Court Opinion

ID: 9956922
Source: CourtListenerOpinion
Date Created: 2024-04-03 14:07:48.513866+00
Date Added: 2024-06-11T08:17:58.893137
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-2559-21

NEW JERSEY TRANSIT
CORPORATION, an
instrumentality of the State of
New Jersey,

          Plaintiff-Respondent,

v.

TP ACCESS, LLC, a Delaware
limited liability company,

          Defendant-Appellant,

and

STATE OF NEW JERSEY,
DEPARTMENT OF THE
TREASURY, DIVISION OF
TAXATION, and VILLAGE OF
RIDGEFIELD PARK, in the
COUNTY OF BERGEN, a
municipal corporation of the
State of New Jersey,

          Defendants.

                   Argued December 13, 2023 – Decided April 3, 2024
             Before Judges Currier, Firko and Susswein.

             On appeal from the Superior Court of New Jersey, Law
             Division, Bergen County, Docket No. L-8306-21.

             Scott Andrew Heiart argued the cause for appellant
             (Carlin, Ward, Ash & Heiart, LLC, and McManimon,
             Scotland & Baumann, LLC, attorneys; Scott Andrew
             Heiart, Michael J. Ash, Kevin Patrick McManimon, and
             Joseph Paul Baumann, of counsel and on the briefs;
             Arthur Usvyat, on the briefs).

             Dale L. Lessne argued the cause for respondent (Hill
             Wallack, LLP, and NJ Transit Corporation, attorneys;
             Dale L. Lessne, of counsel and on the brief).

PER CURIAM

        In this condemnation matter, defendant TP Access, LLC (defendant)

appeals from April 13, 2022 orders entering final judgment and appointing

commissioners, and denying defendant's motion for a stay, discovery, and a

plenary hearing. We affirm.

                                      I.

        Defendant owns two non-contiguous lots in the Village of Ridgefield

Park.     UBS owned larger adjacent parcels of land abutting defendant's

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properties.1 In 1999, pursuant to the Local Redevelopment and Housing Law

(LRHL), N.J.S.A. 40A:12A-1 to -89, Ridgefield Park designated certain

parcels—including those eventually owned by UBS—in need of redevelopment.

Years later, in 2012, Ridgefield Park adopted the "Skymark Redevelopment

Plan." In 2016, to further the Skymark Redevelopment Plan, Ridgefield Park

expanded the designated redevelopment area to include the properties at issue,

which were subsequently purchased by defendant.           Two developers were

unsuccessful in their attempts to redevelop the area.

      In 2019, NJ Transit began searching for properties to accommodate its

need to construct a garage to house its growing fleet of large electric buses (the

project). In May 2019, NJ Transit sent a letter to defendant's principal, Gulshan

Chhabra, informing him that NJ Transit "may require the acquisition of"

defendant's properties. The letter advised NJ Transit was "ready to initiate pre-

acquisition activities," such as completing a property title report, survey,

appraisal, and environmental investigation as part of the preliminary design of

its project.

1
  Plaintiff New Jersey Transit Corporation (NJ Transit or agency) acquired the
UBS properties through "friendly" condemnation proceedings in November
2020.
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      In July 2019, Patrick Ard, MAI, a licensed real estate appraiser, sent

Chhabra a letter informing him that NJ Transit had retained his firm to inspect

defendant's properties. Ard invited Chhabra to accompany him on the inspection

and to provide any information he wanted Ard to consider in valuing the

properties. In September, Chhabra sent an email confirming the inspection for

the following day and including documents he wanted Ard to consider in his

appraisal. One document was a valuation of the properties from a commercial

real estate broker. The broker opined that if the properties were developed as a

warehouse, they would be valued at approximately $30 million. The letter noted

the properties were not zoned for warehouse development and the broker's

opinion was not "an appraisal" in the legal sense, meaning it was not "a study

and analysis by an appraiser authorized by law to perform appraisals."

      After inspecting the properties, and considering the then-existing

permitted uses, Ard concluded the highest and best permitted use was retail use,

not industrial use, and appraised the value of the two properties at $9,600,000.

      On May 6, 2020, NJ Transit informed Chhabra it had "determined that the

acquisition of [defendant's] [p]roperties is required for [the project]." NJ Transit

extended an offer of just compensation to Chhabra in the amount of $9,557,000.

