TOLL BROS., INC., et al. v. TOWNSHIP OF MOORESTOWN et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2537-04T22537-04T2

TOLL BROS., INC., and

LAUREL CREEK, L.P.,

Plaintiffs-Appellants,

v.

TOWNSHIP OF MOORESTOWN and

THE MOORESTOWN TOWNSHIP

PLANNING BOARD,

Defendants-Respondents.

 

Argued April 4, 2006 - Decided September 18, 2006

Before Judges Lefelt, Hoens and Seltzer.

On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-167-04.

Carl S. Bisgaier argued the cause for appellants (Flaster/Greenberg, attorneys; Mr. Bisgaier, David R. Oberlander and Richard J. Hoff, Jr., on the brief).

Peter Thorndike argued the cause for respondents (Ryan & Thorndike, attorneys; Mr. Thorndike, on the brief for Moorestown Township Planning Board; Dennis P. Talty, on the brief for Township of Moorestown).

PER CURIAM

Plaintiffs Toll Brothers, Inc. and Laurel Creek, L.P., appeal from the December 20, 2004 order of the Law Division granting summary judgment to defendants Township of Moorestown (the "Township") and the Moorestown Township Planning Board (the "Planning Board") in this prerogative writs action. At issue is whether a portion of plaintiffs' Laurel Creek development is entitled to Mt. Laurel rezoning protection and whether the Planning Board arbitrarily denied plaintiffs' application for an extension of final site plan approval. We affirm.

Many of the facts relevant to the historical background that gives rise to this appeal are set forth in our opinion, published today, in Toll Bros., Inc. v. Bd. of Chosen Freeholders of County of Burlington, N.J. Super. (App. Div. 2006)(No. A-4814-03T5). We therefore set forth only those facts necessary for an understanding of this prerogative writs action and this appeal.

In February 1984, a developer known as Affordable Living Corporation ("ALC"), which is not a party to this litigation, filed a law suit against defendants contending that they had failed to meet their obligations to provide affordable housing. That dispute was transferred to the Council on Affordable Housing ("COAH"). As a part of its efforts to settle that dispute, the Township proposed to satisfy its unmet affordable housing needs by granting favorable zoning to a tract owned by ALC and to the Laurel Creek tract, then owned by Foursome, plaintiffs' predecessor, in exchange for significant cash contributions. That cash would then be used by Moorestown to develop other projects, elsewhere in the Township, that were predominantly or entirely comprised of affordable units. As a part of this resolution of the COAH litigation instituted by ALC, Foursome agreed to contribute approximately $2.6 million to Moorestown's Affordable Housing Trust Fund. The terms of that agreement were summarized in an April 27, 1987 letter from counsel for Foursome to the Township. In July 1993, the Township and Foursome executed a developer's agreement that required payment of at least $6,081.82 to the Affordable Housing Trust Fund for each of the proposed 470 market rate dwelling units in the Laurel Creek luxury development. It is undisputed that plaintiffs have, in fact, paid approximately $2.8 million into Moorestown's Affordable Housing Trust Fund in satisfaction of that developer's agreement.

This litigation primarily concerns Phase 1 of the Laurel Creek development, a thirty-seven acre tract where plaintiffs proposed to construct office buildings. By its March 22, 2001 resolution, the Planning Board granted plaintiffs final subdivision approval for this part of the overall development. The effect of that resolution was to divide Phase 1 into three separately owned taxable lots, each of which was to be the site of a separate office building. Following that approval, Phase 1A was developed with a 74,400 square foot office building, which at all times relevant to this dispute has been fully leased to Comcast.

On April 5, 2001, the Planning Board granted final site plan approval for Phase 1B, which plaintiffs proposed to develop with a 104,600 square foot office building and 522 parking spaces. On April 26, 2001, the Planning Board granted final site plan approval for Phase 1C, which was approved for a 154,530 square foot office building together with 758 parking spaces. The resolutions granting final site plan approval for Phase 1B and Phase 1C were both expressly conditioned on Toll securing all requisite approvals from the Burlington County Planning Board.

After securing final site plan approval for Phase 1B and Phase 1C, plaintiff proposed a plan pursuant to which Phase 2 of the overall development and the Winner Farm, which plaintiffs had by then entered into a contract to purchase, would be rezoned. At the time Phase 2, which was located across Centerton Road from Phase 1, was zoned for office space but the Winner Farm, which was adjacent to Phase 1 on the same side of Centerton Road, was zoned for residential use. Plaintiffs believed that it would be a better zoning alternative to separate the office space from the residential uses. As a result, plaintiffs proposed that the Winner Farm be rezoned into a specially restricted industrial ("SRI") zone and that Phase 2 be rezoned for age restricted residential use. The result would be that Phase 2, which was adjacent to the part of Laurel Creek that had been developed as residential use, would also be zoned for residential use, and the Winner Farm, on the opposite side of the road, would be in the SRI zone.

