The New Jersey Appellate Division recently held that Hoboken cannot designate an 11.5-acre site in the city as an “area in need of rehabilitation,” which had allowed it to implement a redevelopment plan. It found that the Hoboken City council misinterpreted the appropriate statute. The Appellate Division held that it was unclear whether the council properly applied the relevant statutory criteria because the city's resolution misstated the statute upon which it relied. The suit, brought by leather goods manufacturer R. Neumann & Co. against the city of Hoboken, its mayor, and several other defendants, claimed that the resolution wasn't supported by adequate evidence, was motivated by an ulterior purpose and was inconsistent with the state's Local Redevelopment and Housing Law, according to the opinion.
The panel also rejected the company's argument that the delineation of an "area in need of rehabilitation" gives municipalities the right to exercise eminent domain, finding that the designation only allows them to adopt a redevelopment plan. Those plans don't provide for the taking or acquisition of property within such an area, according to the opinion. According to state law cited in the panel's opinion, the area would need to be designated as an "area in need of redevelopment" before a municipality would have the power to take or acquire private property by condemnation.
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