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Dutch Neck Land Company, LLC v. City of Newark

May 14, 2008

DUTCH NECK LAND COMPANY, LLC, AND COLUMBIA CONTAINER SERVICES, LLC, PLAINTIFFS-APPELLANTS,
v.
CITY OF NEWARK; MUNICIPAL COUNCIL OF THE CITY OF NEWARK; THE CENTRAL PLANNING BOARD OF THE CITY OF NEWARK; AND MORRIS DOREMUS AVENUE ASSOCIATES, LLC, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-8232-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 28, 2008

Before Judges Lintner, Sabatino and Alvarez.

Plaintiffs, Dutch Neck Land Company, LLC ("Dutch Neck") and Columbia Container Services, LLC ("Columbia Container"), are the respective owner and lessee of nearly seven acres of commercial property in the City of Newark ("the City"). Plaintiffs filed this action in lieu of prerogative writs, upon learning that the City had adopted an ordinance in December 2005 amending its 1964 Redevelopment Plan so as to slate plaintiffs' property for acquisition. Before discovery, the Law Division dismissed plaintiffs' action with prejudice, and plaintiffs thereafter appealed.

We vacate the dismissal order and reinstate this case in the Law Division for reconsideration in light of supervening case law. Such a remand will also enable the parties and the trial court to explore, this time with the benefit of discovery, various claimed irregularities, documentation gaps, and other issues that fairly implicate the validity of the Plan amendment.

I.

The pertinent history of this matter dates back to at least July 24, 1963, when the City's Municipal Council ("the Council") adopted a resolution*fn1 directing the City's Central Planning Board ("the Planning Board") to investigate whether certain areas in the City qualified as "blighted areas."*fn2 After the Planning Board presumably conducted the requested hearing and made findings of blight and associated recommendations, the Council adopted a corresponding resolution on November 6, 1963.*fn3 That resolution designated as "blighted" an area generally bounded by the Passaic River on the north, Doremus Avenue and Newark Bay on the east, the Lehigh Valley Railroad Line and Port Street on the south, and the Passaic Branch of the New York Bay Railroad on the west.

Seven months later, on June 18, 1964, the Council passed a resolution adopting a redevelopment plan ("the Plan") identified as the "NJR-121 Industrial River Urban Renewal Plan." The Plan was generated in April 1964 by the City's Housing Authority.

The Plan apparently*fn4 was based upon the legal authority of the former statutes that preceded the enactment in 1992 of the Local Redevelopment and Housing Law ("LRHL"), N.J.S.A. 40A:12A-1 to -49.*fn5 The corresponding land maps that the Plan cross-referenced covered a large portion*fn6 of the City's area. Some of the properties within the area had residential uses in 1964, but the majority appear to have been industrial or other commercial uses.

Among other things, the 1964 Plan declared that "[t]he major part of the properties in the project area will be acquired for clearance and redevelopment." However, "[t]he exceptions [to acquisition] are properties whose improvements are substantial and in good condition or conservable and their use[s] compatible with the uses proposed by this Plan as shown [on the accompanying maps]." The Plan contemplated that certain portions of the redevelopment area would be used for public and semi-public purposes, and that the remainder of the area would be zoned for industrial uses. Related commercial uses were also allowed in the industrial areas. The Plan also specified various zoning requirements for building heights, lot coverage, setbacks, off-street parking, off-street loading, landscaping, lighting, storage, density, flood plain control, and easements.

With respect to the determination of blight, the Plan stated:

Certain properties in the project have been preliminarily judged as being subject to upgrading to standard condition through the accomplishment of a backlog of normal maintenance, while certain others have been judged as deteriorated and substandard. Further investigation may bring a decision that rehabilitation action would be more appropriate in certain cases.

The Plan also declared that "[t]he elimination of substandard structures will be accomplished by slum clearance and redevelopment." Additionally, it stated that "[t]he spread of slums and blight will be checked by the renewal of the [p]roject [a]rea and a good industrial area will result from it."

