Eminent Domain

N.J. Judge Reverses Course, Blocking Seizure of Atlantic City House

Unless the redevelopment authority can show its plan has a good chance of actually happening, Charlie Birnbaum gets to keep his property.

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Institute for Justice

Last fall New Jersey Superior Court Judge Julio Mendez ruled that the state's Casino Reinvestment Development Authority (CRDA) could proceed with plans to seize piano tuner Charlie Birnbaum's Atlantic City house even though it had no clear idea of what it would do with the property. Yesterday Mendez changed his mind. Sort of. Mendez said the CRDA is "not required to produce plans identifying the specific structure that will be on the property." But he expressed concern that the CRDA's South Inlet Mixed Use Development Project, the pretext for taking Birnbaum's house, may never materialize:

The Court shares Birnbaum's concern about the uncertainty of the various plans for Atlantic City's recovery and the ability of the CRDA to implement the plan that justifies the taking of the Birnbaum property….The Court lacks confidence that the plans as presented here will be effectuated in light of the uncertainty surrounding Atlantic City, the economic conditions of Atlantic City, and the pending legislation [that would cut the CRDA's funding]….

The Court's concern is that it is unclear whether the plan proposed for the Birnbaum property remains viable in light of the pending legislation and economic uncertainty surrounding Atlantic City….The Court must have reasonable assurances that the plan that justifies the taking of the property will be implemented, to avoid a situation where the Birnbaum property is taken, remaining idle for years, and never being used for a public use or benefit.

The development project was originally intended to "complement the new Revel Casino and assist with the demands created by the resort." Revel went bankrupt and closed last September, making the point of the project—which Birnbaum's lawyers described as "a vague notion rather than specific plan"—rather fuzzy.

That much was clear last November, when Mendez said the CRDA nevertheless could condemn Birnbaum's house and figure out what to do with it later. But yesterday he ordered the authority to "reevaluate the feasibility of the proposed project" and gave it 180 days to supply additional evidence that it needs the house for a "public use." Absent such evidence, he said, the forfeiture cannot proceed. Mendez explained his reversal by citing casino closings and a proposed bill that would sharply cut the CRDA's budget, developments that were apparent prior to his last decision.

"This ruling underscores that what CRDA is doing makes no sense," said Birnbaum, whose family has owned the house for 45 years and whose piano tuning business is located on the first floor. "Thank goodness that Judge Mendez has brought this kind of common sense to the situation."

Robert McNamara, a senior attorney at the Institute for Justice, which is representing Birnbaum and his wife, Cindy, called the decision "a victory for judicial engagement and for property rights nationwide," adding that the CRDA "isn't taking Charlie's property because they need it for something; they're just taking it because they think they can get away with it." Yesterday's ruling, he said, shows "that is simply not enough."