Under the Local Redevelopment and Housing Law a municipality may declare private property to be blighted if it meets one of the enumerated criteria set forth it the statute at N.J.S.A. 40A:12A-5. For example, under the so-called “e” criteria – referred to as such because it is codified at N.J.S.A. 40A:12A-5e – property may be deemed blighted or in need of redevelopment if the property lacks “proper utilization” caused by such things as conditions of title, diverse ownership or “other conditions,” which result in a “stagnant or not fully productive condition of land potentially useful and valuable for contributing to and serving the public health, safety and welfare.”
In Gallenthin Realty v. Bor. of Paulsboro, decided last year, the New Jersey Supreme Court held that in order to satisfy the “e” criteria there must be substantial, credible evidence that the “particular configuration” of properties or their “fractionalization” due to conditions of title, diverse ownership or other conditions would frustrate the orderly redevelopment of the study area. A mere showing that property is not being used in an optimal manner is not enough. As such, it is essential to review deeds and other title records and conduct surveys of property and public rights-of-way in evaluating the applicability of the “e” criteria. If these studies show that the proposed redevelopment area (a) is characterized by landlocked parcels, (b) contains properties having questionable or invalid title, (c) is marked by numerous physical encumbrances into the public rights-of-way and/or (d) displays other similar deleterious circumstances directly linked to stagnation and underutilization, then all or some of the study area may qualify for redevelopment under the “e” criteria.