CASINO REINVESTMENT DEVELOPMENT AUTHORITY, a public corporate body of the State of New Jersey, Plaintiff-Appellant/Cross-Respondent,
CHARLES BIRNBAUM and LUCINDA BIRNBAUM, Defendants-Respondents/Cross-Appellants, and LOUIS TAYLOR DAVIS, GERALD GITTENS, THE ATLANTIC CITY MUNICIPAL UTILITIES AUTHORITY, THE ATLANTIC CITY SEWERAGE CO., and THE CITY OF ATLANTIC CITY, Defendants.
October 24, 2018
appeal from Superior Court of New Jersey, Law Division,
Atlantic County, Docket No. L-0589-14.
M. Lederman argued the cause for appellant/cross-respondent
(Riker Danzig Scherer Hyland & Perretti LLP, attorneys;
Stuart M. Lederman, of counsel; Rudy S. Randazzo, Kellen
Murphy, and Katherine Nunziata, on the brief).
J. McNamara (Institute for Justice) of the Virginia bar,
admitted pro hac vice, argued the cause for
respondents/cross-appellants (Potter and Dickson, Robert J.
McNamara and Daniel L. Alban (Institute for Justice) of the
Virginia bar, admitted pro hac vice, attorneys; Peter D.
Dickson, on the brief).
M. Gordon, attorney for amicus curiae Fair Share Housing
Miller, attorney for amicus curiae Pacific Legal Foundation.
Judges Koblitz, Ostrer and Currier.
Casino Reinvestment Development Authority (CRDA) appeals from
the August 5, 2016 dismissal of its complaint for
condemnation of a residential property in the city of
Atlantic City owned by defendants Charles and Lucinda
Birnbaum. The CRDA sought to condemn the Birnbaum property in
furtherance of its mandate to promote tourism in Atlantic
City. The property is located in the Atlantic City Tourism
District, within the boundaries of the CRDA's South Inlet
Mixed Use Development Project (Project), where the CRDA
proposes private, economic redevelopment, including the
construction of tourism-focused residential, retail, and
time of the decision under review, the CRDA had no specific
redevelopment plans under consideration for the Project; it
had not issued a request for proposals (RFP) to prospective
developers, and no developer had committed to redeveloping
within the Project area. Nevertheless, the CRDA maintains it
had a right to "bank" the Birnbaum property for
redevelopment at some unspecified time in the future.
Atlantic County Assignment Judge Julio Mendez dismissed the
condemnation complaint as a manifest abuse of power because
the CRDA did not provide reasonable assurances that the
proposed redevelopment would come to fruition in the
foreseeable future. The CRDA appeals from that judgment. We
Birnbaums cross-appeal from an earlier, November 17, 2014
determination that the condemnation was for a sufficiently
specific public use and the Birnbaum property was reasonably
included in the Project area. At that time the judge also
held that the CRDA was taking the property to promote tourism
and therefore was not required to comply with the Blighted
Areas Clause of the New Jersey Constitution, N.J. Const. art.
VIII, § 3, ¶ 1. But, Judge Mendez found, in any
event, the taking did comply with those requirements. We need
not reach the cross-appeal.
1976, a constitutional amendment authorized casino gambling
in Atlantic City. N.J. Const. art. IV, § 7, ¶ 2(D).
Eight years later, the Legislature created the CRDA, in, but
not of, the Department of the Treasury. N.J.S.A. 5:12-153.
See In re Plan for Abolition of Council on Affordable
Hous., 214 N.J. 444, 448 (2013) (explaining significance
of "in, but not of" designation). The statutory
purposes of the agency are set forth at N.J.S.A. 5:12-160,
and include "directly facilitat[ing] the redevelopment
of existing blighted areas," N.J.S.A. 5:12-160(a), and
"encourag[ing] investment in, or financing of, projects
which are made as part of a comprehensive plan to improve
blighted or redevelopment areas . . . ." N.J.S.A.
Jersey courts have recognized that "[t]he general
purpose of the [CRDA] is to manage the proceeds received
under N.J.S.A. 5:12-144.1 and 5:12-162 and to direct the
rehabilitation of blighted areas of Atlantic City."
In re Casino Licensee, 224 N.J.Super. 316, 323 (App.
Div. 1988) (citing N.J.S.A. 5:12-160 and 5:12-161); see
also Barbara Nash Westcott, Note, Dealing a Fair
Hand to Atlantic City Property Owners, 31 Rutgers
L.J. 913, 921-23 (Spring2000) (describing CRDA's
funding sources). The CRDA is a "financing and
investment agency" that facilitates redevelopment
projects, but does not act as a developer or operator.
