62-64 Main Street, L.L.C. and 59-61 Moore Street, L.L.C. v. Mayor and Council of the City of Hackensack Planning Board of the City of Hackensack (072699)

• Court: Supreme Court of New Jersey
• Decided: March 23, 2015
• Docket: A-19/20-13
• Status: Published

Opinion

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interest of brevity, portions of any opinion may not have been summarized.)

62-64 Main Street, L.L.C. and 59-61 Moore Street, L.L.C. v. Mayor and Council of the City of Hackensack; Planning Board of the City of Hackensack (A-19/20-13) (072699)

Argued October 7, 2014 -- Decided March 23, 2015

ALBIN, J., writing for a majority of the Court.

The issue in this appeal is whether the designation of plaintiffs’ properties as part of an area in need of redevelopment under N.J.S.A. 40A:12A-5(a), (b), and (d) of the Local Redevelopment and Housing Law conforms to the Blighted Areas Clause of the New Jersey Constitution.

In 2006, the Hackensack City Council authorized the City’s Planning Board to undertake a preliminary investigation to determine whether a two-block area comprised of fourteen individual properties in Hackensack’s central business district -- a mix of commercial and residential uses -- should be designated as an area in need of redevelopment. After eight days of hearings, the Planning Board concluded that five of the fourteen properties were in need of redevelopment, including plaintiffs’ two properties on Main and Moore Streets, five lots where a now defunct auto body repair shop had operated. All five lots are contiguous to one another and are owned by the same individuals through two separate limited liability corporations, each of which is a plaintiff in this case.

In February 2008, the Planning Board adopted a resolution recommending that Lots 4-7 at 62-64 Main Street and Lot 8 at 59-61 Moore Street, along with three other properties comprising six other lots, be designated as an area in need of redevelopment. The Board determined that Lots 4-7 satisfied the criteria set forth in subsections (a), (b), and (d) of N.J.S.A. 40A:12A-5 for an area in need of redevelopment. The property met subsection (a) because the two buildings were “substandard and unsafe for occupancy.” The buildings were “boarded up” and displayed “prominent signs of structural deterioration.” Subsection (b) was met because the deteriorated condition of the buildings rendered them vacant and untenantable. In addition, the adjoining “parking area [was] unsightly and not well maintained.” Last, the property overall “suffer[ed] from faulty arrangement [or] design under” subsection (d). The Board also determined that Lot 8 satisfied subsection (d) of N.J.S.A. 40A:12A-5 because of its “faulty arrangement [or] design” as evidenced by the “undefined layout and related poor circulation for the parking lot.” The Board noted that the conditions on this lot had “a negative impact on the surrounding properties.” In April 2011, the Mayor and Council adopted the recommendations of the Planning Board designating the plaintiffs’ two properties and three others -- eleven lots in all -- as an area in need of redevelopment.

Plaintiffs filed a complaint in lieu of prerogative writs in the Law Division and argued that their properties were improperly classified as in need of redevelopment because they did not meet the constitutional standard for blight set forth in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007). The court rejected that argument, reasoning that Gallenthin addressed only an infirmity in subsection (e) of N.J.S.A. 40A:12A- 5, and not subsections (a), (b), and (d) on which the Planning Board and the Mayor and Council relied in making their redevelopment designations. The court also determined that substantial evidence in the record supported the findings of the Planning Board and the Mayor and Council that plaintiffs’ properties met the in-need-of- redevelopment criteria of N.J.S.A. 40A:12A-5(a), (b), and (d).

In an unpublished opinion, the Appellate Division reversed, concluding that the Planning Board and the Mayor and Council did not apply the required constitutional standard for blight enunciated in Gallenthin. That blight standard, according to the Appellate Division, requires a determination that the property suffered from “‘deterioration or stagnation that negatively affects surrounding areas,’” (quoting Gallenthin, supra, 191 N.J. at 363). In the panel’s view, only if that constitutional threshold is met can property be designated as in need of redevelopment. The panel concluded that Gallenthin’s definition of blight must necessarily apply to every subsection of the statute, including subsections (a), (b), and (d).

1 The Supreme Court granted the Planning Board’s and the Mayor and Council’s petitions for certification. 216 N.J. 7 (2013).

HELD: As the Court earlier concluded in Wilson v. City of Long Branch, 27 N.J. 360 (1958), subsections (a), (b), and (d) of N.J.S.A. 40A:12A-5 do not violate the Blighted Areas Clause of the New Jersey Constitution. A determination that an area is blighted and in need of redevelopment does not require a finding that the area “negatively affects surrounding properties,” so long as the legislative definitions are met. Substantial evidence in the record supports the Hackensack Planning Board’s findings -- later adopted by the Mayor and Council -- that Lots 4-7 at 62-64 Main Street and Lot 8 at 59-61 Moore Street were part of an area in need of redevelopment.

1. The New Jersey Constitution provides that “[p]rivate property shall not be taken for public use without just compensation.” N.J. Const. art. I, ¶ 20 (Eminent Domain Clause) (emphasis added). One such public use is the redevelopment of blighted areas. N.J. Const. art. VIII, § 3, ¶ 1 (Blighted Areas Clause). The Blighted Areas Clause is an affirmative grant of authority to municipal and public entities to rehabilitate and revitalize areas that have decayed into a state of blight. Gallenthin, supra, 191 N.J. at 359. Although the Constitution does not define blight, redevelopment laws enacted in the years immediately before the 1947 Constitutional Convention defined the term and allowed for the taking of private property for slum clearance and other purposes. The Redevelopment Companies Law in 1944 defined “blighted areas” as those “areas of municipalities . . . [where] there exist substandard conditions and [un]sanitary housing conditions owing to obsolescence, deterioration and dilapidation of buildings, or excessive land coverage, lack of planning, of public facilities, of sufficient light, air and space, and improper design and arrangement of living quarters.” L. 1944, c. 169, § 2. The Blighted Areas Clause was intended to remove any doubt about the constitutionality of that enactment. (pp. 16-19)

2. Shortly after the ratification of the Blighted Areas Clause, the Legislature passed the Blighted Areas Act, L. 1949, c. 187. According to the 1949 Act, a “blighted area” included “[b]uildings and structures which have economically deteriorated and where there is a disproportion between the cost of municipal services rendered to the area as compared with the tax revenue derived therefrom.” L. 1949, c. 187, § 1(c). In 1951, the Legislature amended the definitions of “blighted area” in the Blighted Areas Act. In 1992, the Legislature replaced the Blighted Areas Act with the Local Housing and Redevelopment Law (Redevelopment Law), L. 1992, c. 79. The Redevelopment Law substituted the term “area in need of redevelopment” for the pejorative term “blighted area” used in the repealed 1951 statute. The definitions of “blighted area” contained in the 1951 Blighted Areas Act are almost identical to those contained in the Redevelopment Law at subsections (a), (b), and (d) of N.J.S.A. 40A:12A- 5. The structure of subsection (e), however, unlike subsections (a), (b), and (d), underwent a significant change. The 1992 Redevelopment Law empowered a municipality to declare property blighted in a way never authorized before -- merely because the property was not put to its optimal use. That was the constitutional issue that the Court addressed in Gallenthin. (pp. 19-25)

3. In Gallenthin, the Court concluded that an “interpretation of N.J.S.A. 40A:12A-5(e), which would equate ‘blighted areas’ to areas that are not operated in an optimal manner, cannot be reconciled with the New Jersey Constitution.” Gallenthin, supra, 191 N.J. at 365. Although “deterioration or stagnation that negatively affects surrounding properties,” id. at 360, describes blight, and perhaps most cases of blight, it does not describe every possible form of blight. The Court has never stated that an area is not blighted unless it “negatively affects surrounding properties” because, to do so, would undo all of the legislative classifications of blight established before and after the ratification of the Blighted Areas Clause -- classifications that the Court has previously declared to be constitutional. In Gallenthin, the only issue before the Court was the constitutionality of subsection (e) of the Redevelopment Law, not the constitutionality of subsections (a), (b), or (d). Gallenthin did not establish a constitutional blight standard to be superimposed on top of the legislative classification of blight. (pp. 25-31)

4. The Blighted Areas Clause must coexist with individual rights enshrined in the State Constitution, such as rights protected by the Eminent Domain Clause, which ensures that property will not be taken without just compensation. Redevelopment may not occur at the expense of individual rights. Planning boards and governing bodies are reminded that they have an obligation to rigorously comply with the statutory criteria for determining whether an area is in need of redevelopment. So long as the blight determination is supported by substantial evidence in the record, a court is bound to affirm that determination. (pp. 31-37)

2 5. Substantial evidence in the record supports the Hackensack Planning Board’s findings -- later adopted by the Mayor and Council -- that Lots 4-8 were part of an area in need of redevelopment. Even if the parking area designated as Lot 8, standing alone, did not meet the definition of blight, it still might be properly categorized as part of an area in need of redevelopment. Blight determinations are not viewed in a piecemeal fashion. (pp. 37-44)

The judgment of the Appellate Division is REVERSED.

CHIEF JUSTICE RABNER filed a separate, dissenting opinion, in which JUSTICE SOLOMON joins, stating that the majority has taken a step backward from Gallenthin. The Chief Justice would hold that when the government designates an area to be “in need of redevelopment,” it must prove that the property is in fact “blighted” by demonstrating, through substantial evidence in the record, both components of blight established in Gallenthin: (1) “deterioration or stagnation” that (2) “negatively affects surrounding properties.”

JUSTICES LaVECCHIA and FERNANDEZ-VINA join in JUSTICE ALBIN’s opinion. CHIEF JUSTICE RABNER filed a separate, dissenting opinion, in which JUSTICE SOLOMON joins. JUSTICE PATTERSON and JUDGE CUFF (temporarily assigned) did not participate.

3 SUPREME COURT OF NEW JERSEY A-19/20 September Term 2013 072699

62-64 MAIN STREET, L.L.C. and 59-61 MOORE STREET, L.L.C.,

Plaintiffs-Respondents,

v.

MAYOR AND COUNCIL OF THE CITY OF HACKENSACK; PLANNING BOARD OF THE CITY OF HACKENSACK,

Defendants-Appellants.

Argued October 7, 2014 – Decided March 23, 2015

On certification to the Superior Court, Appellate Division.

Joseph P. Kreoll argued the cause for appellant Planning Board of the City of Hackensack (Law Offices of Richard Malagiere, attorney).

Thomas P. Scrivo argued the cause for appellant Mayor and Council of the City of Hackensack (McElroy, Deutsch, Mulvaney & Carpenter, attorneys; John P. Michalski and Robert J. Hitscherich, on the briefs).

Peter Dickson argued the cause for respondents (Potter & Dickson, attorneys; Mr. Dickson and Michael J. Monaghan, III, on the briefs).

David G. Evans submitted a brief on behalf of amici curiae Pacific Legal Foundation, National Federation of Independent Business, Institute for Justice, and Ilya Somin.

JUSTICE ALBIN delivered the opinion of the Court. The New Jersey Constitution grants municipalities the

1 authority to revitalize decaying and disintegrating residential,

commercial, and industrial areas. Our Constitution states that

the “redevelopment of blighted areas” is a “public purpose” and

that private property may be taken to achieve that end, N.J.

Const. art. VIII, § 3, ¶ 1, provided that owners are awarded

just compensation for their property, N.J. Const. art. I, ¶ 20.

The evident goal of Article VIII, Section 3, Paragraph 1

(Blighted Areas Clause) is to give municipalities the means to

improve the quality of life of their residents and to spur

business opportunity and job growth. To implement this

constitutional mandate, the Legislature initially passed the

Blighted Areas Act, L. 1949, c. 187 (codified as amended at

N.J.S.A. 40:55-21.1 to -21.14 (repealed 1992)), and later the

Local Redevelopment and Housing Law (Redevelopment Law), L.

1992, c. 79 (codified as amended at N.J.S.A. 40A:12A-1 to -73).

The Redevelopment Law defines when an area is blighted and

therefore “in need of redevelopment.” N.J.S.A. 40A:12A-5.

Plaintiffs own five lots in the City of Hackensack on which

stood two dilapidated buildings abutted by two poorly maintained

and decrepit parking lots. Hackensack designated eleven out of

twenty lots in a two-block area as in need of redevelopment,

including plaintiffs’ five lots. In doing so, the Planning

Board made specific findings that those lots met the statutory

definitions of blight in N.J.S.A. 40A:12A-5(a), (b), and (d).

2 The Hackensack Mayor and Council passed a resolution that

adopted the Planning Board’s findings.

Plaintiffs filed an action in lieu of prerogative writs in

Superior Court, challenging Hackensack’s classification of their

lots as blighted. Plaintiffs argued that a finding of blight

under N.J.S.A. 40A:12A-5(a), (b), and (d) of the Redevelopment

Law does not meet the constitutional definition of blight

enunciated in Gallenthin Realty Development, Inc. v. Borough of

Paulsboro, 191 N.J. 344, 373 (2007). On that basis, plaintiffs

sought to strike down the Mayor and Council’s resolution

classifying plaintiffs’ properties as part of an area in need of

redevelopment.

The trial court rejected plaintiffs’ argument, concluding

that Gallenthin merely corrected a constitutional defect in

subsection (e) of N.J.S.A. 40A:12A-5 and did not sweepingly

render other subsections of the Redevelopment Law

constitutionally infirm. The trial court, moreover, determined

that substantial evidence supported Hackensack’s classification

of plaintiffs’ properties as in need of redevelopment.

The Appellate Division reversed, holding that Gallenthin

established a heightened constitutional standard for blight

applicable to every subsection of the Redevelopment Law.

According to the Appellate Division, Gallenthin superimposes

over the statutory definition of blight the need for an

3 additional finding that property has suffered a “‘deterioration

or stagnation that negatively affects surrounding areas,’”

(quoting Gallenthin, supra, 191 N.J. at 363).

We now hold that the Appellate Division has over-read the

scope of Gallenthin, which only addressed a specific

constitutional defect in subsection (e) of N.J.S.A. 40A:12A-5.

