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Dutch Neck Land Company, LLC v. City of Newark

A-5825-06T2 (N.J. Super. App. Div. 2008) (Unpublished)

CONDEMNATION; REDEVELOPMENT; NOTICES — Where a municipality has given individual notices of blight designation hearings to some owners with respect to particular properties within a redevelopment area, there is no reason why it should not be required to give such reclassification hearing notices to all affected property owners.

A municipality, through its governing council, declared an area of land to be blighted or in need of redevelopment. About six months following this declaration, the municipality adopted a redevelopment plan under which certain properties were to be acquired by the municipality for redevelopment. Other properties that were in good condition and improved were not designated for acquisition. According to the plan, whether a particular property was to be acquired was subject to change depending on whether conditions on the property had changed. Forty-one years following the adoption of the plan, the municipality’s most recent amendment to the plan authorized the planning board to reassess whether certain properties were in need of reclassification as to whether they should be acquired or not.

One year following this amendment to the redevelopment plan, a lessee who operated a storage facility on a large tract part of a property owner’s land, leased a smaller adjoining tract from the same property owner. The lessee then subleased that property to a tenant that stored empty shipping containers on the adjoining property. The property owner’s land included the leased property, the adjoining property that had subsequently been leased and then sublet, and a small property used as salvage yard for commercial vehicles. Part of the property owner’s land had been designated for acquisition throughout the period of time that the redevelopment plan was in effect. Following the plan’s amendment, all of the land became targeted for acquisition.

While the lessee was negotiating to lease and sublease the adjoining tract, it unsuccessfully attempted to view the redevelopment plan. The municipality would not provide the lessee with the plan. Instead, a municipal official wrote to the lessee that the storage operations were a permitted use but did not mention that the amendment to the plan was simultaneously being adopted. Subsequently, the municipality entered into an agreement for the redevelopment of all of the property owner’s land. The property owner and the lessee brought an action against the municipality and against the site’s designated developer, seeking to invalidate the redevelopment plan amendment as well as the development agreement. At a pre-trial hearing, the lower court found that the property owner and the lessee had failed to bring their claim within the required forty-five day period from when the amendment was adopted and granted the request by the developer and the municipality to dismiss their claims in their entirety and with prejudice.

On appeal, the Appellate Division pointed out that over the prior forty years, the municipality had given individual notices of hearings to affected landowners and that there was no apparent reason why the municipality did not give notice of the reclassification hearing for this property to this particular property owner. It also pointed out that soon after the lower court dismissed the matter, the New Jersey’s Supreme Court had clarified the circumstances under which a time requirement to bring an action can be relaxed as a matter of public interest. The Court found that although redevelopment statutes may not require that individual notice be given for hearings that would affect a landowner, there may be an equitable argument as to whether such a practice had existed by custom and would have thereby induced the property owner to rely on such notice. Thus, it reversed and remanded the matter for a factual determination based on recent holdings. The matter was also reversed and remanded because while the most recent amendment was included in the Court’s record, the original declaration of the blighted area, previous amendments, and documents relating to the most recent amendment were not included in the record and also had not been reviewed by the lower court. The Court also remanded the matter for a factual determination as to whether the municipality had violated the open records statutes and, if so, whether the property owner and the lessee were entitled to any relief as a result.

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