N.J. court tightens land-seizure rules

TRENTON - In a ruling that places stricter limits on New Jersey towns seeking to seize property for redevelopment, the state Supreme Court yesterday sided with a Paulsboro landowner who argued the borough could not take his land merely because it was "not fully productive."

The high court ruled unanimously that in order for land to be seized, it must be negatively affecting surrounding properties - not simply underutilized.

Therefore, it invalidated Paulsboro's decision to include the disputed 63 acres of vacant land in its redevelopment zone, which is a first step to eminent domain. The borough wanted the land to be part of a deepwater port project.

"The New Jersey Constitution does not permit government redevelopment of private property solely because the property is not used in an optimal manner," wrote Supreme Court Chief Justice James Zazzali. Zazzali said by that definition, virtually any land in the state could be seized.

The high court decision was the first to address a 1992 redevelopment law now being used by towns all over the state - including Camden and Lawnside - in their quest for more tax ratables.

While the state constitution authorizes government redevelopment of only "blighted" areas, the 1992 law said one way to define blight was "not fully productive."

Zazzali's ruling says towns cannot rely solely on that basis to seize land, and that the clause can only apply to areas that have issues with title or diversity of ownership.

New Jersey public advocate Ronald Chen hailed the ruling, saying it gave stronger protections to property owners and "rejects the argument that municipal government can take New Jersey homes and businesses simply because they believe the land could be put to better use."

Chen has long argued that the "not fully productive" clause was so vague that it had become a popular way for municipalities to condemn anything they wanted. He had filed a friend-of-the-court brief on behalf of Paulsboro landowner George Gallenthin.

Robert Goldsmith, an attorney for the League of Municipalities, which filed a brief on behalf of Paulsboro, said the ruling set New Jersey apart from the controversial U.S. Supreme Court Kelo decision, which ruled that towns could seize land because it was underutilized.

However, Goldsmith emphasized that yesterday's ruling did not kill the right to take land for redevelopment - only narrowed the criteria to do so.

The dispute centers on 63 acres of woods, wetlands and open space owned by Gallenthin, a Woodbury resident and Army Reserves lieutenant colonel whose family has owned the property since 1951 and used it as early as 1901.

Since 2003, Gallenthin has been in court fighting to keep his property and develop it himself, perhaps as a dredge-spoil site.

The town wanted to include Gallenthin's land in a proposed deepwater port aimed at creating jobs by reinvigorating an old industrial area.

But the high court ruled that Paulsboro did not adequately prove why it wanted the land, or consider the benefits of its protected wetlands. Nor did the borough prove that the rest of its redevelopment zone was adversely affected by Gallenthin's land.

Gallenthin's attorney, Peter Dickson, called the opinion "very balanced."

"The beauty of this decision is it does absolutely nothing to stop legitimate redevelopment of legitimately blighted areas," he said. "We wish Paulsboro well, and we hope the redevelopment plan succeeds."

But Gallenthin's battle with Paulsboro may not be over. Paulsboro attorney James Maley said that while he was "disappointed" by the court decision, it also provided a roadmap for the town to legally redevelop the land.

Paulsboro Mayor John Burzichelli says the port plan is moving forward, and thinks some of Gallenthin's land will likely be needed to build a connector road between Interstate 295 and the port.

Burzichelli said the town would wait for the Gloucester County Improvement Authority to determine whether Gallenthin's land was needed for the road before deciding how to proceed.

Burzichelli also serves as a Democratic state assemblyman who is sponsoring legislation to change the very redevelopment law the court says his borough violated.

And, both he and public advocate Chen said yesterday, his bill would address the high court's concerns by narrowing the definition of blight.

The bill has passed the Assembly and is stalled in the Senate; Burzichelli expects a consensus bill to be acted on in the fall.

He said Paulsboro officials "didn't set out with malice" and had thought they had followed the law correctly and for the greater good of the borough.

David Snyder, a Philadelphia lawyer and eminent-domain expert who has represented both landowners and condemners in Pennsylvania and New Jersey, called yesterday's decision "one of these cases that is an offshoot of the Kelo backlash. And we're going to see more of it locally and nationally."

In New Jersey, Snyder said the ruling would have wide-ranging effects.

"I think it's going to require redevelopment agencies to take a fresh look at some of their projects to make sure that they can meet the 'blight' definition without using the category of 'not fully productive,' " he said.

To read the full decision, go to http://go.philly.com/domainEndText