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      In response, defendant notified NJ Transit it wished to negotiate. On June

24, 2020, the parties conferred on a conference call. On July 6, defendant

inquired about the scope of the project, how much acreage it required, and

whether NJ Transit needed all of defendant's land. Defendant advised it wanted

to "outline alternative scenarios that would permit [it] to redevelop at least a

portion of [its p]roperty and/or some of the portion of the surrounding property,

currently owned by UBS."

   On August 11, 2020, NJ Transit informed defendant it needed all its property

for the project. NJ Transit further informed defendant it would not entertain its

$30 million counteroffer because it was "based on a highest and best use

dependent on the rezoning of the properties." NJ Transit invited defendant to

present another counteroffer based on then-current zoning or an appraisal

prepared by a professional appraiser. NJ Transit informed defendant if there

was no response by August 21, 2020, it would institute condemnation

proceedings.

      In continuing negotiations, defendant proposed a public-private

partnership between itself and NJ Transit. On August 26, 2020, NJ Transit

formally rejected the counteroffer and proposed partnership, stating it "would

not be in furtherance of the agency's objectives to develop the proposed" project.

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      In September, NJ Transit sent defendant a copy of the conceptual plan for

the garage and the minimum infrastructure requirements, which included an

indoor parking facility for a minimum of 500 buses, comprised of both 45-foot

and 60-foot articulated buses, maintenance bays to service both diesel and zero

emission buses, washing facilities, parts storage facilities, staff offices, a

welfare facility for bus operators and mechanics, electrical infrastructure to

support an electric fleet, fuel storage, a backup generator for the entire facility,

employee parking for a minimum of 600 vehicles, and fare collection lanes.

      NJ Transit invited defendant to submit its plans and proposals for the

redevelopment site, including site plans and applications, subdivision plans if

applicable, granted approvals, redeveloper agreements, construction costs,

financing term sheets, letters of intent for any proposed tenants, identification

of any general contractor, construction contracts, traffic studies, geotechn ical

studies, environmental studies, wetlands delineation, and endangered species

conservation plans if any. The agency explained, to the extent these documents

existed, they would "suffice to provide NJ Transit a better understanding of

[defendant's] proposed development for this site."          NJ Transit requested

defendant to review the conceptual plan for the garage project and provide a

"comprehensive overview" and "revised site plan (in draft) to show how NJ

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Transit's [project] can be developed (and provide for future expansion) in

conjunction with [defendant's] proposed development of this property."

      During this timeframe, Ridgefield Park expanded the redevelopment area

to encompass both defendant's and UBS's properties. Defendant applied for and

was designated as the "conditional redeveloper" of its properties.          The

Resolution adopting the designation noted defendant "has expressed a desire to

redevelop the entire [r]edevelopment [a]rea" and that condemnation proceedings

had commenced regarding defendant's and UBS's properties. The Resolution

further stated defendant wanted to develop its properties either as "a mixed-use

development consistent with the Redevelopment Plan but with an added

warehouse component" if defendant could "secure control over [the]

development rights for the entire [r]edevelopment [a]rea" or as "a warehouse of

approximately 300,000+/square feet" if defendant could "retain control and

development rights for its own propert[ies]."

      On October 6, 2020, defendant suggested the parties, along with

Ridgefield Park, enter into a memorandum of understanding to create a

"framework for the construction and financing of a warehouse and [b]us [g]arage

within the [r]edevelopment [a]rea together with the required off-site

improvements." On January 26, 2021, NJ Transit notified defendant it was

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proceeding with design work and "otherwise working diligently to advance this

complex and important garage project." NJ Transit informed defendant it was

close to completion of a schedule/timeline for the necessary steps in the process.

      On March 26, 2021, NJ Transit advised defendant it intended to "fully

explore the possible joint development of the properties through a competitive

process and [was] in the process of defining the scope of that project and how

to best procure a partner." NJ Transit offered to meet with defendant "to discuss

the amount of the offer to purchase the propert[ies]" as stated in the May 6, 2020

letter "that was based on the appraised fair market value."

      In a September 14, 2021 letter, NJ Transit referenced a recent meeting

between the parties and confirmed its need to acquire all of defendant's property.

The agency inquired whether defendant was willing to negotiate the purchase

price and other relevant terms. NJ Transit also invited defendant to submit a

counteroffer and the appraisal supporting the valuation of the counteroffer.

      On October 8, 2021, defendant presented a counteroffer of $63,000,000.