In Gallenthin, we simply determined that subsection (e), which

defined blight as the nonproductive use of property, did not

meet the constitutional standard for blight set forth in the

Blighted Areas Clause, N.J. Const. art. VIII, § 3, ¶ 1. We did

not suggest in Gallenthin that the definitions of blight in

subsections (a), (b), and (d) of N.J.S.A. 40A:12A-5, which have

been part of legislative schemes for more than sixty years, were

constitutionally inadequate. Indeed, we upheld the

constitutionality of the provisions at issue in Wilson v. City

of Long Branch, 27 N.J. 360, 378-82 (1958), and Levin v.

Township Committee of Bridgewater, 57 N.J. 506, 510-15 (1971) --

decisions referred to approvingly in Gallenthin.

Applying the required deferential standard of review to the

municipal decision-making in this case, we agree with the trial

court that substantial evidence supported Hackensack’s

designation of plaintiffs’ properties as in need of

redevelopment. We therefore reverse the Appellate Division.

I.

4 A.

In 2006, the Hackensack City Council authorized the City’s

Planning Board to undertake a preliminary investigation to

determine whether a two-block area in Hackensack’s central

business district -- a mix of commercial and residential uses --

should be designated as an area in need of redevelopment. See

N.J.S.A. 40A:12A-6(a). The targeted two-block area is comprised

of fourteen individual properties.

In eight days of hearings between December 2006 and January

2008, the Planning Board took testimony from five witnesses and

received evidence, including expert reports and photographs,

concerning whether to recommend the two-block area as in need of

redevelopment. Ultimately, the Planning Board concluded that

five of the fourteen properties were in need of redevelopment,

including two properties on Main and Moore Streets acquired by

plaintiffs in 1999. Plaintiffs’ two properties encompass five

lots, where a now defunct auto body repair shop had operated.

All five lots are contiguous to one another and are owned by the

same individuals through two separate limited liability

corporations, each of which is a plaintiff in this case.

Plaintiff 62-64 Main Street, L.L.C., owns Block 205, Lots

4, 5, 6, and 7, a 10,443 square-foot parcel of land, on which

sat -- at the time of the hearings -- two vacant, boarded up,

dilapidated buildings with crumbling masonry, which were

5 formerly part of the auto repair business.1 Behind the buildings

is a poorly maintained, partly paved and partly gravel parking

lot.

Plaintiff 59-61 Moore Street, L.L.C., owns Block 205, Lot

8, a 4280 square-foot parcel of land on which formerly sat an

auto garage, which had been demolished. Currently, the property

is used as a paved parking lot, although there are no markings

for individual parking spaces, and the pavement is in a

deteriorated condition. The parking lot has no landscaping or

lighting and encroaches onto the sidewalk.

Plaintiffs intended to build a bank on the five lots, but

could not secure site-plan approval from the City’s Planning

Board or the necessary variances from the City’s Board of

Adjustment to go forward with their proposals. The denials from

those Boards are not at issue in this appeal. Suffice it to

say, plaintiffs have treated all five lots as one property for

development purposes.

The principal witness for the Planning Board was Janice

Talley, a licensed professional planner with H2M Group, the firm

retained by the Board to prepare a redevelopment study of the

area under investigation. According to Talley and the

redevelopment report she authored, the buildings on Lots 4-7

1 While this matter was on appeal, the roof to one of the buildings collapsed. The building was then torn down. 6 were vacant, dilapidated, and “boarded up due to their unsafe

condition.” The exterior of the buildings showed “prominent

signs of structural deterioration.” Notably, plaintiffs refused

to give Talley access to make an assessment of the buildings’

interior conditions. Talley described the parking lot behind

the two buildings as “poorly surfaced” and without lines,

lighting, or other necessary improvements.

Talley testified that the decrepit state of the buildings

created “unwholesome” living and working conditions and that the

buildings were “a detriment to the . . . safety, health and

welfare of the community.” Talley concluded that Lots 4-7 met

the criteria of N.J.S.A. 40A:12A-5(a), (b), and (d) for an area

in need of redevelopment.

Talley also testified that the current parking area on Lot

8, where the automotive garage once stood, was “crumbling” and

“in disrepair.” The parking area, she noted, had no defined

layout, no lighting, no landscaping, and encroached onto the

sidewalk. That encroachment -- the lack of separation between

the parking area and the sidewalk -- posed a threat to

pedestrians and rendered it a public-safety danger, in Talley’s

view. She concluded that Lot 8 met the criteria of N.J.S.A.

40A:12A-5(d) for an area in need of redevelopment.

Plaintiffs’ expert, Peter Steck, a licensed planner,

testified that Lots 4-8 did not satisfy the criteria for an area

7 in need of redevelopment. He explained that the buildings were

boarded up and therefore did not pose a danger. According to

Steck, the property was in a state of transition, and the

buildings were structurally sound, although vacant at the time.

He insisted that the condition of Lots 4-8 did not retard the

development of properties nearby, such as a new drug store, an

automotive parts store, a bank, and a nail salon. Steck

maintained that the buildings were not detrimental to the

neighborhood and that the unpaved parking areas were similar to

others in the neighborhood. He also noted that plaintiffs were

appealing the denial of their application to construct a bank on

the five lots.2

In Steck’s opinion, plaintiffs’ property should not be

considered in need of redevelopment simply because the City

desires taller buildings in the area, and that the Board should

have taken into account the time it takes to secure the

necessary approvals to rehabilitate the property.

B.

In February 2008, the Planning Board adopted a resolution

recommending that Lots 4-7 at 62-64 Main Street and Lot 8 at 59-

2 In June 2008, the Appellate Division affirmed the Superior Court’s determination that the Planning Board had not abused its discretion in denying the necessary approvals for construction of a bank on the property. The Board’s denial was based on traffic concerns and lack of adequate parking spaces. 8 61 Moore Street, along with three other properties comprising

six other lots, be designated as an area in need of

redevelopment.3 By a vote, the Board members found Talley’s

testimony more credible than Steck’s.

The Board determined that Lots 4-7 satisfied the criteria

set forth in subsections (a), (b), and (d) of N.J.S.A. 40A:12A-5

for an area in need of redevelopment. The property met

subsection (a) because the two buildings were “substandard and

unsafe for occupancy.” The buildings were “boarded up” and

displayed “prominent signs of structural deterioration,”

resulting in the City issuing plaintiff 62-64 Main Street a

citation to either “demolish the buildings or correct [the]

unsafe conditions.” Subsection (b) was met because the

deteriorated condition of the buildings rendered them vacant and

untenantable. In addition, the adjoining “parking area [was]

unsightly and not well maintained.” Last, the property overall

“suffer[ed] from faulty arrangement [or] design under”

subsection (d).

The Board also determined that Lot 8 satisfied subsection

(d) of N.J.S.A. 40A:12A-5 because of its “faulty arrangement

[or] design” as evidenced by the “undefined layout and related

3 Nine properties comprising nine lots within the two-block study area did not meet the statutory criteria for an area in need of redevelopment. In all, eleven lots were deemed part of a blighted area. 9 poor circulation for the parking lot.” The Board noted that the

conditions on this lot had “a negative impact on the surrounding

properties because it is an unsightly area and the inefficient

utilization of the parking area contributes to greater use of

the on-street parking resources than would otherwise occur.”

In April 2011, the Mayor and Council adopted the

recommendations of the Planning Board designating the

plaintiffs’ two properties and three others -- eleven lots in

all -- as an area in need of redevelopment.4

C.

Plaintiffs filed a complaint in lieu of prerogative writs

in the Law Division, challenging the Mayor and Council’s

designation of their properties as part of an area in need of

redevelopment. Plaintiffs argued that their properties were

improperly classified as in need of redevelopment because they

did not meet the constitutional standard for blight set forth in

Gallenthin. The court rejected that argument, reasoning that

Gallenthin addressed only an infirmity in subsection (e) of

N.J.S.A. 40A:12A-5, and not subsections (a), (b), and (d) on

which the Planning Board and the Mayor and Council relied in

4 The Mayor and Council had passed an earlier resolution adopting the Planning Board’s recommendations, but that resolution was withdrawn because of litigation, which challenged, among other things, whether the Mayor and Council failed to comply with the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21. Issues relating to this first resolution are not part of this appeal. 10 making their redevelopment designations. The court also

determined that substantial evidence in the record supported the

findings of the Planning Board and the Mayor and Council that

plaintiffs’ properties met the in-need-of-redevelopment criteria

of N.J.S.A. 40A:12A-5(a), (b), and (d).

D.

In an unpublished opinion, the Appellate Division reversed,

concluding that the Planning Board and the Mayor and Council did

not apply the required constitutional standard for blight

enunciated in Gallenthin. That blight standard, according to

the Appellate Division, requires a determination that the

property suffered from “‘deterioration or stagnation that

negatively affects surrounding areas,’” (quoting Gallenthin,

supra, 191 N.J. at 363). In the panel’s view, only if that

constitutional threshold is met can property be designated as in

need of redevelopment. Although the appellate panel

acknowledged that Gallenthin addressed only subsection (e) of

N.J.S.A. 40A:12A-5, it reasoned that Gallenthin’s definition of

blight must necessarily apply to every subsection of the

statute, including subsections (a), (b), and (d). Thus, the

panel held that Gallenthin’s constitutional standard must be

satisfied, in addition to the Redevelopment Law’s criteria,

before a municipality can designate property as in need of

11 The panel also suggested that the Planning Board erred in

classifying Lot 8 as an area in need of redevelopment. The

panel recognized that the parking lot lacked “lighting and

landscaping that led to over-utilization of street parking,” and

was hindered by “a faulty layout and crumbling surface.”

Nevertheless, it believed that improvements to the lot would

have eliminated the “negative impact on the community.” In

addition, the panel faulted the Board for not addressing “the

fact that the owners had attempted to obtain approval to develop

the properties, and that the proposals were denied.”

In short, the panel maintained that the Planning Board and

the Mayor and Council did not apply the constitutionally

mandated standard and that the Board’s factual findings did not

meet that standard.

E.

We granted the Planning Board’s and the Mayor and Council’s

petitions for certification. 62-64 Main St., L.L.C. v. Mayor &

Council of Hackensack, 216 N.J. 7 (2013). We also granted the

motion of the Pacific Legal Foundation, the National Federation

of Independent Business, the Institute for Justice, and Ilya

Somin -- three non-profit advocacy groups and a private legal

scholar -- to submit a joint brief and participate as amici

curiae.

II.

12 A.

The Planning Board and the Mayor and Council present

substantially similar positions in support of reversing the

Appellate Division. They argue that the Appellate Division gave

an “overly broad interpretation” of Gallenthin. They submit

that Gallenthin declared only subsection (e) of N.J.S.A.

40A:12A-5 constitutionally defective because subsection (e),

unlike other subsections of that statute, “permitted a

redevelopment designation in cases where a property was merely

being underutilized.” The Planning Board and the Mayor and

Council maintain that the descriptions of blight in subsections

(a), (b), and (d) of N.J.S.A. 40A:12A-5 conform with the

Blighted Areas Clause of our State Constitution. Thus, they

claim that the Appellate Division erred in construing Gallenthin

as requiring a finding of blight in addition to the findings

mandated by subsections (a), (b), and (d). Last, the Planning

Board and the Mayor and Council contend that the Appellate

Division did not pay deference to the Board’s findings, which

should have been upheld because substantial evidence in the

record supported them.

Plaintiffs ask this Court to affirm the Appellate Division

and declare that property may not be designated as in need of

redevelopment unless the property meets both the constitutional

13 standard defining blight enunciated in Gallenthin and the

statutory requirements imposed by N.J.S.A. 40A:12A-5. According

to plaintiffs, Gallenthin’s blight analysis was intended not

only to address the constitutional shortcomings of subsection

(e), but also those of the statute’s other subsections. They

contend that some subsections of N.J.S.A. 40A:12A-5 “plainly do

not describe anything akin to ‘blighted,’” and that despite the

Planning Board’s “cherry-picking of convenient phrases” from

subsections (a), (b), and (d) to declare their property “in need

of redevelopment,” the Board’s findings still fell short of the

constitutional definition of blight.

Plaintiffs also argue that the Law Division “failed to rule

on the city’s designation of the area as opposed to plaintiffs’

properties,” pointing out that the City “did not find that

blighted properties ‘predominated’ in the area” or that those

properties established the area’s “‘general character.’”

Amici, the Pacific Legal Foundation, the National

Federation of Independent Business, the Institute for Justice,

and Ilya Somin, acknowledge that “Gallenthin was resolved by

construing only subsection 5(e) of the Redevelopment Law in

light of the Blighted Areas Clause,” but nevertheless urge this

Court to apply its reasoning to each subsection of N.J.S.A.

40A:12A-5. Amici insist that “[e]ach of the subsections

14 identify conditions which may, in a particular case, indicate

that an area is blighted but will not always satisfy the

Blighted Areas Clause’s requirements.” According to amici,

property is only constitutionally blighted under the Clause

where “‘deterioration or stagnation . . . negatively affects

surrounding properties,’” (quoting Gallenthin, supra, 191 N.J.

at 360). Amici catalogue cases that they claim exemplify the

misuse of the eminent domain power to redevelop non-blighted

areas that were home to the poor and minorities for the purpose

of yielding greater economic value. Amici believe that without

meaningful judicial scrutiny, the political branches will

expansively apply the designation of blight “to encompass merely

unattractive property or land that falls below political

leaders’ desired level of productivity.”

III.

The essential issue is whether the designation of

plaintiffs’ properties as part of an area in need of

redevelopment, pursuant to N.J.S.A. 40A:12A-5(a), (b), and (d),

conforms to the Blighted Areas Clause of the New Jersey

Constitution. To resolve that issue, we must examine the text,

origin, and purpose of the Blighted Areas Clause; legislative

enactments following adoption of the Blighted Areas Clause; and

our jurisprudence that has construed both the Clause and the

Redevelopment Law and its predecessor statutes.

15 A.

The New Jersey Constitution provides that “[p]rivate

property shall not be taken for public use without just

compensation.” N.J. Const. art. I, ¶ 20 (emphasis added).

