According to New Jersey State policy, when local or county government exercise eminent domain powers for a valid public purpose, that process should be transparent, and used only as a last resort. However, there is another important policy being pushed to the back burner, and that is a policy fostering environmental public health and safety.

There are hundreds of properties in New Jersey—some vacant, some occupied—that could be severely contaminated, yet are not being remediated. Of course, there are practical reasons for that, ranging from an absence of available remediation funds, fear of environmental liability, ignorance regarding the full extent of contamination, and in some instances, policies protecting property owner rights in eminent domain matters that are so strict they are competing with the public's right to a clean environment.

In New Jersey, owners have the legal responsibility to address contamination at their properties, including is some instances, contamination that they did not cause. If eminent domain powers could be exercised in concert with environmental protection, brownfields and other compromised sites could be revitalized. But first, the notion that contamination is, in fact, "blight" must be accepted.

Local government possesses authority to condemn private property for "public purposes," and that includes condemnation in order to implement redevelopment plans. Government has the ability to secure environmental remediation grant funds from the state—funds for which owners and redevelopers are not eligible. The question becomes whether local government should take control of more contaminated property and take advantage of site investigation and cleanup grants. If contaminated sites could be recognized as the blighted sites they truly are for purposes of eminent domain, government would be in an excellent position to condemn, remediate and safely reuse those sites. Taking private property in order to serve public purposes, upon payment of just compensation, typically promotes construction of new roads, hospitals, prisons, and other public facilities, but redevelopment is also a recognized public purpose for condemnation if a "blight" determination pursuant to the Local Housing and Redevelopment Law, N.J.S.A. 40A:12A-1, et seq., can be supported.

State legislation ensures that property owners have proper notice and a meaningful opportunity to be heard prior to having their properties condemned for redevelopment. Condemnors must alert owners when their properties have been designated in need of redevelopment because designation authorizes a municipality to acquire property against an owner's will, and there is a 45-day window within which an owner may challenge a designation. There are also very specific statutory criteria for designating an area in need of redevelopment, given that designation is a precondition for condemning property. That criteria must be supported by substantial, credible evidence.

What is blight?
Interestingly, as important as it is that local governments have the necessary tools to take control of and transform contaminated properties within their borders, the statutory criteria for a "blight" determination does not specifically include the presence of contamination—at least not in black and white. Many properties being pursued by redevelopers today are brownfield sites left behind long ago by their owners, which could be remediated and reused if their environmental condition alone would suffice as "blight."

The blight criteria list under the Redevelopment Law includes certain conditions related to contamination, but, a clear recognition that unremediated contamination is, in fact, "blight" is warranted. For example, the law views sites with unsanitary or unsafe buildings, and some buildings formerly used for commercial, manufacturing or industrial purposes, as blighted. Also, properties are considered blighted if, due to deleterious land use, they are detrimental to community health. Also, properties owned by governmental entities are considered blighted if left unimproved and vacant for 10 or more years, and are detrimental to community health and unlikely to be developed with private capital. In addition, sites larger than five acres that have been destroyed so as to materially depreciate the property can satisfy blight criteria. It would not be much of a stretch to simply accept that an abandoned and contaminated site is blighted, and that would allow for acquisition through eminent domain and governmental cleanup and revitalization.

The state of New Jersey is proactive in helping government and private redevelopers reuse underutilized contaminated brownfields, in lieu of redeveloping agricultural or pristine land that may be better used for open space or recreation. Brownfields are underutilized former commercial or industrial sites. Landowners often shy away from selling environmentally compromised property, unless redevelopers agree to assume the cleanup obligations, which many are unwilling to do. Thus, properties remain contaminated, signifying neglect and lack of progress. To encourage brownfield property transfers and redevelopment, the state has provided innocent purchaser environmental defenses concerning pre-existing contamination for redevelopers and municipalities: N.J.S.A. 58:10-23.11(g).

However, if a governmental condemnor attempts to condemn property during an owner's timely cleanup, condemnor will forfeit its innocent purchaser defenses. Why then, where an owner is not undertaking its cleanup responsibilities, cannot government move to condemn contaminated property, with confidence that it will prevail, in order to clean up as part of redevelopment? With grants available, one might imagine that properties are being routinely acquired and cleaned up by local government. However, the difficulty lies in acquiring property under laws that do not always recognize a need for cleanup as fitting criteria to designate a contaminated site "as in need of redevelopment."

Even where redevelopment area designations and condemnation actions are successful, governments must still find funds to acquire contaminated properties. Just compensation must be paid to condemnees. That compensation is not discounted to adjust for cleanup costs, as any property subject to condemnation must be appraised as though it had already been remediated, and compensation based on full appraised value must be posted into a Court trust-escrow account by condemnors.

Although a condemnor may seek to withdraw a portion of the funds to help with cleanup, full compensation must nevertheless be posted upfront, and towns are typically not in the position to raise that money. Willingness by courts to allow condemnors to forego posting exorbitant compensation where the public purposes for the eminent domain action includes environmental remediation would encourage more cleanups and promote environmental health. As New Jersey evolves along a path toward more restrictive eminent domain policies and practices in order to protect landowner rights, local and county condemnors who desire to acquire commercial or industrial brownfields, in order to transform them into clean, productive, tax-producing properties, will have to continue to craft novel approaches to satisfy statutory blight criteria. They will also need to continue to search for ways to secure funds needed for property acquisition and cleanup.

In Camden Redevelopment Agency v. Barbara Aston Financing Corp., Docket No. CAM-L-1058-08, the Superior Court recently allowed condemnation of a contaminated, abandoned commercial brownfield property for the nominal sum of one dollar, in great part because the Agency volunteered to remediate that Camden site. If more courts would focus on cleanup, and, if legislative efforts would recognize the kind of harmful "blight" caused by abandoned, contaminated properties, our communities would be well served.

Contamination must surely be "blight" and should therefore be recognized as such. Moreover, a voluntary remediation offer from a governmental condemnor is certainly a rational reason to relax compensation posting requirements. If harmful contaminants could be addressed by local and county government in conjunction with eminent domain, one of the most important purposes to which the public is entitled would be addressed: promotion of a clean, safe and healthy community.

Phyllis E. Bross, Esquire, is an attorney with Parker McCay in Marlton, N.J., and co-chair of the firm's Real Estate Department. She represents counties, towns, property owners and prospective property owners in real estate deals and environmental compliance matters. Bross was formerly a Deputy Attorney General representing the state in brownfield redevelopment matters, and lectures and publishes regularly on redevelopment and environmental matters, including condemnation.