When plaintiffs presented this plan to the governing body in May 2001, and to the Planning Board in June 2001, they also proposed several ordinances that would be needed to implement the changes in zoning. Over the course of the following several months, plaintiffs' attorneys and the Township's planning consultant and attorney worked together to draft the appropriate ordinances. Eventually, the parties agreed that there would be a contiguous band of office space between Centerton Road and Interstate 295. In order to accomplish this goal, all of the property included in Phase 1 would be rezoned into the Special Restricted Commercial-2 (SRC-2) zone. At the same time, the Phase 2 property, on the other side of Centerton Road, would be rezoned from SRI (Specially Restricted Industrial) zone, which would have permitted office and commercial uses, to the newly created SC-2 zone, which would be limited to development for age restricted housing. In order to implement these zoning changes, five separate ordinances were adopted on December 17, 2001. Ordinance 1977-01 created the SC-2, age restricted residential zone. Ordinance 1978-01 created the SRC-2, or Specially Restricted Commercial zone. Ordinance 1979-01 rezoned the former Phase 2 property from the SRI to the SC-2 zone. Ordinance 1980-01 rezoned both the Winner Farm property and Phase 1 property into the SRC-2 zone.

In March 2003, plaintiffs formally asked the Planning Board to "acknowledge" that Phase 1B and Phase 1C were exempt from the requirements of the SRC-2 zone and to grant statutory extensions of the final site plan approvals. The request for an exemption from the SRC-2 zone was based on plaintiffs' assertion that they had discovered that the SRC-2 zone, which then included Phase 1, had setback and landscaping buffer requirements that impacted on the office building then proposed for Phase 1B. Rather than redesign Phase 1B so as to comply with the SRC-2 zone setback and landscaping requirements, plaintiffs asked the Planning Board in May 2003 to determine that the Phase 1 property was not subject to those standards or, in the alternative, to grant an extension of the final site plan approvals for the Phase 1B and Phase 1C projects. As part of that application, plaintiffs took the position that the Phase 1B and Phase 1C developments were entitled to Mount Laurel designations. This assertion was based on the fact that they had generated substantial sums for the Moorestown Affordable Housing Trust Fund by virtue of the earlier payments pursuant to the COAH settlement. As a result, plaintiffs argued that they were exempt from zoning changes absent their written consent as the property owner that would otherwise be affected by the new zoning ordinance. Plaintiffs took the position that their participation in the drafting of the ordinance by which Phase 1B and Phase 1C were included in the SRC-2 zone did not constitute their written consent and they contended that their only application had related to an effort to have the Winner Farm property and the former Phase 2 property rezoned.

In the alternative, plaintiffs argued that they were entitled to an extension of final site plan approval on three alternate grounds. In particular, they asserted that the depressed state of the commercial real estate market had made the development impossible, see N.J.S.A. 40:55D-52a, that the Phase 1 property exceeded 200,000 square feet of development, see N.J.S.A. 40:55D-52b, and that they had been delayed in proceeding with construction because the County had delayed the approval process, see N.J.S.A. 40:55D-52d.

The Planning Board heard plaintiffs' application at its August 28, 2003 meeting and voted unanimously to deny the request for an extension. The Planning Board's resolution concluded that an extension of final site plan approval would be inconsistent with the SRC-2 zoning for the tract, that Phase 1B and 1C could have been constructed consistent with the terms of the final site plan approvals, that road improvements necessary to service the proposed buildings were unlikely to be built due to then-pending litigation, and that "any delays in previously obtaining an extension of county approval were self-inflicted by the developer in bringing litigation against the county which ultimately resulted in the delay of obtaining final county approval pending the outcome of the litigation."

Plaintiffs filed a complaint in lieu of prerogative writs thereafter. The heart of this complaint was plaintiffs' assertion that the Township exceeded its authority in applying the amended zoning ordinance to Phase 1 and that the Planning Board's decision to deny plaintiffs' request to extend final site plan approvals for Phase 1B and Phase 1C of the proposed office complex was arbitrary and capricious. In August 2004, plaintiffs moved and defendants cross-moved for summary judgment. Judge Sweeney issued his written decision denying plaintiffs' motion and granting the cross-motion of defendants for summary judgment on December 20, 2004.

Before the Law Division, Toll argued that Phase 1B and Phase 1C were part of a Mount Laurel inclusionary zone and therefore not subject to rezoning into the SRC-2 zone absent Toll's specific consent or approval. In rejecting this argument, Judge Sweeney concluded that the agreement by Toll or its predecessor in interest to make a monetary contribution to help fund the development of Mount Laurel housing elsewhere did not make its project inclusionary within the meaning of the applicable statute or regulations. Rather, he found that the payment had permitted Toll to build higher density-than-permitted, market rate housing in the Laurel Creek development, without providing any Mount Laurel units. Alternatively, he concluded that Toll's involvement in the decision to alter the zone from SRI to SRC-2 equated with consent that could not be overcome by Toll's reference to its understanding or its intent of the effect of that zoning change. Finally, he concluded that because Toll was attempting to attack the Ordinance itself, that challenge was time barred.

