Argued February 25, 2002 - Decided June 20, 2002 On certification to the Superior Court, Appellate Division, whose opinion is reported at 341 N.J. Super. 580 (2001).
In this appeal, the Court decides whether a municipality's proposed condemnation of private property constituted a valid exercise of its eminent domain power.
Defendant 769 Associates, L.L.C. (769 Associates or defendant) owns property which consists of an office building and a parking lot that services the building. Nordan Realty Corp. (Nordan) owns a tract of land behind defendant's property, on which it intends to construct a housing development. The proposed development, Northfield Village, abuts another proposed housing development to the north, a County park to the east, and an undeveloped tract of land owned by plaintiff Township of West Orange (Township) to the southeast. The Township seeks to take a 30-foot wide strip of land along the western edge of defendant's property--land which is part of defendant's parking lot--to construct a dedicated street that will serve as an access road to Northfield Village.
In March 1986, the West Orange Planning Board passed a resolution granting Nordan preliminary site-plan approval for Northfield Village. However, the intended means of access to Northfield Village by way of an existing gravel road, Cedar Avenue, was opposed by residents of the Township. As a result, the Township commissioned Hamal Associates, Inc. (Hamal) to conduct a traffic study to appraise alternate routes of access to Northfield Village. Hamal suggested two potential alignments for access to Nordan's property--Cedar Avenue and the proposed road across defendant's property. In support of the proposed right-of-way through defendant's property, the Township engineer stated that it is sound engineering practice for two large developments to be linked by an inter-connected road system, and that the proposed road would serve as a secondary means of ingress and egress for the other proposed subdivision and would be critical in an emergency situation.
In 1992, the Township and Nordan executed a Developer's Agreement, pursuant to which Nordan agreed to negotiate with adjoining property owners including 769 Associates to secure property to construct the right-of-way. The Developer's Agreement also provided that if Nordan's negotiations were successful, the cost for the land and to make the wider right-of-way would be borne by Nordan. If Nordan could not acquire the necessary property after a reasonable time, the agreement stated that the Township would use its powers of eminent domain to provide the necessary access, and Nordan would reimburse the Township for all costs and fees it incurred in the condemnation proceedings, including the price of the property taken.
By 1997, Nordan had acquired the necessary property from all of the adjoining property holders except defendant. As such, the Developer's Agreement obligated the Township to commence condemnation proceedings. The Township Counsel adopted an ordinance that authorized the Township to exercise its power of eminent domain to acquire the 30-foot strip of land on defendant's property. The ordinance stated that the proposed taking would not only serve the public's interest in securing access to Northfield Village but would also provide access to other properties and proposed developments in the immediate vicinity. The Township then filed a condemnation complaint in the Superior Court. 769 Associates contested the action, asserting that there was no valid public use for the taking and that the condemnation proceeding was intended to benefit solely Nordan's private interest. The trial court denied defendant's challenge to the Township's right to condemn the property by eminent domain and entered a final judgment in favor of the Township.
The Appellate Division reversed, concluding that the Township's proposed taking sought to advance only Nordan's private interests and thus was not for a public use. Township of West Orange v. 769 Assocs., L.L.C., 341 N.J. Super. 580, 594 (App. Div. 2001).
HELD: The Township may condemn 769 Associates' property for use as a public road. The proposed road will serve an important public purpose by improving road travel within the Township.
1. Eminent domain is the power of the State to take private property for public use. It is well established that a reviewing court will not upset a municipality's decision to use its eminent domain power in the absence of an affirmative showing of fraud, bad faith or manifest abuse. The State's power of eminent domain is subject, however, to several important constitutional limits: the property acquired must be taken for a public use, the State must pay just compensation in exchange for the property, and no person shall be deprived of his or her property without due process of law. In this appeal, only the public-use requirement is implicated. (Pp. 8-9).
2. New Jersey courts traditionally have granted wide latitude to condemning authorities in determining what property may be condemned for public use, reasoning that it is the province of the Legislature to shape the contours of the public-use requirement. Nevertheless, the question of what constitutes public use has generated discussion in the caselaw. New Jersey's courts have applied a flexible, deferential standard to determine what constitutes a public use. That view considers a public use as anything that tends to enlarge resources, increase the industrial energies, and manifestly contributes to the general welfare and prosperity of the whole community. It is not essential that the entire community or even any considerable portion of the community directly enjoy or participate in the condemned property for the taking to constitute a public use. (Pp. 9-11).
3. Courts have long held that the condemnation of private property for use as a public road fulfills the public- use requirement. Further, courts have approved of agreements between municipalities and third-parties whereby the municipality agrees to acquire private property by eminent domain and the third-party finances the costs of the condemnation. These cases affirm the principle that even though the persons who expect to be benefited agree to defray the whole cost of the work, if the use is public the taking is valid. (Pp. 11 -15).
4. The record in this appeal does not support the Appellate Division's determination that the proposed taking would serve principally Nordan's private interests. Nor has it been demonstrated persuasively that the proposed condemnation constitutes an improper private use or that improper motives or bad faith prompted the Township's exercise of its condemnation power. Although an indiscriminate surrender of the eminent domain power to private parties or private interests would be impermissible, this is not that case. (Pp. 15 to 17).
5. Notwithstanding the dicta in City of Atlantic City v. Cynwyd Investments, 148 N.J. 55 (1998), referring to a "heightened scrutiny" standard of review, the Court has never held that the standard is other than the manifest abuse of discretion test. (Pp. 17-19).
6. Here, the record confirms that the proposed taking of defendant's property for use as a public road constitutes a valid public use and does not constitute a manifest abuse of discretion of the power of eminent domain.
The decision of the Appellate Division is REVERSED and the judgment of the Law Division is REINSTATED.
CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO and LaVECCHIA join in ...