BY CHRISTINE VARNO
Staff Writer
GLORIA STRAVELLI More than 100 people attended a rally to protest plans to condemn homes in Long Branch for redevelopment. An attorney for a group of Long Branch homeowners will appeal a state Superior Court ruling that gives the city the go-ahead to seize his clients’ oceanfront property through eminent domain for a private redevelopment project.
Judge Lawrence M. Lawson rendered the decision on June 22, approximately 90 days after hearing a motion to dismiss condemnation complaints served by the city of Long Branch on 20 residents in the Beachfront North, phase II redevelopment zone known as MTOTSA.
“The decision says that [Lawson] rules against us on all the legal issues we raised,” said William J. Ward, attorney representing two of the homeowners, in an interview last week.
“We now have 45 days to file an appeal,” Ward said of the dismissal of the motions he and attorney Peter H. Wegener filed on behalf of the 20 property owners.
“We will be appealing, and in an odd way [Lawson’s] decision is good for the appeal. [Lawson] could be criticized for some of this ruling.”
Wegener, who represents 18 of the property owners, could not be reached for comment.
According to the 60-page opinion, Lawson ruled that the city’s right to take the MTOTSA properties is a permitted use of eminent domain and granted the city’s request to appoint commissioners to fix the compensation that must be paid for the properties.
Ward explained that the appointing of commissioners “is the final judgment in the right to take property.”
At the March 24 court hearing, Ward asked Lawson to permit further discovery and to schedule a plenary hearing on the city’s right to take private properties for redevelopment.
“He did not grant us a hearing and he did not grant us the right for discovery,” Ward said. “It is very disappointing. At the very least we thought we would be granted a hearing or the discovery, but he didn’t give us anything.”
Plans for MTOTSA (Marine and Ocean terraces and Seaview Avenue) call for designated developer MM Beachfront North II – consisting of Matzel & Mumford, a division of K. Hovnanian, and the Applied Cos., Hoboken – to raze the modest neighborhood and construct three buildings consisting of a total of 185 upscale condominium units.
The property owners retained Ward, Florham Park, and Wegener, Lakewood, to challenge what they claim is an abuse of the city’s power of eminent domain.
Ward and Wegener plan to argue several points in the appeal, including that conflicts of interest between the city and developers occurred throughout the redevelopment process, according to Ward.
“[Lawson] did not give us the time of day on that issue in his opinion,” Ward said.
In addition, Ward and Wegener will argue that the MTOTSA properties are not blighted, as required by redevelopment law, and that the city failed to negotiate with the homeowners in good faith. Ward said he also plans to raise the issue that the city’s original redevelopment plan called for the MTOTSA area to be slated for infill and later changed the plan to condemn the property for residential housing.
“There are no positives for the property owners from the opinion,” Ward said. “If we are lucky, I think oral arguments [for the appeal] will be heard sometime in the fall or December.”
City Attorney James Aaron said earlier this week, “I am pleased on behalf of the city. A court [has ruled] that everything the city has been doing is totally proper.”
He added that he “absolutely” believes that the ruling will prevail at the appellate level.
Opinion on motion
to dismiss arguments: Infill
According to Lawson’s opinion, Ward and Wegener had challenged the city’s right to take the MTOTSA properties and the manner in which the city attempted to do so based on several grounds including that the city was arbitrary and capricious in designating the MTOTSA properties as “an area in need of redevelopment”.
But Lawson ruled, “The designation that the MTOTSA properties were in the redevelopment area was made in 1996, and absent a showing that it was improper at the time, the court must defer to the governing body’s expertise and judgment in determining where the borders to such a designation shall be situated.”
“The court finds that it cannot overturn the city’s decision merely because the decision was debatable. No further evidence or testimony is required, as the court is satisfied that the “area in need of redevelopment” designation was supported by substantial evidence, and therefore was not arbitrary, capricious or unreasonable,” according to Lawson’s opinion.
The two attorneys also charged that the change from “residential infill” to condemnation was made to benefit the private developer and does not advance a public purpose, according to the opinion.
