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Northeast Properties Company v. Borough of Wood-Ridge

A-3613-01T1 (N.J. Super. App. Div. 2003) (Unpublished)

CONDEMNATION; BLIGHT—Where a property owner allows its premises to remain dark and unleased for a long period of time without taking any action, it is reasonable for a court to hold that there has been a discontinuance of use based upon an on-going, progressive, and longstanding situation.

A municipality sought to designate a substantial portion of land as “an area in need of redevelopment.” Essentially, the property in question consisted of three parcels. The largest was a former industrial property containing surplus and obsolete buildings and in was relatively poor condition. It represented about twenty percent of the municipality’s land area. A second, much smaller parcel, was occupied by a single commercial building in good condition. The third parcel, the subject of this case, was a shopping center built about thirty years earlier. The supermarket premises had been “dark” for about two years. A bank building had been empty for about nine years, and the remaining space was occupied by a revolving series of low-end tenants. The shopping center owner purchased the former supermarket’s lease so that it could control the property and negotiate for renting space to a larger tenant. Objecting to the blight designation, the shopping center owner filed suit to set it aside. Competing experts testified. The relevant standards for a designation “in need of redevelopment” are embodied in a New Jersey statute, the relevant of which portion provided as follows: “A delineated area may be determined to be in need of redevelopment if [there is evidence of] ... (b) The discontinuance of the use of buildings previously used for commercial, manufacturing, or industrial purposes; the abandonment of such buildings; or the same being allowed to call into so great a state of disrepair as to be untenantable ... (e) a growing lack or total lack of proper utilization of areas caused by the condition of title, diverse ownership of the real property therein or other conditions, resulting in a stagnant or not fully productive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare.” In reaching a determination as to whether a property is in need of redevelopment, a municipality’s decision is entitled to a “presumption of validity.” Therefore, “[t]he burden is on the party challenging the designation to show that on the facts of the particular case the municipality acted arbitrarily, capriciously or contrary to the law.” In this case, the lower court found substantial credible evidence to support the municipality’s decision. Even though the shopping center owner argued that the lower court had misinterpreted the “discontinuance of use” requirement, the Appellate Division pointed out that the lower court had, in fact, reached a specific determination that the discontinuance was “an on-going, progressive, and longstanding situation.” Therefore, it refused to make “independent credibility determinations” where the lower court’s reasoning was clear. Even though the shopping center owner had eventually taken action with respect to the “dark” supermarket, it was clear to the Appellate Division that it had made “no effort to re-let the bank building, which was left unoccupied for eight or nine years, and the satellite stores remained less than fully occupied for several years.”

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