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City of Asbury Park. v. Asbury Park Towers

A-1235-05T1 (N.J. Super. App. Div. 2006) (Unpublished)

CONDEMNATION; SEVERANCE DAMAGES — Even though the same person owns a building and a separately identified lot designed for parking, where alternate parking exists and the lot is in state of ill-repair, and neither the building’s occupants nor their guests actually use the lot for parking, the property owner is not entitled to severance damages on account of the building when the lot is taken by eminent domain.

A municipality condemned a parcel of land as part of its redevelopment efforts. The landowner claimed: (1) the municipality failed to perform an adequate appraisal and thus failed to engage in bona fide negotiations; (2) the lower court committed error by not holding a hearing on unresolved factual issues material to the determination if bona fide negotiations occurred; and (3) there was no need to condemn the lot. The landowner owned another nearby parcel with an apartment complex serving the elderly. It claimed that the condemned lot was used for parking by guests and residents of that apartment complex. The Appellate Division found that because alternate parking existed and because the condemned parking lot was in a state of ill-repair, neither the apartment complex’s residents nor their guests were actually using the condemned lot for parking. The municipality offered to purchase the lot from the landowner at a value set by a real estate appraiser. After negotiations over the purchase price failed, the municipality began condemnation proceedings.

Prior to filing a condemnation complaint, a condemning authority must conduct an appraisal of the property and allow a representative of the landowner to be present during the appraiser’s inspection. An offer to purchase must be mailed to the landowner disclosing the identity of the property and interest to be acquired, the compensation offered, and the method by which the compensation was calculated. The reasonableness of the disclosures turns on the adequacy of the appraisal and must permit a reasonable average property owner to engage in intelligent negotiations. If two parcels are functionally united so that each is reasonably necessary for the use and enjoyment of the other, the taking of one parcel is a partial taking. In such a situation, a condemnee is entitled to severance damages for the one not being taken, but the landowner has the burden of proving that the two parcels are constituent parts of one economic whole. Here, the lower court found that the municipality adequately explained its valuation methodology; considered, but disagreed with the landowner’s contention that the lot containing the apartment building and the parking lot were a single economic unit; and provided the landowner with a reasonable opportunity to respond and negotiate. The lower court concluded there was no failure to engage in bona fide negotiations where the lot was unused and its future use was questionable. The Appellate Division affirmed the lower court’s factual findings and concluded there were no outstanding facts necessitating a plenary hearing. The Court agreed that the municipality had demonstrated the waterfront was in need of redevelopment and that acquisition of the parking lot was integral to the municipality’s proposed redevelopment. The Appellate Division affirmed the lower court’s ruling not to second-guess the municipality’s decision to redevelop the parking lot.

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