Although the Constitution does not catalogue the wide array of

public uses for which property may be taken, it does identify

one such public use -- the redevelopment of blighted areas.

N.J. Const. art. VIII, § 3, ¶ 1. The Blighted Areas Clause of

our State Constitution is an affirmative grant of authority to

municipal and public entities to rehabilitate and revitalize

areas that have decayed into a state of blight. Gallenthin,

supra, 191 N.J. at 359.

The Blighted Areas Clause, in relevant part, states: “The

clearance, replanning, development or redevelopment of blighted

areas shall be a public purpose and public use, for which

private property may be taken or acquired. Municipal, public or

private corporations may be authorized by law to undertake such

clearance, replanning, development or redevelopment . . . .”

N.J. Const. art. VIII, § 3, ¶ 1. The limiting principle of this

provision is that an area must be “blighted” before it may be

taken for redevelopment purposes. The Constitution does not

define blight. Therefore, we must inquire into the drafters’

understanding of the meaning of blight at the time of the

ratification of the 1947 New Jersey Constitution. See DePascale

16 v. State, 211 N.J. 40, 48-50 (2012) (explaining that framers’

understanding of constitutional provision was informed by

history leading up to adoption of that provision).

The drafters of the Blighted Areas Clause were not writing

on a blank slate. Redevelopment laws enacted in the years

immediately before the 1947 Constitutional Convention defined

the term “blight” and allowed for the taking of private property

for slum clearance and other purposes. Urban Redevelopment Law,

L. 1946, c. 52; Redevelopment Companies Law, L. 1944, c. 169.

“The proceedings of the constitutional convention indicate that

[the Blighted Areas Clause] was adopted to remove any doubts

with regard to earlier pertinent legislation such as the

Redevelopment Companies Law and the Urban Redevelopment Law.”

McClintock v. City of Trenton, 47 N.J. 102, 105 (1966) (internal

citations omitted) (citing to Proceedings of the New Jersey

Constitutional Convention of 1947, vol. 1 at 742-44); see

Gallenthin, supra, 191 N.J. at 361 (noting that fear that then

existing redevelopment legislation might “be declared

unconstitutional” prompted ratification of Blighted Areas

Clause).

Therefore, we may fairly conclude that delegates who

ratified the Blighted Areas Clause understood the term blight in

the manner in which it was used in contemporaneous legislation,

such as the Redevelopment Companies Law, L. 1944, c. 169. See

17 Lloyd v. Vermeulen, 22 N.J. 200, 210 (1956) (“We recognize fully

that resort may be had to contemporaneous and practical

constructions for whatever aid they may fairly afford in

ascertaining the true sense and meaning of constitutional and

statutory provisions.”). The Redevelopment Companies Law in

1944 defined “blighted areas” as those “areas of municipalities

. . . [where] there exist substandard conditions and

[un]sanitary housing conditions owing to obsolescence,

deterioration and dilapidation of buildings, or excessive land

coverage, lack of planning, of public facilities, of sufficient

light, air and space, and improper design and arrangement of

living quarters.” L. 1944, c. 169, § 2; see Gallenthin, supra,

191 N.J. at 361 (quoting Redevelopment Companies Law’s

definition of “blighted areas”); see also Urban Redevelopment

Law, L. 1946, c. 52 (providing for “acquisition by

municipalities of land areas” where there is “congested,

dilapidated, substandard, unsanitary and dangerous housing

conditions and excessive land coverage”). Indeed, “the

[B]lighted [A]reas [C]lause could reasonably be understood as a

constitutional sanction of [the Redevelopment Companies Law and

the Urban Redevelopment Law].” James R. Zazzali & Jonathan L.

Marshfield, Providing Meaningful Judicial Review of Municipal

Redevelopment Designations: Redevelopment in New Jersey Before

and After Gallenthin Realty Development, Inc. v. Borough of

18 Paulsboro, 40 Rutgers L.J. 451, 474-75 (2009).

Shortly after the ratification of the Constitution’s

Blighted Areas Clause, the Legislature passed the Blighted Areas

Act, L. 1949, c. 187, the predecessor to the current

Redevelopment Law. The Legislature broadly defined “blighted

area.” According to the 1949 Act, a “blighted area” included

“[b]uildings and structures which have economically deteriorated

and where there is a disproportion between the cost of municipal

services rendered to the area as compared with the tax revenue

derived therefrom.” L. 1949, c. 187, § 1(c).

In 1951, the Legislature amended the definitions of

“blighted area” in the Blighted Areas Act. L. 1951, c. 248, §

1. Then, in 1992, the Legislature replaced the Blighted Areas

Act with the Local Housing and Redevelopment Law (Redevelopment

Law), L. 1992, c. 79, in part to “codify, simplify and

concentrate prior enactments” into the new law, N.J.S.A.

40A:12A-2(d). The Redevelopment Law substituted the term “area

in need of redevelopment” for the pejorative term “blighted

area” used in the repealed 1951 statute. N.J.S.A. 40A:12A-3

(“‘[A]rea in need of redevelopment’ means an area . . .

determined heretofore to be a ‘blighted area.’”).

The definitions of “blighted area” contained in the 1951

Blighted Areas Act at subsections (a), (b), and (d) of N.J.S.A.

19 40:55-21.1 (repealed) are almost identical to those contained in

our present Redevelopment Law at subsections (a), (b), and (d)

of N.J.S.A. 40A:12A-5. Indeed, a comparison of those two

statutes reveals that the textual differences in the subsection

(a), (b), and (d) definitions for “blight” and “area in need of

redevelopment” are minor in nature. See Forbes v. Bd. of Trs.

of S. Orange Vill., 312 N.J. Super. 519, 526 (App. Div.),

certif. denied, 156 N.J. 411 (1998) (noting that subsections

(a), (b), and (d) of Blighted Areas Act and Redevelopment Law

are “virtually identical” in terms of “their structure and

verbiage”).

The differences between subsections (a), (b), and (d) of

the Blighted Areas Act and the current Redevelopment Law are

delineated below. Words and punctuation that have a strike-

through were present in the 1951 Blighted Areas Act and are

deleted from our current Redevelopment Law, whereas words and

punctuation that are underscored are additions to the

Redevelopment Law. Today’s Redevelopment Law provides that a

municipality’s governing body may declare “an area in need of

redevelopment” when it finds the following conditions:

(a) The generality of buildings used as dwellings or the dwelling accommodations therein are substandard, unsafe, inunsanitary, dilapidated, or obsolescent, or possess any of such characteristics, or are so lacking in light, air, or space, as to be conducive to unwholesome living or working

20 conditions;.

(b) 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 untenantable;.

. . .

(d) Areas (including slum areas), with buildings or improvements which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light and sanitary facilities, excessive land coverage, deleterious land use or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community;.

[Compare N.J.S.A. 40:55-21.1(a), (b), (d), with N.J.S.A. 40A:12A-5(a), (b), (d).]

The minor definitional changes in subsections (a), (b), and

(d) are important to our analysis because we have upheld the

constitutionality of those definitions of “blighted area”

contained in the Blighted Areas Act. See Forbes, supra, 312

N.J. Super. at 528-29 (stating that Legislature’s 1951 “multi-

faceted definition of blight . . . has not been successfully

challenged on the basis of constitutional non-conformance,

overstatement or over-breadth”). In Forbes, Judge Pressler

observed that the definition of blight in the Blighted Areas Act

“clearly constituted and came to constitute a community

consensus and expressed a common understanding of what is meant

21 by blight subject to public remediation.” Ibid. (citing Wilson,

supra, 27 N.J. at 370).

In Wilson, supra, we upheld the constitutionality of the

legislative classifications of blight for the then five

subsections of the Blighted Areas Act, including (a), (b), and

(d), which plaintiffs challenge in this appeal. 27 N.J. at 378-

82. We determined that our State Constitution, through the

Blighted Areas Clause, gave “specific approval and authorization

of redevelopment projects.” Id. at 372. In the process of

validating the constitutionality of the 1951 Blighted Areas Act,

we made the following observation:

Community redevelopment is a modern facet of municipal government. Soundly planned redevelopment can make the difference between continued stagnation and decline and a resurgence of healthy growth. It provides the means of removing the decadent effect of slums and blight on neighboring property values, of opening up new areas for residence and industry. In recent years, recognition has grown that governing bodies must either plan for the development or redevelopment of urban areas or permit them to become more congested, deteriorated, obsolescent, unhealthy, stagnant, inefficient and costly.

[Id. at 370.]

In Wilson, we found that, for constitutional purposes, the

five subsections of the Blighted Areas Act “define ‘blighted

area’ with substantial exactitude and confine the municipal

decision to those limits.” Id. at 378. We concluded that the

22 legislative descriptions of blight sufficiently channeled the

exercise of municipal authority, while acknowledging that “‘the

exigencies of modern government have increasingly dictated the

use of general rather than minutely detailed standards in

regulatory enactments under the police power.’” Ibid. (quoting

Ward v. Scott, 11 N.J. 117, 123 (1952)). We noted that “[t]he

area to be classed as blighted is the portion of a municipality

which in the judgment of the planning board or governing body,

as the case may be, reasonably falls within the definition laid

down by the Legislature.” Id. at 379 (emphasis added). We also

noted that the designation of a “blighted area” might

necessarily include “some sound homes or buildings” to

accomplish the redevelopment plan because it is the

redevelopment of an area, not a particular structure, that is

the statutory objective. Id. at 379-81. We rejected the

argument that the absence of a definition for the term

“blighted” in our State Constitution meant that “the authority”

to define blight “resides in the judicial and not the

legislative branch of the government.” Id. at 381. As we

pointed out, the Blighted Areas Clause authorized the passage of

legislation empowering municipal governments to undertake

redevelopment. Id. at 382-83. Although undoubtedly “the

Judiciary is the final arbiter of the institutional commissions

articulated in the Constitution,” Gallenthin, supra, 191 N.J. at

23 358, we clearly held in Wilson that the Legislature did not

exceed its commission in enacting the Blighted Areas Act.

In 1971, in Levin, supra, the Court addressed whether

vacant, unimproved land “was properly the subject of a

declaration of blight under subsection (e)” of the Blighted

Areas Act. 57 N.J. at 515-16. In doing so, we reaffirmed the

validity of the five subsections of the Blighted Areas Act,

including (a), (b), and (d). Id. at 510. Levin focused

entirely on the application of subsection (e) to the record in

that case.

Although subsection (e) is not at issue in the appeal

before us, a brief discussion of subsection (e) in Levin is

important to an understanding of Gallenthin, where our sole

focus was subsection (e). Subsection (e) at the time of Levin

provided that blight exists when there is

“A growing or total lack of proper utilization of areas caused by the condition of the title, diverse ownership of the real property therein and other conditions, resulting in a stagnant and unproductive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare.”

[Ibid. (quoting N.J.S.A. 40:55-21.1(e)) (emphasis added).]

We stressed in Levin that “the Legislature intended by means of

(e) to encourage the proper and sound growth of suburban and

rural land, particularly open areas which because of the

24 conditions described therein were stagnant and unproductive.”

Id. at 515 (emphasis added). We upheld the declaration of

blight under subsection (e) to the land at issue in Levin. Id.

at 539.

The structure of subsection (e), unlike subsections (a),

(b), and (d), underwent a significant change with passage of the

Redevelopment Law in 1992. Whereas subsection (e) of the

Blighted Areas Act, L. 1951, c. 248, § 1(e), permitted a finding

of blight only if property were “stagnant and unproductive,”

(emphasis added), subsection (e) of the 1992 Redevelopment Law,

L. 1992, c. 79, § 5(e), permitted a finding that property was

“in need of redevelopment” if it were “stagnant or not fully

productive,” (emphasis added). By altering the conjunctive to

the disjunctive in subsection (e), the 1992 Redevelopment Law

empowered a municipality’s governing body to declare property

blighted in a way never authorized before -- merely because the

property was not put to its optimal use.

That was the constitutional issue that we addressed in

Gallenthin.

In Gallenthin, supra, the Borough of Paulsboro classified a

sixty-three-acre parcel of vacant wetlands as “in need of

redevelopment” under N.J.S.A. 40A:12A-5(e). 191 N.J. at 348.

The municipality based that determination solely on a finding

25 that the land’s unimproved condition rendered it “not fully

productive.” Ibid. Paulsboro believed that it was entitled to

make such a classification based on the then language of

N.J.S.A. 40A:12A-5(e), which stated that property qualified as

an area in need of redevelopment if it were “stagnant or not

fully productive,” L. 1992, c. 79, § 5(e). Id. at 357.5 As

earlier noted, the 1992 Redevelopment Law’s version of

subsection (e) was materially different from the subsection (e)

iteration in the Blighted Areas Act, N.J.S.A. 40:55-21.1(e),

which we had found to be constitutionally sound in Levin, supra,

57 N.J. at 511-15 and Wilson, supra, 27 N.J. at 378-82.

We concluded that subsection (e) of the Redevelopment Law

5Following our decision in Gallenthin, the Legislature amended subsection (e) to read:

A growing lack or total lack of proper utilization of areas caused by the condition of the title, diverse ownership of the real properties therein or other similar conditions which impede land assemblage or discourage the undertaking of improvements, resulting in a stagnant and unproductive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare, which condition is presumed to be having a negative social or economic impact or otherwise being detrimental to the safety, health, morals, or welfare of the surrounding area or the community in general.

[L. 2013, c. 159, § 1 (emphasis added).]

26 violated the Blighted Areas Clause because it allowed a

declaration of blight to apply to any property that is “‘not

fully productive’ yet potentially valuable for ‘contributing to

and serving’ the general welfare.” Gallenthin, supra, 191 N.J.

at 365. We observed that “[u]nder that approach, any property

that is operated in a less than optimal manner is arguably

‘blighted’” and that “[i]f such an all-encompassing definition

of ‘blight’ were adopted, most property in the State would be

eligible for redevelopment.” Ibid. Thus, we held in Gallenthin

that an “interpretation of N.J.S.A. 40A:12A-5(e), which would

equate ‘blighted areas’ to areas that are not operated in an

optimal manner, cannot be reconciled with the New Jersey

Constitution.” Ibid.

