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Originally published in the New Jersey Law Journal on 8/2/2004

Alleging Race-Based Condemnation;

With little success so far in stopping municipal condemnations of blighted property, opponents of urban renewal plans are trying out a new strategy - calling the condemnations violations of constitutional and civil rights.

Challengers claim in court that the wrecking ball is hitting hardest in low-income, minority neighborhoods with high concentrations of African-Americans and Hispanics. Legal Services of New Jersey is fighting condemnations in Ventnor, Mount Holly and Camden, and property owners in Lindenwold have mounted a similar challenge against a large-scale redevelopment plan.

The challenges are in response to what critics call an increasingly aggressive use of New Jersey's redevelopment law to make over entire neighborhoods. "Cities are using eminent domain to try to bring in residents they think are more desirable than the residents that are there now," says Dana Berliner, senior attorney for the Institute for Justice in Washington, D.C., which contends that eminent domain is often abused. "It's not even as if they're trying to remove slums."

"We're seeing a whole new wave of the use of the redevelopment law not by inner cities, but by a lot of suburban communities that are using the law to target particular sections," says Kenneth Goldman, a staff attorney for South Jersey Legal Services in Atlantic City who represents plaintiffs in the Mount Holly and Ventnor cases.

The suits - premised on the Fair Housing Act, the New Jersey Law Against Discrimination, the Equal Protection clauses of the state and federal constitutions and the Title VI of the Civil Rights Act of 1964 - are venturing into untested waters.

Challenges to municipal condemnations typically concern compliance with the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq., requiring courts to second-guess local officials' determinations about blight.

But New Jersey courts have yet to rule on whether condemnations that fall disproportionately on minority residents are actionable.

"There's an imperative under Mount Laurel to create opportunities to build low-cost housing," Goldman says. "We believe there are similar constitutional constraints on eliminating housing that's already there."

Municipalities, of course, deny any racial or ethnic factor in their redevelopment plans or any intent to discriminate. Ventnor says its proposed condemnation of properties - including 332 housing units - in a 28-acre area bordering Atlantic City is aimed at reducing population density.

While the plaintiffs charge that the targeted area has the city's largest concentration of Hispanic residents, many of whom commute by public transit to casino jobs, Ventnor's attorney, John Abbott, a Margate solo, says Hispanics are scattered throughout Ventnor and the redevelopment zone is primarily white.

Plaintiffs say a few homes are boarded up in Ventnor's redevelopment zone but most are in decent shape. The enclave consists mostly of large, single homes on small lots, many of which have been split into two or three apartments. The city wants to replace many of the homes with senior citizen apartments, townhouses, assisted living centers and bed-and-breakfast properties. Some existing properties in the redevelopment zone would remain but would be eligible for local subsidies and tax incentives if they are converted from multifamily to single-family use and limited to seasonal occupancy.

The Ventnor suit, Hispanic Alliance of Atlantic County Inc., v. City of Ventnor City, ATL-C-136-03, follows a failed challenge of the project as violating the redevelopment statute. The earlier suit, Gober v. City of Ventnor, A-2837-02T2, was dismissed at the trial level and on appeal.

"Despite plaintiffs' valid concerns over the questionable impact that the plan's proposed changes will have in remedying the problems identified by the study, our inquiry must focus on whether or not the statutory requirements of N.J.S.A. 40A:12A-7 are satisfied," Judges Michael King, Dennis Braithwaite and Joseph Lisa wrote in Gober. "Our careful review of the record convinces us that the plan sufficiently complies with [the statute]."

In the Mount Holly suit, Legal Services alleges that blacks and Hispanics would feel a disparate impact from the township's plan to demolish all 379 row houses in an area known as Mount Holly Gardens built in the 1950s.

Legal Services won an injunction on June 10 from Assignment Judge John Sweeney barring Mount Holly from demolishing homes or initiating acquisitions of homes in Citizens in Action v. Township of Mt. Holly, BUR-L-003027-03. The township has not begun condemnation but has acquired 40 homes in Mount Holly Gardens through tax foreclosures or purchase without condemnation, and has demolished some of those homes.

Mount Holly's attorney in the case, M. James Maley Jr., is confident the redevelopment of Mount Holly Gardens will be upheld. He says that if disparate impact is proven, the court would still consider the redevelopment on its own merits. And opponents of the redevelopment fail to consider that the municipality is required under N.J.A.C. 5:40-6.1 to help find suitable housing for displaced residents, says Maley, of Parker, McCay & Criscuolo in Marlton.

Maley, also mayor of Collingswood, says his own town has twice instituted eminent domain against poorly maintained apartment complexes. He says renters there who had to leave their homes were initially upset about being forced to move but were ultimately pleased with the outcome of their relocation. Some used relocation assistance funds as down payments to purchase a home, says Maley. He also advised Lindenwold on its redevelopment project and represented the lead plaintiff in Gober before withdrawing due to a conflict.

Renovation of units in Mount Holly Gardens is not economically feasible because the room sizes are smaller than today's homebuyers prefer, says Maley. New Jersey's Supreme Court has recognized an affirmative duty by municipalities to take action when neighborhoods are deteriorating, he says.

"Some people will find evil in every good act," Maley says.

On Thursday, Legal Services filed suit in Camden County Superior Court seeking to block redevelopment of a Camden neighborhood called Cramer Hill, claiming violations of the Fair Housing Act and the Law Against Discrimination. The redevelopment site, which also includes a former landfill and extensive brownfields, would be turned over to a developer who intends to build 5,000 new homes and a golf course.

In Lindenwold, the redevelopment calls for demolishing 2,300 two-story garden apartments in five complexes, which would be replaced with single-family homes, townhouses, senior housing and commercial structures. The town says the complexes are dilapidated and have problems with poor drainage and traffic circulation.

Owners of two apartment complexes that face the wrecking ball have filed suit, as has a condominium homeowner association in the redevelopment zone and a group of individual owners there. All three of the Lindenwold suits have claims under the Law Against Discrimination, but one, by the owner of a complex called Trent Court, goes much farther. The Trent Court suit, filed by Cherry Hill solo Michael McKenna, also cites the Fair Housing Act and makes civil rights, due process and equal protection claims.

John Kearney, who represents Lindenwold in the three suits, says the civil rights claims are suspect because they come not from the renters but from their landlords, who he calls "stick-up men" seeking to get more money out of the town. He adds that the redevelopment would not have a major impact on the demographics of the diverse town. Lindenwold expects to remain in compliance with the guidelines of the Council on Affordable Housing even after the redevelopment is complete, he says.

Kearney, of Kearney & Schweitzer in Haddon Heights, says Lindenwold is seeking to repair poor planning that stemmed from pervasive municipal corruption in the town during the early 1970s. After the State Commission on Investigation found apartment developers paid $198,500 to town officials for favorable treatment, former Lindenwold Mayor William McDade and councilman George LaPorte pleaded guilty to bribery and conspiracy charges in 1975.

"The redevelopment statute is a very, very powerful tool that allows stuff to get done. Folks are going to disagree, but in this case, it's not like we're getting a huge outcry," Kearney says.
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