New Jersey City Seeks To Use Eminent Domain To Turn 1940s Sears Building Into Luxury Apartments

A New Jersey city wants to turn a historic 1940s art deco building that was formerly a Sears Roebuck and Co. store into a mixed-use project with up to 325 apartments, retail space, and more.

However, the move is being challenged in court by the property’s owners who argue that the city is improperly using eminent domain to take land that is not blighted.

"There are many cases in which a government can legally exercise its powers of eminent domain to take private property," attorney Ben Michael of Michael & Associates in Dallas tells Realtor.com®. "They seize the property from the owners, even if the owners don’t want to give it up. But, there are legal requirements here—the government can’t just take your property for any reason."

Michael says some of the qualifying reasons that can allow for condemnation include the property being unsafe or the property being needed for a public project like building infrastructure or sometimes economic development.

"Ultimately, the reason has to allow for the action of the government to benefit the public in some way," he explains.

The former Sears building, which opened in 1932, is located in Hackensack's Main Street Rehabilitation Area and is included in a redevelopment plan approved by the City Council last year.

Sears declared bankruptcy in 2019, and the Hackensack store at 440–468 Main Street closed in 2020.

The city's master plan reports stated that: "Apartment uses which can overlook the Hackensack River in the downtown are potentially marketable and can provide an alternative market for goods and services in the downtown corridor."

According to the redevelopment plan, the building’s historic facade and its 105-foot tower would be preserved.

Details of the lawsuit

The owners of the Sears building filed a complaint on Nov. 26, 2025, in Bergen County Superior Court alleging that the city’s proposed use of eminent domain violates the New Jersey and U.S. constitutions.

At the center of the dispute is a February City Council resolution designating the property as an area in need of redevelopment “with condemnation,” followed by approval of a redevelopment plan for the former Sears site.

The lawsuit maintains that the property is economically viable and does not qualify for condemnation under state law.

The building's owners—Arcolo Hackensack LLC, Sugensteve Hackensack LLC, Sugencole Hackensack LLC, and Sugengran Hackensack LLC—argue the designation was motivated by redevelopment ambitions rather than documented blight and that the city improperly used the threat of eminent domain to advance private redevelopment.

Realtor.com reached out to the attorney for the plaintiffs, Jameson P. Van Eck, who said, "We have no comment at this time."

Hackensack Mayor Caseen Gaines, who was sworn in on July 1, issued the following statement to the Hackensack Daily Voice: "The city is currently looking into the claim made by the owners of the Sears property in a recently filed lawsuit alleging that Mayor John Labrosse and his City Council illegally designated the site as an area in need of redevelopment in the run-up to last spring's election, violating not only state law, but the owners' rights under the constitutions of both New Jersey and the United States. The city will respond to the lawsuit after our investigation into the previous administration's actions is complete."

According to the lawsuit, Hackensack justified condemnation largely by asserting the building had been vacant since 2020, citing an inspection, media reports, and a phone call with the building department.

The owners dispute that claim, saying the city ignored key facts, including a decades-old ground lease and an active tenant still operating at the site.

They also argue the city failed to meet legal standards under state redevelopment law, acted arbitrarily and in bad faith, and did not provide proper notice of the redevelopment designation.

The suit seeks to invalidate the condemnation designation, bar its enforcement, and recover damages, legal fees, and other relief.

Main Street being revitalized

City officials have spent years working to revive Hackensack’s Main Street after decades of decline.

In the 1950s, the corridor was a major draw for Bergen County shoppers, lined with bustling stores, movie theaters, and restaurants.

Like downtowns across the country, however, Hackensack’s Main Street gradually lost its vibrancy over time.

Now that the area is being revitalized, there are more boutiques, cafes, and eateries—and as downtown grows, luxury apartments are being built there, too.

The 270-unit luxury rental building Ora debuted in downtown Hackensack in February 2025 where rents for a two-bedroom can run around $3,495.

“Our investments in Hackensack have helped transform the city, welcoming residents, visitors, and businesses to be part of its exciting evolution over the past several years,” Ora developer James Hanson II said in a press release. “With Ora’s opening, we’re proud to continue that momentum, inviting even more residents and businesses to experience everything Hackensack has to offer.”

Meridia on Main apartments offer luxury amenities like a state-of-the-art fitness center, social room, and library with dining room.

There's also Crossroads 389, which is an 82-unit multifamily property located in the heart of downtown Hackensack. Studios and one- and two-bedroom apartments feature sleek finishes like quartz countertops, stainless steel appliances, and in-unit washers and dryers.