We did not presume in Gallenthin to craft a precise

standard for the metes and bounds of the Blighted Areas Clause.

See id. at 365 (“We need not examine every shade of gray

coloring a concept as elusive as ‘blight’ to conclude that the

term’s meaning cannot extend as far as Paulsboro contends.”).

We noted that in Wilson we had concluded that the Blighted Areas

Act’s “definition of blight was within the bounds of the

Constitution,” id. at 362-63 (citing Wilson, supra, 27 N.J. at

382), and that in Levin we had upheld the validity of the Act’s

definitions of blight, id. at 363 (citing Levin, supra, 57 N.J.

at 511-16).

27 After favorably discussing Wilson and Levin, we remarked:

“Although the meaning of ‘blight’ has evolved, the term retains

its essential characteristic: deterioration or stagnation that

negatively affects surrounding properties.” Ibid.

From that passage and another -- “[a]t its core, ‘blight’

includes deterioration or stagnation that has a decadent effect

on surrounding property,” id. at 365 -- plaintiffs argue that we

created an overarching constitutional standard in Gallenthin for

defining blight. By those comments, we intended nothing more

than descriptions of blight -- not a one-size-fits-all

definition of blight. Had we intended otherwise, we would have

repudiated Wilson and Levin, which upheld the classifications of

blight in subsections (a), (b), and (d) that are challenged in

this appeal. That we did not do. Instead, we observed

approvingly that in Wilson “we upheld the constitutionality of

the Blighted Areas Act’s (BAA) progressive definition of

‘blight.’” Id. at 362.

To be clear, although “deterioration or stagnation that

negatively affects surrounding properties,” id. at 360,

describes blight, and perhaps most cases of blight, it does not

describe every form of possible blight. For example, we did not

mean by those words that an isolated slum, such as a dilapidated

housing project with dangerous conditions that posed an

immediate threat to the health and safety of its residents,

28 would not be a blighted area under a subsection of N.J.S.A.

40A:12A-5 merely because it did not negatively affect

surrounding properties. Nor have we ever suggested that a

crumbling and abandoned toxic industrial site, removed by

distance from other properties, would not fit the statutory

definition of blight.6 We have never stated that an area is not

blighted unless it “negatively affects surrounding properties”

because, to do so, would undo all of the legislative

classifications of blight established before and after the

ratification of the Blighted Areas Clause -- classifications

that we have previously declared to be constitutional.

Additionally, we made clear from the opening statement in

Gallenthin that the only issue before the Court was the

constitutionality of subsection (e) of the Redevelopment Law:

“Because the New Jersey Constitution authorizes government

redevelopment of only ‘blighted areas,’ we conclude that the

Legislature did not intend N.J.S.A. 40A:12A-5(e) to apply in

6 Ifthe dissent is correct that these hypothetical properties would negatively affect surrounding properties -- no matter how distant, then it stands to reason that the decrepit, tumble-down buildings on 62-64 Main Street certainly negatively affected properties next door and across the street. That would suggest that the legislative classifications in N.J.S.A. 40A:12A-5(a), (b), and (d) will lead in most, if not all, cases to the redevelopment of properties that adversely affect surrounding properties.

29 circumstances where the sole basis for redevelopment is that the

property is ‘not fully productive.’” Id. at 348. The

constitutionality of subsections (a), (b), and (d) was never at

issue in Gallenthin. There, we never expressed doubt about

Wilson’s validation of those subsections.

Last, had we intended to create a new, far-reaching

constitutional standard for blight, we certainly would have said

so in our holding in Gallenthin. We concluded Gallenthin by

declaring: “N.J.S.A. 40A:12A-5(e) applies only to property that

has become stagnant and unproductive because of issues of title,

diversity of ownership, or other conditions of the same kind.”

Id. at 373 (emphasis added). We simply rendered the statute

constitutional by replacing the “or” with an “and.”

Had we adopted a new constitutional construct in Gallenthin --

as plaintiffs and the Appellate Division believe -- we would

have ended the opinion differently, perhaps by stating that

subsection (e) “applies only to property that has become

stagnant and unproductive and that negatively affects

surrounding properties.”

We therefore reject the notion that Gallenthin established

a constitutional blight standard to be superimposed on top of

the legislative classifications of blight. To the extent that

our language in Gallenthin has created any misunderstanding, we

now make explicit that we did not intend to create a

30 constitutional blight standard that rendered unconstitutional

the classifications of blight we upheld in Wilson and Levin.

The dissent’s jurisprudential approach would require this

Court to declare unconstitutional subsections (a), (b), and (d)

of N.J.S.A. 40A:12A-5 in its present form, and in every prior

legislative iteration since before and after the 1947 New Jersey

Constitution. It would require this Court to find that

redevelopment projects that have helped rebuild Newark, Jersey

City, New Brunswick, and other urban centers were the product of

unconstitutional statutes and reliance on prior misguided

decisions of this Court, such as Wilson and Levin. If we had

intended in Gallenthin to undo the entire carefully crafted

framework of our redevelopment laws, as the dissent concludes,

we would have said so directly. We would not have concentrated

in Gallenthin on the infirmity in subsection (e) -- a single

defective timber -- if the whole statutory scheme was rotten.

If the dissent’s view were to prevail and this Court were

to repudiate its holding in Wilson and strike down subsections

(a), (b), and (d), countless redevelopment projects up and down

this state might be halted and mired in litigation. See Chester

R. Ostrowski, Comment, A “Blighted Area” of the Law: Why

Eminent Domain Legislation Is Still Necessary in New Jersey

After Gallenthin, 39 Seton Hall L. Rev. 225, 228-29 (2009)

31 (identifying almost one thousand redevelopment projects,

including thirty in Jersey City, ongoing in June 2005).

Planning boards, municipal bodies, and courts would have to

apply the dissent’s newly minted constitutional standard as a

substitute for the long-standing legislative definitions on

which they have relied for more than sixty years. The dissent’s

interpretation of subsections (a), (b), and (d) would have dire

implications and perhaps lead to a state of chaos for ongoing

redevelopment projects.

The drafters of the 1947 Constitution understood the

enormous benefits afforded by redevelopment. Their foresight

has been realized by the redevelopment projects that have helped

raise some urban centers literally from the ashes. Those

projects have spurred the opening of new businesses and the

construction of new housing for low- and moderate-income

citizens in our state. Robert S. Goldsmith & Robert Beckelman,

What Will Happen to Redevelopment in New Jersey when the Economy

Recovers? 36 Rutgers L. Rec. 314, 327 (2009) (describing

successful redevelopment projects in Jersey City, Newark,

Trenton, and Perth Amboy).

The redevelopment of decaying neighborhoods was the

objective of the drafters of the Blighted Areas Clause. That

Clause must coexist with individual rights enshrined in our

State Constitution, such as rights protected by the Eminent

32 Domain Clause, N.J. Const. art. I, ¶ 20, which ensures that

property will not be taken without just compensation.7

Redevelopment may not occur at the expense of individual rights.

Our courts will continue to protect individual rights of

landowners, as they have done before and since our decision in

Wilson.

As is clear, plaintiffs are seeking a declaration from this

Court that the descriptions of blight in subsections (a), (b),

and (d) of the Redevelopment Law do not adequately define blight

consistent with the Blighted Areas Clause of our State

Constitution. However, the Redevelopment Law, like all

statutes, is entitled to a “strong presumption of

constitutionality that . . . can be rebutted only upon a showing

that the statute’s ‘repugnancy to the Constitution is clear

beyond a reasonable doubt.’” Hamilton Amusement Ctr. v.

7The Eminent Domain Act provides a number of protections to a landowner before property can be taken by the government. Hous. Auth. of New Brunswick v. Suydam Investors, L.L.C., 177 N.J. 2, 14 (2003). Before filing a declaration of taking, a public entity is required to engage in “bona fide negotiations” with the owner to acquire the property. N.J.S.A. 20:3-6. If the negotiations are unsuccessful, the public entity can file a condemnation action, and the court then appoints three commissioners to set compensation based on the fair market value of the property. N.J.S.A. 20:3-12(b). The landowner can reject the commissioners’ award and request that a jury hear testimony and award just compensation for the taking of the property. N.J.S.A. 20:3-13(b).

33 Verniero, 156 N.J. 254, 285 (1998) (quoting Harvey v. Bd. of

Chosen Freeholders, 30 N.J. 381, 388 (1959)), cert. denied, 527

U.S. 1021, 119 S. Ct. 2365, 144 L. Ed. 2d 770 (1999).

Plaintiffs’ challenge to subsections (a), (b), and (d) are not

new. As previously discussed, we upheld the constitutionality

of those subsections in Wilson and reaffirmed their validity in

Levin. Plaintiffs’ constitutional challenge is premised on the

belief that we had established in Gallenthin an overarching

constitutional standard for defining blight under the Blighted

Areas Clause. That belief is mistaken. In Gallenthin, we did

not impugn our decisions in Wilson and Levin. We have no reason

to reconsider the constitutionality of subsections (a), (b), and

(d) in light of the facts before us.

IV.

A.

Having resolved the constitutional issue, we remind

planning boards and governing bodies that they have an

obligation to rigorously comply with the statutory criteria for

determining whether an area is in need of redevelopment. A

finding that an area is in need of redevelopment will have

significant consequences for the property owner. Gallenthin,

supra, 191 N.J. at 373. “In general, a municipality must

establish a record that contains more than a bland recitation of

applicable statutory criteria and a declaration that those

34 criteria are met.” Ibid. A resolution adopted by a planning

board or governing body should clearly articulate the factual

findings that support the statutory criteria for designating an

area as in need of redevelopment. It disserves the municipality

and the parties to go through lengthy hearings, with the

presentation of multiple witnesses and volumes of evidence, only

to have the process jeopardized because of a poorly crafted

resolution.

We must be mindful, however, that after the municipal

authorities have rendered a decision that an area is in need of

redevelopment, that decision is “invested with a presumption of

validity.” Levin, supra, 57 N.J. at 537. “Judicial review of a

blight determination” must be informed by an understanding “of

the salutary social and economic policy” advanced by

redevelopment statutes. Ibid. So long as the blight

determination is supported by substantial evidence in the

record, a court is bound to affirm that determination.

Gallenthin, supra, 191 N.J. at 372-73 (citing N.J.S.A. 40A:12A-

6(b)(5)). That said, the discretion exercised by municipal

authorities “is not unfettered.” Levin, supra, 57 N.J. at 537.

Judicial deference does not mean that a court is a rubber stamp.

A blight determination based on a net opinion or insubstantial

evidence cannot stand. Gallenthin, supra, 191 N.J. at 372-73.

In reviewing the validity of the blight declaration in this

35 case, we must remember that plaintiffs treated 62-64 Main Street

and 59-61 Moore Street -- five contiguous lots -- as one

property for development purposes. The issue is not whether one

isolated lot might have some redeeming features, but whether an

“area” is in need of redevelopment. Levin, supra, 57 N.J. at

539. For example, where an area in need of redevelopment

encompasses a large residential or industrial/commercial area, a

municipality may “draw within a blighted area certain houses or

buildings which are in good condition” because, to do otherwise,

“would be in some instances to defeat the overall legislative

purpose, namely, the redevelopment of blighted areas.” Wilson,

supra, 27 N.J. at 381; see also Gallenthin, supra, 191 N.J. at

372 (“[N]on-blighted parcels may be included in a redevelopment

plan if necessary for rehabilitation of a larger blighted

area.”); Levin, supra, 57 N.J. at 539 (“The fact that single

parcels in the area are useful and could not be declared

blighted if considered in isolation is basis neither for

excluding such parcels nor for invalidating the designation.”).

Nothing in the Blighted Areas Clause or the Redevelopment Law

suggests that an area in need of redevelopment must meet some

minimum size requirement. Maglies v. Planning Bd. of E.

Brunswick, 173 N.J. Super. 419, 422 (App. Div.) (finding blight

“even though confined to a relatively small area”), certif.

denied, 84 N.J. 462 (1980); see also Wilson, supra, 27 N.J. at

36 379 (noting that “courts will not interfere with the boundary

lines adopted in the absence of palpable abuse of discretion”).

We now must assess whether the Hackensack Planning Board

and the Mayor and Council properly designated plaintiffs’

properties as part of an area in need of redevelopment. More

particularly we must decide whether Hackensack’s blight

determination, based on the statutory criteria in N.J.S.A.

40A:12A-5, is supported by substantial evidence in the record.8

As described earlier, the statutory criteria for blight include

buildings that are “substandard,” “unsafe,” “dilapidated,” or

“obsolescent,” N.J.S.A. 40A:12A-5(a); buildings no longer in use

for commercial or industrial purposes, abandoned buildings, and

buildings that have fallen “into so great a state of disrepair

as to be untenantable,” N.J.S.A. 40A:12A-5(b); and “[a]reas with

8 Thedissent does not give Hackensack the benefit of the deferential standard of review that applies to municipal designations of blight. The Planning Board credited certain testimony over other testimony. Making credibility determinations was within the purview of the Board. Our role is to see whether the evidence in the record -- in this case, the hearings before the Planning Board -- support the findings made by the municipality. The issue is solely whether there is substantial evidence to support Hackensack’s designations, not whether we would have come to a different decision if we were the Planning Board or Mayor and Council. See Lyons v. City of Camden, 52 N.J. 89, 98 (1968) (stating that if blight determination is “supported by substantial evidence, the fact that the question is debatable does not justify substitution of the judicial judgment for that of the local legislators”). 37 buildings or improvements which, by reason of . . . faulty

arrangement or design . . . are detrimental to the safety,

health, morals, or welfare of the community,” N.J.S.A. 40A:12A-

5(d).

At the redevelopment proceedings, the Planning Board

reviewed reports, inspected photographs, and received testimony

at eight days of hearings. It credited the report and testimony

of a professional planner, Janice Talley, who examined the

properties at issue.

