november 2006

New Jersey Legislature Considers Post-Kelo Legislation Concerning Eminent Domain for Redevelopment Purposes

BACKGROUND

Since Kelo v. New London sustained the taking of private property for “economic development” purposes as a “public use” under the Fifth Amendment, widespread public interest and debate concerning the expanding use and potential abuse of eminent domain continues to thrive. In Kelo, the Court stressed that states are free to impose their own restrictions on the exercise of the takings power, and in response, Congress and various states, including New Jersey, have enacted or are considering legislation addressing various aspects of the exercise of eminent domain.

Although New Jersey, to date, has not enacted post-Kelo legislation, several bills which would significantly impact the exercise of eminent domain within the state are under consideration. The most significant of these is Assembly Bill No. A3257, which would amend the existing Local Redevelopment and Housing Law which allows takings for redevelopment purposes. This would impact the taking of private property for redevelopment purposes throughout state municipalities.

Among its provisions, A3257 would create greater transparency in the redevelopment process by substantially increasing the notice and public hearing requirements for designating a redevelopment area and adopting a redevelopment plan. In determining the amount of just compensation, the Bill would allow consideration of the permitted uses of the property under the Redevelopment Plan, which likely would result in higher just compensation for property owners. A3257 would also create a new designation criterion for redevelopment if a property has been vacant or substantially underutilized for 24 consecutive months due to environmental contamination.

WE RECOMMEND

The Senate Community and Urban Affairs Committee is holding its hearings on the use of eminent domain for redevelopment purposes, which may result in changes to A3257 as passed by the Assembly. All parties involved – municipalities, developers, and private property owners – should follow these legislative efforts, as any legislation enacted will impact takings for redevelopment in New Jersey.

If you have any questions concerning Eminent Domain for Redevelopment purposes, please contact John J. Reilly .