Township of West Windsor in County of Mercer v. Nierenberg

• Decision Date: 22 November 1995
• Citation: 285 N.J.Super. 436,667 A.2d 362
• Parties: TOWNSHIP OF WEST WINDSOR IN the COUNTY OF MERCER, a Municipal Corporation of the State of New Jersey, Plaintiff-Appellant, v. Yvette NIERENBERG and Princeton Manor Associates, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 436

285 N.J.Super. 436

667 A.2d 362

TOWNSHIP OF WEST WINDSOR IN the COUNTY OF MERCER, a Municipal Corporation of the State of New Jersey Plaintiff-Appellant, v. Yvette NIERENBERG and Princeton Manor Associates Defendants-Respondents.

Superior Court of New Jersey Appellate Division.

Argued Nov. 8, 1995.

Decided Nov. 22, 1995.

Richard L. Rudin, Parsippany for appellant (Weiner, Lesniak, attorneys; Mr. Rudin, of counsel; Mr. Rudin and Susan Sigle, on the brief).

Edward D. McKirdy, Morristown, for respondent Yvette Nierenberg (McKirdy & Riskin, attorneys; Mr. McKirdy, on the brief).

Andrew J. Rothman, Woodbridge, for respondent Princeton Manor Associates (Greenbaum, Rowe Smith, Ravin & Davis, attorneys; Mr. Rothman, on the brief).

Before Judges BAIME, VILLANUEVA and KIMMELMAN.

The opinion of the court was delivered by

BAIME, J.A.D.

The narrow question presented in this case concerns the date for valuing property condemned by the Township of West Windsor. The Eminent Domain Act of 1971 ( N.J.S.A. 20:3-1 to -50) provides three alternative dates for valuation--the date the condemnor takes possession of the property, the date the condemnation suit is commenced, or the date on which action is taken by the condemnor which substantially affects the condemnee's use and enjoyment of the property. N.J.S.A. 20:3-30. The value of the property on the date of the earliest of these events is to control for the purpose of determining just compensation. Ibid.

At issue is whether the Township's letter to the defendants advising them that it might acquire their vacant tract for development of a community park so impaired the marketability of the property as to require that the value of the parcel on that date be used to determine fair compensation. Following an evidentiary hearing, the Law Division concluded that the letter triggered a downward fluctuation of the value of the property directly attributable to the proposed condemnation, thus establishing the date of valuation. ¹ We disagree. We hold that the Township's equivocal expression of its interest in acquiring the land did not so directly interfere with defendants' use and enjoyment of their property as to fix the date of valuation for determining just compensation.

I.

Princeton Manor Associates is a partnership formed in 1987 by Philip Kramer, Stuart Nierenberg, Sol Kramer, Ely Kramer and Marilyn Nierenberg for the purpose of developing a fifty-acre tract initially owned by Stuart's mother, Yvette. The property fronts on the Princeton-Heightstown Road and partially consists of wetlands. Approximately 44.6 acres are suitable for development.

The property is zoned R-2 residential, which permits single-family detached dwellings on three-quarter acre lots with seventy-five feet of frontage. Open space cluster developments, with minimum lot size of 20,000 square feet, are permitted as a conditional use if the property is serviced by either public water or sewer. The property here is serviced by public water and partially by public sewer. It is undisputed that the highest and best use of this property is for residential development of single-family dwellings.

Although the exact chronology is not entirely clear, prior to 1987, the property, along with two contiguous parcels, was designated by the Township's master plan as a potential site for a community park. Phillip Kramer, a highly experienced real estate developer, was aware of this fact both when the partnership was formed and when it purchased the property from Yvette on July 8, 1987 for $4,500,000.

Prior to January 1988, the Township Committee adopted a resolution authorizing appraisals of the proposed park site and a request for a Green Acres loan. In early 1988, the Township was awarded a $3 million low interest loan, and the Township Committee authorized the mayor to enter into an agreement with the Green Acres Program to fund acquisition of the properties for park development.

