Casino Reinvestment Development Authority v. Birnbaum, 458 N.J. Super. 173 (App. Div. 2019). On January 7, 2019, the Appellate Division decided Borough of Glassboro v. Grossman, 457 N.J. Super. 416 (App. Div. 2019), as discussed here. The key takeaway from that opinion was that, under the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -149 (“LRHL”), a municipal agency cannot condemn property for redevelopment unless there is a particular redevelopment project identified, tied to the proposed acquisition, and supported by proof. Writing for that panel, Judge Sabatino stated that a desire to “stockpile a parcel for some possible future need in the redevelopment area,” what he called “take first, decide later,” was impermissible.
Today, in an opinion by Judge Koblitz that relied on Glassboro, as well as cases from other jurisdictions, the Appellate Division reached a similar conclusion where the condemning authority was the Casino Reinvestment Development Authority (“CRDA”). In so ruling, the panel affirmed the decision of the Law Division that had “dismissed the condemnation complaint as a manifest abuse of power because the CRDA did not provide reasonable assurances that the proposed redevelopment would come to fruition in the foreseeable future.” Judge Koblitz applied de novo review of legal issues while noting that factual findings are binding on appeal when “supported by adequate, substantial and credible evidence.”
The CRDA was created by the Legislature to be in, but not of, the State’s Department of the Treasury, and was given the power of eminent domain by N.J.S.A. 5:12-182. As Judge Koblitz observed after a detailed discussion of the significant body of legislation relevant to the appeal, there are differences between the power that the Legislature conferred on the CRDA and that given under the LRHL. Under N.J.S.A. 5:12-182(b), the CRDA may condemn when it finds that “necessary to complete a project in the city of Atlantic City.” Nonetheless, the CRDA’s condemnation power was “constrained by the terms of the delegation, the Eminent Domain Act, N.J.S.A. 20:3-1 to -50; see N.J.S.A. 5:12-182(c), and the federal and state constitutions.”
Judge Koblitz noted that “[a]t the time of the decision under review,the CRDA had no specific redevelopment plans under consideration for the Project; it had not issued a request for proposals (RFP) to prospective developers, and no developer had committed to redeveloping within the Project area.” Instead, the CRDA contended, as had Glassboro, that it could “bank” for future use the property that it sought to condemn.
Recognizing that “there are inherent uncertainties in the redevelopment process and … such uncertainties are insufficient to deny a complaint for condemnation,” and citing cases for that proposition, Judge Koblitz said that “the imposition of a strict timeline would be inappropriate.” But she held that the CRDA’s power to condemn where “necessary” means “reasonably necessary,” as Glassboro had found under the LHRL. “[T]he proposed stockpiling of land for future redevelopment does not suffice to establish a taking is reasonably necessary.” There must be evidence that “a proposed development will occur in the foreseeable future.”
Judge Koblitz found that the Law Division’s factual findings that no project was likely in the foreseeable future were well-supported. Missing were “a detailed redevelopment plan showing a planned use for the condemned property; a developer, or group of developers, who have expressed interest in the redevelopment project; an RFP or other evidence of attempts to solicit developers’ interest in the redevelopment project; or draft agreements with developers concerning the redevelopment.”
Instead, the Law Division had only a “concept plan” for a development to be complementary with the Revel Casino, which declared bankruptcy and has not operated since 2014. Moreover, Atlantic City was experiencing “an unprecedented financial downturn,” and the CRDA had lost significant funding. Thus, the Law Division correctly found, Judge Koblitz ruled, that “[a]pproval of the condemnation could well leave the Birnbaum property vacant for an indefinite period of time, as the CRDA ‘wait[s] for the right project to present itself.'” Because “the CRDA could not provide evidence-based assurances that the Project would proceed in the reasonably foreseeable future,” the panel affirmed the dismissal of the condemnation complaint.