December 10, 2018
appeal from Superior Court of New Jersey, Law Division,
Gloucester County, Docket No. L-0075-18.
William Potter argued the cause for appellants (Potter and
Dickson, attorneys; R. William Potter and Peter Dickson, on
James Maley, Jr., argued the cause for respondent (Maley
Givens, PC, attorneys; M. James Maley, Jr., Erin E. Simone,
and Kevin Diduch, on the brief).
J. McNamara (Institute for Justice) of the Virginia bar,
admitted pro hac vice, argued the cause for amicus curiae
Institute for Justice (McKirdy, Riskin, Olson &
DellaPelle, PC and Robert J. McNamara, attorneys; Anthony F.
DellaPelle and Robert J. McNamara, on the brief).
Judges Sabatino, Haas and Sumners.
accelerated appeal, we must consider the evidentiary
implications of a key provision within the Local
Redevelopment and Housing Law ("LRHL"), N.J.S.A.
40A:12A-1 to -49. The provision in question, N.J.S.A.
40A:12A-8(c), authorizes a municipality or redevelopment
agency to acquire by condemnation lands or buildings which
are "necessary for the redevelopment project."
we must address what showing, if any, of necessity the
municipality or agency must make in order to condemn a parcel
located within the redevelopment zone and take it from its
owners. Existing case law instructs such a taking must at
least have a reasonable basis. The case law does not make
clear, however, whether the condemning authority can simply
proclaim that it needs the parcel for redevelopment, or
whether the condemnor must do more if the taking is
challenged and present proof of necessity tied to a specific
reasons that follow, we hold that if a landowner within the
redevelopment area contests the necessity of a condemnation
pursuant to N.J.S.A. 40A:12A-8(c), the statute logically
requires the condemning authority to articulate a definitive
need to acquire the parcel for an identified redevelopment
project. That articulated need must be more specific than the
mere "stockpiling" of real estate that might,
hypothetically, be useful for a redevelopment project in the
future. In addition, the condemning authority in such a
contested case must present to the court at least some
evidence - consisting of facts, expert opinion, or both -
that provides reasonable substantiation of the need. To hold
otherwise and allow the condemning authority merely to
proclaim a need, without having any obligation to
substantiate its existence, would improperly read the term
"necessary" out of the Legislature's enactment.
light of our legal conclusion, we reverse the trial
court's decision allowing the Borough of Glassboro to
acquire defendants' property because the Borough
presented no evidence substantiating that the property is
necessary for the purpose of future public parking, a need
that was asserted in conclusory fashion in the Borough's
verified complaint. Consequently, we revoke the Borough's
declaration of taking and vacate the trial court's
appointment of condemnation commissioners to value the
property. Our ruling is without prejudice to the Borough
pursuing a new complaint with appropriate evidential support.
reject defendants' other arguments for reversal,
including their claims that the Borough has acted in bad
faith and thereby forfeited its power to condemn, and that
the Borough is estopped from arguing that it needs or will
need the subject property for public parking due to an
unpublished opinion in an unrelated zoning case.
subject property is a mostly vacant lot consisting of .91
acres, designated on the municipal tax map as Block 29, Lot
17, and also known as 24-26 North Academy Street in the
Borough of Glassboro. A small "derelict structure"
is on the property. According to the Borough's brief, the
property is about a block away from an ongoing redevelopment
activity in Glassboro that contemplates 190, 600 square feet
of retail space, 81, 000 square feet of classroom space, 1,
870 student-housing beds, 109 apartments, and a 1.75-acre
park. The overall cost of the redevelopment is estimated at
title documents in the appendix reflect the property is
currently owned by defendants Jack Grossman and Matthew
Roche. Grossman and Roche acquired the property in October
2002. A sale contract, recorded September 27, 2016, reflects
that codefendant Dan DeSilvio has entered into an agreement
with Roche and Grossman to purchase the property from them
for $125, 000. The purchase price is payable with $25, 000
down and a $100, 000 balance to be paid in installments
through August 2020.
to DeSilvio's certifications, he and his wife, both of
whom are graduates of Rowan University in Glassboro, hope to
develop the lot and other nearby parcels they have acquired.
