October 10, 2008
LAND PLUS, L.L.C., PETER A. TUCCI, SR., INDIVIDUALLY AND PETER A. TUCCI, SR., TRADING AS PAN ASSOCIATED, PLAINTIFFS-RESPONDENTS,
MAYOR AND COUNCIL OF THE CITY OF HACKENSACK, DEFENDANT-RESPONDENT, AND PLANNING BOARD OF THE CITY OF HACKENSACK, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-8029-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 16, 2008
Before Judges Skillman, Collester and Grall.
This is an appeal from a final judgment of the Law Division, which vacated the part of a resolution of the defendant Mayor and Council of the City of Hackensack that included five lots owned by plaintiffs in an area declared in need of redevelopment pursuant to the Local Redevelopment and Housing Laws (LRHL), N.J.S.A. 40A:12A-1 to-73.
In October 2005, the Mayor and Council adopted a resolution that authorized the defendant Planning Board of the City of Hackensack to conduct a preliminary study of an area of land south of Moonachie Road and bordered by Hudson Street to the west, South River Street to the east, and the border of Little Ferry to the south, to determine whether it should be designated as in need of redevelopment. The Board retained a professional planner to conduct the study. The planner recommended that portions of the study area be designated as an area in need of redevelopment.
The Board held hearings on this recommendation at which testimony was presented by the Board's planner and other witnesses, including plaintiff Peter A. Tucci, Sr. and another planner retained by plaintiffs. Based on the report of the Board's planner and the evidence presented at the hearing, the Board adopted a resolution designating twenty-eight of the thirty-nine lots in the study area as in need of redevelopment under the criteria set forth in N.J.S.A. 40A:12A-5(d) and/or (e). Five of those lots, which are contiguous to each other and compose more than half the redevelopment area, are owned by plaintiffs. The resolution also identified four other lots, two of which are owned by plaintiffs, that do not qualify as in need of redevelopment under the criteria set forth in either N.J.S.A. 40A:12A-5(d) or (e) but may be needed in the future for the effective redevelopment of the area.*fn1
On October 3, 2006, the Mayor and Council adopted a resolution that accepted the Board's findings and designated the lots delineated in the Board's resolution as in need of redevelopment.
Plaintiffs brought this action in lieu of prerogative writs challenging the inclusion of five of their lots in the redevelopment area. During the pendency of this action, the Supreme Court decided Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007), which held that to preserve the constitutionality of N.J.S.A. 40A:12-5(e), this subsection of the LRHL must be interpreted to apply "only to areas that, as a whole, are stagnant and unproductive because of issues of title, diversity of ownership, or other similar conditions." Id. at 348. The trial court concluded in a written opinion that, under Gallenthin, plaintiffs' lots had been improperly included in the area designated as in need of redevelopment. The Board filed a motion for reconsideration, which the court denied. Accordingly, the court entered final judgment vacating the designation of those lots as in need of redevelopment.
The Board appeals from the judgment.*fn2
N.J.S.A. 40A:12A-5(e) was the sole authority cited by the Planning Board for the inclusion of four of plaintiffs' lots in the area in need of redevelopment-lots 1.01, 1.03, 1.04 and 3 in block 2.01. This subsection of the LRHL authorizes the classification of land as "in need of redevelopment" and thus subject to the State's eminent domain power if a municipality finds:
A growing lack or total lack of proper utilization of areas caused by the condition of the title, diverse ownership of the real property therein or other conditions, resulting in a stagnant or not fully productive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare.
In Gallenthin the Court concluded that an "interpretation of N.J.S.A. 40A:12A-5(e), which would equate'blighted areas' to areas that are not operated in an optimal manner, cannot be reconciled with [Article VIII section 3, Paragraph 1] of the New Jersey Constitution." 191 N.J. at 365. Therefore, to give effect to the Legislature's apparent intent in enacting N.J.S.A. 40A:12A-5(e) and to preserve its constitutionality, the Court interpreted this subsection "to apply only to property that has become stagnant because of issues of title, diversity of ownership, or other similar conditions." Id. at 370.
The Board did not identify any "issues of title, diversity of ownership, or other similar conditions" that could justify inclusion in the redevelopment area of the four lots owned by plaintiffs that were included solely under the authority of N.J.S.A. 40A:12A-5(e). The Board only found that those lots had been "vacant" for a substantial period of time and therefore "show strong evidence of a total lack of proper utilization." As interpreted in Gallenthin, N.J.S.A. 40A:12A-5(e) does not authorize the inclusion of a property in an area in need of redevelopment simply because it is not utilized in an optimal manner. Therefore, the trial court correctly concluded that the inclusion of those four lots in the redevelopment area was not authorized by the LRHL and must be set aside.
The Board cited both N.J.S.A. 40A:12A-5(e) and N.J.S.A. 40A:12A-5(d) as authority for the inclusion of the fifth of plaintiffs' lots in the redevelopment area-the eastern portion of lot 5.06 in block 2.01. The sole ground for the inclusion of this lot in the redevelopment area under N.J.S.A. 40A:12A-5(e) was "lack of proper utilization." Therefore, the designation of this lot under N.J.S.A. 40A:12A-5(e) was invalid for the same reasons as the inclusion in the redevelopment area of plaintiffs' other four lots.
The question is whether the inclusion of the eastern portion of lot 5.06 in the redevelopment area should be sustained because the Board also found it to meet the criteria set forth in N.J.S.A. 40A:12A-5(d). This subsection authorizes the classification of land as in need of redevelopment if a municipality finds:
Areas with buildings or improvements which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light and sanitary facilities, excessive land coverage, deleterious land use or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community.
In concluding that the designation of the eastern portion of lot 5.06 was justified under N.J.S.A. 40A:12A-5(d), the Board stated:
[This area] is used mainly for storage of truck, trailers and construction equipment, contains an obsolete design and layout. There is no demarked parking or circulation. In addition, this portion presents a poor aesthetic environment and has a chain link fence which is in disrepair.
However, for a municipality to designate land as in need of redevelopment under N.J.S.A. 40A:12A-5(d), it not only has to find a "deleterious land use or obsolete layout" or one or more of the other conditions described in the first part of this subsection, but also that the condition or conditions are "detrimental to safety, health, morals or welfare of the community." The Board made no such finding regarding the "obsolete design and layout," "poor aesthetic environment," or "chain link fence... in disrepair" that it found in the eastern portion of lot 5.06. Therefore, the trial court correctly concluded that the designation of this lot as in need of redevelopment under N.J.S.A. 40A:12A-5(d) was not justifiable.
We also note that the eastern portion of lot 5.06 is mostly vacant. Moreover, the "poor aesthetic environment" is primarily the result of conditions that are temporary in nature and could be easily corrected, such as the presence of trailers, a piece of heavy equipment and piles of dirt. Most significantly, Hackensack could easily correct those conditions itself because Hackensack is in possession of the eastern portion of lot 5.06 and is responsible for the presence of the trailers, heavy equipment and dirt that its expert relied upon in concluding that the lot was suitable for designation as in need of redevelopment under N.J.S.A. 40A:12A-12(d).