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Jersey City Redevelopment Agency v. Kugler

Decided: July 1, 1970.

JERSEY CITY REDEVELOPMENT AGENCY, A BODY CORPORATE AND POLITIC OF THE STATE OF NEW JERSEY, ET AL., PLAINTIFFS-APPELLANTS,
v.
GEORGE F. KUGLER, JR., ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, ET AL., DEFENDANTS-RESPONDENTS



Conford, Collester and Kolovsky. The opinion of the court was delivered by Conford, P.J.A.D.

Conford

This action was begun by Jersey City Redevelopment Agency (Redevelopment) and John J. Marchese, individually and as an officer of Redevelopment, to obtain a judgment declaring unconstitutional N.J.S.A. 20:1-9 and N.J.S.A. 40:55-21.10 insofar as those enactments provide that in eminent domain proceedings involving the development or redevelopment of blighted areas the value of any property sought to be acquired shall be determined at no less than the value thereof as of the final declaration of blight by the municipality concerned. The Law Division in a well-considered opinion by Judge Fink (unreported) sustained the statutory provisions as valid and granted summary judgment to defendants. We agree with that determination.

The case concerns the Henderson Street (Jersey City) Urban Renewal Project. On February 2, 1960 the governing body adopted a resolution approving the project. As required by law, the resolution included a declaration of blight as to the area involved. Initial steps toward condemnation of any

property within the 24.8 acres of the project did not take place until 1969. In the meantime, L. 1967, c. 217 and L. 1967, c. 218, took effect, providing, as noted above, for a minimum valuation in blight condemnations of the value of the property as of the date of declaration of blight by the municipality.

Pending argument of the appeal defendant Goldhand, Ltd., owner of a parcel of land affected, moved to strike Redevelopment and Marchese (in his official capacity) as plaintiffs-appellants for lack of standing to assert the unconstitutionality of a legislative enactment. We reserved decision pending oral argument. We fully agree that Redevelopment, as a municipal agency and creature of the State, and Marchese as its official, is without standing to make the contention urged below and here that the statutes as thus amended deprive it of equal protection of the laws contrary to the Fourteenth Amendment. See Camden County v. Pennsauken Sewerage Auth. , 15 N.J. 456, 470 (1954). However, Redevelopment also argues that the acts violate the constitutional prescription of "just compensation" for private property taken for public purposes and (on appeal for the first time) that they effect an unconstitutional donation of public funds to private persons. Rather than debate the question whether the agency, or Marchese as an official thereof (or Marchese as a taxpayer), has standing to assert either or both of those asserted constitutional deficiencies, we deem it preferable in the public interest to settle the constitutional questions presented on their merits. The motions to dismiss are consequently denied, but without prejudice.

I -- EQUAL PROTECTION

Plaintiffs contend that while public bodies having the right of condemnation are subject to the rule, in all other kinds of condemnation, that valuation is fixed as of the date of filing the complaint in the proceedings, N.J.S.A. 20:1-9; State v. Nordstrom , 54 N.J. 50, 53 (1969), condemnors

of blighted property are arbitrarily singled out for subjection to the rule of valuation as of the date of declaration of blight -- a date which may, as here, be years earlier than the filing of the complaint or the taking of possession of the property by the public agency.

Aside from the point of lack of standing of a municipal body to assert denial of equal protection by the State Legislature, as noted above, the contention lacks intrinsic merit. The legislative treatment of blight cases is based on the common knowledge born of widespread experience that the pronouncement of blight by a public body authorized to condemn generally produces a severe downward phase in the value of the property. Potential buyers and long-term lessees are discouraged, the rate of tenant-vacancies increases, and the incentive for protective maintenance is dulled.

The Supreme Court clearly implied its concurrence in the reasonableness of the legislative action here debated when it recently said, in another blighted area-condemnation case:

There can be no doubt that a declaration of blight ordinarily adversely affects the market value of property involved. This is unfortunate because in so many instances the physical taking of the property does not occur for a number of years. In the meantime the owner can only wait for that ultimate taking; there is usually no reasonable market otherwise open to him for sale of the property. Moreover, in the interim his good housekeeping incentive generally recedes and deterioration of the building sets in. The Legislature has recognized the difficulty and has partially rectified it by providing that when property previously declared blighted is ...


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