In the alternative, Toll also argued in the Law Division that the Planning Board erred in refusing to grant it an extension on its final site plan approvals pursuant to N.J.S.A. 40:55D-52. Toll raised arguments under three of the subsections of this section, each of which the judge rejected. First, Toll contended that section 52a permitted an extension on its approvals in light of the "soft" housing market, citing Jordan Developers, Inc. v. Planning Board of the City of Brigantine, 256 N.J. Super. 676 (App. Div. 1992). Second, Toll sought an extension of its approvals pursuant to section 52b, contending that Phase 1B and Phase 1C were part of a development that exceeded 200,000 square feet. Finally, Toll sought an extension pursuant to section 52d, contending that its inability to receive the approvals from the County that were a condition of its final site plan approval entitled it to an extension.

We first address, in Points I A, B and C, Toll's arguments relating to its application for an exemption from the SRC-2 zone based on its asserted status as an inclusionary development, that its consent was not given, and that defendants should be equitably estopped. We thereafter consider, in Points II A, B and C, Toll's arguments relating to its application for an extension of final site plan approval.

I.

In summary, Toll argues, first, that Phase 1B and Phase 1C are part of an inclusionary Mount Laurel project which were immune from the change in zoning, that Toll did not consent to that change in zoning as required in order for it to apply in light of its Mount Laurel status, and that, in the alternative, the Township was equitably estopped from changing the zoning for the project. Consequently, Toll contends that the Planning Board arbitrarily and capriciously declined to exempt it from the setback and landscaping provision of the SRC-2 zone adopted by the municipality approximately eight months after the final site plan approvals had been granted.

A.

Whether Toll's project qualifies as an inclusionary development under COAH rules, and whether those rules immunize the project from zoning changes, are questions of law. As a result, we owe no special deference to the conclusions of the Planning Board or the Law Division judge, but engage instead in a de novo review. Manalapan Realty, L.P. v. Twp. Committee of Manalapan, 140 N.J. 366, 378 (1995). Zoning ordinances carry a presumption of validity, and ordinarily they apply to any pending application for development. Id. at 378-79; see Burcam Corp. v. Planning Bd. of Medford, 168 N.J. Super. 508, 512 (App. Div. 1979). However, both the Municipal Land Use Law, N.J.S.A. 40:55D-1 to -163 (MLUL), and applicable regulations, include a number of provisions which immunize certain developments from being subject to changes in a zoning ordinance that would otherwise affect them. Included among these are COAH regulations on which Toll relies.

To bring the entire Laurel Creek project within those COAH regulations that protect against zoning changes, Toll argues that the July 1993 developer's agreement between the Township and Toll's predecessor Foursome made the project an inclusionary development. As a part of that agreement, Foursome promised to pay approximately $6,000 per unit into the Township's Affordable Housing Trust Fund upon the issuance of a certificate of occupancy for each dwelling unit in Laurel Creek. Toll argues that COAH regulations define these payments as development fees made by an inclusionary development. See N.J.A.C. 5:93-8.10; N.J.A.C. 5:93-8.12(a). Toll next points to language in COAH's grant of second-round substantive certification to the Township, which referred to the fees it and others paid into the Affordable Housing Trust Fund, as evidence that its project was included for Mount Laurel purposes. Toll then relies on COAH's second-round regulations, which provide that sites zoned for inclusionary development shall not be rezoned without the consent of the site's owner. See N.J.A.C. 5:93-5.13(b), (c) and (d). Finally, Toll asserts that because it did not consent to the change to SRC-2 zoning, it cannot be bound by that change.

Our review of the record and these regulations compels us to reject Toll's argument. We first note that Toll's project does not meet the statutory definition of an inclusionary project. The Fair Housing Act, N.J.S.A. 52:27D-301 to -329 (FHA), which our Supreme Court has referred to as the codification of the principles established in the Mount Laurel litigation, see Bi-County Dev. of Clinton, Inc. v. Borough of High Bridge, 174 N.J. 301, 321 (2002), defines an "inclusionary development" as "a residential housing development in which a substantial percentage of the housing units are provided for a reasonable income range of low and moderate income households." N.J.S.A. 52:27D-304f. Second round regulations, similarly, define an inclusionary development to be "a development containing low and moderate income units. This term includes, but is not necessarily limited to, new construction, the conversion of a non-residential structure to a residential structure and the creation of new low and moderate income units thorough the gut rehabilitation of a vacant residential structure." N.J.A.C. 5:93-1.3. We have construed the purpose of this regulation to be to "provide protection to owners of sites previously designated by the municipality as suitable for inclusionary development." Toll Bros., Inc. v. Twp. of W. Windsor, 334 N.J. Super. 77, 104 (App. Div. 2000), certif. denied, 168 N.J. 295 (2001). There is no evidence in this record that any part of Laurel Creek was so designated.

Toll, relying on the Supreme Court's analysis in Bi-County, supra, nevertheless argues that it is entitled to the benefit of the inclusionary zoning status because it contributed to the Affordable Housing Trust Fund which helped to satisfy the municipality's fair share obligation in exchange for favorable zoning.

