Credit: Francis Specker

A state appeals court has ruled that a township in Mercer County may exercise its eminent domain powers to take possession of a mobile home park in furtherance of its court-approved affordable housing plan.

The Appellate Division rejected the property owner's argument that Robbinsville Township's use of the property wouldn't result in a net increase in affordable housing units.

The eminent domain case, Robbinsville v. Mercer Mobile Home Park, flows from earlier litigation before a special master in which the township sought to establish compliance with low- and moderate-income housing requirements set forth in the Mount Laurel line of cases.

“We are satisfied the municipality's broad eminent domain powers authorize the taking of the mobile home park, and the subsequent deed restriction on the mobile homes will create and guarantee affordable housing,” the panel wrote in a per curiam, unpublished decision issued Monday.

According to the decision, the township's 2015 case went to a special master and ultimately yielded a settlement that required in part that the township seek to acquire Mercer Mobile Home Park from its owner, Mercer LLC, for the purpose of adding 70 units of affordable housing.

Mercer County Assignment Judge Mary Jacobson presided over the affordable housing matter and the eminent domain proceedings that would follow, according to the lawyers in the case.

Mercer was at first unresponsive to the township's effort to engage in purchase negotiations, the court said. The township obtained an appraisal—setting the property value at about $5.7 million: $7.37 million, minus $1.51 million in needed sewer upgrades—and passed an ordinance approving the purchase. The township then made a written offer to Mercer for three lots. The lots were made up of the mobile home park itself, and two adjacent properties.

Negotiations failed, and the township ended up changing its offer: $5.7 million for only the mobile home park, not the adjacent properties. Mercer came back with a counteroffer, but it lacked an appraisal, according to the decision.

In the affordable housing case, an amendment to the settlement—contemplating Robbinsville's use of condemnation proceedings to secure the park—was approved. The township filed a condemnation case, and in May 2018, Jacobson denied Mercer's motion to dismiss, finding that the township had engaged in bona fide negotiations, as required by the state Eminent Domain Act, before going to court.

Jacobson found that the property taking would serve a public purpose, particularly because a 50-year deed restriction would mandate that the property be used for public housing.

The Appellate Division granted Mercer leave to appeal and stayed Jacobson's order on Robbinsville's eminent domain power. But panel Judges Mitchel Ostrer, Heidi Willis Currier and Jessica Mayer affirmed in Monday's decision, holding Jacobson's ruling “sound and supported by long-standing precedent.”

“In addressing Mercer's contentions, there are several arguments that overlap with another and essentially assert that the Township was not authorized to condemn MMHP,” the court said. “We are not persuaded by these arguments.”

The panel noted that mobile homes were established as an acceptable form of affordable housing in Mount Laurel I and Mount Laurel II.

Mercer argued that, because mobile homes are inherently affordable, Robbinsville's acquisition of the park wouldn't lead to a net increase in the affordable housing supply in the township.

The panel said it's “true the Township does not seek to increase the number of pad sites at MMHP” but “the subsequent deed restriction on the pads will preserve the affordable nature of those pads for at least fifty years.” Without that restriction, “there is nothing to prevent Mercer from selling or redeveloping its property” apart from local zoning laws, the court added.

Robbinsville Township Attorney Paul Renaud III argued the case for the municipality. Reached by phone, he said the township is “committed to providing fair and decent affordable housing to its residents.”

Also representing Robbinsville was Elissa Grodd Schragger of Mason, Griffin & Pierson in Princeton.

Schragger, reached by phone, noted that New Jersey courts have issued several eminent domain decisions of late. Among them are Borough of Glassboro v. Grossman and Casino Reinvestment Development Authority v. Birnbaum, both issued this year.

“Obviously, it's on the court's mind,” Schragger said.

According to Renaud, the township has asked Jacobson to sign an order allowing it to deposit the purchase funds, and after that plans file a declaration of taking. But Mercer has asked the state Supreme Court for a stay, said Renaud, who expects that it also will petition the high court for certification.

Mercer's counsel, Robert Baranowski of Hyland Levin Shapiro in Marlton, didn't return a call seeking comment.