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Rosengarten v. The Council of the City of Perth Amboy

A-3316-03T1 (N.J. Super. App. Div. 2005) (Unpublished)

CONDEMNATION; INVERSE—Reductions in the value of property during governmental deliberations absent extraordinary delay are incidents of ownership and do not constitute a taking by inverse condemnation.

In 1987, a developer purchased unimproved land. According to the developer, over the next nine years, “his plans to build residential units on this property were thwarted by the municipality.” Then, as the developer was planning to develop his property, the municipality adopted a redevelopment plan including the developer’s land. After four years, with no apparent progress on the redevelopment plan, the developer sought a judgment of inverse condemnation “on the ground that the unrealized plans of various public entities over the years to acquire his property for a number of proposed uses, along with the delays in effecting the redevelopment plan, had together rendered his property unmarketable and unusable for such an extended period of time as to amount to an unconstitutional deprivation of property.” The lower court was faced with the question about how long must the passage of time be between the time that a municipality “declares property blighted for redevelopment” and when it physically take the property. In deciding that such a period had not transpired in this particular case, it accepted the municipality’s argument that “there cannot be a simultaneous acquisition of every piece of property at the inception of a project. Rather, the order of acquisition and pace of development is a question of allocation of scarce resources.” If further agreed with the municipality that “compelling condemnation of [this particular property owner’s] property would give every property owner whose property [was] not immediately taken an equal justification to compel acquisition of their land.” With that in mind, the lower court characterized the issue as “a slippery slope” with which it was not willing to get involved. “As to any loss of value resulting from the delay in acquiring the property, the [lower court] remarked that could be remedied in the ongoing redevelopment by setting a proper valuation date when the property was condemned… .” The property owner appealed, but to no avail.

The Appellate Division pointed out that “[i]nverse condemnation occurs where the state has de facto taken private property, but condemnation proceedings have not been instituted. ... Such a taking may occur where the state has imposed a direct restraint on the use of the land. The governmental action must substantially destroy the beneficial use of the property. ... Restrictions on land use which are ‘sufficiently extensive and prolonged, may constitute a taking.’” Lost economic opportunities, alone, “do not constitute a compensable taking.” Likewise, reductions in the value of property “during governmental deliberations, absent extraordinary delay, are incidents of ownership and do not constitute a taking.” With that in mind, the Appellate Division accepted the factual determinations of the lower court and were satisfied that any “loss of value resulting from the delay would be remedied by setting a proper valuation date.”

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