Simply ignore the U.S. Constitution’s requirement that private property can only be taken for a “public use,” and take property from one private owner in order to hand it over to another private entity in the name of “economic development” and/or the desire to rake in more tax dollars. Of course, the outrageous 5-to-4 U.S. Supreme Court decision in Kelo v. City of New London gave the green light for politicians to abuse eminent domain powers in whatever fashion they like.
Local governments often use a “blight” designation to grease the skids. However, one politician’s blight often turns out to be the home or small business of a hard-working American.
But in New Jersey last week, a state appellate court ruled against the city of Long Branch, NJ, which seeks to grab the oceanfront homes of various residents and hand the property over to a private developer.
The North Country Gazette reported:
A three-judge panel of the New Jersey Appellate Division this week unanimously reversed the June 2006 decision of Superior Court Judge Lawrence Lawson, which allowed the city of Long Branch, N.J., to condemn a charming seaside neighborhood known as MTOTSA for a luxury condominium development.
This is the latest in a series of major decisions from New Jersey courts, including the Supreme Court, recognizing that state law and the New Jersey Constitution place real limits on the power of government to condemn property for private development.
After explaining how the lower court misapplied the law, the court of appeals found that the city did not provide “substantial evidence” to support its findings of blight.
“The Court basically told the city that if that’s all it has, it can’t take these homes,” said Scott Bullock, a senior attorney with the Institute for Justice, which represents many of the homeowners along with Peter Wegener of Bathgate, Wegener & Wolf in Lakewood, N.J. “It’s too late for the city to manufacture more evidence, so the Court’s ruling is a fatal blow to the city. We are confident the owners will prevail on remand.” The owners will also have the opportunity to show that changing the plan to use eminent domain was illegal”.
An August 13 Gannett New Jersey news story further explained:
City officials continue to weigh their options in the wake of an appellate court decision that set aside the 1996 blight designation in a controversial oceanfront section where residents are fighting the use of eminent domain.
After an executive session Tuesday night, City Attorney James G. Aaron said that no final decisions had been made, and the clock is ticking on at least one aspect of the case. If the mayor and council opt to appeal the appellate decision's determination that the 1996 redevelopment report did not comport with 2007 standards on blight, they have only 20 days from last Thursday, the date the appellate decision was released, to file a motion asking the state Supreme Court to review the decision…
The appellate decision stemmed from a 2003 request from residents of the Marine Terrace, Ocean Terrace, Seaview Avenue area to be withdrawn from the redevelopment zone. Negotiations between the group and the city soon broke down and the case ended up in court.
The appellate panel found for the city in several areas, saying it had engaged in bona-fide negotiations with MTOTSA and also had not committed any conflicts of interest in the planning process, a decision DeStefano called "a big victory for us" because it cleared the air about the propriety of relationships between the council, the developers, lawyers involved in the process and a bank that lent money to the developers.
Lori Ann Vendetti, a core member of MTOTSA, who last week called the decision a vindication of their fight, said it was always about standing up for a principle, for the idea that everyone deserved their piece of the American Dream.
In his August 12 Wall Street Journal column, William McGurn weighed in. He wrote:
The good news is that while New Jersey's politicos are apparently content to leave their citizens vulnerable to these kinds of seizures, the courts have been more, well, judicious. In a welcome ruling last year, the New Jersey Supreme Court in Gallenthin Realty Development Inc. v. Borough of Paulsboro said that the government could not declare a property blighted just because someone else might put it to higher economic use. Last week the appellate court followed up by sending the Long Branch case back to the lower court. The three judges made clear they were skeptical of the blight designation -- and put the burden on the city to prove it.
Now, anyone who walks down these streets can see that while the homes may be modest, they are not blighted. A visitor can also see how terrible it is for ordinary Americans to have to live under the threat of a forced sale simply because some government official decides their homes aren't upscale enough.
One might not expect a blow to be struck in favor of property rights in a big government state like New Jersey. But is has been, and that’s good news. The Long Branch nightmare is not over for property owners, but they clearly have a fighting chance now.
Of course, the burning question remains: How did we ever get to this point in the United States of America?
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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