Defendant stated the highest and best use of the property was an

industrial/warehouse use. It included three comparable sales for warehouses in

the area. Defendant also advised it had two written offers to purchase the

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property   for    $60,000,000,    conditioned      on   zoning   approval      for

industrial/warehouse use.

      On October 21, NJ Transit formally rejected defendant's counteroffer for

several reasons, but chiefly because it assumed an industrial/warehouse highest

best use, which was "speculat[ive]" and ignored "the fact that the property

currently is not zoned for such uses." The agency noted defendant's status as a

conditional redeveloper could be revoked at any time, there was no

redevelopment agreement between defendant and Ridgefield Park, and the

process to amend Ridgefield Park's Redevelopment Plan to permit a warehouse

use could be lengthy.

      NJ Transit further noted that the offer letters defendant provided were

prepared in 2020 and 2021, and there were no consummated purchase or sale

agreements. In addition, the agency stated "offers are not considered when

determining value via an appraisal.        For these reasons," the offers were

"speculative and not evidence of current value."

      On November 12, 2021, NJ Transit reminded defendant that the agency

had continuously engaged in negotiations in the eighteen months since it sent its

initial offer and appraisal in May 2020. NJ Transit reiterated that defendant's

counteroffer's valuation was speculative as the property was not zoned for

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industrial/warehouse. The agency expressed interest in a resolution based on

"current, non-speculative circumstances." However, it also advised that if the

matter could not be resolved amicably, it would have no choice other than to

institute condemnation proceedings.

                                      II.

      On December 20, 2021, by way of verified complaint and order to show

cause as a summary proceeding, NJ Transit filed a condemnation action pursuant

to the Eminent Domain Act of 1971 (the Act), N.J.S.A. 20:3-1 to -50. In support

of its complaint and order to show cause application, NJ Transit provided the

metes and bounds description of the property, parcel maps, Ard's appraisal, and

site remediation reports.

      Defendant filed an answer and cross-moved to dismiss the verified

complaint, including a certification from the Ridgefield Park mayor stating that

"[t]he development of a portion of the [p]roperties with a warehouse use would

significantly help [Ridgefield Park] to offset the loss of more than 40 acres of

taxable real property as a result of the planned bus garage." Defendant also

provided a 2020 amended Redevelopment Plan, which it had submitted to

Ridgefield Park, and a proposed amended master plan. In addition, defendant

submitted the correspondence exchanged between the parties, the unsigned

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letters of intent to purchase the property for $60 million, and the draft bus garage

design brief.

   In reply, and in opposition to the dismissal motion, NJ Transit presented

certifications from its Director of Property Valuation & Financial Analysis for

Real Estate, Economic & Transit Oriented Development and Michael Kilcoyne,

Senior Vice President and General Manager of bus operations.              Kilcoyne

certified the agency's board of directors adopted a March 2020 resolution

authorizing the project with the knowledge that its North Jersey bus garages

were already operating at 28% over their design capacity. He further certified

the March 2020 resolution anticipated a 2028 construction completion date, and

cost overruns from delays in constructing the project would cost the agency an

additional $17 million per year of delay.

      NJ Transit also submitted certifications from its Chief Capital Project

Manager and Chief Planner. Both attested to the physical shortcomings of the

agency's current facilities and the specific need for the project to be located at

Ridgefield Park's redevelopment sites.

      On April 13, 2022, the trial court heard oral argument on the order to show

cause and cross-motion to dismiss and issued orders entering final judgment for

NJ Transit and appointing commissioners and denying defendant's cross-motion

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                                        11
and request for discovery. In an accompanying written statement of reasons, the

trial court found it was undisputed the Act authorized NJ Transit to acquire or

condemn public or private property.

      The trial court relied on the detailed certifications from NJ Transit's

planner, engineer, director of finances, and bus operation executive. The court

noted the agency was required under a statewide mandate to transition to a 100%

zero emission fleet by 2040. The court further noted the garage would provide

the critical infrastructure support to enable NJ Transit to meet this goal by both

easing capacity at existing facilities, and allowing retrofitting, while also

supporting the current fleet during planned upgrades to sixteen existing bus

garages.

      In citing to the certification of the Chief Planner, the court noted NJ

Transit had reviewed and analyzed forty potential sites for the project before

concluding defendant's and UBS's sites met all its criteria. The court further

noted the agency considered proximity to existing operations' needs, access to

major roads and highways, environmental issues, separation from residential

areas, ability to accommodate ancillary uses, and zoning, among other factors.

