Gibbons Law Alert

Gibbons Law Alert

Tagged: Condemnation

Recap: IRS Convenes Public Hearing on Proposed Regulations for Opportunity Zones

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Posted in Development/Redevelopment

On February 25, 2019

Jason J. Redd, a Director in the Gibbons Government & Regulatory Affairs Department attended an overflowing public hearing on February 14 convened by the Internal Revenue Service for the purpose of obtaining input from stakeholders concerning the initial proposed regulations for Opportunity Zones (OZ) issued in October. The IRS is reviewing comments on the first round of proposed rules and is expected to issue the next round of proposed regulations in March, with the potential for final regulations to be issued in late spring. Witnesses at the packed hearing included state cabinet officials, as well as representatives from state economic development groups, small businesses, community reinvestment coalitions, investment funds, and technology and planning organizations, among others. Testimony focused on ensuring that program regulations maximize investment and economic growth by generating new development, capital, and jobs in the distressed communities where OZs are located. There was also a clear call, by all in attendance, for clarity and flexibility in the next round of rules. Suggestions included: (i) modifying the rules to provide more flexibility to investors when exiting Qualified Opportunity Fund (QOF) investments, which is currently limited to a sale of the QOF investment itself; (ii) minimizing sourcing and location rules for OZ business income; and (iii) allowing QOFs to reinvest interim gains within a reasonable...

NJ Appellate Division Announces Evidentiary Standards for Condemnations “Necessary” for a Redevelopment Project

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Posted in Development/Redevelopment

On January 18, 2019

At what point is a piece of property “necessary” for a redevelopment project? On January 7, 2019, the New Jersey Appellate Division published a decision in Borough of Glassboro v. Jack Grossman, Matthew Roche, and Dan Desilvio, — N.J. Super. — (App. Div. 2019) (slip op. at 2) that – for the first time – clarifies the phrase “necessary for the redevelopment project” as stated in the Local Redevelopment and Housing Law (LRHL) at N.J.S.A. 40A:12A-8(c). The three-judge panel addressed the question of whether a showing of necessity is required by a condemning authority beyond the designation of the area as one in need of redevelopment, and, what showing it must make in order to condemn a parcel of land located with a redevelopment area. Existing case law required the taking to be “reasonably necessary,” but had never clarified what standards should be used to evaluate how necessary a given property might be to a given redevelopment project. This decision now requires that when a landowner within a redevelopment area contests the necessity of a condemnation, the condemning authority must articulate a definitive need to acquire the parcel for an identified redevelopment project. In Grossman, the defendants owned or were purchasing a parcel located within a redevelopment area in the Borough of Glassboro. The area...

Update: U.S. Supreme Court Announces New Test for Defining “the Parcel” in a Regulatory Taking

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Posted in Development/Redevelopment

On June 30, 2017

On March 22, 2017, we blogged about the importance of the United States Supreme Court’s looming decision in Murr v. Wisconsin – a regulatory takings case that was poised to resolve a key question long left unanswered by the Court’s takings jurisprudence: how do you define the relevant parcel in determining a regulation’s impact on “the parcel as a whole?” On June 23, 2017, the Court issued its ruling, and in a 5-3 decision answered definitively that it depends. Sometimes a regulation may go so far as to effect a “taking” of one’s property. In determining when a regulation has gone so far, the Court has previously instructed that reviewing courts must consider the regulation’s interference with property rights “in the parcel as a whole.” But the precise boundaries of “the parcel” are not always clear and, in many cases, may prove to be dispositive of whether there was a taking at all. The Court described the problem in Keystone Bituminous Coal Assn. v. DeBenedictis, explaining that because the regulatory takings analysis requires a comparison between the value taken from the property to the value which remains, “one of the critical questions is determining how to define the unit of property whose value is to furnish the denominator.” In Murr, the Court was presented with a number...