In Bi-County, the Court noted that "COAH . . . considers a project to be inclusionary when payments are made by the developer in lieu of constructing affordable housing for the purposes of its administration of Mount Laurel obligations." Bi-County, supra, 174 N.J. at 315. There, COAH had relied in part on the proposition that development fees can be the functional equivalent of mandatory set-asides because COAH had concluded that those developers should have the benefit of being protected from regulatory changes in exchange for their financial contributions. See id. at 323-25. In so arguing, COAH relied on a proposition articulated by the Court earlier in upholding the validity of development fees. See Holmdel Builders Ass'n. v. Twp. of Holmdel, 121 N.J. 550, 576 (1990). Toll contends in this appeal that in Bi-County and in Holmdel, the Court endorsed COAH's reasoning, thus entitling Toll to the benefit accorded a property deemed to be inclusionary.

We do not read the decisions in Bi-County or Holmdel so broadly. Rather, in each, the Court recognized "the principle of judicial deference accorded COAH as an administrative agency, and its broad powers in implementing the Mount Laurel doctrine and the goals of the FHA." Bi-County, supra, 174 N.J. at 325. The Court made it explicit, however, that it did "not resolve

. . . whether the Bi-County development is an inclusionary development for purposes of benefiting from COAH's cost generating regulations." Id. at 326.

Nothing in these decisions, however, supports Toll's argument that the Laurel Creek project qualifies as an "inclusionary development" as that phrase is defined by the FHA and COAH regulations or that COAH would so regard it. As the Township points out, COAH specifically identified nine sites that Moorestown would develop to meet its fair share obligations. Toll's Laurel Creek property was not among them. Nothing in COAH's reference to the payments to the Affordable Housing Trust Fund had the effect of turning Toll's project into an inclusionary development. Rather, Toll's payments as they related to the Laurel Creek development fall within N.J.A.C. 5:93-8.10(d), which allows municipalities to collect fees exceeding those otherwise permitted, provided that the municipality offers a "financial incentive for paying higher fees."

Even COAH's more recently adopted third round regulations, which took effect on December 20, 2004, 36 N.J.R. 5748(a), do not suggest a different result. The third round regulations retain the requirement that sites zoned for inclusionary development for purposes of the 1987-1999 housing obligation shall retain that zoning if certain conditions are met. N.J.A.C. 5:94-4.17(a). The third round regulations define "inclusionary development" as "a housing development containing both affordable units and market-rate units." N.J.A.C. 5:94-1.4. The third round development fee regulations, N.J.A.C. 5:94-6.1 to -6.18, do not protect developments, like Laurel Creek, that contribute money in lieu of affordable units, from zoning changes.

B.

Because Toll's project does not qualify as inclusionary, its consent to the zoning change was not required. We would not, however, reach a different conclusion on appeal even if we were to agree with Toll that its consent to the zoning change was required. The record relating to Toll's active participation in the rezoning process amply supports the conclusion that it not only consented to, but solicited, the zoning change to which it now objects. In short, Toll initiated the change in zoning by seeking to alter the zoning for Phase 2 and for the Winner Farm. Thereafter, Toll actively participated in the creation of the contiguous band of office space including Phase 1B and Phase 1C and it also participated in the creation of the SRC-2 zone as a part of that process. Toll's assertion that its involvement fell short of consent is not supported by the record.

C.

Toll also argues on appeal that the Township should be equitably estopped from applying the amended zoning ordinance to Phase 1B and Phase 1C. In essence, Toll argues that the Township benefited from the agreement with Foursome, which established the SRI zone, by receiving payments for the Affordable Housing Trust Fund, because those payments enabled the Township to achieve substantive certification from COAH. Toll also contends that it substantially relied upon the SRI zoning both in making those payments and in "expending large sums of money" to develop Phase 1. The trial judge did not reach this argument, because he concluded that Toll expressly consented to the inclusion of Phase 1 in the SRC-2 zone. Although we have affirmed that conclusion, we address Toll's estoppel argument for the sake of completeness.

"The essential principle of the policy of estoppel here invoked is that one may, by voluntary conduct, be precluded from taking a course of action that would work injustice and wrong to one who with good reason and in good faith has relied upon such conduct." Summer Cottagers' Ass'n of Cape May v. City of Cape May, 19 N.J. 493, 503-04 (1955). Accord Middletown Twp. Policemen's Benevolent Ass'n v. Middletown Twp., 162 N.J. 361, 367-68 (2000); Wood v. Borough of Wildwood Crest, 319 N.J. Super. 650, 656 (App. Div. 1999). To establish equitable estoppel, a plaintiff must show that defendant engaged in conduct that induced plaintiff's reliance and that plaintiff changed its position to its detriment. See Knorr v. Smeal, 178 N.J. 169, 178 (2003). Plaintiff must prove that its reliance was both justified and reasonable. See Palatine I v. Planning Bd. of Twp. of Montville, 133 N.J. 546, 563 (1993), overruled in part by D.L. Real Estate Holdings, L.L.C. v. Point Pleasant Beach Planning Bd., 176 N.J. 126 (2003).

