Appellate panel grants request for trial to set just compensation
BY CHRISTINE VARNO
Staff Writer
A panel of judges for the state Superior Court Appellate Division ruled against the city last week, granting a former Long Branch property owner a trial by jury to establish the value of land condemned for redevelopment.
According to the judges’ ruling, the $294,000 the city offered Dennis S. Spanos for two beachfront parcels totaling 23,400 square feet was not just compensation.
In addition, the panel said the city failed to reveal to condemnation authorities that zoning changes allowed for high-density development on the land.
“This means that Mr. [Dennis S.] Spanos will get his day in court and the just compensation [for his property] will be determined by a jury,” said Spanos’ attorney Kenneth D. McPherson Jr., of Waters, McPherson, McNeill, Secaucus, in an interview last week
According to the appeal filed by McPherson, an auditor hired by Spanos placed the value of his property at $1 million.
Paul V. Fernicola, who represented the city of Long Branch in the appeal, could not be reached for comment.
Spanos’ vacant property, taken by the city through eminent domain, was located in the Beachfront North zone which has been redeveloped as high-density luxury townhomes.
McPherson appealed a January 2005 Law Division court decision that granted the city’s motion to set the just compensation of Spanos’ oceanfront property at $294,000.
The appeal of that ruling was argued on April 26 before Appellate Judges Erminie L. Conley, Harvey Weissbard and Paulette Sapp-Peterson who issued their decision in favor of Spanos on June 14.
The panel ruled that Spanos’ right “to receive every reasonable consideration before the invasive power of eminent domain may be exercised warrants a remand so that the land may be properly valued.”
The suit names the City of Long Branch as the plaintiff-respondent and Spanos and his late wife, Theonie F., as defendants-appellants.
The Spanoses purchased adjacent lots at 32 Ocean Avenue north in 1982 as a retirement investment and just two years later the city issued “a broad blight declaration” covering the Spanoses’ property and “much of the adjacent land,” according to a summary of the judges’ opinion.
“Defendants put their future plans of building and operating a restaurant on the property on hold,” according to the opinion.
In 1987, the Spanoses received a letter from counsel for the Long Branch Redevelopment Agency offering to buy their property for $127,000 which they declined.
Shortly after, the Spanoses were approached by a nearby property owner who offered to buy their lots for $650,000, but that deal fell through, according to court papers.
In December 1988, the city revalued properties for tax purposes and assessed the current market value of the Spanoses’ property at $414,800, the opinion states.
On Jan. 9, 1996, the city enacted Ordinance 50-95, which permitted waterfront mixed residential units, “presumably in an effort to spur owner development,” according to the opinion.
The ordinance increased the maximum permitted development density of the land from eighteen to 30 units per acre.
The Spanoses’ property was designated within the Beachfront North sector of the Oceanfront Broadway Redevelopment Area on Jan. 23, 1996, and five years later, on Jan. 23, 2001, the city adopted an ordinance authorizing the taking of the Spanoses’ property through eminent domain proceedings, according to the opinion.
The city retained appraiser Hugh A. McGuire, of McGuire Associates, who appraised the Spanoses’ property at $152,000, and determined that the “highest and best use of the vacant property was for an assemblage with other property to form a legal size plot in accordance with the zoning regulation,” according to the opinion.
In arriving at the assessed value, McGuire’s appraisal did not mention “the less-restrictive” ordinance 50-95, according to the appeal.
In April 2002, the city filed a complaint and an order to show cause and in August 2002, the city filed a Declaration of Taking and submitted $152,600 to the clerk of the Superior Court.
A condemnation commissioners’ hearing was held in November 2002 with the city’s real estate appraiser as the only witness and his appraisal report the only one entered into evidence, according to the opinion, the appeal said. The commissioners fixed compensation to be paid by the city at $294,000.
On Dec. 6, 2002, the city filed a notice of appeal of the commissioners’ award and the defendants never filed a cross-appeal, the opinion states.
After receiving the city’s notice of appeal. the Spanoses retained Jon Brody of Appraisal Consultants Corp. who concluded in August 2004 that the market value of the Spanoses’ lots was $1,070,000.
Brody’s report found that, “subject to the assemblage process in accordance with the applicable zoning regulation, the highest and best use of the land, taking full advantage of its location within a few hundred feet of the Atlantic Ocean . . . was for mid-rise or townhouse residential development similar to other residential development taking place in Long Branch and nearby communities,” according to the opinion.
In November, the city withdrew its appeal of the commissioners’ award and filed a motion of Final Just Compensation for $294,000 and the Spanoses’ attorney filed a cross motion to remand the matter for another commissioners hearing, according to the summary of the opinion.
The court granted the city’s motion for final judgment and denied the Spanoses’ motion.
On appeal, McPherson raised several issues, including the claim that Spanos had been denied his constitutional right to receive just compensation due to the city’s deliberate decision not to disclose to the condemnation commissioners the existence of a zoning ordinance affecting the value of the property.
Other claims made in the appeal included that the trial court erred in ruling that a formal cross appeal is required in order to continue prosecuting value contentions. In the summary, the judges ruled that “the prejudice to the defendants and the public interest in ensuring fair condemnation proceedings appear to outweigh any prejudice to the city’s interest and the public’s interest in conserving public funds.”