Camden snatches site from developer; developer says eminent domain offer lowball

The Commerce Building, 1 South Broadway, in Camden on February 5, 2015. The Parking Authority of the City of Camden appraised the run-down office building at negative $200,000, making a "good-faith offer" where the land owner would have to pay the city to have his property taken. ( TOM GRALISH / Staff Photographer )

When the Parking Authority of the City of Camden decided it wanted to tear down the decades-old Commerce Building in the heart of downtown to put up a parking garage, it made an offer far below the property owner's expectations.

The Estate of Milton Rubin, a real estate investor in the city, had been paying property taxes on an assessment of $1.66 million, and in 2007 had prepared to sell it for $4.5 million.

The Parking Authority's offer came in considerably lower. In a letter in June, the agency raised the specter of eminent domain as it offered minus $200,000 - essentially asking the estate to part with the building and pay on top of it.

The authority based its offer on an appraisal it commissioned that said the cost of renovating the building would exceed its potential income.

"There's just a level of some inexplicable absurdity here," Robert S. Baranowski, attorney for the estate, said last week. "I'd love to go around taking people's property and telling them they have to pay me to do it."

Peter Dickson, a lawyer who in 2007 successfully argued the landmark eminent domain case Gallenthin Realty Development Inc. v. Borough of Paulsboro before the state Supreme Court, said he and his partner, R. William Potter, were "pretty astonished" by the Camden case when they saw the court records provided by The Inquirer.

"I've never seen one where the offered price to begin with was negative," said Dickson, who is known for his work on land-use, development, and redevelopment cases.

"Telling someone 'I'll take $200,000 in exchange for taking this property off your hands' is pretty strong evidence of bad faith," said Dickson, whose Princeton-based law firm is not involved in the case.

Giving up

Steven Rubin, a trustee of his father's estate, sued, and the city started over, returning this time with a new appraisal and offer: $180,000. Rubin rejected that offer, and a judge upheld the Parking Authority's decision to wield eminent domain.

The authority now owns the vacant, eight-story building and the nearly quarter acre it sits on.

Rubin has decided not to appeal the decision, saying he has given up fighting to keep his property. Now it's up to the courts to decide how much the authority should pay him.

The Parking Authority declined to comment, with a city spokesman citing a policy of not discussing open litigation.

In one court filing, the authority's outside counsel, Michael J. Ash of Bergen County-based DeCotiis, FitzPatrick & Cole L.L.P., wrote it had gone above and beyond its statutory obligations during "exhaustive" negotiations.

Those negotiations followed the second appraisal and offer.

Rubin "cannot demonstrate that the authority's offer is defective in any way," Ash wrote.

New Jersey requires government bodies to first appraise the property and make an offer that is no less than the market value before they can use eminent domain.

Municipalities usually offer the lowest possible value, Dickson said, in part hoping that property owners will choose to give in rather than fight.

New Jersey requires only one round of negotiations; if the property owner rejects the offer, the government body can file for eminent domain.

Rubin and Baranowski went to the Parking Authority's offices Aug. 26, where, their own appraiser in tow, they tried to negotiate the sale of the building.

The two sides couldn't come to an agreement.

"If they would have given me the right amount of money, I would have sold it to them," Rubin said. "You have no choice when it's eminent domain. What do you do? I'm up against a rock and a hard place."

'Windmills'

On Dec. 3, Deborah Silverman Katz, assignment judge of the Camden County courts, sided with the Parking Authority, ordering that it "is entitled to immediate and exclusive possession of the premises."

Rubin's lawyer described the decision not to appeal as a matter of practicality.

"You can't tilt at windmills, you know?" Baranowski said.

Silverman Katz appointed three neutral "commissioners" - lawyers from Cherry Hill, Cinnaminson, and Merchantville - to hear both sides and come up with a number for the compensation.

If either side disagrees with the board's number, a jury trial would begin.

Baranowski would not say what compensation would satisfy his client but insisted that the Parking Authority's offer of $180,000 was based on inaccurate assumptions.

"It's basically a storybook," he said. "The way [the authority's appraiser] comes up with the value here is basically like Grimm's Fairy Tales."

The Commerce Building, built in the 1960s to replace a department store, is at Broadway and Federal Street, right by City Hall, municipal court, the county court, the Walter Rand Transportation Center, and two PATCO stops.

Cooper University Hospital and the Camden County Police Department headquarters are both a block away. Colleges and universities in the city are within a few blocks: Rutgers-Camden, Camden County College, Rowan University, and its Cooper Medical School of Rowan University.

The bulk of the assessed value is the building, which is vacant and run-down inside. Owned by Rubin's father since the late 1960s, it was once filled by Rowan University, known then as Glassboro State College.

A lone pizza parlor

With the poor interior condition, and no obvious tenants to fill a renovated building, Rubin had the building sealed. Only a pizza parlor remained in a corner of the building, leasing 1,300 square feet for $1,500 a month.

Other than Penn Pizza Palace, which had been in the building since 1985 but left last year amid the eminent domain battle, the rest of the building was empty for about 15 years.

Rubin said he held the building for so many years in hopes of developing it during the type of economic renaissance that local officials now tout.

"The town couldn't support the occupancy. . . . There was nobody who wanted to be in Camden at the time."

In 2007, Rubin agreed to sell the Commerce Building to investor George Trimis for $4.5 million. Trimis, of Manhattan-based Dysart Ventures Inc., also was eyeing the Wilson Building up the street.

The Commerce deal fell through, Rubin said, but Trimis did buy the Wilson Building for $3.5 million.

Throughout that time, Rubin continued to pay taxes on the building and the necessary utilities.

"We did everything we could do," he said.

It's the land

Rubin and his lawyer point out that the assessed value of just the land - $380,300 - is more than double the Parking Authority's offer.

"Even if there's no building, 'Location, location, location' is the saying," Rubin said. "Forget the condition of the building. . . . They're not buying it for the building, they're buying it for the land."

Rubin and Baranowski questioned the need for a parking garage in that space, but they have moved on from that fight. Especially because Rubin owns other property in the city, they are wary of appearing like anti-City Hall crusaders.

The loss of the Commerce Building isn't personal, they said.

"I don't want to be cited in the newspaper . . . to say that everyone's out to get us. I don't really think that's the case," Baranowski said.

Rubin said he simply wants to be made whole for his loss of property.

"You can't fight City Hall, you just can't," he said. "You come to the realization that it'll eat your heart out. It'll kill you, fighting City Hall. You can't win that battle."

A ruling by the commissioners is expected by early March.

Source: Philly.com