Equitable estoppel, however, is rarely invoked against municipalities, see Middletown, supra, 162 N.J. at 367, and requires plaintiff to show compelling circumstances. See Palatine I, supra, 133 N.J. at 560. "The purpose of the doctrine is to balance fairly the developer's interest in a stable and predictable regulatory climate with the municipality's interest in promoting sound planning and growth." Ibid.

Our review of the record demonstrates that Toll cannot meet this burden. Indeed, Toll cannot even demonstrate that the Township engaged in conduct on which Toll justifiably or reasonably relied to its detriment. The April 2001 final site plan approvals for Phase 1B and Phase 1C immunized Toll against zoning changes for a period of two years. Even if we were persuaded that Toll did not consent to the change in zoning from SRI to SRC-2, nothing in the record suggests that Moorestown did anything to lead Toll to believe that the final site plan approvals would extend beyond the ordinary period of two years. As the Court did in similar circumstances in Palatine I, we find no basis for equitably estopping the Township here. See Palatine I, supra, 133 N.J. at 562-63. Nor is Tremarco Corp. v. Garzio, 32 N.J. 448 (1960), relied upon by Toll, to the contrary. There, a developer expended substantial sums of money in reliance upon a validly issued permit. Id. at 456. Concluding that the equities strongly favored the developer so as to protect it from revocation of that permit based on a subsequently adopted ordinance that made the use nonconforming, the Court imposed an estoppel. Id. at 457-58. Nothing, however, in this record, suggests that Toll was ever led to believe that its approvals would be extended or that Toll acted in reliance on that belief. We therefore reject Toll's equitable estoppel as well.

II.

In the alternative, Toll contends that the Planning Board was arbitrary and capricious in denying its application to extend the site plan approvals for Phase 1B and Phase 1C. Toll argues that the Board failed to weigh the public interest against the needs of the developer in considering the application under N.J.S.A. 40:55D-52a; erred both legally and factually in considering the three office buildings as three separate projects, none of which exceeded 200,000 square feet, which would be entitled to an extension under N.J.S.A. 40:55D-52b; and erred in concluding it had not adequately proved that it was prevented from proceeding with development because of delays in acquiring legally required approvals from other governmental entities under N.J.S.A. 40:55D-52d. We address in turn each of these separate grounds for relief.

A.

Toll points out that the Planning Board had the power, pursuant to N.J.S.A. 40:55D-52a, to extend its site plan approval and argues that its decision not to do so was arbitrary and capricious. This aspect of the statute, referred to as subsection 52a, provides, in pertinent part: "If the developer has followed the standards prescribed for final approval . . . the planning board may extend such period of protection for extensions of one year but not to exceed three extensions."

In support of its request for an extension under subsection 52a, Toll relied on the report and testimony of its expert, who asserted that factors affecting the commercial real estate market supported the extension. In particular, he opined that the depressed market conditions in the South Jersey area made it unlikely that a large company needing substantial office space would relocate to the area in the near future. As a result, according to Toll's expert, a commercial facility like Laurel Creek "must be flexible in its potential build-out schedule so as to meet the potential, future demand of prospective Philadelphia tenants." He also pointed out that there was an excess of office space in Philadelphia, which made southern New Jersey "less attractive to potential Philadelphia-based tenants." He testified that because prospective tenants in need of large amounts of office space will not sign leases unless land use approvals are certain, extending the final site plan approvals for Phase 1B and Phase 1C was "critical" to Toll's ability to attract a suitable tenant.

The Board found this report and testimony to be insufficient. Instead, the Board concluded that the delays in construction were caused by Toll's decision to institute litigation against the County relating to Toll's obligation to make off-site road improvements. In addition, because that pending litigation, which remained unresolved when the Board considered Toll's extension request, focused on "improvements to surrounding roadways, circulation and traffic patterns, the Board [expressed that it had] serious concerns about the safety issues involving the general public if the road improvements are not made." The Board concluded, therefore, that "upon balancing the benefits against the negative effects of the extension under current ordinances, that the extension sought by Applicant would create a detriment to the public good and would substantially impair the intent and the purpose of the zone plan and zoning ordinances . . . ." Judge Sweeney noted that the scope of his review of the Board's denial of the requested extension was limited. He rejected Toll's arguments because the evidence in the record supported the Board's analysis.

