Information about http://www.njeminentdomain.com/ERECTCa2035-04.pdf
NOT FOR PUBLICATION WITHOUT THE …
Tags: city of perth, city of perth amboy, final judgment, firm attorneys, galvin, grall, greenberg, jury trial, limited liability company, lite depalma, middlesex county, plaintiff, planning board, prerogative writs, respondent, rivas, state of new jersey, superior court of new jersey, superior court of new jersey appellate division, szetela,Pages: 21
Language: english
Created: Wed Nov 9 17:55:31 2005
Display cached document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2035-04T2
ERETC, L.L.C., a Limited
Liability Company of the
State of New Jersey, APPROVED FOR PUBLICATION
November 15, 2005
Plaintiff-Appellant,
APPELLATE DIVISION
v.
CITY OF PERTH AMBOY, a
Municipal Corporation of the
State of New Jersey, MUNICIPAL
COUNCIL OF THE CITY OF PERTH
AMBOY, and PLANNING BOARD OF
THE CITY OF PERTH AMBOY,
Defendants-Respondents.
_______________________________________________________________
Argued September 14, 2005 Decided November 15, 2005
Before Judges Fall, Parker and Grall.
On appeal from Superior Court of New Jersey,
Law Division, Middlesex County, Docket No.
L-10151-01.
Dennis M. Galvin argued the cause for
appellant (The Galvin Law Firm, attorneys;
Erin E. Kurowicki and Mr. Galvin, on the
brief).
Victor A. Afanador argued the cause for
respondents City of Perth Amboy and the
Municipal Council of the City of Perth Amboy
(Lite, DePalma, Greenberg & Rivas,
attorneys; Mr. Afanador, on the brief).
George S. Szetela argued the cause for
respondent Planning Board of the City of
Perth Amboy.
The opinion of the court was delivered by
PARKER, J.A.D.
In this action in lieu of prerogative writs, plaintiff
ERETC, L.L.C. (ERETC) appeals from a final judgment, entered in
the Law Division after a non-jury trial, dismissing the
complaint challenging the inclusion of plaintiff's property in
an area designated as one in need of redevelopment pursuant to
the Local Redevelopment and Housing Law (LRHL), N.J.S.A.
40A:12A-1 to -73, by defendants, City of Perth Amboy (City), the
Municipal Council of the City of Perth Amboy (Council) and the
Planning Board of the City of Perth Amboy (Planning Board). The
following procedural and factual history is relevant to our
consideration of the issues presented on appeal.
On April 25, 2001, the Council adopted a resolution
directing the Planning Board to conduct a preliminary
investigation of underutilized areas in designated sections of
the city to determine whether those areas were in need of
redevelopment pursuant to N.J.S.A. 40A:12A-6.1 The Council
1
N.J.S.A. 40A:12A-6 requires a municipality to undertake
investigation before designating redevelopment areas.
2 A-2035-04T2
further authorized the Planning Board to prepare a redevelopment
plan for those designated areas.
Plaintiff, ERETC, owns a light manufacturing building
located on Sayre Avenue in designated Area 1-7 of the proposed
redevelopment area. ERETC uses part of the building for its own
business and rents the remainder to commercial tenants. The
building is in good condition and is 65 to 75% occupied.
Approximately 345 people are employed in the building, 75 to 80%
of whom live within a five to eight mile radius. Leon Zelcer, a
principal of ERETC, was present for and participated in the
Planning Board's proceedings on the redevelopment area.
The Planning Board commissioned Helga Crowley, the
Executive Director of the Perth Amboy Redevelopment Agency
(PARA), to publish notice for a public hearing regarding the
proposed redevelopment areas 1, 2 and 3. On June 7, 2001,
Crowley faxed a legal notice for the Planning Board's June 25,
2001 hearing to the Home News Tribune newspaper, which
circulates in the City and throughout Middlesex County, and the
notice was published on June 9, and June 16, 2001. Legal notice
was provided to all owners of property within the proposed
redevelopment areas via certified mail. Zelcer acknowledged
receiving a copy of the notice in the mail before June 15.
