Redevelopment Designation in Neptune Rejected

by: Anthony F. Della Pelle
15 May 2008

The Superior Court of New Jersey recently rejected a redevelopment designation by the Borough of Neptune City.  65 Steiner Avenue, LLC v. Borough of Neptune City, MON-L-4082-85.  The area targeted by the Borough through the redevelopment processes of the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq. (“LRHL”), consisted of light industrial uses, some modest single-family homes, a motel, and a fully occupied and well-maintained apartment building.  The study area included multiple zone districts.   The record included comments of the members of the local Land Use Board that the Borough’s true goal was to redevelop a single vacant industrial property within the redevelopment area and that the Borough designated a larger area solely in order to entice a redeveloper to undertake a project which would include the single industrial parcel. 

The court invalidated the municipal redevelopment designation of the area for several reasons. First, the court noted that the Borough’s master plan considered this industrial area to be an important part of the Borough’s Land Use, and contemplated the continued use of the area for industrial purposes.  The court also found that the Borough’s planning consultants made very limited inquiries to the property owners or operators concerning the nature of the uses and operations within the study area. In addition, the planners failed to conduct interior building inspections, did not study occupancy levels, employment within the area, code violations or other routine development considerations.

The Borough’s planning consultants also characterized much of the study area “in need of redevelopment” by virtue of criteria “d,” “e” and “h” of the LRHL. The court found that the Borough had not adequately established the applicability of criterion “d,” since there was nothing to suggest that the factors cited by the Borough planners caused any detriment to human health, safety or welfare. Likewise, the court found that application of criterion “e” of the LRHL was improper, since there were no title or diversity of ownership issues.  Citing the 2007 New Jersey Supreme Court opinion in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, the court noted that while certain properties within the redevelopment area represented less than “optimal” uses of property, that fact alone had been held insufficient to qualify those properties for redevelopment under the LRHL. The court also rejected the Borough’s application of criterion “h” of the LRHL, which relates to “smart growth” planning. The court noted that the Borough’s planning report made no conclusions as to how smart growth principles could be achieved in regard to the study area as a whole.

This decision is further confirmation that New Jersey courts will reject municipal redevelopment designations when the bulk of the area under consideration does not qualify under the criteria for redevelopment under the LRHL.  Blight conditions within a study area must predominate in area, and municipalities must avoid redevelopment designations in areas which are overly broad or overinclusive. 

McKirdy & Riskin’s John H. Buonocore, Jr., and Joseph Grather,, represented one of the property owners, 65 Steiner Avenue, in this redevelopment dispute.