“The condemnees contend that they were told ‘residential infill’ would occur in the area in which the MTOTSA properties are located,” the opinion states, and continues, “The city maintains that either residential infill or planned residential development was always a part of the redevelopment plan. The city chose to use a planned residential development and condemn the MTOTSA properties pursuant to its powers.”
Public purpose
Lawson ruled in the opinion, “The condemnation of the MTOTSA properties is supported by a public purpose – the redevelopment of a blighted area. Therefore, no plenary hearing is warranted on this issue as the condemnees have not raised issues of factual dispute. Rather, they contend on legal grounds that the city did not have a public purpose for the subject condemnation. I find that they did.”
Conflicts of interest
Ward and Wegener, who filed separate but similar motions to dismiss, also argued that there were conflicts of interest between law firms, a bank and a redeveloper in the city’s redevelopment process.
Lawson rrejected the argument: “Although the potential for a conflict would have existed if there was any evidence that the city or either law firm were a part of the negotiation or discussions involving the partnership between Beachfront North LLC and [Matzel & Mumford], no such evidence is before the court.
“Only a speculative potential conflict exists here, and this court cannot find that … warrants such examination,” Lawson stated in the opinion.
Lawson also ruled, “Defendants fail to make any connection as to how this alleged benefit was detrimental to the condemned. This court is satisfied that the condemnees have not identified a potential conflict of interest which may have affected the rights of the condemnees.”
Good faith negotiations
Ward and Wegener also argued that the city improperly delegated its authority to engage in, or failed to engage in, bona fide negotiations and Lawson ruled that “Negotiations are a two-way street. Where as here, the condemnees make it clear that they do not intend to sell their properties, negotiations are rendered a practical impossibility. Thus, the court cannot find that the city failed to negotiate in bona fide negotiations.”
According to Lawson’s opinion, “The condemnees also aver that negotiations were capped by ordinance 2-01, adopted Jan. 23, 2001, which states that the offer cannot exceed an amount set forth in the redevelopment agreement. Having failed to engage in negotiations themselves, the homeowners never challenged the alleged ‘ceiling.’ Thus this is not ripe for the disposition by the court at this time.
“Despite the issue never becoming ripe, this court is troubled by this restriction as well. Although the court is satisfied that the ceiling had no effect on the city’s ability to offer its determination of the full market value of the subject properties, had the offer for fair market value been stunted by this ‘ceiling,’ the court would have no choice but to dismiss the action for failure to engage in bona fide negotiations.”
Refusal to grant stay
Lawson further ruled against the request for a stay on the taking of the homes, stating, “No stay is warranted here as this court has made a definitive ruling that the taking is authorized by law.”
Reaction to ruling
“I am baffled by his opinion that this justifies a public use,” said MTOTSA resident William Giordano. “I don’t know how he justified the city changing the plans from infill to residential.
“And how does he dismiss the conflict of interest,” Giordano continued. “If there is not enough evidence, then that is why we need time to prove our case. I am confused and I am losing confidence in our system.”
Giordano added that the MTOTSA property owners have owned their homes for years. “Why do the developers have more rights to this property than the homeowners who have been paying taxes for 50 to 60 years?”
Denise Hoagland, another MTOTSA resident, had a similar reaction to Lawson’s opinion.
“I am disgusted,” she said. “I think our society has really lost value. I knew this was going to be Judge Lawson’s response,” Hoagland said. “I was not expecting a hearing. But I was not expecting the dissertation that he gave. It blew me away.”
An attorney with the Institute for Justice (IJ), a nonprofit law firm based in Washington, D.C., that specializes in the protection of private property rights, said Lawson “got it wrong.”
“It was a poorly reasoned decision,” Senior Attorney Scott Bullock said. “It was absurd that he would not grant a plenary hearing and discovery.”
Bullock continued, “In virtually every eminent domain case in New Jersey, judges want to hear evidence.
“At the least, the appellate court will review this decision very carefully and order plenary hearing in this matter,” Bullock said. “This is very disappointing. But the homeowners are a very strong candidate for an appeal.”