Legal Memorandum: Equitable Redevelopment of Newark’s City-Owned Property
JONATHAN RAWSON
24, January 2024
As the New Jersey Supreme Court recently noted in Malanga v. Township of West Orange, municipalities can sell or improve upon public property in a number of ways.¹ However, a redevelopment designation appears to be the best way for a municipality to maintain the greatest degree of control over the future of a given parcel, in terms of retaining ownership, choosing a developer and deciding the use to which the parcel will be put. Without such a designation, in order to facilitate non-publicly funded development of city-owned property, a city would have to auction property off to the highest bidder at an open public auction, a risky process over which the city could easily lose control.² Furthermore, though a municipality can impose conditions on the sale and restrictions on the use of property sold at auction,³ it cannot convey property for nominal consideration without a redevelopment designation, unless the property is conveyed to a very narrow set of noncommercial entities.⁴
Municipalities can sell or lease property to a private developer “when acting in accordance” with the Local Redevelopment and Housing Law (“LRHL” or “Act”).⁵ The power to redevelop property is of tremendous value to municipalities. It is an awesome power and, importantly, is limited by both the state and federal Constitutions and state law.⁶ The same standards for redevelopment apply to private and public property.⁷
As CLiME has shown, the City of Newark owns hundreds of parcels by way of tax foreclosure and abandonment.⁸ Nearly three-quarters of these properties fall into the category of City-owned property without a current municipal use, and almost all lie outside of existing redevelopment areas.⁹ Most of these parcels are vacant or undersized lots in residential zones, but some lie within commercial and industrial zoning districts.¹⁰ This paper considers the benefits of a City-created Redevelopment Agency, pursuant to the LRHL, to facilitating equitable redevelopment of such parcels in a manner beneficial to Newarkers. Specifically, it aims to answer the question of how the creation of an entity like a Redevelopment Agency can facilitate Newark’s equitable goals of affordable housing, and mixed-use commercial and industrial development on City-owned property. Several other modes of equitable redevelopment are also considered.
See the memorandum in its entirety below: