3 concept."

On March 16, 1966, after another special meeting on the subject, the agency adopted a resolution which recited that the disposal of the property by negotiation was determined to be the appropriate method of making the property available for redevelopment, and that the price offered by Overlook was not less than the fair market value of the property for its use in accordance with the urban renewal plan. Upon concurrence by the Federal Government, the resolution authorized the execution of a contract for the sale of the property for $320,000 to Overlook after ten days' publication of a notice in the form attached to the resolution of the agency's intention to do so.

Overlook's representatives signed the contract on March 16, the day when the resolution accepting its offer was adopted.

The notice form attached to the resolution referred generally to the terms of the proposed contract, and that the agency "proposes to execute said ...


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