Gallenthin Realty v. Bor. of Paulsboro

• Decision Date: 13 June 2007
• Docket Number: A-51 September Term 2006
• Citation: 924 A.2d 447,191 N.J. 344
• Parties: GALLENTHIN REALTY DEVELOPMENT, INC., a New Jersey Corporation and/or George A. and Cynthia L. Gallenthin III, h/w, both jointly and severally, Plaintiffs-Appellants, v. BOROUGH OF PAULSBORO, a New Jersey Municipality and/or Planning Board of Borough of Paulsboro and/or Paulsboro Redevelopment Agency, jointly and severally, Defendants-Respondents.
• Court: New Jersey Supreme Court

924 A.2d 447

191 N.J. 344

GALLENTHIN REALTY DEVELOPMENT, INC., a New Jersey Corporation and/or George A. and Cynthia L. Gallenthin III, h/w, both jointly and severally, Plaintiffs-Appellants, v. BOROUGH OF PAULSBORO, a New Jersey Municipality and/or Planning Board of Borough of Paulsboro and/or Paulsboro Redevelopment Agency, jointly and severally, Defendants-Respondents.

A-51 September Term 2006

Supreme Court of New Jersey.

Argued April 26, 2007.

Decided June 13, 2007.

Peter D. Dickson, Princeton, argued the cause for appellants (Potter and Dickson, attorneys; Mr. Dickson and R. William Potter, on the briefs).

M. James Maley, Jr., argued the cause for respondents (Maley & Associates, attorneys; Mr. Maley, Elizabeth L. Bancroft, Emily K. Givens, Joseph F. Kunicki, and Erin E. Simone, on the briefs).

Ronald K. Chen, Public Advocate, argued the cause for amicus curiae Public Advocate of New Jersey (Mr. Chen, attorney; Mr. Chen, Brian Weeks, Deputy Public Advocate, Alexander D. Gladney, Assistant Deputy Public Advocate and Catherine Weiss, Director, Division of Public Interest Advocacy, of counsel and on the brief).

Robert S. Goldsmith, Woodbridge, argued the cause for amici curiae New Jersey State League of Municipalities, Downtown New Jersey, Inc. and New Jersey Chapter-American Planning Association (Greenbaum, Rowe, Smith and Davis, attorneys; Robert Beckelman, on the brief).

Carter H. Strickland, Jr., Staff Attorney, Rutgers Environmental Law Clinic, submitted a brief on behalf of amici curiae New Jersey Audubon Society and New Jersey Conservation Foundation.

Kenneth E. Meiser, Princeton, submitted a brief on behalf of amicus curiae New Jersey Builders Association (Hill Wallack, attorneys; Mr. Meiser and Anne L.H. Studholme, on the brief).

Peter H. Wegener, Lakewood, submitted a brief on behalf of amicus curiae Institute For Justice (Bathgate, Wegener & Wolf, attorneys; Mr. Wegener and Jeff Rowes, a member of the New York bar, on the brief).

Chief Justice ZAZZALI delivered the opinion of the Court.

Gallenthin Realty Development, Inc. owns a sixty-three-acre parcel of largely vacant wetlands in the Borough of Paulsboro. In 2003, Paulsboro classified the Gallenthin property as "in need of redevelopment" under N.J.S.A. 40A:12A-5(e) because the property's unimproved condition rendered it "not fully productive." Such a classification subjects property to taking by eminent domain. N.J.S.A. 40A:12A-8(c). The trial court and Appellate Division upheld Paulsboro's redevelopment designation.

Because the New Jersey Constitution authorizes government redevelopment of only "blighted areas," we conclude that the Legislature did not intend N.J.S.A. 40A:12A-5(e) to apply in circumstances where the sole basis for redevelopment is that the property is "not fully productive." We therefore invalidate Paulsboro's redevelopment classification concerning the Gallenthin property and hold that N.J.S.A. 40A:12A-5(e) applies only to areas that, as a whole, are stagnant and unproductive because of issues of title, diversity of ownership, or other similar conditions.

I.

A.

Although the Gallenthin family has owned the parcel at issue since 1951, the family had enjoyed the property as early as 1902, when it used the land to moor barges transporting produce from Mantua to Philadelphia. As it currently exists, the property is bounded on its western edge by Mantua Avenue, on its eastern edge by Mantua Creek, which flows into the Delaware River, and on its southern tip by an industrial facility, across from which is a residential section of Paulsboro. The property's northern edge abuts a packaging facility and an inactive British Petroleum (BP) storage site, which fronts the Delaware River across from the Philadelphia International Airport. Plaintiffs Gallenthin Realty Development, Inc. (Gallenthin), George A. Gallenthin, III, and Cindy Gallenthin own the property with clear, quieted title.