62-64 Main Street -- Lots 4-7

On Lots 4-7 sat two vacant, boarded up, dilapidated

buildings with crumbling masonry -- the vestiges of a defunct

auto repair business. Plaintiffs denied Talley access to the

interior of the buildings. Nevertheless, the buildings’

exteriors showed “prominent signs of structural deterioration”

and were evidently in a dangerous condition, leading Talley to

conclude that the buildings were “a detriment to the . . .

safety, health and welfare of the community.” Indeed, the roof

to one of the buildings collapsed during the appeal of this

case, requiring the building to be torn down.9 Behind the two

9 While it is true that, as the dissent notes, the roof had not collapsed by the time of the Planning Board hearings, the dire condition of the property was fully described at the hearings. The fact is that the building had to be torn down and anyone observing the property today can see that one of the boarded up 38 buildings was a “poorly surfaced” parking lot that did not have

lines, lighting, or other necessary improvements.

The Planning Board determined that the decrepit buildings

and their decayed parking lot satisfied the criteria for an area

in need of redevelopment, focusing on subsections (a), (b), and

(d) of N.J.S.A. 40A:12A-5. The Board adopted a resolution that

explained its findings: the buildings were vacant, in a

deteriorated condition, “substandard and unsafe for occupancy,”

and untenantable, thus meeting the blight criteria for

subsections (a) and (b). Moreover, the entirety of the

property, including the parking lot, suffered from a faulty

arrangement or design under subsection (d).

We hold that substantial evidence in the record supports

the Planning Board’s findings -- later adopted by the Mayor and

Council -- that Lots 4-7 were part of an area in need of

redevelopment. We cannot look separately at the parking lot,

which was an integral part of the property, in assessing whether

it fits under subsection (d). This is the very type of parsing

that Wilson, supra, cautions against in reviewing whether a

municipality properly exercised its authority in designating an

area in need of redevelopment. 27 N.J. at 379-81.

59-61 Moore Street -- Lot 8

buildings is missing, a point related to the Court during oral argument. 39 This lot was part of the former auto repair business that

encompassed Lots 4-7. An auto garage that once sat on Lot 8 was

demolished. The ruins of that property were converted into a

parking lot, although one that had no markings for individual

parking spaces, no lighting, and no landscaping. The pavement

of the parking lot was crumbling and in disrepair and encroached

onto the sidewalk. The lack of any visible separation between

the parking lot and sidewalk created a public-safety hazard,

according to Talley.

In its resolution, the Planning Board determined that the

lot’s unsightliness and its inefficient use of the parking area

-- evidenced by its undefined layout -- contributed to a greater

demand for on-street parking, thereby having “a negative impact

on surrounding properties.” The Mayor and Council adopted the

Board’s finding that Lot 8 met the definition of blight under

subsection (d) because of its “faulty arrangement [or] design.”

We hold that substantial evidence in the record supports that

finding.

Even if Lot 8, standing alone, did not meet the definition

of blight, it still might be properly categorized as part of an

area in need of redevelopment. Blight determinations are not

viewed in a piecemeal fashion. Levin, supra, 57 N.J. at 539.

The Planning Board’s expert testified that Lot 8 could not be

redeveloped on its own, and that it could only be redeveloped in

40 conjunction with its neighboring lots. Lot 8 was one of five

lots on which an auto repair business operated, and plaintiffs

treated Lot 8 as one of five combined lots for development

purposes. Thus, the historical and contemplated use of Lots 4-8

was for a single business purpose.

We cannot agree with the Appellate Division that the

Planning Board erred by not addressing “the fact that the owners

had attempted to obtain approval to develop the properties, and

that the proposals were denied.” A landowner’s desire to

develop property “does not militate against [a] blight

declaration.” Levin, supra, 57 N.J. at 540. Here, the

municipal authorities concluded that the property was unsuitable

for the construction of a bank. Plaintiffs unsuccessfully

appealed their failed efforts to secure the municipal

construction approvals for a bank. In short, plaintiffs’

failure to develop the property in accordance with the lawful

requirements imposed by Hackensack land-use authorities cannot

obscure the reality that the property remains in a state of

blight.10

10 Thedissent seems to draw a nefarious inference from the fact that Hackensack did not give approval to plaintiffs’ flawed proposals to develop their properties. However, the trial court reviewed and upheld the decision of the relevant municipal boards, and the Appellate Division affirmed. Those decisions are not subject to collateral attack here. There is no basis to question the good faith of Hackensack in making those earlier land-use determinations. 41 It bears mentioning that, under N.J.S.A. 40A:12A-8(j),

plaintiffs are free to pursue an agreement with Hackensack that

would permit them to rehabilitate their property in a way

consistent with the redevelopment plan. See N.J.S.A. 40A:12A-

8(j); see also William M. Cox & Stuart R. Koenig, New Jersey

Zoning & Land Use Administration, § 38-7.2 at 953 (2014)

(stating that “statute encourages property owners to voluntarily

repair and rehabilitate buildings and associated improvements to

bring them up to current standards usually accomplished through

an agreement with the governing body or redevelopment entity”).

Even if Hackensack and plaintiffs did not reach an agreement

that would permit either plaintiffs to rehabilitate the property

or Hackensack to purchase the property, plaintiffs are still

entitled to all of the protections of the Eminent Domain Act of

1971, N.J.S.A. 20:3-1 to 20:3-50. In the end, plaintiffs are

entitled to “just compensation” -- the fair market value of

their property -- if Hackensack pursues a taking through its

eminent domain power. See N.J. Const. art. I, ¶ 20; N.J.S.A.

20:3-38 (“The value of any land or other property being acquired

in connection with development or redevelopment of a blighted

area shall be no less than the value as of the date of the

declaration of blight by the governing body upon a report by a

planning board.”).

42 This is not the case of a municipality invoking the

redevelopment laws to declare property blighted solely because

the property -- on which a residence stands or a commercial

business operates -- is not put to its optimal use. We do not

have here, for example, a pristine set of Cape Cod homes

fronting the ocean, which a municipality wants to remove to

build high rises in order to increase its taxable base. This

also is not a case about a municipality driving poor or minority

residents out of a well-maintained older neighborhood for

gentrification purposes. Rather, we have here the more mundane

scenario envisioned by the drafters of the Blighted Areas

Clause, an area in the downtown section of a city, which meets

some of the classic statutory definitions of blight --

dilapidated and vacant buildings, and unsightly and rundown

properties that pose safety hazards.

For sure, the abuse of the redevelopment laws cannot be

countenanced. Although a municipality’s blight determination is

entitled to judicial deference, courts still must be vigilant to

ensure that there is compliance with the Redevelopment Law. But

we cannot forget that the “Blighted Areas Clause [has] enabled

municipalities to intervene, stop further economic degradation,

and provide incentives for private investment.” Gallenthin,

supra, 191 N.J. at 362. Nor can we forget that the

Redevelopment Law promotes a “salutary social and economic

43 policy,” Levin, supra, 57 N.J. at 537, a policy that gives

municipalities the authority to rehabilitate and revitalize

blighted areas for the benefit of the public -- a benefit

realized through better housing and enhanced business and

employment opportunities.

VI.

For the reasons expressed, we reverse the judgment of the

Appellate Division. We affirm the Law Division’s holding that

substantial evidence in the record supports the Hackensack

Planning Board’s and the Mayor and Council’s designations of

JUSTICES LaVECCHIA and FERNANDEZ-VINA join in JUSTICE ALBIN’s opinion. CHIEF JUSTICE RABNER filed a separate, dissenting opinion, in which JUSTICE SOLOMON joins. JUSTICE PATTERSON and JUDGE CUFF (temporarily assigned) did not participate.

44 SUPREME COURT OF NEW JERSEY A-19/20 September Term 2013 072699

MAYOR AND COUNCIL OF THE CITY OF HACKENSACK; PLANNING BOARD OF THE CITY OF HACKENSACK,

CHIEF JUSTICE RABNER, dissenting.

One of our most prized liberties is the right to possess

and protect property free from governmental interference. That

right is so fundamental that it appears in the first sentence of

the State Constitution: “All persons are by nature free and

independent, and have certain natural and unalienable rights,

among which are those of . . . acquiring, possessing, and

protecting property.” N.J. Const. art. I, ¶ 1.

In certain limited, carefully prescribed circumstances, a

governmental body may seek to take a person’s private property

for a public purpose. For example, when done properly, towns

can redevelop deteriorated areas in a way that halts further

decay and enhances the life of the community. But before local

or state officials can use that authority and take private

1 property, they must satisfy a number of important requirements.

Among other things, if they seek to redevelop a “blighted” area,

they must abide by another constitutional command and prove that

the property is in fact “blighted.” N.J. Const. art. VIII, § 3,

¶ 1.

In a significant ruling in 2007, Gallenthin Realty

Development, Inc. v. Borough of Paulsboro, this Court analyzed

the meaning of the term “blighted” in the State Constitution.

191 N.J. 344 (2007). The Court unanimously held that the

essential components of blight are (1) “deterioration or

stagnation” that (2) “negatively affects surrounding

properties.” Id. at 363. The Court then applied that concept

to a different section of the statute that is now before us, the

Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -73

(“LRHL”). The Court held that the clause in question, N.J.S.A.

40A:12A-5(e), could not be reconciled with the Constitution.

Gallenthin, supra, 191 N.J. at 365.

Today, the majority takes a step backward from Gallenthin.

In assessing different sections of the same law, N.J.S.A.

40A:12A-5(a), (b), and (d), the majority concludes that when the

government designates an area to be “in need of redevelopment” -

- a critical step in the takings process -- it need not

affirmatively prove both elements set forth in Gallenthin to

show that a property is “blighted.” Instead, the majority

2 permits the designation of private land for redevelopment even

when government officials have not shown a decadent effect on

surrounding properties.

The majority goes on to affirm the designation of two

private properties in this case as “in need of redevelopment”

based on the conclusory findings of the Hackensack Planning

Board, which the Mayor and City Council adopted. That

designation paves the way for the City to take the properties

from their rightful owners.

When the government seeks to take a citizen’s private

property for redevelopment, it must act with the utmost care.

And it must make its case through substantial evidence in the

record. N.J.S.A. 40A:12A-6(b)(5)(c). To satisfy the commands

of the Constitution, the government must show that the property

it seeks to take is blighted. Because the majority’s approach

falls short of that imperative, I respectfully dissent.

This case involves two adjacent pieces of property in a

commercial area of downtown Hackensack. The first parcel,

located at 62-64 Main Street, encompasses 10,443 square feet of

space or roughly one-quarter of one acre. In 2008, there were

two vacant, boarded-up, masonry buildings and a gravel parking

area on the property. The front portion of one building was two

3 stories; the rear portion and the second building were single-

story. The tax map lists the property as Lots 4 to 7 on Block

205.

The second parcel, located at 59-61 Moore Street (also

known as Church Street), is a single rectangular lot that covers

4,280 square feet or about one-tenth of one acre. The property

is used as a parking lot. It is paved but poorly surfaced, has

no landscaping or lighting, and is not marked for individual

spaces or aisles. In one area, the lot encroaches onto the

sidewalk. The parcel is listed as Lot 8, Block 205.

Both properties are owned by limited liability companies

with the same three members, Michael J. Monaghan, Frank

Callahan, and Danny Callahan. The parties acquired the

properties in 1999 from an old auto body shop. At the time, the

owners demolished a building on the Moore Street property. They

also decommissioned the Main Street property. With an eye

toward redeveloping the property, they spent $20,000 to strip

the interior of the building and remove the electrical and

plumbing work. To address environmental issues, the owners also

spent $60,000 to remediate the properties. Overall, according

to the record, the owners represent that they have invested

“hundreds of thousands of dollars into improving the property.”

Taxes on both properties have been fully paid.

4 In recent years, the owners made a number of efforts to

redevelop the properties. In 1999, they engaged in discussions

with state officials about leasing space to two state agencies;

met with an official at the local building department who

approved a zoning switch from auto repair to office space; and

then abandoned the effort after a meeting with the Mayor who,

according to Monaghan, did not favor the project.

In 2006, the Planning Board denied an application to

demolish the structures at 62-64 Main Street and replace them

with a branch of the Bank of New York and a drive-through teller

lane. The Board’s decision, which was upheld in court, focused

primarily on parking, traffic flow, and congestion issues.

Again in 2011, the City declined permission to build a

branch of PNC Bank with parking and a drive-through lane at the

Main Street site. The Board of Adjustment cited traffic and

parking concerns, among other reasons, when it denied the

request for a variance and site plan approval.

The downtown area near the properties has seen other

development in recent years. CVS, Commerce Bank (now TD Bank),

and Auto Zone have all built new facilities in the area.

At the same time the owners pursued redevelopment plans for

their properties, the City proceeded on a course to take both

parcels. The Mayor and the City Council passed a resolution in

5 July 2006, which authorized the Planning Board to conduct a

preliminary investigation of a two-block area -- that included

the two properties -- as a potential site for redevelopment.

The Planning Board, in turn, hired H2M Group, an architectural,

engineering, and planning firm, to conduct a study. In the

following years, the firm prepared two redevelopment studies and

a separate addendum to report its findings.

The first report, issued in October 2006, was authored by

Janice Talley and Michael Pessolano. It examined twelve

properties in the study area and found that each of them met two

or more criteria in the LRHL which qualified the properties for

designation as an area in need of redevelopment.

The first study concluded that the Main Street property met

five criteria for redevelopment, N.J.S.A. 40A:12A-5(a), (b),

(d), (e), and (h). (The statute is detailed in section III

below.) The report noted that the property, along with the

Moore Street parcel, was the subject of an unsuccessful attempt

to construct a new bank in 2006. In addition, H2M observed that

the two buildings at 62-64 Main Street showed “prominent signs

of structural deterioration,” had “no plaster on significant

portions of the facade,” were boarded up and “vacant due to

deteriorated conditions” that “rendered them untenantable,” were

unsafe, unhealthy, and unsightly, suffered from “faulty

arrangement of design,” and were “economically underutilized.”

6 The study also noted a code enforcement citation for the

property, which the owners had challenged. With regard to

subsection (d), the report stated that the Main Street parcel

has a negative effect on surrounding properties.