The scope of our review is also limited. The authority conferred upon a Planning Board by the language of subsection 52a is discretionary. R.J.P. Builders, Inc. v. Twp. of Woolwich, 361 N.J. Super. 207, 216 (App. Div.), certif. denied, 178 N.J. 31 (2003). We have previously concluded that subsection 52a contemplates "a balancing process, in which the board weighs the public interest in the implementation of the zoning change, the developer's interest in extended protection, and the circumstances in which the need for extension arose." Jordan Developers, Inc. v. Planning Bd. of City of Brigantine, 256 N.J. Super. 676, 680 (App. Div. 1992). Discretionary actions by municipal land use boards are presumptively valid and may be reversed only if arbitrary, capricious or unreasonable. New Brunswick Cellular Tel. Co. v. Borough of S. Plainfield Bd. of Adj., 160 N.J. 1, 14 (1999). "The factual determinations of the planning board are presumed to be valid and the exercise of its discretionary authority based on such determinations will not be overturned unless arbitrary, capricious or unreasonable." Fallone Props., L.L.C. v. Bethlehem Twp. Planning Bd., 369 N.J. Super. 552, 560 (App. Div. 2004).

With this standard of review to guide us, we turn to Toll's specific arguments on appeal. Toll argues that the Board ignored the project's "Mount Laurel status" and Toll's financial contributions to Mount Laurel compliance, overlooked the inter-related nature of the entire Phase 1 project, failed to consider the effect on Toll that being required to partially redesign the project to comply with the SRC-2 setback and landscape buffer requirements would have, and did not appreciate the significance of approvals on Toll's ability to attract a tenant. Further, Toll argues that the Board's focus on the other litigation was inappropriate and prevented it from discharging its duty to weigh the competing interests. In addition, Toll argues that there was no evidence in the record to demonstrate that giving Toll the benefit of the SRI zoning in place of the SRC-2 zoning would harm the general welfare.

We find no merit in these arguments. First, in light of our earlier discussion about the inapplicability of Mount Laurel to this parcel, the Planning Board was entirely correct to ignore that part of Toll's argument. Second, Toll's expert's testimony about the "soft" real estate market merely permitted, see Jordan Developers, supra, 256 N.J. Super. at 680, but did not require, the Planning Board to extend final approval of its development. Moreover, we find no evidence in the record that Toll established that the setback and landscaping requirements in the amended SRC-2 ordinance would cause substantial hardship to its project.

The applicant seeking a land use approval bears the burden of demonstrating that it is entitled to the relief sought. See Tomko v. Vissers, 21 N.J. 226, 238-39 (1956)(variance application); see also Rowatti v. Gonchar, 101 N.J. 46, 51-52 (1985)(application for extension of approval). "This simply means that the applicant has the responsibility to set before the board the evidence necessary for it to decide, in light of the statutory requirements, the right to relief sought, and if the applicant does not do so, the board has no alternative but to deny the application." William M. Cox and Donald M. Ross, New Jersey Land Use Administration 27-7.1 (Gann 2006). The record contains scant evidence supporting Toll's arguments about the real estate market or the effect of a denial of an extension on its ability to complete the project. Nothing in the Planning Board's decision, in light of this record, can fairly be described as arbitrary or capricious. See, e.g., Jock v. Zoning Bd., 184 N.J. 562, 597 (2005); Burbridge v. Mine Hill Twp., 117 N.J. 376, 385 (1990).

Nor do we agree with Toll's argument that the Planning Board should not have considered the pending litigation. Rather, the Planning Board was permitted to weigh Toll's extension application in light of the continuing litigation in which Toll objected to being required to build improvements to the adjoining roadways and nearby intersections. We detect nothing arbitrary or capricious in the Planning Board's consideration of this information or in its ultimate conclusion to reject the subsection 52a extension application.

B.

Toll next argues that the Board erred in rejecting its application for an extension pursuant to N.J.S.A. 40:55D-52b. This subsection provides as follows:

In the case of a subdivision or site plan for a planned development of 50 acres or more, conventional subdivision or site plan for 150 acres or more, or site plan for development of a nonresidential floor area of 200,000 square feet or more, the planning board may grant the rights referred to in subsection a. of this section for such period of time, longer than two years, as shall be determined by the planning board to be reasonable taking into consideration (1) the number of dwelling units and nonresidential floor area permissible under final approval, (2) economic conditions and (3) the comprehensiveness of the development. The developer may apply for thereafter, and the planning board may thereafter grant, an extension of final approval for such additional period of time as shall be determined by the planning board to be reasonable taking into consideration (1) the number of dwelling units and nonresidential floor area permissible under final approval, (2) the number of dwelling units and nonresidential floor area remaining to be developed, (3) economic conditions and (4) the comprehensiveness of the development.

[N.J.S.A. 40:55D-52b.]

The facts relevant to an analysis of subsection 52b are not in dispute. Phase 1 consists of thirty-seven acres. Viewed in its totality, the buildings to be constructed on that land exceed 200,000 square feet. However, by resolution adopted on March 22, 2001, the Planning Board granted Toll's request that it be permitted to subdivide the thirty-seven acres into three separate lots to allow for separate ownership and financing for each of the three buildings it planned to construct. The Planning Board granted Toll's application for preliminary and final subdivision approval and granted its request for several bulk variances, which "created[ed] three individual lots each to contain a single office building and amenities as previously approved by the Board under the site plan for this project." On April 5, 2001, the Planning Board granted final site plan approval for Phase 1B consisting of a 104,600 square foot office building and on April 26, 2001, the Planning Board granted final site plan approval for Phase 1C consisting of a 154,530 square foot office building.

