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City of South Amboy v. Great Lakes Dredge & Dock Co.

July 17, 2007

CITY OF SOUTH AMBOY, PLAINTIFF-RESPONDENT,
v.
GREAT LAKES DREDGE & DOCK COMPANY, AND RALPH CLAYTON & SONS MATERIALS, LP, T/A AMBOY AGGREGATES JOINT VENTURE, DEFENDANTS-APPELLANTS, AND BANK OF AMERICA CORPORATION; UNITED STATES OF AMERICA; AND STATE OF NEW JERSEY, DEFENDANTS.
CITY OF SOUTH AMBOY, PLAINTIFF-RESPONDENT,
v.
LOWER MAIN STREET DEVELOPMENT, LLC, AND AMBOY AGGREGATES JOINT VENTURE, DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket Nos. L-2288-05 and L-2424-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 1, 2007

Before Judges Coburn, Axelrad and Gilroy.

This is a consolidated condemnation action in which plaintiff, the City of South Amboy (the City), seeks to acquire real property interests for the purpose of building an access road, a breakwater, and a commuter parking lot, as part of a federally-funded project for a Regional Intermodal Transportation Initiative. The condemned parcels lie within a larger tract that the City seeks to acquire in order to implement a redevelopment plan that, if successful, would create office space, retail uses, a marina, and housing, in addition to the regional transportation center. Defendant Lower Main Street Development, LLC (Lower Main), and defendant Amboy Aggregates Joint Venture (Amboy Aggregates) (collectively, the defendants), related companies that mine and process sand, gravel, and other construction materials along the City's waterfront, appeal from the September 9, 2005 judgment, appointing Commissioners and denying their motion to dismiss the two complaints.*fn1

We affirm in part; reverse in part; and remand the matter to the trial court for further proceedings consistent with this opinion.

Lower Main is a limited liability company whose members are a subsidiary of defendant Great Lakes Dredge & Dock Company and an entity owned and controlled by the Clayton family. Amboy Aggregates is a joint venture, comprised of defendant Great Lakes Dredge & Dock Company and defendant Ralph Clayton & Sons Materials, an entity also owned and controlled by the Clayton family. Amboy Aggregates owns approximately thirty acres of uplands, Block 162, Lot 6.02, consisting of approximately 5.566 acres; and Block 161, Lot 25, consisting of approximately 24.7 acres. Lower Main owns Block 161, Lot 90. This property consists of approximately 22.8 acres of uplands and approximately 10.4 acres of tidelands. Defendants' properties adjoin or are near the Raritan Bay. Amboy Aggregates leases the Lower Main site pursuant to a written lease agreement dated March 1, 2003.

Amboy Aggregates operates a sand and gravel mining operation. Sand is dredged from a shipping channel, known as the Ambrose Channel, transported to the properties, segregated by particle size, sometimes mixed with other natural materials, and then transported off-site by barge or by truck for use in construction and related activities. Defendants' properties are in the City's northern waterfront area, which consists of approximately eighty-four acres, including tidelands. All but twenty acres are owned by defendants; the remaining twenty-acre tract is owned by Consolidated Rail Corporation (Conrail). The northern waterfront area is to be developed for an Intermodal Transportation Center that would involve the construction of a new high-level platform at the New Jersey Transit train station; a new ferry terminal; a bus terminal area, along with improved roads, grade crossings, and a commuter parking area. The State and Federal Governments have allocated approximately $15,000,000 to this project. The ferry terminal would provide high-speed ferry access to and from New York City.

Since 1988, the City has studied whether to declare its waterfront area as in need of development. A 1992 report concluded that the 245-acre waterfront area, comprising approximately 25% of the City's land area, could become a major regional transportation center that would support a variety of industrial, commercial, residential and public uses. Additional redevelopment studies were completed in 1997, 2002, 2003, and most recently, in October 2004.*fn2 In January 2005, the City and its Planning Board approved the redevelopment plan and declared the northern waterfront, including defendants' properties, as in need of redevelopment.

On November 3, 2004, the City adopted ordinances authorizing the condemnation of the properties. The City seeks to acquire 7.276 acres of uplands from Lower Main, as well as such rights and interest that Lower Main may possess in the 10.404 acres of tidelands. In addition, the City seeks to obtain a temporary construction easement over a portion of the property. The City's appraiser valued the uplands portion of the Lower Main property at $615,500, but he did not ascribe any value to the tidelands because "title to all the underwater tidelands area is held by the State of New Jersey." Following the offer to purchase, Lower Main and the City exchanged correspondence concerning why the City's appraiser had not placed a value on the tidelands acquisition.

On March 29, 2005, the City filed its complaint, seeking to acquire approximately one-third of an acre owned by Amboy Aggregates. On May 24, 2005, judgment by default was entered appointing condemnation commissioners. On April 1, 2005, the City filed a second complaint, seeking to acquire the aforesaid interests in Lower Main's property. On June 1, 2005, the City filed a declaration of taking in the latter action.

On June 3, 2005, defendants filed a motion to vacate the default judgment in the Amboy Aggregates' action, a motion to consolidate the two actions, and a motion to dismiss both complaints. On August 19, 2005, the motion judge issued a written decision granting the motion to vacate and the motion to consolidate, but denying the motion to dismiss the complaints. Judgment appointing commissioners was entered on September 9, 2005.

On appeal, Lower Main argues under Points II and III that the complaint should be dismissed because: a) the proceeding was instituted in bad faith, as it was brought for the purpose of advancing the interest of a private developer, rather than for a "public purpose"; b) the condemnation proceeding is barred by the doctrine of prior public use, as defendant's sand mining operation is serving a public purpose by deepening the shipping channel adjacent to the property; and c) the City failed to engage in bona fide negotiations prior to filing the complaint. Lower Main also argues under Points I and IV that the judgment should be vacated, or the action stayed, pending the trial court resolving the preliminary issues of: a) whether the properties have unity of ownership and unity of use; and b) whether Lower Main has a compensable interest in the tidelands.

We have carefully considered defendants' arguments in light of the applicable law and briefs. As to the arguments presented under Point II and III we are not persuaded by any of them and affirm substantially for the reasons articulated by the motion judge in his written ...


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