The first study also found that the parking lot at Moore

Street met three criteria for redevelopment, N.J.S.A. 40A:12A-

5(d), (e), and (h). H2M stated that the property displayed

“faulty arrangement of design,” had no landscaping or lighting,

encroached into the sidewalk along one street, and was

“economically underutilized.” In addition, the report found

that the parcel had “a negative impact on the surrounding

properties” because it was unsightly and inefficient, in a way

that contributed to greater use of on-street parking.

After a hearing before the Planning Board in December 2006,

which involved extensive questions of Mr. Pessolano, H2M

submitted a revised Redevelopment Study dated May 15, 2007. The

new report assessed the same study area but regrouped the lots

as fourteen properties. This time, H2M found that only eight

properties qualified under the LRHL for designation as an area

The new version had some additional information --

including the results of several interior inspections -- but was

quite similar overall to the first study. (The report noted

that the owners did not grant permission to inspect the interior

7 of the Main Street property.) The analysis of the Main and

Moore Street parcels remained the same with one exception: the

report no longer found that any properties should be designated

as in need of redevelopment based on N.J.S.A. 40A:12A-5(h) (“The

designation of the delineated area is consistent with smart

growth planning principles adopted pursuant to law or

regulation.”).

Ms. Talley submitted an Addendum to the second

Redevelopment Study on September 26, 2007. The Addendum

responded to a recent property revaluation in Hackensack and the

Court’s decision in Gallenthin. Based on Gallenthin, the

Addendum concluded that the properties no longer met the

criterion for redevelopment under N.J.S.A. 40A:12A-5(e). As a

result, according to H2M, the Main Street property now qualified

as an area in need of redevelopment under only three sections of

the LRHL, N.J.S.A. 40A:12A-5(a), (b), and (d), and the Moore

Street parking lot now qualified under only one section,

N.J.S.A. 40A:12A-5(d).

The Planning Board held public hearings on eight days from

December 13, 2006 to January 24, 2008. During the hearings,

planners testified for both sides. Monaghan also testified

about the history of the properties.

During the course of the hearings, Mr. Pessolano, an author

of the first study and a planner retained by Hackensack,

8 conceded that he had not considered whether property values had

increased, declined, or remained the same in the potential

redevelopment area; whether any properties had been foreclosed

upon or sold through tax sales; whether people were actively

buying or selling property in the area and the prices of any

properties sold; or whether properties were in arrears for non-

payment of taxes, among other related factors. Although the

redevelopment studies highlighted parking, circulation, and

traffic concerns at multiple points, Mr. Pessolano also

testified that no parking study was done of the area, no parking

inventory had been done, and traffic accidents in the area had

not been reviewed.

Ms. Talley, who worked on both studies and the addendum for

the Planning Board, testified as well. Among other things, she

stated that the parking lot at Moore Street met the criteria for

redevelopment under the LRHL. She also agreed, under cross-

examination, that with a few improvements, the property would

not meet the criteria; some landscaping, striping, and exterior

lighting could better define the parking area and separate it

from the sidewalk, so that the parcel would no longer be “in

need of redevelopment.”

Peter Steck, a community planning consultant retained by

the owners, submitted a report and testified as well. He

9 maintained that the properties did not qualify for designation

under the LRHL as areas in need of redevelopment.

On February 13, 2008, the Planning Board adopted a

resolution that designated five properties -- including 62-64

Main Street and 59-61 Moore Street -- as areas in need of

redevelopment. It found that nine other properties did not

qualify. The resolution referenced the studies and testimony at

the hearing, without further comment, and contained brief

findings of fact and conclusions of law for the properties,

which are reviewed below.

The Mayor and City Council passed Resolution No. 272-08 on

August 5, 2008, which accepted and adopted the recommendations

of the Planning Board. For reasons that are not relevant to

this appeal, the governing body withdrew the resolution and, on

April 5, 2011, adopted Resolution No. 159-11 (Resolution), which

again accepted the Planning Board’s recommendations.

Plaintiffs 62-64 Main Street, L.L.C., and 59-61 Main

Street, L.L.C., filed a complaint in lieu of prerogative writs

on May 18, 2011 to challenge the Resolution. They sought a

declaration that the designated properties were not an area in

need of redevelopment.

The trial court affirmed the Resolution. The court

rejected the owners’ interpretation of Gallenthin, supra, and

10 held that “the term ‘blight’ does not apply to each of the

LRHL’s statutory criteria.” The trial judge concluded that

Hackensack had not acted arbitrarily, capriciously, or

unreasonably and found substantial evidence in the record to

support the designation of each property.

The Appellate Division reversed. In an unpublished

opinion, the panel observed that “Gallenthin established a

heightened standard for designating an area in need of

redevelopment, requiring not only a determination that an area

satisfies a subsection under N.J.S.A. 40A:12A-5, but also a

finding of blight.” In light of Gallenthin, that finding was

necessary to satisfy the State Constitution. Thus, although the

Court in Gallenthin addressed only subsection (e) of the LRHL,

the panel reasoned that “Gallenthin’s holding applies to every

subsection of N.J.S.A. 40A:12A-5.”

As applied to this case, the panel noted, “[i]t is also

clear that neither the Board nor the Mayor and Council

considered whether the conditions noted in the Board’s

resolution rose to the level of blight.” In addition, the

Appellate Division found that the resolutions “provide[d]

insufficient findings to support their conclusions.” The panel

therefore reversed Hackensack’s designations under the LRHL.

11 II.

The government’s taking of private property is an

extraordinary event. As this Court has cautioned, “[t]he

condemnation process involves the exercise of one of the most

awesome powers of government.” City of Atl. City v. Cynwyd

Invs., 148 N.J. 55, 73 (1997) (discussing Eminent Domain Act).

The same is true for the redevelopment process. The immense

authority that municipalities have to designate areas in need of

redevelopment and ultimately take private property for that

purpose can serve as “a valuable tool” to reverse the effects of

“economic deterioration.” Gallenthin, supra, 191 N.J. at 365.

But that power, of course, can also be abused. In either case,

use of the government’s authority has lasting, serious

consequences for owners of private property -- not all of whom

have the means to challenge official actions and try to protect

homes and businesses they have lived in and operated for years.

The State Constitution therefore places important limits on

the State’s power to take -- and seek to take -- private

property. As this Court expounded upon in Gallenthin, the

Constitution requires the State to pay “just compensation” for

property taken by eminent domain. Id. at 356; N.J. Const. art.

I, ¶ 20. The Constitution also guarantees that no one can be

“deprived of property without due process of law.” Gallenthin,

12 supra, 191 N.J. at 356 (citing Twp. of W. Orange v. 769 Assocs.,

172 N.J. 564, 572 (2002)). In addition, government may only

take property for a “public use.” N.J. Const. art. I, ¶ 20.

Article VIII, Section 3, Paragraph 1 of the Constitution,

referred to as the Blighted Areas Clause, expands on that

requirement. It states that “[t]he clearance, replanning,

development or redevelopment of blighted areas shall be a public

purpose and public use, for which private property may be taken

or acquired.”

To guard against governmental abuse of power, the United

States Constitution has similar protections. As Justice

Brandeis wrote more than seventy-five years ago, the federal

Constitution requires a “justifying public purpose” and the

payment of just compensation before the government may take

private property under its eminent domain authority. Thompson

v. Consol. Gas Util. Corp., 300 U.S. 55, 80, 57 S. Ct. 364, 376,

81 L. Ed. 510, 524 (1937) (citations omitted). The guarantee of

due process before the government may take private property is

equally well-settled. See Ochoa v. Hernandez y Morales, 230

U.S. 139, 161, 33 S. Ct. 1033, 1041, 57 L. Ed. 1427, 1437

(1913). In light of those state and federal constitutional

protections, any legislation to redevelop and take private

property must strike the right balance between serving a public

purpose and protecting individual property rights.

13 Based on the authority of the Blighted Areas Clause, the

Legislature enacted the LRHL and its predecessor, the Blighted

Areas Act, N.J.S.A. 40:55-21.1 to -21.14 (repealed by L. 1992,

c. 79, § 59), which empowered government officials to designate

areas as blighted or in need of redevelopment. Gallenthin,

supra, 191 N.J. at 357, 362; see also N.J.S.A. 40A:12A-6(c). To

be sure, the Clause granted the Legislature, and state and local

governments in turn, only the authority “allowed by [the] State

Constitution.” Gallenthin, supra, 191 N.J. at 359. For that

reason, the entirety of the LRHL, and not just a single

subsection, derives its authority from the Blighted Areas Clause

and must comply with it. In that way, the Clause “operates as

both a grant and limit on the State’s redevelopment authority.”

Ibid. And those twin purposes enable government both to

redevelop deteriorated property and guard against the abuse of

that power.

The LRHL outlines a careful process for the redevelopment

of private property. First, the governing body of a

municipality must “authorize the planning board to undertake a

preliminary investigation to determine whether the proposed

area” qualifies as a “redevelopment area” under the law.

N.J.S.A. 40A:12A-6(a). The statute calls for notice and a

public hearing in front of the planning board. N.J.S.A.

40A:12A-6(b)(2)-(3). After the hearing, the planning board must

14 recommend whether the area meets the statutory criteria for

redevelopment. N.J.S.A. 40A:12A-6(b)(5)(a). The town’s

governing body, in turn, “may adopt a resolution determining

that the delineated area, or any part thereof, is a

redevelopment area.” N.J.S.A. 40A:12A-6(b)(5)(b). That

determination must be supported by substantial evidence in the

record. N.J.S.A. 40A:12A-6(b)(5)(c).

Section 5 of the LRHL lies at the heart of the process.

The section lists eight specific criteria. N.J.S.A. 40A:12A-

5(a)-(h). For a municipality to designate an area “to be in

need of redevelopment,” town officials must first find that one

of the delineated conditions exists.

The town’s designation is pivotal to the takings process.

Without it, the process stops in its tracks. See Gallenthin,

supra, 191 N.J. at 348, 371 (noting that designation subjects

private property to taking by eminent domain). If town

officials decide that an area is in need of redevelopment, the

governing body may go forward and adopt a redevelopment plan for

the area. N.J.S.A. 40A:12A-7(a). The municipality can then

“proceed with the clearance, replanning, development and

redevelopment of the area designated in that plan.” N.J.S.A.

40A:12A-8. In particular, the town can condemn and acquire

private property under the Eminent Domain Act to carry out the

15 redevelopment plan. N.J.S.A. 40A:12A-8(c) (citing N.J.S.A.

20:3-1 to -50).

In 2007, this Court considered the constitutionality of the

LRHL in Gallenthin. The case centered around a sixty-three acre

parcel of land in Paulsboro, most of which was undeveloped open

space that the State Department of Environmental Protection had

identified as protected wetlands. Gallenthin, supra, 191 N.J.

at 348-49. Gallenthin Realty and George and Cindy Gallenthin

(collectively, Gallenthin) owned the property. Id. at 348.

They sporadically used it as a “dredging depot” and leased parts

of the land to an environmental clean-up organization. Id. at

349.

The Borough of Paulsboro adopted a new master plan in 1998,

which described the Gallenthin property as “idle” and encouraged

the town to explore acquiring and redeveloping the property.

Id. at 350. The following year, the local planning board

investigated whether several parcels -- not including the

Gallenthin property -- could be designated as in need of

redevelopment under the LRHL. Ibid. In 2002, the town added

the Gallenthin property to the potential redevelopment site and

asked an engineering firm to examine the parcel. Id. at 351.

The firm later reported that the land was “stagnant and not

fully productive,” and that it “underutiliz[ed]” a rail line on

16 the edge of the property. Id. at 352. As a result, the study

concluded that the “existing conditions . . . satisfy the

statutory criteria necessary to deem the study area an area in

need of redevelopment.” Ibid. After a public hearing, the

planning board, relying on N.J.S.A. 40A:12A-5(e),1 recommended

1At the time, section 5(e) of the LRHL provided that an area could be found to be in need of redevelopment if the governing body found

[a] growing lack or total lack of proper utilization of areas caused by the condition of the title, diverse ownership of the real property therein or other conditions, resulting in a stagnant or not fully productive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare.

[N.J.S.A. 40A:12A-5(e) (2007) (emphasis added).]

Following Gallenthin, the Legislature amended section 5(e). It now reads as follows:

[a] growing lack or total lack of proper utilization of areas caused by the condition of the title, diverse ownership of the real properties therein or other similar conditions which impede land assemblage or discourage the undertaking of improvements, resulting in a stagnant and unproductive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare, which condition is presumed to be having a negative social or economic impact or otherwise being detrimental to the safety, health, morals, or welfare of the surrounding area or the community in general.

17 that the Gallenthin property qualified for redevelopment, and

the Borough adopted the recommendation. Id. at 352-54.

Gallenthin challenged the designation and claimed that its

property did not meet any of the criteria under the LRHL. Id.

at 354. The trial court upheld Paulsboro’s determination, and

the Appellate Division affirmed that judgment. Ibid. This

Court granted Gallenthin’s petition for certification, which

challenged the constitutionality of section 5(e) of the LRHL.

The Court reversed, and its decision followed a

straightforward path. As the Court explained, the appeal

“requires us to ascertain the meaning of the term ‘blighted’ as

used in the New Jersey Constitution, and determine whether . . .

N.J.S.A. 40A:12A-5(e) is within the scope of that term.” Id. at

358 (emphasis added). To decide the first question, the Court

reviewed various definitions of the term “blight,” considered

scholarly articles that spanned sixty years, examined the record

of the 1947 Constitutional Convention, and surveyed the statutes

and case law of other states. Id. at 360-62, 364-65.

The Court also examined the evolution of the term “blight”

in New Jersey. It noted that “in adopting the Blighted Areas

Clause, the framers were concerned with addressing a particular

phenomenon, namely, the deterioration of ‘certain sections’ of

[N.J.S.A. 40A:12A-5(e) (2015) (emphasis added)].

18 ‘older cities’ that were causing an economic domino effect

devastating surrounding properties.” Id. at 361-62. The Court

observed that, years later, the term “blight” expanded beyond

“slum clearance” to include redevelopment plans in suburban and

rural areas and “the acquisition of land in that context.” Id.

at 363 (referencing the Blighted Areas Act).