In August 2003, the Planning Board rejected an extension of final site plan approvals under subsection 52b, concluding that the buildings proposed for Phase 1B and Phase 1C "could have been constructed as stand alone projects and did not have to rely on build out of the entire project." The Board noted that "a separate building has already been built in connection with Phase 1A, and as of the time of the Board's meeting on August 28, 2003, is currently being occupied." The Board reasoned that Toll could have proceeded with the construction of the remaining buildings, but chose not to. The Board also cited its concern about extending the approvals for such large office projects without any assurance that Centerton Road and the nearby intersections would be improved. Judge Sweeney upheld the Planning Board's denial of the extension under subsection 52b, concluding that both factually and legally Phase 1 ceased to be an integrated project when plaintiff subdivided it into three parcels, pursuing site plan approvals separately for each phase.

On appeal, Toll argues that the Board ignored the statutory language requiring it to consider the "comprehensiveness" of its development. Toll asserts that Phase 1B and Phase 1C, when viewed "comprehensively" exceed the requisite 200,000 square foot floor area, thus entitling Toll to the subsection 52b extension. Pointing to the historical fact that all three phases were a single parcel and to the language of the resolution that approved Phase 1B which referred to a "project

. . . divided into three phases," Toll argues that the Planning Board arbitrarily and capriciously engaged in a "self-serving distortion of the history relative to both Phase 1 and the overall Laurel Creek development." Toll points to the evidence in the record of cross-easements as further proof that Phase 1 remains a single, integrated development rather than three separate projects. Finally, Toll contends that the evidence relating to the depressed state of the market, which makes construction impossible as a practical matter, is further support for its entitlement to an extension.

A careful reading of the language of the statute supports the Planning Board's analysis rather than Toll's. The plain language of subsection 52b refers to a "site plan for development of a nonresidential floor area of 200,000 square feet or more." Toll never sought approval for a single site plan for all of Phase 1. On the contrary, it subdivided the property and submitted three separate site plans, one for each Phase and each comprising less than 200,000 square feet. Toll's election to separate the Phase 1 into three separate parcels, with separate ownership interests and financing and with a separate site plan submission for each belies its argument on appeal that this was a single integrated project. We discern no error in the Planning Board's analysis of these facts or its understanding of subsection 52b.

We also reject Toll's argument that the Planning Board was arbitrary in denying the application in part because the traffic generated by the construction of the development would create a safety hazard in light of the continuing lack of improvements to Centerton Road and the nearby intersections. We find in the discretion granted to the Planning Board by subsection 52b ample room for the Planning Board to consider the effect of the on-going road improvement dispute on the extension application.

C.

Arguing again in the alternative, Toll challenges the Board's denial of an extension of site plan approval under N.J.S.A. 40:55D-52d. Subsection 52d mandates an extension when the developer cannot proceed with construction because it was unable to secure permits and approvals from other agencies. That subsection provides:

The planning board shall grant an extension of final approval for a period determined by the board but not exceeding one year from what would otherwise be the expiration date, if the developer proves to the reasonable satisfaction of the board that the developer was barred or prevented, directly or indirectly, from proceeding with the development because of delays in obtaining legally required approvals from other governmental entities and that the developer applied promptly for and diligently pursued these approvals. . . .

[N.J.S.A. 40:55D-52d.]

We have described the purpose of this subsection as follows:

to establish fixed legal standards to govern a developer's application for an extension of the period of protection provided by subdivision and site plan approval based on delays in obtaining required governmental approvals, instead of requiring a developer to seek such relief under the essentially standardless discretion reposed in a planning board by N.J.S.A. 40:55D-52a.

[Knowlton Riverside Estates, Inc. v. Planning Bd. of Twp. of Knowlton, 347 N.J. Super. 362, 368 (App. Div.), certif. denied, 172 N.J. 357 (2002).]

Because the subsection 52d extension is mandatory if the developer demonstrates prompt application, due diligence, delays from other governmental agencies, and causation, the scope of review is "whether there is sufficient credible evidence in the record to support the planning board's findings that the applicant failed to establish the facts that would entitle it to an extension." Id. at 369.

In support of its request for an extension under this subsection, Toll contended that the following facts demonstrated that Burlington County had interfered with the project. According to Toll, on July 3, 2001, the County notified Moorestown's construction official that Toll was required to submit a detailed design for the intersection of Centerton Road and Hartford Road and post a bond before beginning construction on Phase 1B. Between October 2001 and July 2002, representatives of Toll met with the County engineer and exchanged correspondence regarding these road improvements. As of July 22, 2002, all of the requested information had been gathered so that the road plans could be submitted to the New Jersey Department of Transportation ("NJDOT"), which would need to authorize the installation of the traffic signal. On November 8, 2002, an engineer for Toll submitted to the County additional information about the intersection and the proposed traffic light. According to Toll, the County never submitted the information to NJDOT and never advised Toll that the designs were insufficient in any way.

