Trenton Mayor vs. City Council: Who Controls the Creation of a Redevelopment Agency?

In Mercer County, there is a lawsuit heating up between the Trenton City Council and Mayor Reed Gusciora over the creation of a new redevelopment agency. The City Council kicked off the lawsuit in April 2022 with a Verified Complaint and Order to Show Cause. The Order to Show Cause sought to preliminarily restrain the Mayor and his administration from blocking the creation of the new agency pending final disposition of the permanent relief sought in the Verified Complaint.

In late May 2022, Judge Robert Lougy, A.J.S.C. denied the request for preliminary restraints against the Mayor because the City Council failed to demonstrate, by clear and convincing evidence, any of the factors from Crowe v. De Gioia, 90 N.J. 126, 132-34 (1982) (that (1) the injunctive relief is necessary to prevent irreparable harm; (2) the legal right underlying the Plaintiffs’ claim is settled; (3) the material facts are uncontroverted and demonstrate a reasonable probability of ultimate success on the merits; and (4) the relative hardship to the parties favors granting the relief). That decision can be found here.

Following the denial of the Order to Show Cause, the parties are now proceeding in normal course to the permanent relief sought in the Verified Complaint. Under the Local Redevelopment and Housing Law (“LRHL”) a “municipal governing body” is authorized to make preliminary investigations and determine that an area is in need of redevelopment, to adopt a redevelopment plan, N.J.S.A. 40A:12A-4(a), and to create a redevelopment agency by ordinance and pursuant to the Local Authorities Fiscal Control Law (“LAFCL”), N.J.S.A. 40A:12A-11. The LRHL defines a “governing body” as “the body exercising general legislative powers in a county or municipality according to the terms and procedural requirements set forth in the form of government adopted by the county or municipality.” N.J.S.A. 40A:12A-3.

The LAFCL imposes certain requirements for “creating” a local redevelopment authority. See N.J.S.A. 40A:5A-4.  Importantly, the LAFCL requires that “no authority shall be created by any local unit … without the prior approval of the Local Finance Board.”  N.J.S.A. 40A:5A-4.  “Prior to the introduction of an ordinance or the adoption of a resolution to create an authority, the local unit … proposing this creation shall make application to the Local Finance Board for its approval.”  Id. The LAFCL defines “local unit” to mean “a county or municipality which created . . . or which proposes to create . . . [a local] authority.”  N.J.S.A. 40A:5A-3e.  The plain language of N.J.S.A. 40A:5A-4 requires a municipality to first apply to the Local Finance Board and obtain its approval to create a local redevelopment authority before an ordinance is introduced or a resolution is adopted by the municipal council to create the local redevelopment authority.

The parties dispute what it means for a “municipality” to “create” a local redevelopment authority.  The Council argues that it is responsible for filling out the application and may request information required for the application directly from executive officials without going through the Mayor.  On the other hand, the Mayor contends that filling out and submitting the application is an implementation of the Council’s legislative purposes and falls within the executive’s control pursuant to the “Faulkner Act.” The Mayor also argues that, even if the City Council can fill out and submit the application, it must go through the Mayor to request any required information necessary to complete the application.

At this point in time, the parties filed cross-motions for summary judgment which are pending for a decision sometime in December 2022. New Jersey has a reputation for contentious local politics and this case epitomizes that reputation. In the event that a new redevelopment agency is created in Trenton, we will be sure to keep an eye out for new projects that can impact private property rights. Our attorneys often challenge redevelopment designations in court on behalf of property owners in an effort to prevent the potential use of eminent domain or the stigma that a “condemnation redevelopment area” label can bring to a property. Feel free to contact us for an initial consultation.