The parcels classified in 1964 as "to be acquired" were identified on a land acquisition map associated with the Plan. The Plan stated that properties in the "not to be acquired" category could be reclassified for acquisition in the future, if their owners did not comply with specified criteria and restrictions. In particular:

If the owners of such "not to be acquired" property are unable or unwilling to comply or conform with the regulations, controls or restrictions applicable to each such parcel, the Housing Authority of [the City], in order to achieve the objectives of [the Plan] reserves the right to acquire any such non-conforming or non-complying "not to be acquired" property. Upon acquisition of such property the Housing Authority . . . may, at its option, clear such property for redevelopment or may dispose of such property without demolition of any existing structures or improvements but expressly subject to the pertinent and appropriate provisions, regulations, controls and restrictions of the Plan.

Reciprocally, the Plan provided that property initially identified as "to be acquired" may be reclassified as "not to be acquired" where either (1) the property owner desired "to clear and redevelop or rehabilitate the property to acceptable condition," or (2) the property is in "standard condition," the use planned for it is "compatible" with the Plan, and the Housing Authority is satisfied that not acquiring the property would be "inducive [sic] to the implementation" of the Plan. An exhibit attached to the Plan set forth minimum rehabilitation standards to guide such rehabilitation work.

The original Plan contained a sunset provision, specifying that "as it may be amended from time to time, [the Plan] shall be in effect for a period of forty (40) years from the date of its approval by the [Council]." Since the Plan was approved by the Council on June 18, 1964, this forty-year period seemingly would have expired on June 18, 2004.*fn7 The record does not indicate whether a forty-year sunset provision was similarly contained in the City's original blight designation for the redevelopment area.

Section F of the 1964 Plan provided that it may be amended periodically, "upon compliance with the requirements of all applicable laws, by the [Council], upon its own initiative or upon the recommendation of the Housing Authority or the . . . Planning Board." Such amendments require the written consent of "the purchaser, or lessee, of any land in the Project Area, previously acquired in accordance with [the Plan], whose interests therein are materially affected by such amendment."*fn8

Pursuant to that provision, the Plan has been periodically amended thirteen times between June 1964 and June 2005. According to a recital in the so-called "[Fourteenth] Amendment" to the Plan that is at the heart of this appeal, each time the Plan was amended, some kind of proceeding took place before the Planning Board, followed by a ratification of the amendment by the Council.*fn9 Plaintiffs allege that the City would routinely give advance written notice of such a proposed amendment, individually, to any owners whose properties were going to be reclassified as property to be acquired.*fn10

One of the large properties within the redevelopment area was a forty-six-acre portion that included a tar manufacturing facility. Between 1988 and 1994, that tar manufacturing facility was demolished. Thereafter, the forty-six acres were divided into three commercial use parcels: a 37.67-acre tract that Columbia Container continues to use as a storage facility, a 6.66-acre tract used by Maher Truck Terminal ("Maher"), and a small 1.66-acre salvage yard used for commercial vehicles.

The specific property at issue in this litigation is the 6.66-acre tract, which is identified on the City's tax maps as Block 5016, Lots 4 and 5. For many years, the property has been used in the transportation business for the operation of what is described in the complaint as an "off dock empty container terminal." As we understand it, the premises store empty containers that are used in shipping through the Port of New York and New Jersey. The terminal is operated by Maher, a marine transportation company. Maher, which is not a party to this litigation, allegedly is a profitable, active enterprise that employs twenty workers at the site.

Although the history of title to the property is not completely provided in the record, it appears that Columbia Container entered into a contract on September 29, 2005 to acquire the property from a entity identified as 295 Doremus Urban Renewal Associates, L.P. ("295 Doremus").*fn11 On February 17, 2006, Columbia Container assigned its purchase rights to Dutch Neck. On that same date, 295 Doremus deeded the property to Dutch ...


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