Holding Her Ground

They huffed and puffed, but developers could not blow down Edith Younger-Huff's business

the city council or a city redevelopment agency, says attorney Elnardo Webster II, a partner at Booker, Rabinowitz, Trenk, Lubetkin, Tully, DiPasquale & Webster in West Orange, New Jersey. “It is public information,” says Webster, whose concentration is government affairs, land use and zoning, and real estate and leasing issues.

To prevent the shock that Younger-Huff experienced, Webster advises small-business owners to visit their planning board office and ask to see the city’s master plan for their neighborhood. He also points out that had Younger-Huff been the property owner, she would not have been surprised.

According to Webster, under New Jersey law, “Renters are not entitled to business loss and they usually get only moving expenses paid.” To safeguard against this, Webster advises small-business owners to make sure that the language in their lease is clear “about how much condemnation money you are entitled to from the landlord in the event the property is condemned for redevelopment.”

As a renter, Younger-Huff felt adequately compensated, but Webster warns, “That was a deal she got because [she had] local community leverage, not because of legal leverage.” Christopher Paladino, president of New Brunswick Development Corp., echoes this sentiment: “In a standard commercial lease, the lease is voided in the event of condemnation, so renters have no rights except state-mandated relocation expenses. But we often go far beyond what the statute requires.”

Gather a group of other businesses being affected and sign petitions or make objections known at city council meetings.

Write letters and call your local politicians to gain their support.

Hire your own appraiser and make an economic argument based on the value of the property.

Reflect your business’ true value on tax returns. If you don’t count tips, or your real sales are not reflected in taxes, it will be hard to prove your business’ worth.

Understand the soft possibilities or the elasticity of the discretionary pool. The legalities offer hard, cut-and-dry options–i.e. a renter is only entitled to moving expenses. However, Webster explains that a developer will often bend on items other than the actual cash settlement check. These may include rent subsidy at another property owned by the developer or a lease at the new building once it’s built, similar to Younger-Huff’s settlement.

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