New Jersey Supreme Court Decides 62-64 Main Street, L.L.C. v. City of Hackensack, Clarifies Definition of “Blight” in Context of Redevelopment

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Posted in Development/Redevelopment

On August 6, 2015

On March 23, 2015, in 62-64 Main Street, L.L.C. v. City of Hackensack, the New Jersey Supreme Court determined that property does not need to have a negative effect on surrounding properties in order to be deemed “blighted.” Prior to the Court’s decision in this case, it was unclear whether a negative effect on surrounding properties was a prerequisite to a finding of blight, or simply one way to establish it. Because the New Jersey constitution allows municipalities to exercise their powers of eminent domain to redevelop blighted property, the Court’s decision could encourage more municipalities to move forward with the condemnation of property for private redevelopment.

Opening the Flood Gates?: U.S. Supreme Court Holds That Takings Clause Covers Temporary Flooding

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Posted in Environmental and Green Issues

On December 12, 2012

When government actions cause flooding of your land, does it constitute a “taking” that triggers the Fifth Amendment’s requirement of “just compensation?” Supreme Court precedent dating back to 1872 teaches that when the flooding is permanent, such as when a new dam creates a lake, a compensable taking has occurred. But what if the flooding is only temporary? Can that constitute a taking? The Federal Circuit said, “Never.” In Arkansas Game and Fish Commission v. United States, the Supreme Court disagreed, and said, “Sometimes.”

N.J. Appellate Court Clarifies That Owners of Pre-1993 Property Must Prove Due Diligence During Acquisition Under the Innocent Purchaser Defense Codified in the Spill Act

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Posted in Environmental and Green Issues

On November 14, 2012

On October 29, 2012, as Hurricane Sandy began its assault on the State, a New Jersey Appellate Court in New Jersey School Developments Authority v. Marcantuone created its own “storm” in Spill Act jurisprudence by holding that purchasers of contaminated property prior to September 14, 1993, can be liable under the Spill Act if they failed to conduct due diligence prior to purchase. In reaching this conclusion, the Appellate Division held that the long-standing 2001 decision in White Oak Funding, Inc. v. Winning had been superseded, in part, by the 2001 amendments to the Spill Act (“2001 Amendments”), which had been adopted a few weeks before the White Oak decision and became effective a week after the decision.

N.J. Court Finds No “Temporary Taking” During Abandoned Condemnation Proceeding

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Posted in Development/Redevelopment

On October 25, 2012

A New Jersey Appellate Court ruled against several landowners in Long Branch who sought compensation for losses they allegedly suffered during the pendency of a condemnation action that the city eventually abandoned. In the absence of an actual “declaration of taking,” the Court held in its October 16 opinion, the landowners were not entitled to compensation.

Whose Interest is it Anyway?: How the Town of Kearny, N.J. Stumbled on the Condemnation of a Leasehold Interest

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Posted in Development/Redevelopment / Transactional Real Estate and Leasing

On April 7, 2011

Last month, the New Jersey Supreme Court issued an opinion in Town of Kearny v. Discount City of Old Bridge, which refined and further complicated the process of condemning a leasehold interest. The decision also called into question condemnation provisions in existing leases. The atypical facts in the case likely led to the complex conclusion. The Town of Kearny designated an industrial area as an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law.

It Wasn’t Yours to Begin With: New Jersey Supreme Court Holds That City Need Not Compensate Beachfront Condemnee for Land Created by Beach Replenishment Project

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Posted in Environmental and Green Issues / Transactional Real Estate and Leasing

On October 8, 2010

As discussed in a recent post, beaches have a way of generating difficult cases about when land-use regulations result in a compensable “taking” of property. A new opinion from the New Jersey Supreme Court reminds us that things can be just as complicated when the government takes beachfront property the old-fashioned way, via eminent domain.

When and Who?: New Jersey, U.S. Supreme Courts Grapple With Beachfront “Takings” Issues

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Posted in Development/Redevelopment

On July 28, 2010

“Beach nourishment” and “beach restoration” projects, where sand from other locations (often the ocean bottom) is dumped on a beach to retard erosion or to repair its effects, is expensive. It also raises complex issues of fairness and equity about who should pay for the projects and who should be compensated for their negative effects. In two decision handed down in June, the New Jersey and United States Supreme Courts grappled with another often controversial aspect of these projects: when can beachfront owners allege that the project has actually taken their property, triggering the requirement of “just compensation” found in the New Jersey constitution and the Fifth Amendment to the federal constitution?

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