NJ Supreme Court Sheds Light on Requirements for a “Redevelopment Area” Designation

A recent decision by the New Jersey Supreme Court has provided clarity on a key factor that is used to designate a property, under criterion d of the Local Redevelopment and Housing Law, as an “area in need of redevelopment.” Specifically, the Court asserted that, for an area to be deemed as needing redevelopment, a town must provide sufficient evidence showing how the particular faults or conditions of the area/structure directly undermine public health safety and welfare.

A municipality can find that a property is an “area in need of redevelopment” if it meets one of criteria a through h of section N.J.S.A. 40A:12A-5 of the Local Redevelopment and Housing Law. Criterion d, in particular, states that an area can be determined to be in need of redevelopment if:

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.

In Malanga v. Township of West Orange, Township of West Orange Planning Board and Township of West Orange Township Council, decided March 13, 2023, the New Jersey Supreme Court interpreted the meaning of criterion d of N.J.S.A. 40A:12A-5. The Court held that criterion d requires two things:

(1) sufficient proof that areas with buildings or improvements suffer from one or more specified conditions; and (2) sufficient proof that, as a result of the particular condition or conditions, the areas “are detrimental to the safety, health, morals, or welfare of the community.”

The case involves the West Orange Public Library, built in the 1950s and renovated in the 1970s. It had capped asbestos, which did not represent a health risk. It was also small and cramped but received over 150,000 visits a year, which did not meet the Court’s standard of “obsolete” as no longer in use or useful. The Court stated that whether the library had a faulty arrangement or an obsolete layout was a closed question, and the record might meet the substantial evidence standard. However, the Court concluded that there was a lack of substantial evidence linking the conditions of the area to detrimental effects on the public health safety and welfare. Thus, the Township’s designation of the library as an “area in need of redevelopment” was overturned.

The Court’s decision highlights the requirement of substantial evidence of causation between the factors listed in the criterion d and the detriments listed in the criterion.

Kevin Moore is a partner in Stevens & Lee’s Real Estate Department, where he concentrates his practice in redevelopment and land use law. Kevin has successfully argued two land use cases before the New Jersey Supreme Court.