NEW JERSEY INSTITUTE FOR CONTINUING LEGAL EDUCATION

Eminent Domain and Regulatory Takings: 2014 Update - A

Webinar 

August 14, 2013

The Panel2

Anthony F. Della Pelle, Esq. , CRE (Moderator)

Anne S. Babineau, Esq. CRE

Hon. Anthony M. Bucco, Esq.

Andrew Davis, Esq.

Lewis Goldshore, Esq.

Robert H. Thomas, Esq.

The Panel3

Practice limited to eminent domain, condemnation, redevelopment and real estate tax appeals 25+ years representing property owners and special counsel to condemning authorities in eminent

domain matters Author, New Jersey Condemnation Law Blog, www.njcondemnationlaw.com New Jersey “Super Lawyer” (“Top 100” - 2009-2013; “Top 10” – 2012) Subcommittee Chair, ABA Section of Litigation – Condemnation, Land Use & Zoning Committee Member of Governor Chris Christie’s Transition Team – Authorities Committee (2009) President, Franklin & Marshall College Alumni Association; Vice President, New Jersey Hall of

Fame Foundation

Anthony F. Della Pelle, Esq. , CREadellapelle@mckirdyriskin.com

•Shareholder, McKirdy & Riskin, PA •Certified Civil Trial Attorney by NJ Supreme Court• New Jersey Representative, Owners’ Counsel of America• Member, Counselors of Real Estate®

The Panel4

Anne S. Babineau, Esq. , CREababineau@wilentz.com

•Partner: Wilentz, Goldman & Spitzer, PA•Chair of Firm Redevelopment Practice•Member, Counselors of Real Estate®

•Member, American College of Real Estate Lawyers•Program Chair – NJICLE Annual Redevelopment Institute

• Counsel to developers and redevelopment agencies in municipalities such as Jersey City, New Brunswick, Hoboken, Belmar, Collingswood, Montclair, Camden, Elizabeth and Pennsauken• Experience in Brownfields redevelopment projects in cities such as Newark, Linden, Carteret, Perth Amboy and Trenton•Experience in redevelopment designations, redevelopment plans and agreements, incentive programs, abatement and financing agreements and related litigation•Officer and member of industry organizations such as New Jersey Future, NAIOP and Urban Land Institute•New Jersey “Super Lawyer”; Best Lawyers in America; Chambers USA•Member, NJ Builders’ Association Land Use and Redevelopment Committee

The Panel5

• B.A. in Managerial Economics and Business Administration- Lycoming College• J.D. Seton Hall University School of Law• Member of the Governor’s Council on Alcoholism and Drug Abuse• Serves on the Boards of Trustees of several charitable organizations• Areas of Practice: Administrative Law; Election Campaign & Political Law; Eminent

Domain; Government Agencies & Programs; Government Contracts; Land Use & Zoning; Real Estate Law; State, Local and Municipal Law; and Taxation Law.

Assemblyman Anthony R. Bucco, Esq. (R-25)ABucco@MurphyMcKeonLaw.com

• Deputy Minority Leader• Member of Assembly Budget and Commerce & Economic Development Committees• Partner at Murphy McKeon, P.C. in Riverdale, NJ • Municipal Attorney for Roxbury Township, Netcong Borough, and Mine Hill Township

The Panel6

Chief Counsel, New Jersey Highlands Council Former General Counsel to Paulus, Sokolowski & Sartor Professor of environmental and land use planning law, Bloustein

School of Planning and Public Policy, Rutgers University Former Director of Land Use Management and Legal Affairs, NJ

Meadowlands Commission Former Assistant Counsel, Governor of New Jersey Former Deputy Attorney General (NJ) Former Deputy Assistant Commissioner, NJ Department of

Transportation Chairman, NJSBA Land Use Section (2009-2010)