The Planning Board denied the application for an extension under subsection 52d for two reasons. The Planning Board concluded that delays in securing needed permits were due in part to Toll's on-going litigation with the County about the road improvements and that Toll "did not act timely or diligently in pursuing all of its approvals for the road improvements necessitated by the extent and magnitude of this project." Although Judge Sweeney concluded that the Board could not deny the subsection 52d extension because of the unresolved litigation with the County, he sustained the Board's conclusion that Toll's evidence was insufficient to demonstrate that it had acted with the diligence required to entitle it to an extension.

On appeal, Toll urges us to conclude, contrary to the Planning Board, that its efforts to secure needed approvals from the County were diligent and that its inability to secure those approvals in spite of those efforts prevented it from proceeding with the project. Defendants urge us to conclude, as did Judge Sweeney, that the Planning Board's decision was neither arbitrary nor capricious.

In particular, defendants point out that many of Toll's assertions of fact about the intersection improvements are not supported by any testimony or documentary evidence. Defendants assert that the only facts established by the record reveal that the County approved the intersection design, with conditions, on July 3, 2001, and that Toll responded to one of the conditions on August 3, 2001, but that Toll did not submit its final site plan to the Board until October 2002 or to the County until November 2002. Defendants argue that Toll's factual assertions regarding its efforts to obtain easements and rights-of-way similarly lack support in the record. Finally, defendants point out that the resolutions granting Toll final site plan approval for Phase 1B and Phase 1C both required that Toll also secure approvals from the Burlington County Soil Conservation District, from the Moorestown Department of Public Works for a domestic water supply, from the Mount Holly Municipal Utilities Authority for sanitary sewer extensions and connections and from the New Jersey D.E.P. for stream encroachment, wetlands buffer averaging and water development permits. As defendants point out, the record includes no documentation, testimony or evidence about the status of any of these other required approvals.

On appeal, we review the record on which the Board relied in making its decision and, to the extent that the parties make factual assertions not based on the record, we do not consider them. See Middle Dep't Insp. Agency v. Home Ins. Co., 154 N.J. Super. 49, 56 (App. Div. 1977), certif. denied, 76 N.J. 234 (1978). Here, although the resolution does not specifically analyze the evidence submitted by Toll, see Smith v. Fair Haven Zoning Bd. of Adj., 335 N.J. Super. 111, 123 (App. Div. 2000), we do not conclude that the resolution is deficient under the circumstances. Rather, the record demonstrates that Toll did not present any witness to testify about the elements necessary to support a subsection 52d extension.

At most, the documentary evidence would support a finding that Toll initially applied promptly for the approvals that it needed from the County. Nevertheless, filing an application alone is not sufficient and there is no evidence that Toll "diligently pursued" the needed approvals, that the County unreasonably delayed processing those approvals, or that the absence of the requested approvals in fact prevented Toll from commencing construction of Phase 1B within two years after it received final site plan approval. Toll offered no evidence or testimony before the Planning Board to support its claims that the County had delayed the approval process. In fact, Toll offered no evidence to suggest it had taken any steps to learn the names of the owners of property from which easements or rights-of-way might need to be acquired for the improvement of the intersection of Centerton Road and Hartford Road. On the contrary, the record includes a letter dated December 31, 2002, from the county engineer to Toll seeking an explanation for Toll's delay in acquiring rights-of-way for that intersection. Particularly compelling, in our view, is the absence of evidence that Toll did anything to secure the approvals it needed after November 2002, when it submitted its last set of drawings and its design. Toll's single letter, sent in March 2003, inquiring about the status of the traffic signal design, does not, in our view, equate with due diligence.

III.

In summary, based upon our review of the record, we find no support for Toll's Mount Laurel-based argument and substantial credible evidence in support of the Planning Board's finding that Toll consented to the change in zoning as it affected Phase 1. We reject Toll's equitable estoppel argument as lacking in factual support in the record. We conclude that the Planning Board's resolution denying Toll's application for an extension of final site plan approvals for Phase 1B and Phase 1C pursuant to N.J.S.A. 40:55D-52a, -52b and -52d was neither arbitrary nor capricious but was based on substantial evidence in the record.

Affirmed.

 

S. Burlington County N.A.A.C.P. v. Twp. of Mount Laurel (Mount Laurel II), 92 N.J. 158 (1983); S. Burlington County N.A.A.C.P. v. Twp. of Mount Laurel (Mount Laurel I), 67 N.J. 151, cert. denied and appeal dismissed, 423 U.S. 808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975).

The record includes a certification describing the fifth Ordinance, Ordinance 1981-01, as providing for site plan, subdivision and landscaping requirements for each of the new zones, but the Ordinance itself is not included in the record.

The issues relating to the litigation over the road improvements are addressed in our other opinions filed today. See Toll Bros., supra.

The matter to which the Board was referring is the litigation against the County, among others, relating to the improvements to Centerton Road. We address certain aspects of that litigation in the other appeals decided today. See Toll Bros., supra.

(continued)

(continued)

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A-2537-04T2

 

September 18, 2006