Sean Ryan is associate editor of Real Estate New Jersey

NEWARK-Successes and failures of the condemnation process were examined at a special panel brought together at the Newark Club by the New Jersey chapter of the National Association of Industrial and Office Properties. Christopher Paladino, president of the not-for-profit New Brunswick Development Corp., says Devco works on a case-by-case basis to minimize relocation--often giving people a better setup at the end of the project.

Devco shut a pizza parlor down for two years, but reopened it at the base of a complex housing 650 Rutgers students. A sandwich shop operator went from renting retail space in a redevelopment area to owning a building four blocks away, becoming landlord to the residential units above. An Ethiopian restaurant moved just across the street, its previous spot now home to an office. Paladino admits that the condemnation process is hard-hitting for the displaced. "Even when it's good, it's brutal."

Dr. Mindy Fullilove presented a counterpoint, in opinions she outlined in her book "Root Shock." It posits that African-American communities are wrecked by haphazard redevelopment, leading to the inadvertent destruction of communities and a raft of mental and economic problems. Her suggestions to help included trying to make the relocation efforts a win-win for all parties. By simple matters such as letting displaced residents pick the door color of the new construction they'll be moving into, residents can see the process as moving up, not out.

"I don't like it, but eminent domain is a necessary evil," said State Senator Ronald Rice. His issue with condemnation is the compensation. Giving a more generous settlement to the displaced could make a big difference. Rice brought up the Mulberry St. redevelopment in Newark, where protests came not from people losing their houses, he said, but from people not being adequately compensated for them.

The value of the property due to the redevelopment opportunities is not a simple thing to quantify, said Michael Hedden, director of the CBIZ Valuation Group. It also legally doesn't have to be factored into what a condemned property owner gets paid. New Jersey law already interprets "public use" broadly, said John Reilly, partner of Farer Fersko. His partner Jack Fersko, also of Farer Fersko, moderated the panel. The Kelo v. New London decision doesn't have an immediate impact on New Jersey law, other than bringing other states to New Jersey's line of reasoning on "public purpose."

Instant Insights /

Condemnation Shock Can Be Minimized

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