On August 9, 2019, New Jersey Governor Phil Murphy signed bill A1700 into law. The new law provides for the designation of shopping centers and office parks with significant vacancies as properties that qualify as areas in need of redevelopment pursuant to the Local Redevelopment and Housing Law. N.J.S.A. 40A:12A-1 et seq. The Local Redevelopment and Housing Law equips municipalities with powerful redevelopment tools that can be used to promote a broad range of redevelopment projects. 

The process begins with the municipality adopting a resolution designating an area within its borders as an area in need of redevelopment (“Redevelopment Area”) N.J.S.A. 40A:12A-6. A Redevelopment Area designation requires a showing that the property in question satisfies at least one of the eight criteria (generally known as the “a” through “h” criteria) signifying that the area is “blighted” and in need of redevelopment. N.J.S.A. 40A:12A-5; N.J.S.A. 40A:12A-6(a). The new law expands criteria “b” to include buildings that are retail, shopping malls or plazas, or office parks that have experienced significant vacancies for at least 2 consecutive years. Previously, criteria “b” was limited to commercial, manufacturing and industrial buildings where the use was discontinued; the buildings were abandoned; or the buildings were untenantable due to their state of disrepair.

The amendment of criteria “b” is a positive step forward that will provide municipalities and developers alike with the resources of the Local Redevelopment Housing Law to encourage the redevelopment of underutilized retail districts, shopping centers and office parks throughout the state. The amendment comes in response to the recent change in market conditions that have led employers to relocate away from suburban office parks and have led to the closing of numerous retail stores.