3 A-2035-04T2
The Planning Board designated Michael T. Carr, the City's
Planner, to study the proposed areas. On June 15, 2001, Carr
submitted a preliminary statement which purportedly provided an
initial analysis of whether the statutory criteria of N.J.S.A
40A:12A-5 justified redevelopment in those areas. The statement
was intended to assist the public in participating in the
hearing process.
In his preliminary report, Carr reevaluated the City's
Focus 2000 Redevelopment Plan and noted that "[t]he City is
specifically considering the inclusion of properties which are
immediately north to the existing Area 1." The proposed
expansion of the designated area included plaintiff's property.
Carr stated the purpose of the investigation:
The City of Perth Amboy is 94% developed, as
based upon the 1990 Master Plan. However,
over the past two decades the City's former
industrial base has diminished, leaving
abandoned, environmentally impaired and/or
underutilized properties behind. Therefore,
the only significant opportunity for
revitalization of the City is through the
redevelopment of underutilized land mass.
The challenge of the City of Perth Amboy is
to provide incentive to property owners to
bring these sites to market. The resulting
benefits of the City's redevelopment
initiatives will include optimal use of
available lands, the removal of blight from
the City's landscape, and the creation of
new jobs and new tax ratables.
4 A-2035-04T2
Carr's preliminary report included maps and a brief
description of the proposed areas. The report recited the
statutory criteria for establishing redevelopment areas and a
"Preliminary Application of Criteria to Proposed Areas." With
respect to Proposed Area 1-7, Carr stated:
[D]ue to the land and nature of development,
there has been an excessive amount of land
coverage and deleterious land use, with
insufficient layout. Also, the area
consists of a diverse ownership of real
property which will create a growing lack of
property utilization and not a fully
productive condition of land potentially
useful and valuable for contributing to
serving the public health, safety and
welfare.
Therefore, criteria D & E [of N.J.S.A.
40A:12A-5] apply to this area.
On June 25, 2001, ten days after Carr submitted the
preliminary report, the Planning Board conducted a public
hearing on the areas proposed for redevelopment. The stated
purpose of the meeting was "to listen to any comments and
suggestions that may be put forward" regarding potential
redevelopment and for the Board to "hold [a] public hearing and
make recommendations to the City Council." At the meeting, the
Planning Board addressed the expansion of the redevelopment
area.
Zelcer participated in the meeting, asking questions and
exchanging views with Planning Board members. Leah Healey,
5 A-2035-04T2
attorney for the Redevelopment Agency, responded to Zelcer's
question as to how the redevelopment plan would effect the ERETC
property by stating that the City would undertake a two-step
process:
First we must investigate the area and
that's what this Board does. This Board
then makes a recommendation about whether or
not the area meets the criteria to the City
Council. It is that body that will then
determine ultimately what areas are adopted
as redevelopment areas. And once that step
is taken and . . . concurrently with this
step, then, which is some comment that the
Mayor is eliciting through the audience
members, what redevelopment would enhance
that area, what types of uses should be
encouraged to come to that area and that
ultimately ends up in an actual overall plan
for the redevelopment area.
Based upon citizen input at the June 25, 2001 meeting, the
Planning Board directed Carr to prepare a second and "Final
Statement Setting Forth Basis for Investigation of Proposed
Redevelopment Areas" (Final Statement), dated July 24, 2001.
The final report indicated that all of the proposed areas were
in need of redevelopment except for certain residential
properties in Area 1. Carr evaluated the tax assessor's
records, tax collector's records, building department records,
Division of Engineering files, the Perth Amboy Zoning Ordinance
and Master Plan, site plans, all variances and development
construction applications, investigations and proposals for the
6 A-2035-04T2
City in preparing the Final Statement. The report stated the
following with respect to proposed Area 1-7:
The proposed area consists of a mixed
land use, consisting of residential,
commercial and industrial [property]. The
majority of properties fronting along New
Brunswick Avenue and Convery Boulevard are
commercial, with some residential uses. The
properties along Sayre Avenue are commercial
and industrial use, and the western portion
of Sayre Avenue, is a multi-family
residential use. The western portion of the
project, bounded by McKeon Street, consists
of residential and vacant commercial land.
