Appeals court reverses eminent domain case
Councilman seeks to drop plans to redevelop oceanfront neighborhood
BY CHRISTINE VARNO Staff Writer

Top: Long Branch residents and supporters rally outside the courthouse in Trenton before the appeal in the MTOTSA case is argued. Above: Institute for Justice attorney Scott Bullock. Left: Anna DeFaria, former MTOTSA resident and advocate against the abuse of eminent domain, died in November, but never gave up fighting to save her home from condemnation.

At least one Long Branch councilman is seeking to abandon plans to redevelop a city beachfront area after a state appeals court issued a ruling last week that declared the three-street neighborhood is not blighted.

A three-judge panel of the New Jersey Appellate Division on Aug. 7 unanimously reversed the June 2006 decision of Superior Court Judge Lawrence M. Lawson, which allowed the city of Long Branch to condemn what has become known as the MTOTSA neighborhood for a luxury condominium development.

The case has been remanded back to Lawson's court, where the city will have the opportunity to expand the record to attempt to continue with plans to redevelop the MTOTSA neighborhood.

"The administration and council has lots of thinking to do about how to proceed," said Councilman Brian Unger. "Personally, I think we should do what's best for this neighborhood, its residents and the taxpayers around the city as a whole.

"Spending more energy, time and money on defeating our own residents is, to my mind, a mistake," he said, adding, "The real estate bubble burst.

"I'm only one vote, but I would like to put aside our differences and in a public and consensually determined framework move forward with infill, rebuild this neighborhood ... and move on," he said.

The appeals court ruling is the latest in a series of major decisions from New Jersey courts, recognizing that state law and the New Jersey Constitution place limits on the power of a government to condemn property for private development.

After explaining in an 85-page opinion how the lower court misapplied the law, the court of appeals found that the city did not provide "substantial evidence" to support its findings of blight in the Beachfront North, phase II redevelopment zone, which comprises Marine and Ocean terraces and Seaview Avenue.

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At this time, city officials have several choices, all of which are under consideration, according to City Attorney James Aaron.

The city can comply with the appellate decision and proceed with the case before Lawson.

"The city can put forth additional information it has that the properties are subject to blight designation and necessary for the redevelopment plan," Aaron said. "There is significant additional information, including transcripts of the Planning Board hearing in 1996, police records, zoning department records, planning department records and testimony of the planners who prepared the plan."

The city can also choose to petition the state Supreme Court within the next 20 days, according to Aaron.

Although the appellate panel ruled in favor of the homeowners, Aaron said that he is "certainly pleased" with the portion of the opinion that dismissed all allegations of conflicts of interest surrounding city officials and the redevelopment process.

The attorneys representing MTOTSA argued in the appeal that several conflicts of interest may have existed, including that council members and Aaron hold stock in Monmouth Community Bank, which is the bank that extended a loan of credit to the developers of the redevelopment zone.

"All of the city's efforts of good faith negotiations were upheld by the court," Aaron said. "All of the allegations of conflicts of interest of my firm, my self, the council ... were all thrown out.

"That part of the decision is particularly pleasing to council, the mayor and all of our professionals," Aaron added.

Attorneys for MTOTSA question if the city will have a case to bring before Lawson.

"At this point, the homeowners won and Long Branch lost," said Jeff Rowes, an attorney with the Arlington, Va.-based public interest Institute for Justice (IJ) law firm.

Rowes and IJ attorney Scott Bullock argued the case on behalf of approximately 17 MTOTSA homeowners as co-counsel with Peter H. Wegener, of Bathgate Wegener and Wolf in Lakewood.

Attorney William J, Ward of Carlin and Ward, Florham Park, also argued the case for one MTOTSA family.

"It is inconceivable to me that the city has any secret evidence that will make a difference," Rowes said. "The decision of the court is that we won unless Long Branch can pull some ace out of its sleeve."

"I was hoping for an outright dismissal," Ward said.

When the case starts up again in Lawson's court, Ward said, "We will ask Judge Lawson for a dismissal and we will also ask for counsel fees and costs.

"Right now, I feel great," he said, adding, "We won and we got a reversal."

The remand to Lawson will also involve the resolution of the conflicting interpretations of the parties regarding the term "residential infill," according to Ward.

The city's original 1996 redevelopment plan called for the MTOTSA properties to be redeveloped with residential infill, according to Ward.

"It is clear from the documents produced by Long Branch that this term means single family residential," Ward said. "The city interprets this term to mean that they could proceed to acquire these properties and build an additional 185 residential condominiums.

"The court will be asked to determine whether or not the MTOTSA area acquisitions are necessary for the implementation of the redevelopment plan," Ward added.

The appellate courts ruling builds on and reinforces last summers New Jersey Supreme Court decision in Gallenthin Realty Development Inc. vs. Borough of Paulsboro, in which the state's high court held that the government cannot declare an area "blighted" and seize property simply because the government wants to engage in economic development.

"It's too late for the city to manufacture more evidence, so the court's ruling is a fatal blow to the city," Bullock said. "The victory for the Long Branch homeowners is a victory for property owners across the Garden State, sending a clear message that abusers of eminent domain will be held accountable."

Rowes added, "Our long awaited trial will expose the city's eminent domain abuse as the sham it is."