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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. ...