CRDA v. City of Atl. City, 18 N.J. Tax 463, 476-77
forth in N.J.S.A. 5:12-160, the purposes of the CRDA include:
k. to encourage investment in, or financing of, projects
which are made as part of a comprehensive plan to improve
blighted or redevelopment areas or are targeted to
benefit low through middle income residents of the
jurisdiction or region in which the investments are to be
made . . . .
CRDA was granted the power "[t]o exercise the right of
eminent domain" in Atlantic City. N.J.S.A. 5:12-161(p).
N.J.S.A. 5:12-182 states in pertinent part:
a. The Legislature finds and declares that the achievement of
the beneficial purposes of this 1984 amendatory and
supplementary act requires the granting to the [CRDA] of the
right of condemnation and the exercise by it of the right of
eminent domain in the city of Atlantic City because special
problems may arise or exist in that city concerning the
necessity for the acquisition of the property for projects
for the public good under this 1984 amendatory and
supplementary act, including inflated land values resulting
from speculation and intentional obstruction of a landowner
or speculator to the acquisition of needed property in order
to exact an unreasonable and prohibitive purchase price.
b. In the event the [CRDA] finds it is necessary to
complete a project in the city of Atlantic City, the
authority may acquire any real property in the city, whether
a fee simple absolute or lesser interest and whether for
immediate use, that the authority may find and determine is
required for public use, and upon such a determination,
the property shall be deemed to be required for a public use
until otherwise determined by the authority; and with the
exceptions hereinafter specifically noted, the determination
shall not be affected by the fact that such property has
theretofore been taken for, or is then devoted to, a public
use, but the public use in the hands or under the control of
the authority shall be deemed superior to the public use in
the hands or under the control of any other person,
association or corporation.
c. If the [CRDA] is unable to agree with the owner or owners
thereof upon terms for the acquisition of any such real
property in the city for any reason whatsoever, then the
authority may acquire, and is hereby authorized to acquire,
after consultation with the appropriate agency of the city by
way of notification 30 days prior to the filing of
condemnation proceedings, such property, whether a fee simple
absolute or lesser interest, by condemnation or the
exercise of the right of eminent domain pursuant to the
provisions of the "Eminent Domain Act of 1971," . .
. and the "Relocation Assistance Act," . . . .
same time, under N.J.S.A. 5:12-220(f), Atlantic City was
prohibited from "designat[ing] the tourism district or
any portion thereof as an area in need of redevelopment or an
area in need of rehabilitation, or adopt[ing] a redevelopment
plan for any property within the tourism district pursuant to
the 'Local Redevelopment and Housing Law' . . .
(N.J.S.A. 40A:12A-1 to -73 [LRHL]) without the consent of the
2001 CRDA Urban Revitalization Act, N.J.S.A. 5:12-173.9 to -
173.20, established an "incentive program,"
administered by the CRDA, "to facilitate the development
of entertainment-retail districts for the city of Atlantic
City . . . ." N.J.S.A. 5:12-173.12(a). Ten years later,
the Legislature adopted the Atlantic City Tourism District
Act (Tourism Act), N.J.S.A. 5:12-218 to -233, which gave the
CRDA power "to establish and exercise authority over the
Atlantic City Tourism District. . . ." N.J.S.A.
5:12-160(m) and 5:12-161(q). The CRDA also was required to
develop a Tourism District Master Plan.
Relevant CRDA Resolutions
2011, pursuant to the Tourism Act of the same year, the CRDA
created the Tourism District in Atlantic City. Thereafter, in
February 2012, by Resolutions 12-14 and 12-23, the CRDA
adopted a Tourism District Master Plan, which called for
redevelopment of several areas of the city, including the
2012, the CRDA issued Resolution 12-68, which preliminarily
determined that the Project was of the type and character
eligible for approval under N.J.S.A. 5:12-173,  and authorized
further action including holding a public hearing. The CRDA
described the Project as being "constructed in phases
that complement the new Revel Casino and assist with the
demands created by the resort."
CRDA also stated that "[p]rior to implementation of the
project," certain privately owned properties would have
to be acquired, and addressed funding for the Project,
Prior to implementation of the project, land acquisition of
sixty two (62) low rise units, and certain privately owned
adjoining parcels including vacant and improved properties on
Blocks 68, 70, and 72, acquisition of certain properties
within Blocks 128 through 131, relocation, demolition and
site remediation must take place. The estimated real estate
costs . . . are . . . up to $25 million. . . . Upon
completion of acquisition and relocation, the CRDA staff will
work with potential partners to develop the land for
restaurant, residential and retail use. The source of funds
will be the CRDA's Tourism District and ...