The Court concluded that “blight” has two components under

the meaning of the State Constitution: (1) “deterioration or

stagnation” (2) that “has a decadent effect on surrounding

property.” Id. at 365. To underscore its holding, the Court

repeated it not once, not twice, but three times:

*“[T]he term presumes deterioration or stagnation that

negatively affects surrounding areas,” id. at 360;

*“Although the meaning of ‘blight’ has evolved, the term

retains its essential characteristic: deterioration or

stagnation that negatively affects surrounding properties,” id.

at 363; and

*“At its core, ‘blight’ includes deterioration or

stagnation that has a decadent effect on surrounding property,”

id. at 365.

The Court placed no limit on its holding. It set out to

define the meaning of blight under the New Jersey Constitution,

not a subpart of a statute. And the Court expressly outlined a

standard. Only after determining what “blight” meant under the

19 Constitution did the Court turn to its second question: whether

subsection (e) complied with the constitutional standard. The

Court found that Paulsboro’s construction of the law did not.

Id. at 365. The Court concluded that “Paulsboro’s

interpretation of N.J.S.A. 40A:12A-5(e), which would equate

‘blighted areas’ to areas that are not operated in an optimal

manner, cannot be reconciled with the New Jersey Constitution.”

Ibid. And the Court explained why: because the meaning of the

term “blight” under the Constitution “includes deterioration or

stagnation that has a decadent effect on surrounding property.”

Ibid. Under Paulsboro’s approach, by contrast, “any property

‘blighted.’” Ibid. The Court reasoned that “[i]f such an all-

encompassing definition of ‘blight’ were adopted, most property

in the State would be eligible for redevelopment.” Ibid.

Because Paulsboro’s sole reason “for classifying the Gallenthin

property as ‘in need of redevelopment’ was that the property, in

isolation, was ‘not fully productive,’” the Court ruled that the

designation went “beyond the scope” of subsection 5(e) and

invalidated the finding. Id. at 372.2

2 To avoid rendering section 5(e) unconstitutional, the Court held that the clause only applied “to areas that, as a whole, are stagnant and unproductive because of issues of title, diversity of ownership, or other similar conditions.” Id. at 348 (emphasis added). The Legislature revised the statute accordingly in 2013. L. 2013, c. 159, § 1.

20 Gallenthin teaches certain important lessons. Whenever a

town designates an area to be in need of redevelopment, the

designation must satisfy the definition of blight under the

Constitution. As a result, if the Legislature passes a statute

that allows for the taking of property on less than a showing of

blight, as required by the Constitution and defined in

Gallenthin, the statute cannot survive a challenge and the

designation cannot stand.

The Appellate Division understood Gallenthin in that way.

It acknowledged that the opinion only addressed one clause of

the LRHL but highlighted the Court’s approach: that subsection

5(e) could not be “applied to cover property that is not

blighted within the meaning of the Constitution.” Focusing on

the Court’s reasoning, the panel concluded that “Gallenthin’s

holding applies to every subsection of N.J.S.A. 40A:12A-5.”

Another appellate panel made the following similar observation:

Gallenthin “reaffirmed that the New Jersey Constitution requires

a finding of actual blight before private property may be taken

for purposes of redevelopment.” Hoagland v. City of Long

Branch, 428 N.J. Super. 321, 324 (App. Div. 2012), certif.

denied, 213 N.J. 388 (2013).

The majority, however, reads Gallenthin differently. It

essentially argues that Gallenthin could not have meant what it

21 said in light of the history of earlier legislative schemes, the

meaning of the Blighted Areas Clause, and prior decisions of the

Court in Wilson v. City of Long Branch, 27 N.J. 360 (1958), and

Levin v. Township Committee of Bridgewater, 57 N.J. 506, appeal

dismissed, 404 U.S. 803, 92 S. Ct. 58, 30 L. Ed. 2d 35 (1971).

See ante at __-__ (slip op. at 17-25). A careful reading of the

historical record and the case law, however, reveals that they

did not address the meaning of the term “blighted” under the

Constitution or foreclose Gallenthin’s discussion of that issue.

The Blighted Areas Clause was adopted as part of the 1947

Constitution against the backdrop of two legislative schemes:

the Redevelopment Companies Law, L. 1944, c. 169; and the Urban

Redevelopment Law, L. 1946, c. 52. Both acts provided for

public and private roles to redevelop decaying urban areas.

Neither statute, though, defined the term “blighted.” The 1944

law “declared” that “substandard conditions and [u]nsanitary

housing conditions owing to obsolescence, deterioration and

dilapidation of buildings, or excessive land coverage, lack of

planning, of public facilities, of sufficient light, air and

space, and improper design and arrangement of living quarters”

exist in certain municipalities in New Jersey. L. 1944, c. 169,

§ 2. The 1946 act contained a similar declaration. L. 1946, c.

52, § 2 (“congested, dilapidated, substandard, unsanitary and

dangerous housing conditions and excessive land coverage

22 existing in portions of the municipalities in this State are a

menace to the health, safety, morals and welfare of the public,

and constitute social and economic liabilities”). Both statutes

outlined an approach to address the problem, but they did not

identify specific criteria to determine when a parcel of private

land could be considered “blighted” or “in need of

redevelopment,” as the BAA and LRHL later did.

Neither statute appears to have gotten much use. A witness

at the constitutional convention explained that, “with the fear”

that the laws might be “held unconstitutional hanging over their

heads,” “[n]o corporations have been willing, so far,” to invest

money to undertake the public/private projects envisioned.

Proceedings of the New Jersey Constitutional Convention of 1947,

vol. 1 at 743-44.

The Blighted Areas Clause, no doubt, was adopted to address

that concern and signal that the new Constitution authorized

legislation like the 1944 and 1946 acts. See McClintock v. City

of Trenton, 47 N.J. 102, 105 (1966); see also James R. Zazzali &

Jonathan L. Marshfield, Providing Meaningful Judicial Review of

Municipal Redevelopment Designations: Redevelopment in New

Jersey Before and After Gallenthin Realty Development, Inc. v.

Borough of Paulsboro, 40 Rutgers L.J. 451, 474-75 (2009). The

history of the constitutional convention shows that the framers

validated an important concept: the new Constitution, in broad

23 terms, empowered government to redevelop and take blighted

private property. But the framers did not analyze or validate

each declaration and phrase in the 1944 and 1946 acts. Nor did

they define the term “blighted.”

The Legislature acted soon after, in 1949, and passed the

Blighted Areas Act, the predecessor to the LRHL. L. 1949, c.

187. The new law defined “blighted area” in four subsections.

The definition included, for example, “[b]uildings and

structures which are unfit, unsanitary and unsafe for human use

and habitation by reason of age, physical deterioration,

dilapidation or obsolescence,” id. at § 1(a), and “[a]

prevalence of factors conducive to ill health, transmission of

disease, infant mortality, juvenile delinquency, crime and

poverty,” id. at § 1(d).

Two years later, in 1951, the Legislature amended the

statute and broadened the definition of “blighted areas.” L.

1951, c. 248, § 1. (The abbreviation “BAA” refers to this

amended version of the Blighted Areas Act.) As the majority

outlines, the definitions that appear at N.J.S.A. 40:55-21.1(a),

(b), and (d) (repealed) of the BAA are nearly identical to their

companion sections in the LRHL, at N.J.S.A. 40A:12A-5(a), (b),

and (d). See ante __-__ (slip op at 20-21); see also Forbes v.

Bd. of Trs. of S. Orange Vill., 312 N.J. Super. 519, 526 (App.

Div.), certif. denied, 156 N.J. 411 (1998).

24 The Court addressed certain aspects of the

constitutionality of the BAA in Wilson. In that case, the Mayor

and Board of Commissioners of the City of Long Branch adopted a

recommendation of the planning board that declared an area of

the city “blighted.” Wilson, supra, 27 N.J. at 368-69. The

City acted under the BAA. Owners of the land challenged the

designation and argued that the BAA was unconstitutional for

various reasons.

Justice Francis’s opinion offers a robust defense of the

benefit of “[c]ommunity redevelopment.” Id. at 370-71. The

detailed opinion also outlines the specific bases for

plaintiffs’ constitutional challenge: (1) the title of the BAA

embraces three objects and thereby violated Article IV, section

7, paragraph 4 of the Constitution; (2) the BAA permits a taking

of property without just compensation, in that a determination

of blight alone diminishes the market value of property and thus

constitutes a taking; (3) the State and Federal Constitutions

conflict with the BAA because the law “permits the taking of

property by the municipality for private use, namely, for

development by private capital and for the pecuniary profit of

private individuals”; (4) the act “discriminates against private

property owners and in favor of public utilities”; (5) “the act

contains no reasonable standards to guide a planning board or

governing body in making a determination that an area is

25 blighted”; and (6) the authority to define the term “blighted,”

as used in the Blighted Areas Clause of the Constitution,

“resides in the judicial and not the legislative branch of the

government.” Id. at 373-83. Against those particular

challenges, Wilson upheld the constitutionality of the statute.

The first four bases for upholding the law against

constitutional attack are of no relevance here. The fifth claim

-- whether the BAA delegated unbridled discretion to towns --

also rested on explicit arguments that the Court addressed. The

owners claimed that the act’s delegation of power was

unrestrained because (1) it did not contain “any limitation upon

the size of the area which may be designated as blighted”; and

(2) the act allowed for “the possibility that sound structures

or even a portion of a municipality containing a number of such

structures may be included.” Id. at 379. In that particular

context, Justice Francis stated that the five relevant criteria

in the BAA “define ‘blighted area’ with substantial exactitude

and confine[d] the municipal decision to those limits.” Id. at

378. He therefore expressed “no hesitancy in finding [the

criteria] to be a sufficient channeling of the local authority.”

Ibid. The opinion, however, did not attempt to define the term

“blighted” or address whether the individual criteria in the BAA

lived up the term’s meaning under the Constitution.

26 The owners’ sixth constitutional challenge -- whether the

judiciary or the legislative branch had the authority to define

“blighted” -- likewise does not relate to the questions the

Court tackled in Gallenthin.

To be sure, Wilson upheld the BAA against constitutional

challenge. It did so in the context of the specific challenges

leveled before the Court in that case, and it should be read in

that context. As Justice Francis’s careful accounting of the

parties’ arguments reveals, though, the opinion did not squarely

address the core question of the meaning of the term “blighted”

under the Constitution.

The decision in Levin likewise did not directly consider

that issue. For the most part, the Court evaluated whether a

declaration that certain land was “blighted” satisfied the

statutory test of the BAA. Levin, supra, 57 N.J. at 509. It

did not address constitutional concerns except for one minor

issue.

The Levin Court debated whether the facts of the case

justified the declaration under one subsection of the law. Id.

at 541. A sharply divided Court found substantial evidence to

support the finding. Ibid. In the last paragraph of the

majority’s opinion, Justice Francis, relying on Wilson, once

again rejected a constitutional claim that the BAA “delegates

unbridled legislative power to the municipal agencies” without

27 “adequate standards.” Id. at 545. As before, that conclusion

did not address or foreclose the issues raised in Gallenthin.

Gallenthin marked the first time the Court squarely focused

on the meaning of the term “blighted” in the Constitution. See

Zazzali & Marshfield, supra, at 491-92. The opinion did not

need to parse Wilson or Levin, which had a different emphasis in

response to different claims. Because neither decision embraced

a particular definition of “blighted” under the Constitution,

there was no need to “repudiate[]” those rulings, as the

majority suggests. See ante at __ (slip op. at 28). Gallenthin

thus stands as the guiding law for the constitutional meaning of

“blighted.”

Among other reasons, the majority suggests that

Gallenthin’s standard for “blight” -- “deterioration or

stagnation that negatively affects surrounding properties,”

Gallenthin, supra, 191 N.J. at 363 -- was not meant to encompass

parts of the LRHL beyond subsection (e) because the definition

“does not describe every form of possible blight.” Ante at __

(slip op. at 28). As proof, the majority offers hypotheticals

that are hard to imagine. Id. at __-__ (slip op. at 28-29).

Are there “isolated” deteriorating slums that do not affect

surrounding properties? Don’t truly decadent slums have a

harmful effect on neighboring properties -- both developed and

unimproved land -- and inhibit growth because of decay? Can it

28 really be said that a “toxic industrial site” has no effect on

neighboring land? Gallenthin logically extends to both

hypotheticals, and both would likely be able to satisfy its test

for “blight.”

Gallenthin established a clear standard for the meaning of

blight in the Constitution, which prior case law not been

required to address. By doing so, Gallenthin achieved another

important aim: it helped guard against the real risk of abuse

that the power of eminent domain presents. Justice Haneman’s

dissent in Levin gave voice to that concern. He wrote that

“[g]overnment is here taking land from one owner by force and

giving it to another, on terms that may not benefit the former

but will of necessity benefit the latter. . . . In this aspect

of the municipal relationship lies the inherent danger of an

abuse of discretion.” Levin, supra, 57 N.J. at 551 (Haneman,

J., dissenting). The Justice added that “an individual without

political connections runs the risk of having his property taken

from him by force for the benefit of a better connected or more

highly regarded individual.” Id. at 552.

With today’s reversal of Gallenthin’s reach, that risk

resurfaces.

This case focuses on three different parts of the LRHL:

subsections 5(a), (b), and (d). Those sections, as well, should

29 be analyzed in light of the constitutional standard in

Gallenthin. Section 5 provides in part as follows:

A delineated area may be determined to be in need of redevelopment if, after investigation, notice and hearing as provided in [N.J.S.A. 40A:12A-6], the governing body of the municipality by resolution concludes that within the delineated area any of the following conditions is found:

(a) The generality of buildings are substandard, unsafe, dilapidated, or obsolescent, or possess any of such characteristics, or are so lacking in light, air, or space, as to be conducive to unwholesome living or working conditions.

(b) 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 untenantable.

(d) Areas with buildings or improvements which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light and sanitary facilities, excessive land coverage, deleterious land use or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community.

[N.J.S.A. 40A:12A-5 (emphasis added).]

