Stalled by legal battle, Hackensack may condemn Sears property through eminent domain
HACKENSACK — As development of the landmark Sears Building on Main Street has stalled amid a legal battle between the city and property owners, city officials are seeking a designation that would condemn the site and allow the acquisition of the property through eminent domain.
The City Council on Tuesday passed a resolution asking the city Planning Board to investigate whether the former Sears property meets the criteria for designation as an area in need of redevelopment with condemnation and repeal its June vote that named it as a non-condemnation development area.
The art deco building has sat vacant since 2020 when the struggling legacy retailer closed the Hackensack store. A redevelopment plan for the site calls for a mixed-use residential and commercial development at the property and requires that the building's façade and its 105-foot iconic tower be preserved.
City officials have said they want to preserve and restore the historic elements of the building, which has been a landmark since 1932 when Sears Roebuck and Co. opened in Hackensack as the largest department store in Bergen County and one of the tallest buildings in the area.
But lawsuits brought by the property’s owners have threatened that plan. Transform Holdco, LLC, the company that acquired Sears Holdings' assets in 2019, a year after the retailer went bankrupt, filed a suit in 2022 claiming Hackensack had "downzoned" the site and limited what it could do with the property.
The parties reached a settlement in January 2023 that seemed to clear the way for development at the site. The agreement included a 30-year PILOT, or payment in lieu of taxes for the developer, and an $80,000 "community benefit contribution" paid to the city by Transform.
But Arcolo Hackensack LLC, and the several other related limited liability corporations that own the building sued in September claiming the agreement with Transform, which holds a long-term lease on the building and owns the surrounding property, was agreed to without their knowledge or consent, despite being named parties in that complaint.
The suit brought by Arcolo and the related entities claims the designation should be voided because the property does not meet the state's requirements and the city did not provide notice to the property owners.
Attorneys for Arcolo did not respond to a request for additional information.
A case management conference is scheduled for next month before Judge Gregg Padovano, according to court records.
In the nearly five years since the store closed, the building, with boarded-over and blacked-out windows, has “remained vacant and deteriorating,” at the “core of the city’s downtown without any redevelopment progress having occurred,” said the resolution adopted by the council this week.
In that time, the property has been plagued with “persistent illegal parking and dumping” and has accumulated an “increasing number of code violations,” said Nick Bond, a spokesman for the city.
A planner will now investigate the site, and the planning board will then hold a hearing to determine whether it meets the criteria for designation as an area in need of redevelopment with condemnation.
“The city is fully prepared to seek other legal remedies to complete this redevelopment should the parties associated with the site be unable to come to an agreement in a timely manner," Bond said.
This article originally appeared on NorthJersey.com: Hackensack seeks to condemn Sears property through eminent domain