On May 13, 1988, Princeton Manor filed an application for a major subdivision of its fifty-acre property into forty-eight half-acre lots, a cluster development. On June 3, 1988, the partnership was advised that its application was not complete because the entire property was not within the sewer service area, and, therefore, percolation tests and soil log data would be required to determine the property's suitability for septic systems. At that point, Princeton Manor had two choices. It could attempt to have the sewer service plan amended to encompass the entire tract so the project could proceed with public sewers, or it could conduct the percolation tests at a cost of $40,000 to determine whether the land was suitable for septic systems.

The partnership was in the process of considering these options and had begun studying the sewer plan amendment process when it received a letter from the Township Administrator dated July 29, 1988. That letter, addressed to Yvette, is the focal point of the partnership's contention regarding the date of valuation, and we, thus, reproduce it in its entirety:

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 had 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 Windsor 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.

Yvette Nierenberg received letters in August and September 1988 from two appraisers retained by the Township inviting her to accompany them during their inspection of the property. Pursuant to the appraisers' request, the partnership's attorney, Peter Buchsbaum, forwarded information relating to the terms of the 1987 contract. According to Michael Hartsough, the Township's attorney during this period, the appraisals were required for Green Acres funding. The state program had to approve the appraised value of the property before it would lend the Township the money necessary to acquire it.

The matter remained dormant for several months during which the Township's Green Acres application was pending. This silence was broken by an exchange of heated letters between Buchsbaum and Robert Bruschi, the Township Administrator. Buchsbaum complained that the partnership could not proceed with its plans for developing the property while the Township was considering acquiring it for use as a park. Bruschi responded that the Township was in no position to begin negotiations concerning the purchase of the property until it received approval of the contemplated acquisition from the Green Acres Program.

In March 1989, Hartsough was advised that Green Acres had approved the acquisition. The Township Committee then adopted a resolution authorizing Hartsough to send "offer to purchase" letters to Princeton Manor and to Cox-Sheffey, the owner of the adjacent tract. In a letter from Hartsough dated April 19, 1989, Buchsbaum was informed that the Green Acres Program had accepted an appraisal valuing Princeton Manor's property at approximately $3,000,000. Although the letter provided that Princeton Manor had fourteen days in which to accept the offer, Hartsough agreed to several extensions, during which negotiations continued.

The Township had budgeted $7,000,000 for the acquisition and development of the park. Once the appraisals were obtained on the Princeton Manor and Cox-Sheffey tracts, it became apparent that acquisition of the entire properties would leave the Township with no money for development of the park. Consequently, the Township began to consider the feasibility of acquiring only a portion of the Princeton Manor property. The negotiations between Buchsbaum and Hartsough reflected this shift in focus. Princeton Manor proposed that it be permitted to construct 115 townhouses on thirteen acres and that the Township acquire the remaining land. The Township rejected that proposal but suggested that it was amenable to the construction of forty-eight units on the property to be retained by the partnership. Various counterproposals were then offered by the parties.

Negotiations continued through 1989 and into 1990. Princeton Manor offered to convey thirty-seven acres to the Township for $1,250,000 provided the remaining land could be developed with not more than sixty units. The Township Committee adopted a resolution accepting that offer, conditioned on the rezoning of the property and planning board approval. However, the Township park planning committee recommended against the proposed rezoning, noting that each dwelling unit would be situated on only one-fifth of an acre, a far too intensive use of the land to be retained by Princeton Manor. The proposed zoning change was ultimately defeated.

The focus of the negotiations then returned to the Township's original proposal for acquisition of the entire tract. However, negotiations broke down after the defeat of a bond ordinance that would have permitted the Township to incur sufficient debt to fund the purchase. On January 22, 1991, Princeton Manor filed a complaint in the Law Division seeking, among other things, just compensation for the temporary and permanent taking, or in the alternative, a rezoning of its property to permit construction of sixty units on thirteen acres and payment...