Courts Must Fine-Tune Eminent Domain's Application to Shopping Malls and Office Parks
We support the expansion of the statute because shopping malls and office parks are vulnerable to decay amounting to blight, but courts will have to define case by case what vacancies are "significant".
November 10, 2019 at 10:00 AM
3 minute read
The New Jersey Constitution authorizes government to take private property and redevelop it for public use upon payment of "just compensation" to the owners (eminent domain). 8:3-1. Whether or not a property is in need of redevelopment is governed by the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-5. Several subsections of that statute delineate the conditions which, if present, will be deemed to describe an area in need of redevelopment. Until recently, subsection (b) stated that an area could be determined to be in need of redevelopment upon, "the discontinuance of the use of buildings previously used for commercial, manufacturing, or industrial purposes; the abandonment of such buildings; or the same being allowed to fall into so great a state of disrepair as to be untenable."
New Jersey has experienced an increasing number of distressed shopping centers and office parks. In August, the governor signed a bill which expanded the criteria in subsection (b) for the redevelopment determination. It now reads, "The discontinuance of the use of a building or buildings previously used for commercial, retail, shopping malls or plazas, office parks, manufacturing or industrial purposes; the abandonment of such building or buildings; significant vacancies of such building or buildings for at least two consecutive years; or the same being allowed to fall into so great a state of disrepair as to be untenable."
Before the amendment of subsection (b), shopping malls and office parks might have been able to qualify as in need of redevelopment if they satisfied the criteria of other subsections of the statute. However, the Legislature decided to expand the language so that even if a shopping mall or office park did not meet the criteria of any of the other subsections of the statute, if they were abandoned or the use of a component building or buildings was discontinued for at least two consecutive years, redevelopment was legally permitted.
We support the expansion of the statute to include shopping malls and office parks because trends in the economy have shown that both types of property are vulnerable to decay amounting to blight. The expansion of the definition of blight beyond outright abandonment to include "significant vacancies" for two years is more problematic. The courts will have to define case by case what vacancies are "significant" in the different contexts of enclosed malls, strip malls, big box stores and office development. They will have to be wary of using a declaration of blight simply to change management when it appears that some other owner might do a better job of exploiting a property. Similar to Gallenthin Realty Development Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007), moreover, the expansion of the definition of blight to include significant vacancies over a limited period raises the question of whether temporary vacancy constitutes deterioration or stagnation within the limits of the Constitution's Blighted Areas Clause.
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