Robert S. Goldsmith's presentation for the Penn IUR conference: LAND AND POWER: THE IMPACT OF EMINENT DOMAIN IN URBAN COMMUNITIES

1. Redevelopment Matters
(Really!)
November 9, 2007
LAND AND POWER: THE IMPACT OF EMINENT
DOMAIN IN URBAN COMMUNITIES
By:
Robert S. Goldsmith, Esq.
Greenbaum, Rowe, Smith & Davis LLP

9. Half of New Jersey Is Developed
and
Policies Restrict or Prohibit Development In:
 Wetlands
 Farmlands
 Highlands
 Pinelands
 Coastal Areas

10. The English tended to take property without
compensation from circa 1000 to 1776
(in the U.S.).
The U.S. Constitution provides
“[N]or shall private property be taken for public
use, without just compensation.”

11. Berman v. Parker
U.S. Supreme Court (1954), unanimous decision
 What is in the public interest is for legislature to determine, not the
court
 Once the valid legislative objective is established, it is within the
legislature’s power to determine means to obtain that objective,
including eminent domain
 Exercise of eminent domain does not violate the Constitution when
property is taken from one private party for redevelopment by
another private entity, as the latter may well better be situated to
carry out the project
 (Notably, the power can be delegated as with railroads) It rarely is.

12. Berman v. Parker
U.S. Supreme Court (1954), unanimous decision
 Governing body need not determine that every property is blighted or
substandard, on a structure by structure basis, and may acquire
property not in itself blighted when necessary to effectively carry out a
comprehensive redevelopment plan
 Aesthetics, not just health and welfare, is a legitimate public interest
 Once it is determined that a taking is for a public purpose, it is for the
legislature, not the court, to determine the amount and character of land
to be taken
 Private property may be transferred to private parties because the
likelihood is that the public sector does not have the means or expertise
necessary to effectuate redevelopment
 The constitutional rights of property owners whose land is taken by
eminent domain are satisfied by payment of just compensation

13. Inherent Safeguards
 Market Reality
 Political concerns and political reality
 Judicial review to ensure no abuse
 EMINENT DOMAIN IS A TOOL OF LAST
RESORT

14. A-3257/S-1975
Proposed Amendments for the Local Redevelopment &
Housing Law
Far More Complicated, Far More Costly
Most Notably Would Shift the Presumption of Validity

15. NJ CONST Art. 8, Sec. 3, p 1:
The clearance, replanning, development or redevelopment of
blighted areas shall be a public purpose and public use, for
which private property may be taken or acquired. Municipal,
public or private corporations may be authorized by law to
undertake such clearance, replanning, development or
redevelopment; and improvements made for these purposes
and uses, or for any of them, may be exempted from taxation,
in whole or in part, for a limited period of time during which
the profits of and dividends payable by any private
corporation enjoying such tax exemption shall be limited by
law. The conditions of use, ownership, management and
control of such improvements shall be regulated by law.

16. GALLENTHIN
•The decision sustains the constitutionality of redevelopment
•The New Jersey constitutional provision, Article 8, Section 3, Paragraph 1 is
both a grant of power and limitation
•The Supreme Court maintains the presumption of validity of the designation of
a redevelopment area despite requests to shift to a presumption of invalidity
•The Court reaffirms the decisions of Levin v. Bridgewater and Forbes v.
Village of South Orange Township
•The Court continues the principle that properties not in and of themselves
blighted may be included in a Redevelopment Plan if necessary for
rehabilitation of a larger blighted area (indeed the Court invited that possibility)
•The Court has clarified that not fully productive is not a stand alone basis for
determining an area in need of redevelopment. Thus, a Motel 6 cannot
automatically become a Ritz Carlton, however, if the Motel 6 is in a state of
disrepair, is not well maintained, is vacant and otherwise adversely affecting a
neighborhood, then the Motel 6 can be redeveloped but it cannot be
redeveloped solely because it is not fully productive in that it may be a more
productive use.
•The Court has required something more than net expert opinion that merely
cites redevelopment criteria conditions without any real substantive analysis.

17. The Court revised sub-section (e) which had read as follows:
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.
To read as follows:
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 similar conditions, resulting in a stagnant and not productive
condition of land potentially useful and valuable for contributing to and
serving the public health, safety and welfare.

18. South Bound Brook

20. South Bound Brook

23. South Bound Brook

24. Long Branch
Before

31. Long Branch
After

33. Princeton

36. Morristown

37. Morristown –
The “Epstein’s Project”

39. Concept Site Aerial View

42. Building B – Market Street
Looking West

43. Concept Front Elevation – Dehart Street

45. Morristown Rehabilitation

46. Maple Avenue Elevation

49. The Nevada Supreme Court stressed that “[m]ining is the
greatest of the industrial pursuits in this state. All other
interests are subservient to it. Our mountains are almost
barren of timber, and our valleys could never be made
profitable for agricultural purposes except for the fact of a
home market having been created by the mining
developments in different sections of the state. The
mining and milling interests give employment to many
men, and the benefits derived from this business are
distributed as much, and sometimes more, among the
laboring classes than with the owners of the mines and
mills….The present prosperity of the state is entirely due
to the mining developments already made, and the entire
people of the state are directly interested in having the
future developments unobstructed by the obstinate
action of any individual or individuals.”

50. Dayton Gold & Silver Mining Co.,
11 Nev. 394 (1876)

51. “It Don’t Come Easy”
Ringo Starr
“Too hard, too long, too slow.”
Bob Goldsmith

52. NEWARK – MULBERRY STREET
BEFORE – CHINA TOWN

55. MULBERRY STREET
NEWARK - NOW

67. For more information contact
Robert S. Goldsmith, Esq.
Greenbaum, Rowe, Smith & Davis LLP
rgoldsmith@greenbaumlaw.com
732-476-2620
Partner, Real Estate Department
Chair, Redevelopment Practice Group