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Powerhouse case for Redevelopment

May 28, 2010 | No Comments
Posted by Michael Bruno

In what continues to be a very good month for redevelopment, on May 17, 2010 the Appellate Division decided Powerhouse Arts District Neighborhood Association Redevelopment, et al v. City Council of the City of Jersey City and rejected the arguments of the plaintiff neighborhood association group challenging the City’s amendments to the redevelopment plan for a downtown portion of Jersey City.  The Court also rejected the association’s argument that the area was not blighted and was improperly included within the redevelopment area years earlier.   The Court found that under the redevelopment plan provisions of the Local Redevelopment and Housing Law the “municipality’s adoption of a zoning ordinance or, as here, a redevelopment plan, is a discretionary decision of broader application” than that of a redevelopment designation.   The Court found that because the municipalities action was discretionary such decisions should be reviewed under the “arbitrary or  capricious” standard rather than the more strict “substantial evidence” standard.   The Supreme Court under the Gallenthin case  previously held that proper standard of review for redevelopment designations  under the Local  Redevelopment and Housing Law is the more strict standard of whether the municipal action is based upon “substantial evidence” in the record.   Although redevelopment plan amendment and redevelopment designation powers are found in different sections of the The Local Redevelopment and Housing Law, given the series of decisions since the Gallenthin case was decided, there was significant concern that the Court would find that the more restrictive “substantial evidence” standard of review applied to redevelopment plan amendments.  The Powerhouse case is a critical victory for redevelopers and serves to confirm that municipalities have broad discretion to amend redevelopment plans.

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