In particular, the DeSilvios plan to "erect mixed
residential, commercial, [and] retail [buildings] to service
the growing needs of nearby Rowan University for student
housing and to provide economic stimulus to the downtown . .
. [through] . . . an infusion of 'walkable' urban
defendants acknowledge, their property is located within a
redevelopment area, pursuant to a redevelopment designation
adopted by the Borough in a May 2000 ordinance. Under the
LRHL, a municipality is authorized to designate a
"redevelopment area," also referred to as an
"area in need of redevelopment," if the area meets
certain conditions and certain procedures are followed.
N.J.S.A. 40A:12A-5 and -6.
area is designated a "redevelopment area," a
municipality must adopt a "redevelopment plan"
before going forward. N.J.S.A. 40A:12A-7. A
"redevelopment plan" is defined in the LRHL as:
[A] plan adopted by the governing body of a municipality for
the redevelopment or rehabilitation of all or any part of a
redevelopment area, or an area in need of redevelopment,
which plan shall be sufficiently complete to
indicate its relationship to definite municipal
objectives as to appropriate land uses, public
transportation and utilities, recreational and municipal
facilities, and other public improvements; and to
indicate proposed land uses and building requirements in the
redevelopment area or area in need of rehabilitation, or
[N.J.S.A. 40A:12A-3 (emphasis added).]
noted at the outset of this opinion, once a redevelopment
plan is adopted, the municipality is empowered, among other
Acquire, by condemnation, any land or building which is
necessary for the redevelopment project, pursuant to
. . . the "Eminent Domain Act of 1971," [N.J.S.A.
20:3-1 to -50], provided that the land or building is located
within (1) an area that was determined to be in need of
redevelopment prior to the effective date of P.L.
2013, c. 159, or (2) a Condemnation Redevelopment
[N.J.S.A. 40A:12A-8(c) (emphasis added).]
"redevelopment project" is broadly defined under
the LRHL as:
[A]ny work or undertaking pursuant to a redevelopment plan;
such undertaking may include any buildings, land, including
demolition, clearance or removal of buildings from land,
equipment, facilities, or other real or personal properties
which are necessary, convenient, or desirable
appurtenances, such as but not limited to streets, sewers,
utilities, parks, site preparation, landscaping, and
administrative, community, health, recreational, educational,
and welfare facilities."
[N.J.S.A. 40A:12A-3 (emphasis added).]
the Borough established a redevelopment area by ordinance
over eighteen years ago. The redevelopment ordinance has been
amended in major respects three times. In each instance,
Block 29, where defendants' lot is located, has been
included within the redevelopment area. The first amendment
to the plan was adopted by ordinance on December 9, 2003. The
second amendment was adopted by ordinance on February 22,
2005. The third amendment was adopted by ordinance on
December 27, 2007.
significant aspect of the third amendment is that it creates
two separate zoning districts: the Arts District and a
separate Entertainment District. Residential uses are allowed
in the Arts District. However, the Entertainment District,
which includes the subject property, does not allow
residential uses. If the subject property is not taken from
them by the Borough, the DeSilvios apparently expect to apply
for use variances that would enable them to include
residential units within their anticipated mixed-use
the Borough decided to acquire defendants' property.
Toward that end, the Borough hired an appraiser who performed
an inspection of the property on May 23, 2017. The appraiser
was there a week early, as the notice provided to defendants
had stated that the inspection would take place on May 30.
After this scheduling glitch was discovered, the appraiser
met with defendant DeSilvio and his wife at the property on
May 30 and had further discussions.
Borough's appraiser issued a report, which he completed
on August 8, 2017. Using a "Sales Comparison
Approach" method, the appraiser valued the property at
$125, 000, which is the same price that DeSilvio is paying
Grossman and Roche pursuant to the September 2016 installment
contract. However, DeSilvio contends that the $125, 000 price
he is paying is a distressed-sale figure. He maintains the
parcel is worth far more, apparently because of the
property's development potential.
the appraisal, the Borough offered defendants $125, 000 for
the property. Defendants did not make any counteroffer before
the present ...