Margolis, J.c.c., Temporarily Assigned.
This is a condemnation case.
In August 1972 plaintiff Town of Montclair, by the Montclair Redevelopment Agency (Agency), commenced proceedings
pursuant to N.J.S.A. 40:55C-12(j) et seq., to acquire defendant D'Andrea's land for the purpose of redeveloping an area in the Town of Montclair known as the Lackawana Plaza Project.
Plaintiff took title to the premises by filing a declaration of taking, and commissioners were appointed for the purpose of assessing value. The condemned property consists of land and a building thereon operated as Al's Restaurant, containing restaurant equipment and fixtures, and is presently in operation and paying a rental to Agency on a month-to-month basis.
Defendant D'Andrea appeals to this court from the commissioners' award. The matter was tried without a jury. Counsel have stipulated the value of the real estate, leaving for determination the question of compensation for the personal property in the restaurant.
D'Andrea contends she is entitled to just compensation and that under the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 (hereinafter new act), this must be the value of the real estate as it is enhanced by the restaurant equipment and fixtures which include a neon sign, counters, stools, cash register, glass display case, work bench with dishwasher and sink, refrigerator, exhaust fan, broiler and grill, steam table, toaster, three-ton air conditioner, slicing machine, freezer, tables and chairs, plates, knives and forks. Many of these items are installed by electricity and plumbing connection.
"Property" is defined in the new act as follows:
(d) Property means land, or any interest in land, and (1) any building, structure or other improvement imbedded or affixed to land, and any article so affixed or attached to such building, structure or improvement as to be an essential and integral part thereof, (2) any article affixed or attached to such property in such manner that it cannot be removed without material injury to itself or to the property, (3) any article so designed, constructed, or specially adapted to the purpose for which such property is used that (a) it is an essential accessory or part of such property; (b) it is not capable of use elsewhere; and (c) would lose substantially all its value if removed from such property" [ N.J.S.A. 20:3-3(d)]
D'Andrea maintains that the restaurant equipment would lose substantially all of its value if severed from the building. She relies on State v. Gallant, 42 N.J. 583 (1964), holding essentially that where there is a substantial difference between the value of a building with such articles and without same, compensation should reflect the enhanced value. This is generally referred to as the "functional unit" rule.
Agency argues that the "functional unit" rule, as expressed in Gallant, was not adopted by the Legislature when it enacted the new act and urges the court to evaluate the restaurant equipment articles as severed from the functioning restaurant on the grounds that they do not meet the criteria of "property" under the new act (20:3-2(d), in that (1) they are not essential accessories; (2) they are capable of ...