The southernmost properties, directly
adjacent existing redevelopment Area 1,
satisfy the statutory criteria to be
established as in need for redevelopment.
This area includes property that is
underutilized as a result of zoning
constraints; buildings that are lacking
proper [space] ventilation and have
faulty/obsolete arrangement; and facilities
that operate deleterious land use.
Therefore, this area includes properties
that meet Criteria A (Buildings that are
substandard, unsafe, unsanitary,
dilapidated, or obsolescent [sic] or possess
any of such characteristic, or are so
lacking in light, air, or space, as to be
conducive to unwholesome living or working
conditions), Criteria C (land that is owned
by the municipality), Criteria D (facilities
which by reason of faulty arrangement or
design, lack of ventilation, deleterious
land use, are detrimental to the safety,
health, morals, or welfare of the
community), and Criteria E (property that
has a total lack of proper utilization of
areas resulting in a stagnant or not fully
productive condition of land potentially
useful and valuable for contributing to
7 A-2035-04T2
serving the public health, safety, and
welfare.
Carr concluded that Area 1-7 met the statutory criteria of
N.J.S.A. 40A:12A-5.
No hearings were held after the July 25, 2001 Planning
Board meeting, but on August 1, 2001, the Planning Board voted
to adopt Carr's recommendation in the preliminary and final
reports to redevelop Areas 1, 2 and 3. On September 12, 2001,
the Council adopted a resolution accepting the Planning Board's
recommendation and determining that the areas described in
Carr's Final Statement are in need of redevelopment.
On October 24, 2001, plaintiff filed an action in lieu of
prerogative writs challenging inclusion of the ERETC property in
the proposed Area 1-7. At trial, Zelcer testified that the
ERETC building is 65 to 75% occupied and could be fully occupied
but for the City's requirement that potential tenants sign a
letter acknowledging that they agree to move on demand. Zelcer
testified further that the current tenants have long-term
leases, with six years remaining on the longest lease. Three
hundred and forty-five individuals are employed in plaintiff's
building, 75 to 80% of whom live within a five to eight mile
radius. Zelcer noted that the building houses thriving
businesses and has never been cited for code violations, except
for overgrown weeds. ERETC has invested more than $300,000 to
8 A-2035-04T2
improve the building over the last five years, and one of the
tenants, a manufacturer of hydraulic equipment, spent
approximately $225,000 to install its equipment in the building.
He noted that ERETC provides "a unique structure where small
businesses can find a home . . . in Perth Amboy" and the
building's tenants are among the City's largest employers.
At trial, Eileen Banyra testified on behalf of plaintiff as
an expert in the field of planning. She stated that she was
retained to examine the property and proposed redevelopment plan
and render an opinion as to whether plaintiff's property met the
statutory criteria. Banyra testified that she examined
plaintiff's property and found it to be neat, maintained and
painted. She observed no apparent structural flaws. She also
reviewed Carr's Final Statement, the City's zoning and land
development ordinance, the tax records and a survey of the
property. Based upon her review of the records and the
property, she concluded that Carr's report was inadequate. She
testified:
[I]n order for the governing body or for the
Planning Board to make a finding, there
needs to be substantial evidence. And what
I found in terms of the report was a report
that was inadequate and void of any
information that would lead to the
conclusion that was obtained by the City
which was that the area was in need of
redevelopment.
9 A-2035-04T2
The report contained only cursory
references to conditions. There were a
number of pictures taken of the buildings.
There was no site investigation, there were
no tax records [ ] presented in the report.
There was no quantitative information which
is typical of these reports that was
indicated in the findings of Mr. Carr.
So in terms of my findings, I felt that
[Carr's report] lacked substantial evidence.
It was really a - - it took the
redevelop[ment] law out of context and it
seemed to draw conclusions without
substantiating those conclusions.
