62-64 Main St., L.L.C. v. Mayor & Council of Hackensack

• Decision Date: 23 March 2015
• Docket Number: No. A-19/20 September Term 2013, 072699.,A-19/20 September Term 2013, 072699.
• Parties: 62–64 MAIN STREET, L.L.C. and 59–61 Moore Street, L.L.C., Plaintiffs–Respondents, v. MAYOR AND COUNCIL OF THE CITY OF HACKENSACK; Planning Board of the City of Hackensack, Defendants–Appellants.
• Court: New Jersey Supreme Court

221 N.J. 129

110 A.3d 877

62–64 MAIN STREET, L.L.C. and 59–61 Moore Street, L.L.C., Plaintiffs–Respondents

v.MAYOR AND COUNCIL OF THE CITY OF HACKENSACK; Planning Board of the City of Hackensack, Defendants–Appellants.

No. A-19/20 September Term 2013, 072699.

Supreme Court of New Jersey.

Argued Oct. 7, 2014.

Decided March 23, 2015.

Joseph P. Kreoll, Moonachie, argued the cause for appellant Planning Board of the City of Hackensack (Law Offices of Richard Malagiere, attorney).

Thomas P. Scrivo, Newark, argued the cause for appellant Mayor and Council of the City of Hackensack (McElroy, Deutsch, Mulvaney & Carpenter, attorneys; John P. Michalski and Robert J. Hitscherich, Hackensack, on the briefs).

Peter Dickson, Princeton, argued the cause for respondents (Potter & Dickson, attorneys; Mr. Dickson and Michael J. Monaghan, III, on the briefs).

David G. Evans, Flemington, submitted a brief on behalf of amici curiae Pacific Legal Foundation, National Federation of Independent Business, Institute for Justice, and Ilya Somin.

Opinion

Justice ALBIN delivered the opinion of the Court.

The New Jersey Constitution grants municipalities the authority to revitalize decaying and disintegrating residential, commercial, and industrial areas. Our Constitution states that the “redevelopment of blighted areas” is a “public purpose” and that private property may be taken to achieve that end, N.J. Const. art. VIII, § 3, ¶ 1, provided that owners are awarded just compensation for their property, N.J. Const. art. I, ¶ 20. The evident goal of Article VIII, Section 3, Paragraph 1 (Blighted Areas Clause) is to give municipalities the means to improve the quality of life of their residents and to spur business opportunity and job growth. To implement this constitutional mandate, the Legislature initially passed the Blighted Areas Act, L. 1949, c. 187 (codified as amended at N.J.S.A. 40:55–21.1 to –21.14 (repealed 1992)), and later the Local Redevelopment and Housing Law (Redevelopment Law), L.1992, c. 79 (codified as amended at N.J.S.A. 40A:12A–1 to –73). The Redevelopment Law defines when an area is blighted and therefore “in need of redevelopment.” N.J.S.A. 40A:12A–5.

Plaintiffs own five lots in the City of Hackensack on which stood two dilapidated buildings abutted by two poorly maintained and decrepit parking lots. Hackensack designated eleven out of twenty lots in a two-block area as in need of redevelopment, including plaintiffs' five lots. In doing so, the Planning Board made specific findings that those lots met the statutory definitions of blight in N.J.S.A. 40A:12A–5(a), (b), and (d). The Hackensack Mayor and Council passed a resolution that adopted the Planning Board's findings.

Plaintiffs filed an action in lieu of prerogative writs in Superior Court, challenging Hackensack's classification of their lots as blighted. Plaintiffs argued that a finding of blight under N.J.S.A. 40A:12A–5(a), (b), and (d) of the Redevelopment Law does not meet the constitutional definition of blight enunciated in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344, 373, 924 A. 2d 447 (2007). On that basis, plaintiffs sought to strike down the Mayor and Council's resolution classifying plaintiffs' properties as part of an area in need of redevelopment.

The trial court rejected plaintiffs' argument, concluding that Gallenthin merely corrected a constitutional defect in subsection (e) of N.J.S.A. 40A:12A–5 and did not sweepingly render other subsections of the Redevelopment Law constitutionally infirm. The trial court, moreover, determined that substantial evidence supported Hackensack's classification of plaintiffs' properties as in need of redevelopment.

The Appellate Division reversed, holding that Gallenthin established a heightened constitutional standard for blight applicable to every subsection of the Redevelopment Law. According to the Appellate Division, Gallenthin superimposes over the statutory definition of blight the need for an additional finding that property has suffered a “ ‘deterioration or stagnation that negatively affects surrounding areas,’ ” (quoting Gallenthin, supra, 191 N.J. at 363, 924 A. 2d 447).

