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Quagliariello v. Township of Edison

A-6187-03T1 (N.J. Super. App. Div. 2005) (Unpublished)

CONDEMNATION; REDEVELOPMENT — Under the New Jersey Local Redevelopment Housing Law, a municipality, not its redeveloper, has the sole power to exercise redevelopment functions; therefore, it has no right to intervene in a suit over the validity of a redevelopment designation.

A developer received site plan approval to construct a drug store on a tract of land. Part of the land was deemed a historical site. The developer then purchased the property. It and the municipality entered into an agreement by which the municipality agreed to purchase the part of the land that contained the historical site. It further provided that the municipality would have the planning board investigate a property across the street which contained a gas station, school bus operation, and rental residences to determine if the property was in need of redevelopment. If the board determined that redevelopment was necessary, the municipality agreed to adopt a redevelopment plan under which a drug store would be built on that property. The plan would designate the company as the redeveloper. The agreement also provided that the municipality would acquire the property by condemnation at the developer’s expense. Shortly after the agreement was executed, the planning board investigated the property and recommended to the governing body that it be designated as an redevelopment area. The governing body adopted this recommendation in a resolution. The municipality then adopted a redevelopment plan which condemned the property, appointed an appraiser to determine its fair market value, and designated the developer as redeveloper. Upon notification that an appraiser had been appointed but before the commencement of condemnation proceedings, the property owners filed a complaint in lieu of prerogative writs in which they challenged the municipality’s actions. The lower court invalidated the ordinance on grounds that the municipality had no basis to determine that the property was in need of redevelopment. It found that the property was being kept in good condition and was not in violation of any laws. It further found that the owners were operating a school bus business, which benefitted the public. It held that the adoption of the redevelopment plan did not serve a legitimate public purpose as required, and that the only purpose of the plan was to permit the developer to build a drug store. As a result, it concluded that the taking of the property was for a private and not public use, and therefore unconstitutional. It further held that the property owners were not entitled to counsel fees. The municipality declined to appeal, but the developer moved to intervene in the action. The property owners cross-moved for counsel fees. The lower court denied the developer’s motion on the basis that the developer, as the designated redeveloper, lost all interest in the matter when the municipality decided to abandon its redevelopment plan. It also denied the property owners’ counsel fee request. Both parties appealed the lower court’s ruling.

The Appellate Division affirmed the lower court’s ruling. It held that in order for the developer to be granted the right to intervene, it had to demonstrate an interest in the subject property. It found that the developer had no interest in the matter because under the New Jersey Local Redevelopment Housing Law, the municipality solely had the power to exercise redevelopment functions. As the designated redeveloper, the company was merely acting as an instrumentality to accomplish the municipality’s public purpose. Therefore, when the municipality abandoned its redevelopment plan, any rights that the company had in the plan were extinguished. The Court further held that under the New Jersey Eminent Domain Act it had no authority to grant the property owners counsel fees because such fees are only awardable in condemnation proceedings.

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