Town expected to appeal ruling on Haberman property

BLOOMFIELD, NJ — Anticipated this fall is the appeal, by the township, of the $2.9 million price a jury determined it would have to pay the former owner of the historic train station on Lackawanna Place.

The township acquired title to the property through eminent domain. The former owner is the Bloomfield Daval Corp. In its appeal, the township is asking for a new trial to set a new and hopefully lower price. Court papers were filed earlier this year.

The township took possession of the property December 2012 believing that the “highest and best” use of the .62 acres of sloping land would be to revitalize the train station for commuters. For this use, the township had the property appraised for $440,000.

But Bloomfield Daval Corp. owner Howard Haberman, believing the “highest and best” use of the land would be a mixed-use redevelopment project, had the property appraised at $3.2 million.
A trial was held last year and in June 2016 a six-person jury, deciding 5-1, valued the property at $2.9 million. In its appeal, the township is being represented by Kevin McManamon, of McManimon, Scotland & Baumann. Counsel for Haberman is Anthony Della Pelle, of McKirdy and Riskin. Both attorneys represented their respective clients at the jury trial.

In court papers filed in the Appellate Division, McManamon asserts that Judge Robert Gardiner, who presided over the jury trial, should have prohibited testimony by an expert witness for Haberman who valued the property at $3.2 million. This was because Haberman’s proposal had no parking onsite and he offered no parking plans.

Haberman had proposed a mixed-use project with 34 residential apartments and 12,500 square feet of retail space on the site. Residential parking was to be across the street in a proposed parking deck with 900 spaces.

McManamon also argues that it is unreasonable to think that zoning requirements would be changed to accommodate any proposed mixed-use project on the historic train station site.
He said the jury was also subjected to speculations about a mixed-use development that did not meet minimum parking requirement.

“Since (Bloomfield Daval Corp.) is not taking this uncertainty as to parking requirements into account when valuing the property, evidence about the mixed-use project should have been precluded,” court papers said.

McManamon argues that expert testimony on Haberman’s behalf regarding the financial feasibility of the project should not have been allowed because there was no data supporting it. Without the data, he said the testimony was only opinion and from this, a project cannot be presumed to be potentially profitable. But Gardner ruled that it was up to the jury to decide the financial feasibility and allowed the testimony.

McManamon also argues that Gardner should have allowed expert testimony, on behalf of the township, that “no developer would be reasonably able to secure financing for the mixed-use project.”

A previous judge, before Gardner took over the case, agreed to let this testimony be heard but Gardner refused to have it presented to the jury.

Citing case law, McManamon said that one judge should not reverse the ruling of another judge unless there are exceptional circumstances. He said there were no exceptional circumstances for Gardner to do what he did.

In his rebuttal, Della Pelle, for Haberman, said while the township argues that the proposed project had no parking, Bloomfield zoning regulations did not require onsite parking for the project and specified that any parking needs “were to be provided in a municipal parking deck to be constructed directly across the street.”

Regarding the financial feasibility of the proposed project, Della Pelle said it was correct for Gardner to prohibit testimony addressing the lack of financial feasibility of Haberman’s project because the testimony would have been highly speculative. On the contrary, he said testimony supporting Haberman came from extensive market data “as well as input from market participants in similar development projects in concluding that the development proposal was, in fact, financially feasible.”

He also said that the township made a factual mistake when it said Haberman’s $3.2 million appraisal for the land was based on data for land already improved. Della Pelle said the appraisal supporting Haberman was based on vacant lands that were later developed.

Regarding the legality of having a proposed development without onsite parking, Della Pelle said the testimony of an expert witness for Haberman understood a shared parking arrangement existed “to accommodate the parking generated by the proposed development in the area.”
Della Pelle said that even a witness for the township agreed that it was understood there would be a shared-parking arrangement for Haberman’s project.

He also said the parking deck that was built, with its reduced number of spaces, “should not have been considered at all because the final design of the deck occurred after the township decided to acquire the property.” In effect, he said, by removing Haberman’s property from a list of potential development sites, the need for parking in the area was reduced. He argues that Haberman’s property should be valued at what it was before the township acquired it.

“The decision to take the property was no different than had the township changed the zoning of the property to reduce the cost of acquisition,” he said.

Regardless of the outcome of its appeal, the township will also be responsible for interest payments on the final price of the train station. Interest, at roughly 2.5 percent, began accruing the day of the jury verdict. The township has already deposited, with the courts, the $440,000 it believes the property is worth. It would have to pay interest on that amount. But for a property valued at $2.9 million, including the interest, as of Dec. 31, 2016, the township owed Haberman about $3.2 million.

In a July 18 email to The Independent Press, Della Pelle said the case was fully submitted to the appellate court and he was awaiting assignment of a date for oral argument.