Designating an Area in Need of Redevelopment Designating an area in need of redevelopment, particularly in communities where redevelopment has not been used previously, is the most sensitive point in the process. If undertaken haphazardly or without regard to procedural requirements or the interests and concerns of local property owners, it can lead to legal challenges, destroy community consensus on redevelopment, and doom future efforts to effectively redevelop the area. Given the inherent political and legal sensitivity in designating an area in need of redevelopment, it is crucial that the planning analysis supporting the designation be comprehensive and well documented. In particular, the designation should be based on objective criteria rather than a subjective analysis not supported by facts. If there is "substantial evidence" to support a finding that an area is need of redevelopment, and that evidence is well documented, a redevelopment area designation will be legally defensible if challenged in court. The Preliminary Investigation The first step in determining whether an area is in need of redevelopment is the preliminary investigation, which is a planning analysis conducted by the local planning board to determine if the area meets the statutory criteria set forth in the Local Redevelopment and Housing Law. The results of the preliminary investigation typically are presented in the form of a planning report containing relevant documentation, including photographs and maps, to support the conclusion that the area is or is not in need of redevelopment. The governing body initiates the preliminary investigation process by adopting a resolution directing the planning board to undertake the study. The governing body resolution will include a list of properties that the planning board is directed to study and their lot and block designations, obtained from municipal tax records. The planning board cannot undertake a preliminary investigation without authorization by the governing body. However, the planning board can initiate the redevelopment designation process. It can do so by recommending that the governing body adopt a resolution requesting a preliminary investigation for a particular area. In fact, it is often when updating or undertaking a periodic reexamination of the master plan that the planning board may identify areas that warrant consideration for a redevelopment area designation. Selecting the Study Area Boundaries The key decision the governing body must make when it directs the planning board to undertake a preliminary investigation involves choosing the study area boundaries. Often, the physical and economic conditions that would warrant a redevelopment designation are apparent even to the casual observer. Under these circumstances, the boundaries of the study area may already seem somewhat obvious. It also is likely that such an area has historically been an area of concern for the community and may have been the target of other public revitalization efforts. Sometimes, a boundary is dictated or formed by dominant physical edges, such as a river, freeway, or elevated rail line. Or, a boundary might be suggested by a sudden change in land use, or a change in physical conditions that create a clear demarcation between the study area and adjacent stable neighborhoods or viable commercial and industrial areas. Care is required in selecting the size of the study area. If too narrowly defined, opportunities for redevelopment may be missed. If the study area is too large, it may unnecessarily increase the cost and reduce the credibility of the preliminary investigation. Regardless of the methodology chosen for selecting the study area boundary, the preliminary investigation must be limited to the properties identified in the governing body resolution. The planning board cannot add new properties to the list later on or increase the boundaries of the proposed redevelopment area. However, in providing its recommendations to the governing body, the planning board may recommend that certain properties within the study area not be designated in need of redevelopment. It also is important to remember that an area in need of redevelopment may include parcels that do not meet the statutory criteria, but are necessary for effective redevelopment of the area. If such properties are included, however, the report must contain a clear explanation of the planning rationale and reasons for their inclusion. The Preliminary Investigation Report Once directed by the governing body to undertake the preliminary investigation, the planning board is required to prepare a map delineating the boundaries of the proposed redevelopment area and the various parcels located within the study area. Often this consists of a local tax map showing the blocks and lots within the redevelopment area. The preliminary investigation report contains a detailed land use planning analysis of the area, including: (1) a description of the physical conditions within the study area, including existing land uses, building and environmental conditions, and site layout; (2) a review of the zoning and master plan designations for the area; and (3) an analysis describing how the study area meets the statutory criteria. The analysis of the statutory criteria can focus on the area as a whole, be evaluated on a block-by-block basis, or be applied to each individual parcel within the study area. After all the data is collected and analyzed, a report containing the findings of the preliminary investigation is prepared. The report will usually contain maps showing existing land uses, zoning, and master plan designations within the study area. The report also may contain an aerial photograph of the study area, as well as other maps and graphics to illustrate and support the planning analysis contained in the report. Public Hearing and Notice Requirements Once the planning board accepts the summary report, a public hearing on the designation must be scheduled. Notice of the public hearing must be given twice (once a week for two consecutive weeks) in the newspaper used by the municipality for its other public notices, with the last notice appearing not less than ten days prior to the hearing date. In addition to the public notice in the newspaper, a notice of the proposed public hearing must be mailed to every property owner within the proposed redevelopment area. As with notices for public hearings on master plans and zoning amendments, the notice for a public hearing on the designation of a redevelopment area must clearly describe the nature of the hearing; its date, time, and location; and information about where and when the summary report and map may be viewed. The notice sent to property owners must advise the recipients that their properties are included in an area proposed for designation as a redevelopment area. During the public hearing, the results of the preliminary investigation report are presented. The planning board hearing represents the primary opportunity for public input and testimony concerning the proposed designation. Property owners or other individuals that object to the designation of their properties as being in need of redevelopment are allowed to make statements to the board and present their own evidence, witnesses, and expert reports to support their objections. The planning board must consider all the evidence objectively and make its recommendation to the governing body based on "substantial evidence" in accordance with the statutory criteria described in Chapter 5. Governing Body Action Once the governing body receives the planning board's recommendation, it may designate the area in need of redevelopment by resolution. The governing body may alter the boundaries recommended by the planning board, although typically it does not. The governing body also has the authority to designate properties in the original study area that were removed by the planning board. If it does so, it must state the reasons for reinserting the property in its resolution. Within ten days of the adoption of the designation resolution, the governing body must serve notice of the determination upon each person who filed a written objection. If written objections were filed at the planning board's public hearing, the governing body or redevelopment entity is not permitted to take any action to acquire any property by condemnation within the redevelopment area within 45 days following the adoption of the resolution designating the area in need of redevelopment. This allows a property owner or interested party time to file a lawsuit challenging the designation. Expiration of the Designation Municipalities and property owners commonly ask: "When does the redevelopment designation expire?" The answer is that the LRHL has no provision for the expiration of an area in need of redevelopment designation. The LRHL also is silent on whether a governing body may rescind the designation. From a statutory and legal perspective, the designation could continue in perpetuity. In a practical sense, however, an area is in need of redevelopment until the redevelopment plan has been fully implemented. The former urban renewal laws that were replaced by the LRHL included a sunset provision for redevelopment plans. Consequently, redevelopment plans that were adopted under these statutes may still have such a provision. While the LRHL does not contain such a sunset provision, it does specify that a redeveloper agreement (the contract between the redeveloper and the redevelopment entity) must contain provisions for a certificate of completion, which is issued by the redevelopment entity when the redevelopment project is completed in a manner consistent with the redevelopment plan. If a redevelopment project covers only a portion of the redevelopment area, the redevelopment area designation will remain in place for the other properties in the area, until they have similarly been redeveloped. Once all of the redevelopment projects within the redevelopment area have been certified as complete, and the redevelopment plan has been fully implemented, the area is no longer considered in need of redevelopment. The redeveloper agreement and certificates of completion are discussed in detail in Chapter 9. Finally, the LRHL permits a municipality to amend a redevelopment plan or adopt a new plan to reflect changing conditions or to recognize the completion of redevelopment in a designated area. As part of the master plan reexamination report, the planning board could also recommend to the governing body that the area is no longer in need of redevelopment.