In 2007, just as regulations began to force New Jersey development into its urban areas, where the use of redevelopment is a virtual necessity, the New Jersey Supreme Court decided Gallenthin Realty v. Paulsboro. There, the Supreme Court rejected a municipality’s designation of an area in need of redevelopment because the underlying investigation was insufficient under the Local Redevelopment and Housing Law criteria.
In the years since Gallenthin, New Jersey courts have repeatedly rejected redevelopment area designations as not meeting the statutory criteria, thereby stalling redevelopment efforts throughout the State and creating developer angst about the future of development in New Jersey.
But recently, the Appellate Division upheld a city’s designation of a portion of its central business district as an area in need of redevelopment. In Suburban Jewelers, Inc. v. City of South Plainfield, the Court found that the City’s preliminary investigation of the area met the substantial evidence burden because it contained specific findings on the condition of each property and detailed how those conditions met the applicable statutory criteria. The report further demonstrated how those conditions were detrimental to health, safety, and welfare and to surrounding properties.
This decision offers some guidance as to the necessary elements of a redevelopment investigation and gives the real estate industry a glimmer of hope that redevelopment remains a viable mechanism in New Jersey in the post-Gallenthin world.