As a licensed planner, Banyra explained what she typically did
in preparing a redevelopment report:
I go to the building department, I'll pull
any building department files. We do
sometimes a DEP [Department of Environmental
Protection] search to see if the site is a
brown field, is there anything that we need
to know, is there any toxic information. We
might look at maps called Sanborn Maps. The
Sanborns are historical maps that have been
used for fire [protection], so you could see
what the previous land uses were, so that
you could [see] even if there weren't [sic]
contamination that showed up, you can
sometimes tell from a Sanborn map that they
date back to the early 1900s, what type of
use is on the property and you could say,
you know what, there may be contamination or
at least underground tanks.
We normally contact police, fire, any
kind of unusual reported activity, any fire
calls, tax department. We'll go to the tax
department, get values of property, we'll
get - - is the value of the property
increasing, is it decreasing. You know,
that's standard documentation and our
10 A-2035-04T2
planning reports and pretty much throughout
the state, any of the planner's reports.
Banyra further noted that Carr's report merely recited the
criteria in a conclusory fashion without tying it to the reasons
the properties should be included in the redevelopment area.
She observed that Carr recited a section of the statute and
stated, for example, that a property was designated for
redevelopment "by reason of dilapidation, obsolescence,
overcrowding, or that there's some deleterious land use,"
referring to the language in N.J.S.A. 40A:12A:-5d.
You can't just say by reason of
dilapidation you're in an area of
redevelopment. You have to indicate how
that's detrimental to the safety, health,
morals, or welfare of a community. And in
order to demonstrate that . . . that's where
the evidence comes into play.
That could have been demonstrated or
possibly demonstrated through zoning
violations, building code violations, [fire]
reports, something of that nature. Again,
that wasn't present in the report.
Banyra explained that the Planning Board must rely on its
experts to present evidence that the statutory criteria for
redevelopment has been met. Carr, however, provided "no
substantiation of the criteria." She noted that the Department
of Community Affairs (DCA) published guidelines for the
preparation of redevelopment plans, but Carr's reports did not
follow these guidelines.
11 A-2035-04T2
Carr testified as the City's planning expert. He claimed
that the information contained in his report was derived from
his physical inspection of each site within Area 1-7. He
inspected the buildings from the outside, contacted the tax
assessor's office to determine whether there were any
outstanding tax liens and contacted the code enforcement
officers to determine whether there were any outstanding
violations on any buildings in the area. He acknowledged that
there were no tax liens or building violations for plaintiff's
property. He never inspected the interior of the buildings,
however, and did not know whether any indoor improvements had
been made.
Crowley, the Executive Director of PARA, testified on
behalf of defendants. She oversaw day-to-day operations of PARA
and negotiated and monitored redevelopment agreements. PARA's
goals were "to bring underdeveloped, underutilized properties
back to productive use, revitalize the City and eliminate the
properties that are of concern." Crowley testified that the
City's plan for Area 1-7 included building a new school and
relocating affordable housing areas. She noted that PARA owns
property adjacent to plaintiff's property and that PARA's
property contains "little shacks . . . and some boat storage."
She claimed that the buildings were "in poor condition" and that
12 A-2035-04T2
the City planned to demolish them. She considered plaintiff's
property important to the redevelopment plan which included a
mix of residential units for sale or lease, ranging from single-
family to multi-dwelling buildings.
After hearing the testimony, the trial judge rendered a
written opinion in which he noted that "Area 1, of which Area 1-
7 is a part, was originally designated in 1997." He commented
that "[m]unicipalities, at times, have dreams of grandeur and
have high hopes of converting those dreams into reality" but he
recognized that
when that dream encompasses such a large
area it takes years, many years, to come to
fruition, if at all. When the area gets
painted with too broad a brush, the impact
of such decisions sometimes has the opposite
effect. As in this case, an affected
property owner may have difficulty in
renting its facility because of the
declaration of rehabilitation.
The judge noted that "[w]hen the Plaintiff bought the subject
property it was 100% occupied; at the time of trial, occupancy
was only 65%." He noted further that if the redevelopment
project proceeds, "the property owners' damages can be
considered at the time in the eminent domain proceeding. Of
course[,] the problem arises when the municipality never elects
to bring its dream to fruition."