We now hold that the Appellate Division has over-read the scope of Gallenthin, which only addressed a specific constitutional defect in subsection (e) of N.J.S.A. 40A:12A–5. In Gallenthin, we simply determined that subsection (e), which defined blight as the nonproductive use of property, did not meet the constitutional standard for blight set forth in the Blighted Areas Clause, N.J. Const. art. VIII, § 3, ¶ 1. We did not suggest in Gallenthin that the definitions of blight in subsections (a), (b), and (d) of N.J.S.A. 40A:12A–5, which have been part of legislative schemes for more than sixty years, were constitutionally inadequate. Indeed, we upheld the constitutionality of the provisions at issue in Wilson v. City of Long Branch, 27 N.J. 360, 378–82, 142 A. 2d 837 (1958), and Levin v. Township Committee of Bridgewater, 57 N.J. 506, 510–15, 274 A. 2d 1 (1971) —decisions referred to approvingly in Gallenthin.

Applying the required deferential standard of review to the municipal decision-making in this case, we agree with the trial court that substantial evidence supported Hackensack's designation of plaintiffs' properties as in need of redevelopment. We therefore reverse the Appellate Division.

I.

A.

In 2006, the Hackensack City Council authorized the City's Planning Board to undertake a preliminary investigation to determine whether a two-block area in Hackensack's central business district—a mix of commercial and residential uses—should be designated as an area in need of redevelopment. See N.J.S.A. 40A:12A–6(a). The targeted two-block area is comprised of fourteen individual properties.

In eight days of hearings between December 2006 and January 2008, the Planning Board took testimony from five witnesses and received evidence, including expert reports and photographs, concerning whether to recommend the two-block area as in need of redevelopment. Ultimately, the Planning Board concluded that five of the fourteen properties were in need of redevelopment, including two properties on Main and Moore Streets acquired by plaintiffs in 1999. Plaintiffs' two properties encompass five lots, where a now defunct auto body repair shop had operated. All five lots are contiguous to one another and are owned by the same individuals through two separate limited liability corporations, each of which is a plaintiff in this case.

Plaintiff 62–64 Main Street, L.L.C., owns Block 205, Lots 4, 5, 6, and 7, a 10,443 square-foot parcel of land, on which sat—at the time of the hearings—two vacant, boarded up, dilapidated buildings with crumbling masonry, which were formerly part of the auto repair business.¹ Behind the buildings is a poorly maintained, partly paved and partly gravel parking lot.

Plaintiff 59–61 Moore Street, L.L.C., owns Block 205, Lot 8, a 4280 square-foot parcel of land on which formerly sat an auto garage, which had been demolished. Currently, the property is used as a paved parking lot, although there are no markings for individual parking spaces, and the pavement is in a deteriorated condition. The parking lot has no landscaping or lighting and encroaches onto the sidewalk.

Plaintiffs intended to build a bank on the five lots, but could not secure site-plan approval from the City's Planning Board or the necessary variances from the City's Board of Adjustment to go forward with their proposals. The denials from those Boards are not at issue in this appeal. Suffice it to say, plaintiffs have treated all five lots as one property for development purposes.

The principal witness for the Planning Board was Janice Talley, a licensed professional planner with H2M Group, the firm retained by the Board to prepare a redevelopment study of the area under investigation. According to Talley and the redevelopment report she authored, the buildings on Lots 4–7 were vacant, dilapidated, and “boarded up due to their unsafe condition.” The exterior of the buildings showed “prominent signs of structural deterioration.” Notably, plaintiffs refused to give Talley access to make an assessment of the buildings' interior conditions. Talley described the parking lot behind the two buildings as “poorly surfaced” and without lines, lighting, or other necessary improvements.

Talley testified that the decrepit state of the buildings created “unwholesome” living and working conditions and that the buildings were “a detriment to the ... safety, health and welfare of the community.” Talley concluded that Lots 4–7 met the criteria of N.J.S.A. 40A:12A–5(a), (b), and (d) for an area in need of redevelopment.

Talley also testified that the current parking area on Lot 8, where the automotive garage once stood, was “crumbling” and “in disrepair.” The parking area, she noted, had no defined layout, no lighting, no landscaping, and encroached onto the sidewalk. That encroachment—the lack of separation between the parking area and the sidewalk—posed a threat to pedestrians and rendered it a public-safety danger, in Talley's view. She concluded that Lot 8 met the criteria of N.J.S.A. 40A:12A–5(d) for an area in need of redevelopment.

Plaintiffs' expert, Peter Steck, a licensed planner, testified that Lots 4–8 did not satisfy the criteria for an area in need of redevelopment. He explained that the buildings were boarded up and therefore did not pose a danger. According to Steck, the property was in a state of transition, and the buildings were structurally sound, although vacant at the time. He insisted that the condition of Lots 4–8 did not retard the development of properties nearby, such as a new drug store, an automotive parts store, a bank, and a nail salon. Steck maintained that the buildings were not detrimental to the neighborhood and that the unpaved parking areas were similar to others in the neighborhood.

He also noted that plaintiffs were appealing the denial of...