None of the sections expressly requires a finding that a

property suffers from deterioration or stagnation in a way that

has a negative effect on surrounding properties. In other

words, none of the subsections expressly satisfies the

30 constitutional standard. It is therefore necessary to ask

whether the subsections implicitly live up to the required two-

part definition of blight through the way they describe various

conditions of property.

Because the statute is written in the disjunctive, any

combination of findings could justify the conclusion that a

property is in need of redevelopment. In other words, towns can

pick from a menu of factors to reach that end.

Many of the phrases in subsection (a), if supported by

substantial evidence in a record, could justify a finding of

deterioration or stagnation. But is that true for all of the

factors? Is “substandard” property deteriorating or stagnating

in all cases? Do all small properties that are “so lacking in .

. . space . . . as to be conducive to unwholesome living”

necessarily satisfy that requirement? The above language does

not even require that unwholesome conditions actually exist,

only that the premises are “conducive” to that condition.

Subsection (a) is also silent as to the second prong of the

definition of blight -- a negative or decadent effect on

surrounding properties -- which must also be satisfied.

The same concerns are true for subsections (b) and (d).

Once again, many of the factors listed could support a finding

of blight, but it is not clear that all necessarily would.

Under subsection (b), for example, does “discontinuance of . . .

31 use,” on its own, suffice to show blight in all cases? Under

subsection (d), does a “faulty arrangement or design” or

“excessive land coverage” which is “detrimental to the . . .

morals . . . of the community” necessarily establish

deterioration or stagnation? It is far from clear what that

even means. Other combinations of factors also invite troubling

concerns and do not necessarily meet the standard of blight

Only subsection (d) comes close to addressing the second

prong that “blighted” encompasses -- a negative effect on

surrounding properties. The section states that the listed

factors must be “detrimental to the safety, health, morals, or

welfare of the community.” But not all of those disjunctive

terms necessarily mean there is an actual negative effect on

neighboring properties.

Gallenthin alleviated those concerns by defining “blighted”

with care. To satisfy the State Constitution, a town seeking to

redevelop and ultimately take property under any section of

N.J.S.A. 40A:12A-5 -- and not just subsection (e) -- must find

that the property is deteriorating and stagnant in a way that

negatively affects surrounding properties. Construed in that

fashion, the statute is saved both from possible overreaching

and constitutional attack.

32 Gallenthin has led to clarity, not chaos. See ante at

(slip op. at 31-32). There is no reason to expect otherwise by

adhering to its holding. The majority’s narrow reading of

Gallenthin, by contrast, leaves open the possibility of

countless future challenges. Even worse, officials of governing

bodies will be empowered to proceed down the road toward taking

private property on less than a meaningful showing of actual

blight. If and when that happens, the commands of the

Constitution will go unmet.

In my judgment, this matter should be remanded to the

Planning Board. The Board should be allowed to reconsider its

determination in light of the standard for blight in Gallenthin.

In other words, the Planning Board should be asked to consider

whether, in addition to the required findings under subsections

(a), (b), or (d) of N.J.S.A. 40A:12A-5, the two properties are

deteriorating or stagnant in a way that negatively affects

The majority instead upholds the City’s determination on

the record before the Court. A close look at the town’s

findings and the record, however, does not support the decision

the town reached.

The majority cites at length to the redevelopment studies

and addendum prepared by H2M. To the extent they support

33 findings in the resolution of the Planning Board, which the

Mayor and City Council adopted, the studies are relevant --

provided they contain “substantial evidence” in support of the

town’s determination. N.J.S.A. 40a:12A-6(b)(5)(c). But the

studies cannot serve as a substitute for the actual findings of

the Board and Council. The Board and Council’s findings must

themselves address and establish blight.

The proper starting point, then, is the limited set of

findings that Hackensack made. The Planning Board resolution

found as follows:

[As to 62-64 Main Street:]

Based upon H2M Group’s revised Redevelopment Study, dated May 15, 2007 and Addendum 1 report dated September 27, 2007, Mr. Steck’s Planning Evaluation dated August 21, 2007, and the testimony given at the hearings by Mr. Pessolano on December 13, 2006, Ms. Talley on September 27, 2007, and Mr. Steck on December 4, 2007, the Board found that Block 205, Lots 4 through 7 contains buildings which show prominent signs of structural deterioration, and is boarded up to prevent unauthorized access. The code enforcement issued by the City to the property owner on March 10th, 2005, to demolish the buildings or correct unsafe conditions, places the property within criteria ‘a’ of the statute because the two buildings are substandard and unsafe for occupancy. The property meets criteria ‘b’ because the two existing commercial buildings are vacant due to deteriorated conditions that have rendered them untenable [sic]. The parking area is unsightly and not well maintained. The property also suffers from

34 faulty arrangement of design under criteria ‘d’.3

[As to 59-61 Moore Street:]

Based upon H2M Group’s revised Redevelopment Study, dated May 15, 2007 and Addendum 1 report dated September 27, 2007, Mr. Steck’s Planning Evaluation dated August 21, 2007, and the testimony given at the hearings by Mr. Pessolano on December 13, 2006, and Ms. Talley on October 11, 2007 and November 8, 2007, the Board found that Block 205, Lot 8 meets criteria ‘d’ for faulty arrangement of design, which is indicated by the undefined layout and related poor circulation for the parking lot. The conditions have a negative impact on the surrounding properties because it is an unsightly area and the inefficient utilization of the parking area contributes to greater use of the on-street parking resources than would otherwise occur.

Based on those brief findings -- and nothing more -- the City

can now proceed down the road to take private property from its

3The majority repeats statements counsel made at oral argument - - that the roof to one of the buildings at 62-64 Main Street collapsed during this appeal, and the building was later torn down. See ante at __, __ (slip op. at 6 n.1, 38). That information does not belong in the opinion. It is not in the record and, of course, was not before the City when it reached its decision. A reviewing court evaluates the propriety of a resolution based on particular evidence at the time of the initial decision. See N.J.S.A. 40A:12A-6(b)(5)(c). Courts should not consider evidence outside the record that was not before a planning board -- whether the evidence strengthens or weakens the board’s decision. In this case, ironically, the removal of one of the buildings makes the overall property safer.

This matter does not require the Court to consider whether the passage of time and changes to an area might warrant reconsideration of a town’s redevelopment designation. See Zazzali & Marshfield, supra, at 499-500.

35 rightful owners because this Court’s decision paves the way. I

believe that the Constitution requires more.

“[A] presumption of validity” applies to a town’s

designation of blight. Levin, supra, 57 N.J. at 537. Its

determination is entitled to deference if supported by

“substantial evidence” in the record. See Gallenthin, supra,

191 N.J. at 372-73; N.J.S.A. 40A:12A-6(b)(5)(c).

Here, the sparse findings of the Board make only a passing

reference to the Redevelopment Studies and Addendum and the

testimony before the Planning Board. The Board’s resolution

mentions few concerns and highlights no particular areas of

testimony. In addition, the resolution offers little by way of

explanation. For the most part, it recites conclusory terms

that mirror the statute: “substandard,” “unsafe,”

“untenantable,” “faulty arrangement of design,” and the like.

Gallenthin, supra, cautioned against that very practice: “[A]

municipality must establish a record that contains more than a

bland recitation of applicable statutory criteria and a

declaration that those criteria are met.” 191 N.J. at 373.

Beyond that, as the Appellate Division noted, it is “clear

that neither the Board nor the Mayor and Council considered

whether the conditions noted in the Board’s resolution rose to

the level of blight” under Gallenthin. The Board’s findings,

36 adopted by the Mayor and City Council, are therefore

insufficient.

The Board’s findings for 62-64 Main Street do not address

whether the property has a negative effect on the surrounding

area. That issue cannot be left to inference and instead calls

for “meaningful and quantitative evidence.” Zazzali &

Marshfield, supra, at 496. The public and the property’s owners

are entitled to a crisp determination on this vital question

before government officials can designate private property as in

need of redevelopment. That is particularly true when

properties are not located in an area suffering from economic

degradation. Here, both parcels are in a thriving, commercial

area that is home to a newly built CVS, Auto Zone, and branch of

TD Bank.

As to 59-61 Moore Street, the resolution points to a

“faulty arrangement of design” because of the lot’s “undefined

layout” and “related poor circulation.” The resolution then

concludes -- in a single sentence -- that the parcel’s

conditions “have a negative impact on the surrounding

properties” because the property is “unsightly” and has led to

more “on-street parking . . . than would otherwise occur.” Yet

one of the City’s experts conceded that no parking study had

been done of the area. And the City’s other expert conceded

that with a few improvements -- some landscaping, striping, and

37 exterior lighting, to better define the boundary between the

parking lot and the sidewalk -- the property would not qualify

as an area in need of redevelopment under the statute. The

Board credited both experts. Cf. ante at (slip op. 37 n.

8). It is difficult to see how those minor conditions, which

can be easily remedied, can satisfy the constitutional

definition of “blighted” and lead to the taking of private

property.

At the core of the Board’s conclusion is the very

possibility that Gallenthin found unacceptable: that private

property might be redeveloped because it “is not used in an

optimal manner.” Gallenthin, supra, 191 N.J. at 373. That sort

of conclusion cannot support a finding of blight under the

Constitution. Ibid.

The majority, focusing on the Moore Street parcel, suggests

that even if the property does not meet the definition of

blight, it might still be designated as part of an area in need

of redevelopment because “[b]light determinations are not viewed

in piecemeal fashion.” Ante at __ (slip op. at 40). The

suggestion, as Hackensack concedes, is premature.

Hackensack focused on whether the Main Street and Moore

Street properties themselves qualify for redevelopment under the

LRHL. The Planning Board’s resolution expressly states that

because “no redevelopment plan has been proposed at this time,”

38 it would be “premature” to include properties “that do not

otherwise meet the statutory criteria” as part of a

redevelopment area.

There are other reasons for concern as well. The LRHL

states that

[a] redevelopment area may include lands, buildings, or improvements which of themselves are not detrimental to the public health, safety or welfare, but the inclusion of which is found necessary, with or without change in their condition, for the effective redevelopment of the area of which they are a part.

[N.J.S.A. 40A:12A-3 (emphasis added).]

That section finds support in prior case law. Wilson recognized

that a redevelopment area may “include[] some sound homes or

buildings” and that a portion of the plan may “incorporate[]”

structures that “are not substandard” “as an integral part and

necessary to the accomplishment of the redevelopment plan.”

Wilson, supra, 27 N.J. at 379 (emphasis added). Levin similarly

noted that the BAA was “concerned with areas and not with

individual properties” and that single parcels that “could not

be declared blighted if considered in isolation” might be

included. Levin, supra, 57 N.J. at 539.

The Court in Levin made that observation while reviewing

Bridgewater’s designation of 122 acres of rural land as

blighted. Id. at 515-16, 520. The area contained only eighteen

39 or nineteen structures throughout; most of the designated land

was undeveloped. Id. at 516.

This case presents a very different situation. Hackensack

plans to redevelop only five parcels of land that together

comprise less than one acre (.797 acre). The two properties in

question -- 62-64 Main Street and 59-61 Moore Street -- are not

contiguous to the other three parcels. In fact, plaintiffs’

properties are across the street from the other three parcels.

Also, plaintiffs’ two properties comprise 42.4 percent of the

total for all five parcels. (A map of the area captures these

points better than words can, and one is attached at Appendix

A.) If neither of plaintiffs’ parcels qualify as areas in need

of redevelopment under the statute, it is too early to predict

whether they might be “necessary” and “integral” to the

redevelopment of non-contiguous land, separated by a street,

which is comparable in size.4 That question would require

careful scrutiny.

The governing body here had the responsibility to ensure

that its designation of property as “in need of redevelopment”

satisfied the LRHL and the Constitution. It did not do so.

4The City’s Resolution directs the Planning Board to investigate whether Bridge Street, which bisects the properties, should be “vacat[ed].”

40 V.

To the majority, this is a “mundane scenario” in which

local officials designated dilapidated, rundown properties in a

downtown section of a city for redevelopment. Ante at __ (slip

op. at 43). It is more than that. According to the record, the

case involved owners of private property who spent hundreds of

thousands of dollars to improve their land in recent years,

leveled part of the buildings on the properties, and presented

three different development plans to town officials -- at the

very time the town moved ahead with its own plan to designate

the area for redevelopment.

That information offers context; the legal question

presented is even more important. Today, the Court permits

privately owned property to be designated for redevelopment --

and ultimately for a taking -- even though local officials have

not found that the land has a negative effect on surrounding

properties. That approach marks a retreat from Gallenthin.

The majority supports its position with pro-development views.

Id. at - (slip op. at 31-32). The Court’s responsibility, though,

is to apply the law in accordance with the Constitution and protect

the individual rights our Constitution guarantees. Those rights serve

as an important check on the power of eminent domain and extend to

residents, homeowners, and businesses that do not want to be removed

from their property and community against their will.

41 To be sure, the redevelopment of deteriorated properties

that cause actual harm to neighboring land can be of great value

to a community. When local officials attempt to take private

property for that purpose, however, they must first satisfy the

commands of the Constitution. Among other things, they must

make a meaningful showing of actual blight. Because that did

not occur here, I respectfully dissent.

JUSTICE SOLOMON joins in this opinion.

42 1 SUPREME COURT OF NEW JERSEY

NO. A-19/20 SEPTEMBER TERM 2013 ON CERTIFICATION TO Appellate Division, Superior Court

MAYOR AND COUNCIL OF THE CITY OF HACKENSACK; PLANNING BOARD OF THE CITY OF HACKENSACK,

DECIDED March 23, 2015 Chief Justice Rabner PRESIDING OPINION BY Justice Albin CONCURRING/DISSENTING OPINIONS BY DISSENTING OPINION BY Chief Justice Rabner

CHECKLIST REVERSE AFFIRM

CHIEF JUSTICE RABNER X

JUSTICE LaVECCHIA X JUSTICE ALBIN X

JUSTICE PATTERSON ----------------------- -------------------- JUSTICE FERNANDEZ-VINA X

JUSTICE SOLOMON X

JUDGE CUFF (t/a) ----------------------- --------------------

TOTALS 3 2