Andrew Davis, Esq.andrew.davis@highlands.state.nj.us

The Panel7

Over 40 years experience in environmental, land use and municipal law

Author of New Jersey Environmental Law, published by the New Jersey Institute for Continuing Legal Education

Author, New Jersey Brownfields Law, NJ Law Journal Books  Co-author, Environmental Law Column, NJ Law Journal Past Chair, Environmental Law Committee, NJSBA Frequent lecturer on environmental and land use law Former Deputy Attorney General Recipient, Alfred C. Clapp Award for Excellence in Continuing

Legal Education

Lewis Goldshore, Esq.Lgoldshore@aol.com

The Panel8

Practice is focused on regulatory takings, eminent domain, water rights, and land use matters

Experience in trial and appellate matters in Hawaii, California and federal courts Chair, Condemnation Law Committee -- American Bar Association, Section of State &

Local Government Law Author, www.inversecondemnation.com Hawaii “Super Lawyer”, Best Lawyers in America Harlan Fiske Stone Scholar, Columbia University School of Law Authored amicus briefs in Koontz and Arkansas Fish & Game cases in USSCT

Robert H. Thomas, Esq. rht@hawaiilawyer.com

•Director: Damon, Key, Leong, Kupchak & Hastert (Honolulu)•Hawaii Representative, Owners Counsel of America•Managing Attorney, Pacific Legal Foundation

Course Outline9

Legislative Update: S-2447/A-3615

Regulatory Takings Update: Koontz v. St. Johns River Authority, __ U.S.__ (decided June 25,2013)

Dune Replenishment/Partial Takings Update: Borough of Harvey Cedars v. Karan, __ N.J. __ (July 8, 2013)

I. Legislative Update10

Eminent Domain Reform by New Jersey’s LegislatureS-2447/A-3615:

Legislative History, Intent, and Implications

Anne S. Babineau, Esq., CREAssemblyman Anthony M. Bucco, Esq.

(R-25th Dist.)

II. Regulatory Takings Update: Koontz v.

St. John’s River Authority11

USSC’s “Unconditional Conditions” Ruling

Andrew Davis, Esq.Lewis Goldshore, Esq.

Robert H. Thomas, Esq.

The Setting

Purchased 14.9 acre undeveloped tract in 1972

Property: wetlands, small creek & forested uplands

1984: FLA Wetlands Protection Act required Wetlands Resource Management (WRM) permits

Water Management District required offsite mitigation

WRM Permit

WRM permit application for 3.7 acres + conservation easement on remainder

District’s 2 alts: 1 acre development + conserve remainder; or 3.7 acres + easement + improve off-site District property [+ 150K]

Owner viewed District alts. as excessive; permit denied; & suit filed for $ damages for taking

FLA Courts

Trial Ct.: Nollan & Dolan tests violated - $376,152 award for temporary taking

FLA Sup. Ct . Reversed - Nollan and Dolan did not apply in permit denial scenario & because demand was for expenditure of $, not an interest in real property

USSC Ruling

5 to 4 dec – (J. Alito + 4)Gov’t action described as coercion,

pressure & extortionUnconstitutional conditions doctrine –

Const’s enumerated rights vindicated by preventing Gov’t from coercing surrender

Gov’t forbidden from out-and-out extortion thwarting 5th Am’s right to just compensation.

USSC Ruling (cont’d)

Nollan & Dolan not dependent on permit approval or denial

Doesn’t matter that Gov’t could have denied permit without option to spend $ to improve public lands

So-called monetary exactions must satisfy Nollan & Dolan nexus & rough proportionality requirements.

USSC Ruling (cont’d)

Govt’s demand for property from permit applicant must satisfy Nollan & Dolan even when permit is denied or demand is for $.

No view expressed on merits of claim that District’s actions failed to comply with the principles set forth in its opinion & those 2 cases.

FLA Sup. Ct judgment rev’d & rem’d.

