The NJ Appellate Division recently decided a case involving an important and recurring issue – valuing a property for a use that requires land development approvals.  In New Jersey Transit Corp. v. Franco, Docket No. A-3802-12T4, the Appellate Division reversed the trial court due to “prejudicial error” in permitting the condemnees’ experts to value the property with an apartment complex as its highest and best use without establishing the reasonable probability of obtaining certain land development approvals.

The Appellate Division explained that the “crucial issue on appeal is whether the creation of a cul-de-sac . . . would have required and received approval by” the municipality. The condemnees’ experts assumed the municipality would not need to approve a use variance access or that the street could be dedicated to the municipality without need for a use variance.  New Jersey Transit contended that the experts’ opinions failed to analyze whether there was a reasonable probability of obtaining the variance or dedication.  Condemnee’s testified at trial over New Jersey Transit’s objections, which resulted in a jury award of $8.1 million.

The Appellate Division held that the condemnees were required to and failed to show a “reasonable probability” the municipality would either grant a use variance for the cul-de-sac or accept the dedication of the cul-de-sac as a public street. The Appellate Division expressed no opinion on whether the condemnees could, in fact, show such a reasonable probability and remanded the case for a new trial.

The site for the $180 million Downtown arena south of the convention center was approved Tuesday by the El Paso City Council.  They also gave the authority to purchase properties and use eminent domain if necessary.  The plan was approved in a 7-0 vote after more than two hours of discussion.  The city can now begin negotiating with property owners to acquire the land.  Mayor Oscar Leeser stated he does not support the use of eminent domain.

The arena will be built in the Union Plaza District and is bounded by West San Antonio Avenue, South Santa Fe Street, West Paisano Drive and Leon Street.  The area contains 42 parcels and includes the Greyhound bus station, some apartment complexes and other buildings. However, the city has identified a total of 22 properties for the arena footprint. Of those parcels, five are vacant or surface lots, seven are commercial, seven are residential and two are city owned, the city said.

The Appellate Division of Superior Court decided a case addressing the amount that should be held in escrow in eminent domain cases involving contaminated properties.  In Housing Authority v. Suydam Investors, L.L.C., the NJ Supreme Court held that in an eminent domain case involving a contaminated property, the condemnor may seek an order requiring estimated remediation costs to be set aside in escrow.  In New Jersey Transit Corporation v. Mary Franco, the Appellate Division the court held that the escrow for the estimated costs of environmental cleanup should be based on “the remediation necessary to achieve the highest and best use of the property used to calculate the amount of the condemnation award” as opposed to the use for which the property is condemned.

Pennsylvania citizens have formed a new group aimed to change the way eminent domain is applied in Pennsylvania.  The group, called Protect Our Pennsylvania, held a rally at the State Capitol Tuesday. At this point, their primary focus is limiting the seizure of private property for pipeline projects. The group is not promoting a specific piece of legislation but has begun discussions with several legislators.

The US Supreme Court has scheduled oral argument for November for an important eminent case. In Murr v. Wisconsin, the Court will consider wither governments may treat 2 distinct parcels that are contiguous and commonly owned as one parcel for purposes of regulatory taking analysis.  Lower courts are split on this issue. There has been significant briefing by the parties and other interested parties.

Our team recently obtained a settlement worth over $5,250,000 in an eminent domain case. PennDOT, the condemnor, originally claimed the property was worth $1,811,000.  Untimely, we were able to settle for a value of $4,500,000 plus interest in the amount of about $7,500,000.  The property was an industrial property located in Philadelphia.  We were able to settle the case before a board of view hearing thereby minimizing the attorney’s fees.

The Texas Comptroller’s office has launched a statewide online eminent domain database. This database will show entities who have exercise dthe power of eminent domain.  “This is clearly an area in which transparency is absolutely essential,” Texas Comptroller Glenn Hegar said. “Knowing who can use eminent domain is the first step to ensuring that this potentially oppressive power is used wisely.”

The database contains 5,042 entities, including cities, counties, school districts, special purpose districts, pipeline and energy companies, water supply corporations, telecommunications companies and other public and private entities.  The database includes each entity’s name and contact information and reported eminent domain information, including

  • the date upon which the entity claims to have been authorized to exercise eminent domain authority;
  • whether the entity filed a condemnation petition in calendar 2015;
  • the projects or purposes for which the entity holds eminent domain authority; and
  • the provisions of the law granting that authority.

NJ State Senator Diane Allen has called for a hearing on two NJ eminent domain bills.  In every legislative session since 2004, Senator Allen has introduced two bills aimed at eminent domain reform. One, S-2505, places a temporary moratorium on the use of eminent domain and creates the Eminent Domain Study Commission to examine its use. The other is a constitutional amendment, SCR-98, that would limit the use of eminent domain to the acquisition of land for essential public purposes.  However, neither bill has moved very far.

California’s Supreme Court recently issued an opinion that could have far reaching implications in that state.  In City of Perris v. Richard C. Stamper, the Court ruled that a judge should decide whether the city would have required a property owner to give up the strip that was condemned as a zoning condition for developing his land before the jury decides the amount of just compensation.

In that case, a city condemned a 1.66-acre strip that divided a nine-acre undeveloped parcel into two irregularly shaped triangles.  It was taken for an access road.  The city argued that the property owner would have been required to dedicate land for the road to the city with no compensation if he’d tried to develop his property for light industrial use and that this requirement must be considered in vaulting the property.

The Court held, “Thus, in a condemnation action, when a government entity makes a claim . . . that it would have required a dedication of some or all of the property being condemned had the property been developed, courts determining just compensation should look to whether that dedication requirement was put in place before it was probable that the property would be included in a government project.”  It further explained, “We hold that the project effect rule generally applies . . . to situations where it was probable at the time the dedication requirement was put in place that the property designated for public use was to be included in the project for which the property is being condemned,.  The applicability of the project effect rule thus turns on a preliminary factual question to be decided by the court.”

A unanimous Illinois Supreme Court ruled that temporary flooding can cause a taking under the Illinois Constitution.  In Hampton et al. v. the Metropolitan Water Reclamation District of Greater Chicago, homeowners alleged that Chicago’s water reclamation district violated Illinois’ takings clause by diverting stormwater onto their properties.

The lower state court wanted to know if the U.S. Supreme Court’s 2012 decision in Arkansas Game was at odds with prior Illinois law.  The Illinois Supreme Court held that the prior law was not an absolute bar to temporary flooding takings suits and that courts would need to examine the facts of each case to determine if there was a taking.