Municipalities which thought that any potential attacks on their designation of an area as in need of redevelopment (aka "blighted") were time-barred may be in for a rude awakening. According to the New Jersey Appellate Division's recent decision in Harrison Redevelopment Agency v. DeRose v. Town of Harrison, et al., A-0958-06T2/A-0382-07T2 (Appellate Division, February 25, 2008), a municipality's designation of an "area in need of redevelopment" pursuant to the Local Redevelopment and Housing Law ("LRHL"), N.J.S.A. 40A:12A-1 to -49, may be attacked well beyond 45 days of its adoption in a subsequent condemnation action, absent specific and clear notice to the property owner.

In Harrison Redevelopment Agency, supra, Harrison Township memorialized its redevelopment designation by resolution on September 4, 1997. It later adopted a redevelopment plan in September 1998, which was subsequently amended in April 2000 and July 2003. The record indicated that Harrison Township adhered to all procedures and all notice provisions called for under the LRHL. Accordingly, Harrison Township argued that the property owner's challenge to the redevelopment designation in the June 2007 condemnation action was time-barred under N.J.S.A. 40A:12A-6(b)(7), as it provides a 45-day deadline for filing a prerogative writs action to challenge a redevelopment designation. The trial court agreed with Harrison Township, but the Appellate Division reversed.

After comparing the LRHL's notice provisions to constitutional due process requirements, the Appellate Division held that the property owner was not time-barred from challenging the blight designation in the subsequent condemnation matter. In so holding, the Appellate Division found that the LRHL's notice provisions were "spotty and incomplete" and lacked "any individualized mechanism to assure that property owners are fairly informed that the blight designation, if approved by the governing body, operates as a conclusive finding of public purpose that will authorize the government to condemn their properties." The LRHL required direct notice to property owners only of the planning board's initial public hearing on whether to designate the area as in need of redevelopment. Based on its analysis, the Appellate Division held that LRHL's notice provisions under N.J.S.A. 40A:12A-6 fell short of fundamental guarantees of due process, both under the federal Constitution as well as the New Jersey Constitution.

However, the Appellate Division refused to strike down the notice provisions of the LRHL. Instead, the Appellate Division chose to harmonize the LRHL with the Eminent Domain Act, N.J.S.A. 20:3-6 et seq. and interpreted it in a manner that the court felt would safeguard the due process rights of property owners while remaining faithful to the apparent objectives of the state legislature. Thus, while holding that a property owner preserves the right to challenge the validity of a municipal designation that his or her property is in need of redevelopment, or is necessary to accomplish the redevelopment of nearby premises, in a subsequent condemnation action given the current LRHL notice requirements, it provided an exception where a municipality goes beyond the limited notice provided under the LRHL and provides notice with three "constitutionally-essential features."

Specifically, the Appellate Division found that where a municipality provides a property owner with "contemporaneous written notice" that fairly alerts the owner that (1) his or her property has been designated by the governing body for redevelopment, (2) the designation operates as a finding of public purpose and authorizes the municipality to take the property against the owner's will, and (3) informs the owner of a presumptive time limit within which the owner may take legal action to challenge the designation, then an owner who wishes to challenge the designation presumptively must bring an action in lieu of prerogative writs within 45-days of the governing body's adoption of the designation. While this exception should provide guidance for municipalities seeking to designate redevelopment areas in the future, it is of little comfort to those municipalities that have already completed their redevelopment designation and who are now seeking to acquire properties through the power of eminent domain.1