Reactions

PLF Attorney Paul J. Beard II: “ruling protects landowners from Govt extortion, whether the extortion is for $ or any other form of property. . . . Govt can’t turn the land use permitting process into an extortion machine.”

VT Law School professor, John Echeverria: “decision is a very serious loss for local governments. It means requirements to pay fees or other payments as a condition of permit approvals will be subject to heightened scrutiny."

Implications

Koontz - far from overUnanswered questions include: FLA procedural issues

discussed/not resolved by USSCAddressing nexus & rough proportionality

requirements from regulatory & evidentiary perspectives

Review of land use rules required – objective standards vs. ad hoc decision-making

Will regulators need to examine their rules – objective standards preferable to ad hoc decision-making?

Will regulators will be less inclined to negotiate or propose alternatives?

Nollan’s and Dolan’s reach may have been clarified but implementation will result in considerable litigation.

Dune Replenishment and Partial Takings

20

Borough of Harvey Cedars v. Karan: Where do we go from here?

Anthony F. DellaPelle, Esq., CRELewis Goldshore, Esq.

Dune Replenishment and Partial Takings

21

Harvey Cedars v. Karan – the facts: $2M oceanfront home on Long Beach Island Borough condemns a “dune easement” to allow US Army Corps

of Engineers to construct a 22-foot high dune on the property Borough offers $300 for easement; contends damages are “de

minimus” Owner’s appraiser: loss of views cause $500,000 of damages Owner moves in limine to bar Borough appraisal which

contends that taking creates “special benefits” via storm protection provided by dune

Evidence excluded by trial court as “general benefit” Jury awards $375,000 in damages Trial court ruling affirmed by Appellate Division

Dune Replenishment and Partial Takings

22

Harvey Cedars v. Karan – the setting: Supreme Court grants certification before Superstorm Sandy Superstorm Sandy causes catastrophic property losses Areas with engineered dunes fare much better than those

without Dune/storm replenishment efforts are renewed in earnest along

the Shore Public perception and media portrayal paints “holdout”

oceanfront property owners as greedy, selfish, obstructionists Increasing political pressure mounted at local and State levels,

subjecting owners to ridicule and shame Amicus curiae status granted to State of New Jersey and other

interest groups Arguments held May, 2013

Dune Replenishment and Partial Takings

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Harvey Cedars v. Karan – the decision: general-benefits doctrine is “at odds with contemporary

principles of just-compensation jurisprudence” Jury only permitted to hear “one side” of the story Could result in a “windfall” to the property owners at public

expense Just compensation in partial taking must be based upon a

consideration of “all relevant, reasonably calculable, and non-conjectural factors that either decrease or increase the value of the remaining property”

Court recognizes that the loss of view is compensable, but requires rehearing permitting evidence regarding the impact of the storm protection benefits upon the value of the property as an offset to damages

Dune Replenishment and Partial Takings

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Harvey Cedars v. Karan – the implications: Shore communities rejoice! Will Karan cause the holdouts to change course and donate their

properties? Will Karan cause, or has it caused, the shore communities to

accelerate efforts to obtain easements, voluntarily or via eminent domain, before this year’s hurricane season is in full-swing?

What impacts will or may it have on just compensation determinations, from the condemnor’s offers to the commissioners’ awards and jury awards that result?

Related issues: loss of access, loss of private beach under public trust doctrine, ambiguity in description of rights obtained

Funding implications and realities

Dune Replenishment and Partial Takings

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Harvey Cedars v. Karan – additional implications: Does the decision impact the two traditional methods of

valuing partial takings? Before and After method: value of entire parcel before taking – value of

remainder after taking = just compensation Per Se method: value of part taken + diminution in value (or damages ) to

remainder = just compensation

Does the decision impact the duty of the condemnor and the owner to mitigate damages?

What remains of the “project influence” doctrine? Shield or sword?

What type(s) of evidence will be offered, and what will be deemed admissible?

Final Thoughts26

Q&A?

Thank you!