And in this corner, … negotiations stay stalled

(Published in The Press of Atlantic City on Friday, Jan. 15, 2010.)


Few situations illustrate the difficulties of urban redevelopment like that of Jose Matta, whose dilapidated building at 19 S. East Ave. is worth a little more than $100,000. The city wants to demolish it to make way for a theater and shopping district.

Matta, of Pleasantville, wants $900,000 for it but says he will settle for $600,000.

His reluctance to sell for anything less highlights the kind of problem that has delayed acquisitions in the city’s ambitious effort to redevelop all four corners of the East and Landis Avenue intersection.

Much is at stake for this city of more than 64,000 residents. For years, Vineland officials have been searching for a way to bring more tourists and visitors to its downtown to boost the local economy. Neighboring Millville has achieved much of what Vineland wants through a downtown that focuses heavily on the arts. City officials think they have a winner in the plan to renovate the circa-1937 Landis Theater into a 750-seat performing arts center with upscale restaurants, shops and new residential development all within walking distance.

Work on the project began in 2007. Progress on the renovations of the Landis Theater has been steady, and the building should be ready by spring. But the development of the other corners has stalled under negotiations with property owners.

“This is symptomatic of the process,” project developer Hans Lampart said Thursday. “There’s reality, and then there’s a king’s ransom. The reality is what the property’s worth, and you see that by looking at properties around it.”

Money fight

Matta’s building, which once housed a shop selling animal feed, is by no means the biggest property in the Four Corners project. The vacant wooden structure sits just off the intersection’s southeast corner, its walls showing separation between the planks that divide its interior from the outside world.

Matta, a contractor who owns several properties across the region, bought the building and an adjacent house in 2005 for $140,000, according to property records. Today, the house is assessed at $102,000, while the vacant Adamo Feed Co. building has an assessed value of $58,200.

Matta estimates he sank $90,000 into repairs, but some are skeptical. Matta says he replaced the roof, but city records show that, if he did, he never obtained a permit for it. At the very least, one can clearly see a patch in the building’s upper ceiling that appears different and newer from the rest. Matta said he would like to do more repairs, but city officials will not help him finance that because of the redevelopment plans initiated in 2006.

He said he is willing to sell, but he wants something close to the $900,000 he says he needs to build a bakery on Route 9 in Pleasantville, where he owns property. Until then, he may start storing construction equipment inside.

“What they’re trying to pay is not right,” Matta said. “Right now, they’re trying to pay me $60,000 for a solid structure.”

Lampart said the offer was closer to $100,000, but either way, it’s still a vast gap, proportionately bigger than with any other Four Corners property.

“Relative to what the property is worth, nobody is out there like Jose Matta,” Vineland Redevelopment Director Sandy Forosisky said.

City officials remain engaged with a number of property owners on the Four Corners project. They have two properties under contract and are optimistic about negotiations on others, such as the Travel Inn, located around the corner from Matta’s property. Mayor Bob Romano said he views eminent domain as a last choice that he does not want to use. But he recognizes that at some point, he may have to, if he wants to see progress.

“They want a lot of money there,” Romano said. “There comes a point at which you say, ‘That’s just not happening.’”

Redevelopment highs and lows

Vineland is not the first city to encounter this kind of situation. Egg Harbor Township officials have long considered eminent domain to deal with a stretch of rundown motels in its West Atlantic City section. It could be an option in Pleasantville, where government officials hope to revamp Main Street.

In Collingswood, Camden County, considered by many to be southern New Jersey’s best redevelopment success story, Mayor Jim Maley saw a situation similar to what Vineland is experiencing right now. When the government becomes a potential buyer, asking prices often spike, Maley said.

“That’s what you usually find, absolutely,” said Maley, a lawyer who has done some consulting work for Vineland. “In this market, it was my experience that if there’s a government buyer, people wouldn’t be bashful.”

Eminent domain comes into the discussion because landowners do not want to sell for what their properties are assessed to be worth. But market value is always determined by what someone is willing to pay. Once a municipality designates a property as blighted and part of a redevelopment zone, it immediately hurts the landowner, according to Bill Ward, a former state deputy attorney general who writes the New Jersey Eminent Domain Law Blog.

“That has an impact on the properties almost immediately because it becomes difficult to sell,” said Ward, who often represents landowners fighting eminent domain. “Owners are hesitant to improve their properties. It’s hard to get financing for their properties, and the municipality is always tied in to a developer.”

And in some cases, the redevelopment and eminent domain options can be abused. In 2008, a state appeals court ruled that Long Branch, Monmouth County, tried to take homes by eminent domain without meeting the required standards of proving they were blighted.

That decision prompted Vineland to reach out this month to a planner and an attorney specializing in eminent domain to evaluate whether the city has done everything required to have the option of eminent domain, should they want it.

City officials stress they do not want to have to use eminent domain. That’s at least one point on which they agree with Matta.

“If they could give me something around $600,000, I could relocate myself,” Matta said.