13 A-2035-04T2
The trial judge correctly applied the deferential standard
in considering the municipality's action, limiting judicial
review to a determination of "whether there existed substantial
evidence to support a declaration that an area was in need of
redevelopment." The court concluded that there was substantial
evidence to support the City's findings and conclusions and that
plaintiff did not meet its burden to warrant reversal.
In this appeal, plaintiff argues that (1) the trial court
erred in concluding that Area 1-7 was in need of redevelopment;
(2) inclusion of plaintiff's property, one of the City's largest
employers, in the redevelopment plan is contrary to the public
policy and goals of redevelopment; (3) the trial court erred in
relying on Carr's report and testimony; and (4) the trial court
erred in granting defendant's motion to dismiss count two of the
complaint which alleges that the votes by the Planning Board and
the Council "were taken with no discussion or explanation of why
any of the sites were included"; the Planning Board failed to
provide the public with an adequate statement of the basis for
its investigation as required by the Redevelopment Law; and the
Planning Board's resolution failed to disclose the evidence upon
which the Board relied.
We first address the applicable standard of review.
Redevelopment designations, like all municipal actions, are
14 A-2035-04T2
vested with a presumption of validity. Levin v. Twp. Comm. of
Bridgewater, 57 N.J. 506, 537 (1971); Hirth v. City of Hoboken,
337 N.J. Super. 149, 161 (App. Div. 2001). It has been long
been recognized that "community redevelopment is a modern part
of municipal government." Levin, supra, 57 N.J. at 540 (citing
Wilson v. Long Branch, 27 N.J. 360, 392, cert. denied, 358 U.S.
873, 79 S. Ct. 113, 3 L. Ed. 2d 104 (1958)). Thus, judicial
review of a redevelopment designation is limited solely to
whether the designation is supported by substantial credible
evidence. Levin, supra, 57 N.J. at 537. This heightened
deference standard is codified in the LRHL, which provides that
an "area in need of redevelopment"2 designation "shall be binding
and conclusive upon all persons affected by the determination"
if it is "supported by substantial evidence and, if required,
approved by the commissioner." N.J.S.A. 40A:12A-6b(5).
Accordingly, it is not for the courts to "second guess" a
municipal redevelopment action "which bears with it a
presumption of regularity." Forbes v. Bd. of Trs., 312 N.J.
Super. 519, 532 (App. Div.), certif. denied, 156 N.J. 411
(1998). As our Supreme Court stated in Lyons v. City of Camden,
52 N.J. 89, 98 (1968):
2
Areas in need of redevelopment were previously designated
"blighted" areas under the Blighted Area Act, N.J.S.A. 40:55-
21.1, repealed by L. 1992, c. 79, §59.
15 A-2035-04T2
Clearly the extent to which the various
elements that informed persons say enter
into the blight decision-making process are
present in any particular area is largely a
matter of practical judgment, common sense
and sound discretion. It must be recognized
that at times men of training and experience
may honestly differ as to whether the
elements are sufficiently present in a
certain district to warrant a determination
that the area is blighted. In such cases
courts realize that the Legislature has
conferred on the local authorities the power
to make the determination. If their
decision is supported by substantial
evidence, the fact that the question is
debatable does not justify substitution of
the judicial judgment for that of the local
legislators.
[Emphasis added.]
Thus, we will defer to the local legislators if their
decision to designate areas in need of redevelopment is
supported by substantial evidence. Levin, supra, 57 N.J. at
537; Jersey City Chapter of Prop. Owner's Protective Ass'n v.
City Council, 55 N.J. 86, 101-102 (1969) (holding that summary
judgment should have been granted where objectors did not tender
any evidence before either the Planning Board or the Law
Division that rebutted substantial evidence in support of
redevelopment designation).
