Township of West Windsor in the County of Mercer v. Nierenberg

Decision Date30 June 1997
Citation150 N.J. 111,695 A.2d 1344
PartiesTOWNSHIP OF WEST WINDSOR IN THE COUNTY OF MERCER, a Municipal Corporation of the State of New Jersey, Plaintiff-Respondent, v. Yvette NIERENBERG and Princeton Manor Associates, Defendants-Appellants.
CourtNew Jersey Supreme Court

Edward D. McKirdy, Morristown, for defendant-appellant Yvette Nierenberg (McKirdy and Riskin, attorneys).

Andrew J. Rothman, Woodbridge, for defendant-appellant Princeton Manor Associates (Greenbaum, Rowe, Smith, Ravin & Davis, attorneys).

Richard L. Rudin, Parsippany, for plaintiff-respondent (Weiner Lesniak, attorneys).

The opinion of the Court was delivered by

STEIN, J.

This case concerns the appropriate date for valuing condemned property pursuant to the Eminent Domain Act of 1971 (N.J.S.A 20:3-1 to -50) (Act). The Act provides for three possible valuation dates: the date the condemnor takes possession of the property being condemned either in whole or in part, N.J.S.A. 20:3-30(a); the date on which the condemnation action is commenced, N.J.S.A. 20:3-30(b); and "the date on which action is taken by the condemnor which substantially affects the use and enjoyment of the property by the condemnee," N.J.S.A. 20:3-30(c). 1 Just compensation for the condemnee is determined as of the earliest of those dates. N.J.S.A. 20:3-30.

At issue is whether a letter written by a municipality to a potential condemnee "substantially affect[ed]" the value of the property, thereby setting the valuation date pursuant to N.J.S.A. 20:3-30(c). The trial court determined that the date of the letter, which stated that the municipality may acquire the property owner's land for use as a community park, had obtained financing for the acquisition, and intended to obtain a prompt appraisal of the property's value, constituted the proper date for valuing the property. The Appellate Division reversed the trial court's decision, holding that the letter was "merely a preliminary step to a potential future condemnation." 285 N.J.Super. 436, 451, 667 A.2d 362 (1995). We granted certification, 145 N.J. 371, 678 A.2d 712 (1996), and now reverse.

I

In 1987, Stuart Nierenberg, Marilyn Nierenberg, Philip Kramer, Sol Kramer, and Ely Kramer formed Princeton Manor Associates. The purpose of the partnership was to develop a 50-acre tract of land owned by Yvette Nierenberg, Stuart's and Marilyn's mother. The Nierenbergs contemplated that Yvette would be given a sum certain for her property, while her adult children would receive, without financial obligation, proceeds from development of the property. Philip Kramer, a highly experienced real estate developer, would handle most of the responsibilities of development.

The property is zoned R-2 Residential by the Township of West Windsor (Township). That zoning permits single-family detached dwellings on three-quarter acre lots. R-2 zoning also allows open-space cluster developments as a conditional use if the lot size is at least 20,000 square feet and is served by either public water or public sewer. The subject property is serviced by public water and partially by public sewer.

At some time prior to 1987, the property, together with two contiguous parcels, was designated on the Township's Master Plan as a potential site for West Windsor's proposed Community Park. On July 8, 1987, Princeton Manor Associates purchased the property from Yvette Nierenberg for approximately $4,320,700, and Yvette simultaneously acquired an interest in the partnership.

In the months following the sale, Princeton Manor Associates prepared a plan for a forty-eight-lot residential subdivision of the property. The partnership spent approximately $25,000 in engineering costs preparing the plan. The final plan conformed with the municipal zoning ordinance. The partnership's attorney Peter Buchsbaum would later testify that it was "a relatively straightforward submission." The partnership's subdivision application was presented to the Township on May 13, 1988.

By letter dated May 19, 1988, the Township's Director of Community Development acknowledged receipt of the partnership's application. The Director notified the partnership that certain administrative requirements had not been met, such as payment of a required application fee/security deposit and submission of additional copies of certain documents. On June 3, 1988 the Township forwarded a second letter, stating that "on further examination of the ... development application," the Township determined, apparently inaccurately, that the subject property in its entirety was not within the area served by public sewers. Therefore, percolation tests and soil log data for the property would be required before the application would be considered further.