The land consists mostly of undeveloped open space and is identified as protected wetlands on the New Jersey Department of Environmental Protection's (DEP) Geographic Information System. There is also an unused railroad spur that traces the property's western edge, an active gas pipeline that bisects the property, and several mooring pylons designed to receive boats navigating Mantua Creek. At Gallenthin's request, the Paulsboro Planning Board rezoned the property in 1998 from manufacturing to marine industrial business park, thereby permitting various commercial, light industrial, and mixed non-residential uses.

The property historically has been used as a deposit site for dredging materials. In 1902, the property was authorized to receive dredge deposits from the United States Army Corps of Engineers, which was responsible for widening and straightening Mantua Creek. The Army Corps of Engineers made deposits on the Gallenthin property in 1902, 1934, 1937, and 1963. Although nearby waterways are not currently being dredged, plaintiffs contend that the property may still receive dredging deposits and that dredging is a "periodic" activity that occurs "every 35 years or so as the need arises."¹

Other than the property's sporadic use as a dredging depot, Gallenthin leased portions of the property to an environmental clean-up organization, Clean Ventures, in 1997 and 1998. Clean Ventures used the property for river access, employee parking, and storage. Additionally, since 1997, a wild-growing reed, phragmites australis (phragmites), has been harvested from the Gallenthin property three times a year. The reed can be used as cattle feed and, according to plaintiffs, is recognized by the federal Environmental Protection Agency as a valuable plant species that actively neutralizes soil pollutants. Although the record does not reveal how much profit Gallenthin generates from harvesting the phragmites, Paulsboro characterizes any revenue as negligible and primarily for tax abatement purposes.

In 1998, Paulsboro — a town of about 6,500 residents and covering approximately two square miles — adopted a new master plan. The plan referenced seven broadly defined areas of Paulsboro that should be redeveloped to stimulate the Borough's economic rehabilitation. Although the Gallenthin property was not included in the master plan's redevelopment recommendations, the plan mentioned the Gallenthin property, stating:

The 63 acre Gallenthin property is idle and may be largely undeveloped due to tidal wetlands regulations. This Mantua Creek site may, however, be available for development as a boat launch or marina.... The Borough should explore acquiring the property and working with redevelopers and with the Nature Conservancy or other nature agency to assist in the development of a creek front marina with the bulk of the property used as a nature center for tidal river appreciation or passive recreation use.

In 1999, the Paulsboro governing body authorized the Planning Board to investigate whether several parcels, primarily the BP facility and an adjacent Dow/Essex Chemical (Dow) property, could be designated as "in need of redevelopment" pursuant "to the criteria set forth in N.J.S.A. 40A:12A-5." The governing body's resolution did not encompass the Gallenthin property. In June 2000, the governing body authorized the Planning Board to investigate additional, contiguous parcels, but the Gallenthin property was again not included.

The investigation reports, prepared by Remington & Vernick Engineers, Inc. (Remington & Vernick) and presented to Paulsboro in 2000, described the properties under review as

land upon which are located a now closed liquid storage facility for petroleum products and an unimproved three (3) acre parcel, all of which being owned by BP Oil Company; contiguous unimproved parcels utilized for miscellaneous storage, owned by Norman B. Swindell; and now a closed chemical plant, owned by Dow Chemical Company.

Remington & Vernick concluded that "given primarily the closure of the facilities and the stagnant and not fully productive condition of the land, ... the parcels comprising the study meet the statutory definition for an `area in need of redevelopment.'" In December 2002, Paulsboro adopted Remington & Vernick's recommendations and designated the implicated property as the "BP/Dow Redevelopment Area."

Also, in 2000, BP and Dow retained URS Corporation (URS) to conduct a two-phase "Site Redevelopment Study" of their combined facilities. The first phase of the URS study did not reference the Gallenthin property. However, the phase-two report, presented to BP and Dow in 2002, contained the first suggestion that the Gallenthin property be included in the BP/ Dow redevelopment project. URS observed that "transportation to the [BP/Dow redevelopment] site is an issue" and proposed three alternative access routes. One proposed route involved a bridge over Mantua Creek connecting to an access road that would traverse a small portion of the Gallenthin property. URS expressly discouraged that option, however, because of "wetlands and ownership challenges." Rather, URS concluded that the most "natural alignment to the site" and the "preferred" access route involved a bridge to the north of the Gallenthin property that would directly enter the BP/ Dow site.

Paulsboro then requested that its own engineers, Remington & Vernick, compile a "Redevelopment Plan Summarization" regarding the URS report. Presented in October 2002, the summarization noted that "[t]he URS Phase II Study indicates the possibility of ultimately including [in the redevelopment project] the [Gallenthin] parcel immediately to the south of the BP site.... In the event of said eventuality, a further preliminary investigation would be necessary as [that] parcel[] w[as] not previously examined."² Consequently, in December 2002, Paulsboro authorized Remington & Vernick to prepare a "Redevelopment Area Study and Plan" that, for the first time, included the Gallenthin property....