N.J.S.A. 40A:12A-5 authorizes designation of an area as in
need of redevelopment if "any" of the "conditions" enumerated
therein are found. The statute provides in pertinent part:
16 A-2035-04T2
A delineated area may be determined to be in
need of redevelopment if, after
investigation, notice and hearing as
provided in section 6 of P.L. 1992, c. 79
(C.40A:12A-6), the governing body of the
municipality by resolution concludes that
within the delineated area any of the
following conditions is found:
a. The generality of buildings are
substandard, unsafe, unsanitary,
dilapidated, or obsolescent, or possess any
of such characteristics, or are so lacking
in light, air, or space, as to be conducive
to unwholesome living or working conditions.
b. The discontinuance of the use of
buildings previously used for commercial,
manufacturing, or industrial purposes; the
abandonment of such buildings; or the same
being allowed to fall into so great a state
of disrepair as to be untendantable.
c. Land that is owned by the municipality,
the county, a local housing authority,
redevelopment agency or redevelopment
entity, or unimproved vacant land that has
remained so for a period of ten years prior
to adoption of the resolution, and that by
reason of its location, remoteness, lack of
means of access to developed sections or
portions of the municipality, or topography,
or nature of the soil, is not likely to be
developed through the instrumentality of
private capital.
d. 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.
17 A-2035-04T2
e. 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.
f. Areas, in excess of five contiguous
acres, whereon buildings or improvements
have been destroyed, consumed by fire,
demolished or altered by the action of
storm, fire, cyclone, tornado, earthquake or
other casualty in such a way that the
aggregate assessed value of the area has
been materially depreciated.
We have carefully considered the record in light of the
applicable law and find that the City's decision was not
supported by substantial evidence. The Planning Board relied
almost exclusively on Carr's Final Statement. The report set
forth the purpose of the investigation; maps and tables showing
geographic locations of the areas and properties investigated; a
recitation of the statutory criteria; and the proposed
redevelopment plan. Nowhere in the report did Carr undertake an
analysis of the statutory criteria as it applied to each of the
properties in the designated Area 1-7.
In her testimony, Banyra correctly identified the type of
analysis necessary for the Planning Board to make an informed
decision on the proposed designated areas for redevelopment.
18 A-2035-04T2
Carr's Final Statement and testimony were conclusory and failed
to include any evidence to support his determination that
buildings were "substandard, unsafe, unsanitary, dilapidated, or
obsolescent." N.J.S.A. 40A:12A-5a. He acknowledged that he did
not inspect the interiors of the buildings, did not review
applications for building permits, did not review occupancy
rates or the number of people employed in the area. He did no
investigation into whether the properties were "properly
utilized" or whether they were "fully productive" or
"potentially useful and valuable for contributing to and serving
the public health, safety and welfare." N.J.S.A. 40A:12A-5e.
For example, Carr made reference to neither the occupancy rate
nor the number of local residents employed in plaintiff's
buildings. His only negative finding was with reference to the
"underutilized" parking lot on plaintiff's property, but he
failed to investigate whether the employees utilized public
transportation rather than drove their own vehicles to work.
The case law more than adequately articulates what
constitutes "substantial evidence" for purposes of the LRHL.
See, e.g., Lyons, supra, 52 N.J. at 95 (noting that the evidence
included structure-by-structure inspections of the interior and
exterior of each building within the proposed redevelopment
19 A-2035-04T2
area); Wilson, supra, 27 N.J. at 389-90 (noting that the city
presented "the elaborate report of the planning consultant who
made a study of the area with respect to blight," which included
maps showing land use in the entire city, topography of the
area, underdeveloped and underutilized land, the extent of
blighting factors and tax delinquencies in the proposed area);
and Hirth, supra, 337 N.J. Super. at 162-63 (noting that the
planning board's consultant "made detailed block-by-block
findings concerning the condition of buildings in the proposed
redevelopment area and the nature and level of the economic
activity being conducted there"). Carr's report contained none
of the information included in the reports referenced in the
cases cited above.
In our view, the evidence presented to the Planning Board,
Council and trial court was not sufficient to sustain a finding
that the properties included in Area 1-7 met the criteria set
forth in N.J.S.A. 40A:12A-5. Absent substantial evidence, the
City's decision to designate Area 1-7 as in need of
redevelopment does not enjoy the deference generally accorded
such findings. We, therefore, reverse and remand to the
Planning Board for reconsideration of its decision in light of
the foregoing. We have carefully considered plaintiff's
20 A-2035-04T2
remaining arguments and are satisfied that we need not address
them in light of our decision here.
Reversed and remanded.
21 A-2035-04T2