The partnership was then faced with a choice. It could wait at least seven months for the seasonal high water period to conduct percolation tests, at an approximate cost of $40,000. Alternatively, the partnership could attempt to have the municipal sewer plan amended to provide service to the entire property. The partnership was studying the sewer plan amendment process when Yvette Nierenberg received a certified letter from Robert Bruschi, the Township Administrator. That letter, dated July 29, 1988, read:

Dear Ms. Nierenberg:

TOWNSHIP MASTER PLAN/COMMUNITY PARK

Enclosed is a copy of the facilities portion of the Township Master Plan. Three (3) properties to comprise a potential Community Park have been designated in it.

In conjunction with the Master Plan, the Township applied to the New Jersey Green Acres for a low-interest loan for the properties' purchase. Several months ago, the Governor notified us of our award of a $3 million loan to supplement the Township's funding for purchasing this property. On June 27, 1988, the Township Committee authorized the Mayor to enter into an agreement with New Jersey Green Acres to fund this acquisition.

Therefore, this is formal notification that West Windosr [sic] Township may acquire this property for the purpose of establishing a Community Park.

Shortly, the Township along with independent appraisers and the Green Acres Office will determine a fair-market value for the property.

In the interim, I am available to answer your questions regarding the above items.

Upon review of the July 29 letter, Buchsbaum advised his clients that they could not secure Township approval for enlargement of the sewer system when the Township appeared intent on condemning the property.

On August 23, 1988, an appraiser retained by the Township wrote to Yvette Nierenberg, stating "[t]his firm has been retained by the Township of West Windsor to make an appraisal on the above captioned property which is part of the Community Park Project." That letter stated that Nierenberg could accompany the appraiser during his inspection of the subject property. On September 2, 1988, a second appraiser hired by the Township wrote to Nierenberg, stating that "[w]e have been retained by the Township of West Windsor to independently appraise the property to be acquired from you." Shortly thereafter, the appraisers inspected the property and requested that Buchsbaum forward information concerning the terms of the 1987 contract of sale.

On February 16, 1989, Buchsbaum wrote to Bruschi, stating:

Confirming our previous conversation, we have found it impossible, as a practical matter, to proceed with the development plans previously filed on the above-referenced property because of the Township's statement that it intends to acquire the property for a park. However, the matter has now been pending some six months, but we have not even received an appraisal or any form of offer.

We can not have our land rendered unusable while the Township considers the matter. This is, in fact, what has occurred over the last six months, even though we have expressed a willingness to discuss the issue with the township.

Bruschi responded:

As I have explained to you in our conversation on the telephone approximately two weeks ago, the Township is not in the position to begin any negotiations with the property owners until such time as we have received the fair market value from the Green Acres Office at the State of New Jersey. As soon as this is received by the Township, we will begin our discussions with the property owners involved, and you will be notified at that point.

In March 1989, the Township attorney Michael Hartsough was informed that the Department of Environmental Protection, Division of Green Acres Land Acquisition (Green Acres) had approved the acquisition. On April 19, Hartsough sent a letter to Buchsbaum stating that Green Acres had accepted an appraisal valuing the property at $3,022,000. Hartsough reminded Buchsbaum that, pursuant to the Act, he had fourteen days to respond. However, Hartsough encouraged negotiations between the Township and the partnership, and granted several extensions to permit further negotiations.

As negotiations continued, it became apparent that grounds for compromise existed. After the Township received the appraisals for the properties to be acquired for the Community Park, it realized that it could not afford to both purchase the properties and develop the park. Discussions began to center on a partial acquisition of the property by the Township with development of the remainder by the partnership. The partnership proposed, among other plans, a dedication of thirty-seven acres to the Township with townhouse development on the thirteen-acre remainder. West Windsor rejected that proposal, but suggested it might be amenable to a forty-eight-lot single-family-home development.

On September 5, 1989, West Windsor's Township Committee adopted a resolution accepting an offer by the partnership to sell thirty-seven acres to the Township for $1,250,000. The partnership would be permitted to complete a residential development of no more than sixty units on the remaining...

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