The court also considered the certified testimony that a new bus garage was

necessary to house up to 500 new 45-foot buses in its Northern division to

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alleviate overcrowding in existing garages, allow for future growth,

accommodate the modernization of the new fleet, and permit the phasing out of

an older garage.

      The court concluded the acquisition of defendant's property was

reasonably necessary, and NJ Transit was acting within the scope of its

authority. The court further found NJ Transit had complied with the Act's pre-

litigation requirements under N.J.S.A. 20:3-6. The court found no evidence of

bad faith, fraud, or "circumstances revealing an arbitrary or capricious action."

The court stated the "disagreement of [defendant] with the amount of

compensation found by the appraisal and the quality of that appraisal is just that,

mere disagreement[,] not proof bona fide negotiations did not take place."

      In addition, contrary to defendant's contention that NJ Transit failed to

bargain in good faith, the court found it "uncontroverted" that the third-party

letters of intent to purchase defendant's properties for $60 million in November

2020 and October 2021 were "conditioned upon the properties being developed

with a warehouse which is not currently a permitted use." The court denied a

stay of its decision.

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                                        III.

         On appeal, defendant contends the court erred in entering final judgment

because NJ Transit did not demonstrate the required necessity to acquire the

properties and it did not engage in bona fide negotiations. Defendant further

asserts the court erred in not granting it discovery and a plenary hearing.

         "'Eminent domain is the power of the State to take private property for

public use . . . .'" Casino Reinvestment Dev. Auth. v. Birnbaum, 458 N.J. Super.

173, 187 (App. Div. 2019) (quoting Twp. of W. Orange v. 769 Assocs., L.L.C.,

172 N.J. 564, 571 (2002)). Our courts typically "grant[] wide latitude to

condemning authorities." 769 Assocs., L.L.C., 172 N.J. at 572. When an agency

has statutory authority to condemn under conditions it deems necessary, its

determinations about necessity and actions are not unfettered but "are subject to

a review on the basis of manifest abuse of power." See Birnbaum, 458 N.J.

Super. at 190-93 (holding a redevelopment agency's mere "stockpiling of land"

was not reasonably necessary where the Board had not approved the conceptual

plan).

         "A reviewing judge will not overturn an exercise of eminent domain

without affirmative proof of 'fraud, bad faith, or a manifest abuse' of

authority." Id. at 187 (quoting City of Trenton v. Lenzner, 16 N.J. 465, 473

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(1954)). The trial judge's factual findings "are considered binding on appeal

when supported by adequate, substantial[,] and credible evidence," Rova Farms

Resort, Inc. v. Invs. Ins. Co. of Am., 65 N.J. 474, 484 (1974), while the judge's

legal findings are reviewed de novo. Manalapan Realty, L.P. v. Twp. Comm. of

Manalapan, 140 N.J. 366, 378 (1995).

      N.J.S.A. 27:25-13(b) authorizes NJ Transit:

            to acquire by purchase, [or] condemnation . . . on the
            terms and conditions and in the manner it deems proper,
            any land or property real or personal, tangible or
            intangible which it may determine is reasonably
            necessary for [its] purposes . . . under the provisions of
            this act.

"[W]hen acquiring property pursuant to subsection[] . . . [(b)] . . . [NJ Transit]

shall exercise its power of eminent domain in accordance with the provisions of

the [Act]." N.J.S.A. 27:25-13(c)(1).

      Under the statute, NJ Transit may condemn property only if the land "is

reasonably necessary for [its] purposes." N.J.S.A. 27:25-13(b). Reasonable

necessity has not been construed to "mean '"absolutely necessary" or

"indispensable" but [] it is sufficient if the right proposed to be acquired is

reasonably necessary to secure the end in view.'" Borough of Glassboro v.

Grossman, 457 N.J. Super. 416, 432 (App. Div. 2019) (alteration in original)

(quoting Vineland Constr. Co. v. Twp. of Pennsauken, 395 N.J. Super. 230, 261

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(App. Div. 2007) (Holston, J., dissenting), appeal dismissed as moot, 195 N.J.

513 (2008)). In Grossman, we stated:

            a condemning authority must do more than recite that a
            parcel it seeks to condemn has some unexplained
            necessity to the overall redevelopment area or the
            redevelopment plan. Instead, there must be a particular
            redevelopment project identified and tied to the
            proposed acquisition. To be sure, that project can be
            massive in scope, such as the building of retail stores
            and other commercial establishments within a whole
            downtown district—or more modest, such as the
            demolition of a particular street corner for a parking
            garage or new municipal building. Our point is that
            there must be an explained linkage between the
            property to be acquired and the identified project.

