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Freeman v. Paterson Redevelopment Agency

Decided: May 6, 1974.


Doan, J.s.c.


In this eminent domain action plaintiff, an owner of commercial property in an area that has been declared blighted, seeks the appointment of commissioners to assess compensation or, in the alternative, to compel defendant redevelopment agency to initiate condemnation proceedings. Pursuant to an order to show cause and for a hearing under R. 4:67, this matter was heard in a summary proceeding. Although the order to show cause was limited to the first count of the complaint, counsel for both parties requested that the court consider the evidence and arguments presented as to both counts of the complaint and all issues in controversy, so that a full and final adjudication could be rendered. Inasmuch as the evidence presented is relevant to both counts of the complaint and the issues have been briefed by counsel, a consideration of the merits of the entire controversy is appropriate. R. 1:1-2.

The property that is the subject matter of this action is a three-story structure located in the downtown business district of Paterson. The building was constructed in 1924 and was acquired by plaintiff in 1958 by devise. The first two floors have been used for professional offices; the third floor

contains two residence apartments. The building itself has been maintained in good condition.

In accordance with the provisions of the Blighted Areas Act of 1949, N.J.S.A. 40:55-21.1 et seq., a large section of the Paterson business district was declared blighted, and a redevelopment plan adopted, in September 1964; the background history is described in Paterson v. Housing Authority of Paterson, 96 N.J. Super. 394, 401-403 (Law Div. 1967). The redevelopment plan is administered by defendant Agency, which is organized and operated pursuant to the Redevelopment Agencies Law of 1949, N.J.S.A. 40:55C-1 et seq. A redevelopment agency does have the power of eminent domain. N.J.S.A. 40:55C-12(j).

In the redevelopment plan plaintiff's property is identified as parcel 14 of block 1106 and is designated for acquisition and demolition. The adopted plan contemplates the construction of a parking garage, utilizing all or a portion of plaintiff's land. The property itself was initially appraised on January 6, 1965, but no offer to purchase was ever made. During the years of 1965 through 1971 there appears to have been little contact between the parties, although the plaintiff himself did testify that many times he was told that his property would be taken soon. Nevertheless, during the same period, the redevelopment agency did implement and complete certain other phases of the adopted plan.

On December 22, 1971 the events that precipitated and formed the basis of the present action commenced. At that time plaintiff was notified by the tenant who occupied the first-floor premises that the tenant would terminate the leasehold and vacate the premises on February 1, 1972. Coincidentally, plaintiff secured a prospective tenant, Gallo's Trophy Shop, which was relocating from a building across the street that had been acquired by the Agency. Because of the extensive renovations that would be necessary to make the premises suitable for its business, this prospective tenant did consult with representatives of defendant Agency before

finalizing the rental agreement and was advised that such a move would be unwise since plaintiff's property would likely be acquired within one year. This prospective tenant decided against the rental because of the impending acquisition. Subsequently, the premises were advertised for rent, but any interest by prospective tenants dissipated when it was learned that the property was included in the redevelopment plan.

Thereafter, plaintiff sought consideration of his property for acquisition because of a hardship situation. The property was inspected on January 21, 1972, and a review of the circumstances initiated. This hardship consideration was ultimately denied because the Agency erroneously assumed that the premises were fully rented since it had learned that certain carpentry work was being done on the first-floor area; in reality, this work was being done in order to repair damages caused by the removal of the previous tenant.

In May 1972 Gallo's Trophy Shop again contemplated rental of the first-floor quarters. From consultation with the Agency, Gallo's was informed that if the property was subsequently acquired, it would not be eligible for another business dislocation payment or reimbursement for any improvements to the property. Although the Agency recognized that such consultation would tend to discourage the rental, nevertheless its intention was to make this prospective tenant aware of the ramifications of a decision to rent. Again, Gallo's decided against the rental.

Plaintiff's property was successively reappraised on November 17, 1972, February 4, 1973 and March 8, 1973. Such appraisal would ordinarily indicate that acquisition was imminent. However, on May 17, 1973 plaintiff was informed that acquisition was not contemplated because no specific development proposal existed for that area and because there was a municipal policy against condemnation of property so as to remove it from the tax rolls without a ...

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