$3.2 Million Settlement Obtained for Water Rights

The Morris County Municipal Utilities Authority agreed to pay $3,200,000 for a 35 acre tract of land in Roxbury, Wharton and Jefferson townships formerly owned by Farley Waterworks, LLC, which the MUA had condemned in 2003 for the specific purpose of using the property’s groundwater to supply drinking water to its customers.   The MUA’s initial offer estimated the value of the property as being $820,000, based upon its potential to be developed with a warehouse, and did not include any compensation for the value of groundwater resources at the property despite the fact that the property lied upon an aquifer and testing confirmed that more than 1.2 million gallons per day of potable water flowed beneath the property’s surface.

The property owner’s appraisers concluded that the groundwater rights increased the value of the property to between $4 million and over $6.5 million, depending upon the quantity of groundwater which the New Jersey Department of Environmental Protection would have allowed to be extracted for water bottling purposes.  The MUA had applied for a court ruling preventing the property from being valued for its water resource, but Morris County Superior Court Assignment Judge B. Theodore Bozonelis denied that application in late 2008.

Prior to commencement of trial, the parties agreed to voluntarily mediate the matter before Retired Judge Burrell Ives Humphreys, which led to the $3,200,000 settlement.  The settlement was affirmed in an Order entered in February, 2009 by Superior Court Judge W. Hunt Dumont.

The property owner in this case was represented by McKirdy & Riskin’s Edward McKirdy, Anthony Della Pelle and Jeffrey Lewis.