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BMIA, LLC v. Planning Board of the Borough of Belmar

A-5974-05T5 (N.J. Super. App. Div. 2008) (Unpublished)

CONDEMNATION; REDEVELOPMENT — To support a blight designation, a municipality must consider whether the buildings are dilapidated, obsolete or overcrowded, are improperly ventilated or unsanitary, or have a deleterious or obsolete layout, but, even if the municipality demonstrates those conditions, the conditions must still be detrimental to the safety, health or welfare of the community in order for the property to be declared in need of redevelopment.

A municipality was considering a certain section of the municipality as an area in need of redevelopment. The area considered for redevelopment comprised fifteen acres of land, and included a shopping mall. The planning board hired a consultant to determine whether the area was in need of redevelopment. The consultant prepared a report which concluded that the area was not properly utilized and created an unattractive environment for private investment or development. The consultant also concluded that the shopping mall was undersized, inefficiently utilized, and obsolete in its layout and structure. The shopping mall owner’s expert witnesses testified that the area did not meet the criteria to designate that section of the municipality as an area in need of redevelopment. The owner’s witnesses opined that the majority of properties within the proposed redevelopment area did not meet the criteria for redevelopment as outlined in the Local Redevelopment and Housing Law (LRHL). They also argued that the area was not blighted and in need of redevelopment since property values had increased significantly in the municipality, especially within the proposed redevelopment area, and that property owners had spent hundreds of thousands of dollars to improve the properties within the proposed redevelopment area. The planning board, nonetheless, found that the area was in a state of blight and designated the area in need of redevelopment. The shopping mall owner sued the board claiming that the board improperly and unconstitutionally applied the LHRL to the properties within the proposed redevelopment area. The lower court upheld the planning board’s finding and the shopping mall owner appealed. The Appellate Division reversed.

Before the Court, the shopping mall owner argued that the lower court used an improper standard when evaluating the evidence. It claimed that the lower court improperly based its decision on the sufficiency of the evidence. The owner argued that since properties designated as in need of redevelopment under the LRHL are acquired by a municipality through eminent domain, the LRHL is a takings statute that must be construed narrowly. The Court agreed, noting that the New Jersey Constitution does not permit government redevelopment of private properly solely because it is underutilized. The redevelopment statute requires the municipality to prove that the area consisted of properties that, through a combination of factors, were detrimental to the safety, health, morals or welfare of the community. Some of the factors to consider include whether the buildings were dilapidated, obsolete or overcrowded, were improperly ventilated or unsanitary, or had a deleterious or obsolete layout. However, even if the municipality demonstrated those conditions, the conditions must still be detrimental to the safety, health or welfare of the community in order to be declared in need of redevelopment. In this case, the Court found that the municipality did not demonstrate that any of the conditions of the proposed redevelopment area met that criteria. The Court noted that the redevelopment statute does not require that all buildings within the proposed redevelopment area meet the criteria as long as the generality of the buildings are substandard. However, in this case, the Court found that only two buildings within the proposed redevelopment area met that criteria. The buildings in question comprised only .34 acres out of a total of 15 acres the municipality proposed to redevelop. The Court found that this percentage (2.26%) was too small to be considered the “generality” of the buildings within the proposed redevelopment area.


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