I. Judicial Review of Agency Determinations
A. New Jersey's Approach
1. Gallenthin Realty v. Borough of Paulsboro
B. New York's Approach
II. The Elusive Definition of "Blight"
III. Whither "Underutilization" and "Blight?"
The public controversy triggered by the United States Supreme Court's expansive decision in Kelo v. City of New London (1) put considerable political pressure on individual states to impose their own independent limits on the use of the power of eminent domain for purposes of redevelopment, in order to conform that power to commonly held notions regarding the inviolability of private property. Kelo held as a matter of federal constitutional doctrine that appropriating property for transfer to a private entity in order to encourage economic development or enhance tax revenues constituted a permissible "public use" under the Takings Clause of the Fifth Amendment. (2) But the Court emphasized that "nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power." (3) Observing that many states already impose "public use" requirements that are stricter than the federal baseline, the Court, in effect, invited the states to temper the breadth of its controversial decision with their own independent limitations. The pressure to identify independent state grounds for invalidating the use of eminent domain for redevelopment was therefore felt by both the legislative and judicial branches of state governments.
One such limitation that is grounded in the legal tradition of a number of states, including New York and New Jersey, is the principle that use of eminent domain for redevelopment should be restricted to areas that are considered "blighted." Elimination of blight through redevelopment projects has thus long been held by the courts to constitute a public benefit which satisfies the "public use" requirement of the Takings Clause. (4) Conversely, both before and after the Kelo decision, many states have required a showing of blight as a precondition to use of redevelopment powers, including eminent domain. (5) Especially after Kelo, several states have explored the concept of elimination of "blight" not only as a source of reaffirmation of a state's redevelopment authority, but at the same time as a potential limit on that same authority, which would protect areas deemed not to be blighted from condemnation for redevelopment.
New Jersey and New York have facially comparable constitutional and statutory provisions regarding use of condemnation to engage in redevelopment of blighted areas. Under the Blighted Areas Clause of the New Jersey Constitution: "The clearance, replanning, development or redevelopment of blighted areas shall be a public purpose and public use, for which private property may be taken or acquired. Municipal, public or private corporations may be authorized by law to undertake such clearance, replanning, development or redevelopment...." (6) The New York Constitution states, albeit in somewhat different language, that "the legislature may provide ... for the clearance, replanning, reconstruction and rehabilitation of substandard and unsanitary areas...." (7) Pursuant to their respective constitutional provisions, both states have, either by statute (8) or by case law, (9) attempted to further elucidate the meaning of "blight."
In two relatively recent decisions, the courts of last resort of both states have laid out their vision for the proper role of the judiciary in defining "blight," and thus also determined its effectiveness in limiting at least some objectionable uses of eminent domain for purposes of redevelopment. But despite the similar focus on the concept of blight, the two courts announced two very different approaches to judicial review of such determinations. In Gallenthin Realty Development, Inc. v. Borough of Paulsboro, (10) the New Jersey Supreme Court interpreted the New Jersey Constitution as imposing judicially enforceable limits on the legislative power to authorize condemnation for purposes of redevelopment, and thus strictly construed the New Jersey Local Redevelopment and Housing Law as not permitting designation of an undeveloped parcel of land as "in need of redevelopment," i. …