                   . . . The claim of necessity, if challenged, must be
            justified by a reasonable presentation of supporting
            proof. It will not suffice for the condemning authority
            to just "say so."

            [Id. at 435.]

Moreover, "no supporting evidence has to be presented unless and until the

necessity of the taking is challenged by an adversary." Id. at 436.

      NJ Transit presented substantial evidence demonstrating the necessity of

the acquisition of defendant's properties for its project. That evidence included

certifications from NJ Transit's management; a director and a senior executive

outlined the agency's need for a new Northern hub located near major highways

to accomplish the dual missions of alleviating overcrowding at current facilities

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and creating infrastructure for expansion for a new fleet of electric vehicles

pursuant to a state mandate. After considering forty sites in North Jersey, only

four were identified as potential locations. Ultimately, NJ Transit concluded the

combined area of defendant's and UBS's properties best met its criteria. The

agency's determination that defendant's properties were reasonably necessary to

complete its project was not a manifest abuse of its authority.

      Defendant's reliance on Birnbaum to support its position is misplaced.

There, the agency's Board adopted an initial "conceptual plan" but had not

presented any subsequent critical plans to carry out implementation of its

proposal before seeking condemnation of the plaintiffs' land two years later. 458

N.J. Super. at 191-93. In contrast, NJ Transit presented detailed documents

regarding its intended development of defendant's properties.         Unlike in

Birnbaum, NJ Transit was not acquiring defendant's properties to stockpile

potential locations for its project.

      As the trial court found, the comprehensive certifications submitted by NJ

Transit provided substantial evidence to demonstrate the acquisition of

defendant's property was reasonably necessary to complete its project. We see

no reason to disturb that finding.

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      We turn to defendant's assertion that NJ Transit failed to comply with pre-

litigation eminent domain requirements, specifically that the agency did not

engage in bona fide negotiations. We are unpersuaded.

      The Act imposes an obligation on government entities to engage in "bona

fide negotiations" with property owners in condemnation proceedings. N.J.S.A.

20:3-6. Such negotiations require:

            an offer in writing by the condemnor to the prospective
            condemnee holding the title of record to the property
            being condemned, setting forth the property and
            interest therein to be acquired, the compensation
            offered to be paid and a reasonable disclosure of the
            manner in which the amount of such offered
            compensation has been calculated, and such other
            matters as may be required by the rules. Prior to such
            offer the taking agency shall appraise said property and
            the owner shall be given an opportunity to accompany
            the appraiser during inspection of the property. Such
            offer shall be served by certified mail. In no event shall
            such offer be less than the taking agency's approved
            appraisal of the fair market value of such property. A
            rejection of said offer or failure to accept the same
            within the period fixed in written offer, which shall in
            no case be less than 14 days from the mailing of the
            offer, shall be conclusive proof of the inability of the
            condemnor to acquire the property or possession
            thereof through negotiations.

            [Ibid.]

      Bona fide negotiations began here in May 2020 when NJ Transit informed

defendant of the need to acquire its property and offered just compensation of

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$9,557,000 per its appraisal. NJ Transit continued to engage in negotiations

with defendant for the next eighteen months—until December 2021 when it

concluded the parties were unable to achieve a resolution. During that lengthy

period of time, defendant repeatedly only extended a counteroffer of $60

million, based on a highest and best use of the property for which it was not

zoned. The counteroffer was not supported by an appraisal from a licensed real

estate appraiser. Rather, it was based on two unsigned and unconsummated

offers to purchase the property conditioned on a zoning amendment to permit

industrial/warehouse use. There is ample evidence that NJ Transit engaged in

lengthy negotiations with defendant and was unable "to acquire the property

. . . through negotiations." Ibid.

      We are satisfied the trial court amply supported its decision to enter final

judgment for NJ Transit and to deny discovery and a plenary hearing. Any

arguments regarding the valuation of the property and fair compensation will be

determined by the commissioners. Hous. Auth. of New Brunswick v. Suydam

Invs., L.L.C., 177 N.J. 2, 16-17 (2003) (explaining that "the three

commissioners, or at least a majority of them, must fix and determine the

compensation to be paid by the condemnor to the condemnee" (citing N.J.S.A.

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20:3-12(g))).

      Affirmed.

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