Builders were dealt a blow this week when the U.S. Supreme Court opted not to hear a case in which New Jersey builder MiPro Homes claimed the township of Mt. Laurel, N.J., unlawfully seized a 16-acre parcel that was under site development and had been legally zoned and approved for construction.
The case, which dates back to 2002, pitted the township, which claimed that exercising eminent domain to protect open space was perfectly legal, against the builders, who said the township's real goal was to halt residential development.
Home builder MiPro won the case in trial court, which agreed with the builder that Mt. Laurel sought to stop development that it determined would be a drain on municipal services. That decision was reversed on appeal and upheld late last year by the New Jersey State Supreme Court.
"The message to all future [site plan] applicants is that you can't rely on New Jersey's policies when it comes to residential development," said Patrick O'Keefe, CEO of the New Jersey Builders Association, which worked closely with the Builders League of South Jersey and the NAHB on the MiPro case.
"The mere mention of the word open space is sufficient justification to grab a parcel of land, irrespective of what the state or local government had planned," O'Keefe continued.
Of course, getting the U.S. Supreme court to hear the case was a real longshot, especially since the court accepts less than 1 percent of the cases petitioned.
O'Keefe said the builders hoped the court would view the MiPro case as a chance to clarify the opinion of Justice John Paul Stevens in the Kelo case, in which Justice Stevens said New London, Conn., was justified in condemning the Kelo property because it had conducted a rigorous planning process prior to the taking, and that redevelopment was an acceptable public use.
"Preserving open space is a proper public use, but in this case it was not part of a well-thought out plan," said Mary Lynn Huett, director of legal services for the NAHB. "The builders contend that it was an ad hoc reaction to residential development," she explained.
Michael Mouber, township attorney for Mt. Laurel said the notion that the township condemned the property in a vacuum is not accurate. He said at least seven months before the condemnation the township notified MiPro in writing that it intended to preserve the land as open space. He said the town council also stated its intentions publicly at a town meeting several months before the condemnation.
Mouber said the combination of a series of recent state laws that let municipalities hold referendums to raise tax money to preserve open space plus the state Supreme Court decision have put municipalities on a more even footing with developers.
"Up until the laws were passed and we won this case, municipalities were powerless to compete with developers for land because they didn't have the money," Mouber said, adding that by and large many taxpayers are willing to pay to preserve open space.
Bill Dressel, executive director of the New Jersey League of Municipalities, said the U.S. Supreme Court has ruled on eminent domain for economic and redevelopment projects and now the state Supreme Court in New Jersey has ruled that eminent domain can be used to preserve open space.
"The courts have ruled on this so let's put it to bed," Dressel said. "The builders need to move on," he said, adding that "I'd rather see them redirect their energies to developing our urban areas," he concluded.
Learn more about markets featured in this article: Norwich, CT.