529 WATERFRONT PROPERTIES, LP v. THE NUGENT GROUP, LLC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3229-07T33229-07T3

529 WATERFRONT PROPERTIES, LP,

Plaintiff-Appellant,

v.

THE NUGENT GROUP, LLC, and THE

LAND USE BOARD OF THE BOROUGH

OF BEACH HAVEN,

Defendants-Respondents.

___________________________________

 

Argued January 6, 2009 - Decided

Before Judges Winkelstein, Gilroy and Chambers.

On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3241-06.

Arnold C. Lakind argued the cause for appellant (Szaferman, Lakind, Blumstein, Blader & Lehmann, P.C., attorneys; Mr. Lakind, of counsel and on the brief).

Willis F. Flower argued the cause for respondent The Nugent Group, LLC (Ford, Flower & Hasbrouck, attorneys; Mr. Flower, on the brief).

Howard Butensky argued the cause for respondent Land Use Board of the Borough of Beach Haven.

PER CURIAM

Plaintiff 529 Waterfront Properties, LP, appeals from the February 22, 2008 order that dismissed its complaint in lieu of prerogative writs, challenging defendant Land Use Board of the Borough of Beach Haven's (Board) grant of site plan approval, together with a parking variance, to defendant Nugent Group, LLC (Nugent). We affirm.

Nugent is the contract purchaser of property known as 116 West Avenue, or Block 141, Lots 4 and 4.01, Beach Haven (the property). The property is located in the MC (Marine Commercial) zone and is occupied by the Boat House Restaurant. The Boat House operates without a retail consumption liquor license.

On June 12, 2006, Nugent filed an application with the Board for preliminary and final site plan approval, together with any variances as might be necessary, to operate a restaurant with a bar on the property. On August 7, 2006, following a hearing on the application, the Board granted site plan approval, together with a variance from the Borough's on-site parking regulations whereby sixty-seven on-site parking spaces are required and none is provided; on September 7, 2006, the Board adopted a memorializing resolution. On October 23, 2006, plaintiff filed its complaint in lieu of prerogative writs challenging the approvals granted by the Board. On February 22, 2008, the trial court entered an order, supported by a written decision, affirming the action of the Board and dismissing the complaint.

I.

Over the years, the Boat House has been the subject of a number of land use applications before the Board. In 1996, the operator of the Boat House filed a land use application "requesting major site plan approval, with all variance and waivers requested and required, to allow the applicant to renovate the existing structure to allow relocation of part of the interior seating to the outside deck, and to add a roof over the outer deck." In a February 5, 1996 resolution approving the application, the Board granted, among other matters, "a variance for 27 parking spaces, where none are provided." At the time of the variance, one parking space was required for every 250 square feet of gross floor area. Additionally, the resolution noted the testimony of Anthony Baldino, the applicant's representative, who "testified that the restaurant will be operated from 4:00 p.m. to 10:30 p.m., and the fish market would be open from 9:00 a.m. until 11:00 p.m. in the evenings." Finally, it limited the Boat House's seating to "no more than 296 patrons."

In 1999, the Borough amended its Master Plan "[t]o encourage the expansion and improvement of existing business as well as attempt to attract new business uses into planned areas, especially adjacent to compatible use areas." Prior to 2002, all commercial uses in the MC zone were permitted, "provided that they [were] accessory to a marina." In 2002, the Borough amended its land use ordinance, deleting the accessory to a marina requirement, thereby allowing commercial uses to be located throughout the MC zone.

In 2006, Nugent sought to add a bar to the Boat House. At the time, Nugent owned another restaurant in the Borough named the Black Whale, which was situated in close proximity to the Boat House. The Black Whale seats 137 patrons and possesses a retail alcoholic beverage consumption license. On receipt of the necessary land use approvals and construction of a bar at the Boat House, Nugent intends to close the Black Whale and transfer its liquor license to the Boat House, extending the Boat House's hours of operation until 2:00 a.m., and re-developing the Black Whale property into a "side by side condo."

On June 12, 2006, Nugent filed an application with the Board for approval of its site plan "for a minor interior improvement (construction of a bar)." In the application, Nugent stated that "there will be no change in the building's footprint, there will be no exterior work, there will be no changes which impact traffic, parking, lighting, drainage, access or egress or other planning considerations." As such, Nugent asserted that "no variance is required and none is requested." However, at that time, the Borough's parking requirements for a restaurant had changed from 1 space per 250 square feet of gross floor area, as it was during the 1996 resolution, to 1 space per 125 square feet. Accordingly, defendant Nugent requested that, in the event the Board deemed a variance necessary, it reserved the right to request one pursuant to N.J.S.A. 40:55D-70c.

At the August 7, 2006 hearing on the application, Nugent called four witnesses: Baldino, Robert Nugent (Mr. Nugent), Eric Magaziner (Magaziner), and Mark Schuster (Schuster). Baldino is now the president of the entity that owns the Boat House. Mr. Nugent and Magaziner are principals of Nugent, the operator of the Black Whale. Schuster is Nugent's planning expert.

Baldino explained that "there are 296 seats in [t]he Boat House" and "137 over at [t]he Black Whale." As to Nugent's intentions, Baldino stated:

The proposed plan for the [Boat House] would be to reduce the dining room seating from 296 down to 208, which represents about a 30% reduction, . . . [t]ake out 88 seats and the corresponding tables and they are going to add 30 seats to a [b]ar area. And then surrounding the bar there will be space that will accommodate another 58 standing patrons.

By eliminating [t]he Black Whale [r]estaurant and its [intensity] of use that that brings, the overall occupancy load for that one block area, would be . . . reduced from 433 seats down to 296. It would be a 32% reduction in the seating in that . . . neighborhood[.]

Additionally, Baldino testified that approximately 80% of the Boat House patrons bring their own alcohol (BYOB) when frequenting the restaurant and that during private parties, self-serve bars are used. As to the site plan, he explained that the Boat House does not offer any on-site parking or loading zones but houses an internal trash area containing dumpsters. When questioned on the references in the 1996 resolution to the Boat House's hours of operation, Baldino responded that he did not consider his testimony as a restriction on future operations, only a statement as to what the hours were at that time.

Mr. Nugent testified that the Black Whale is "completely surrounded by residential homes[,]" as compared to the Boat House, which is surrounded by commercial uses. He approximated that 75% of the Black Whale's income was derived from food service, and 25% from alcohol.

Magaziner testified that the bar at the Black Whale was open "until [2:00 a.m.] on most weekends" and that on weekdays, business slows earlier, so closing is generally around 1:00 a.m. or 12:30 a.m. On average, he estimated that at midnight, the bar contained fifteen to eighteen people. Further, he explained that the turnover rate at the Black Whale was slower than at a restaurant that operated by permitting customers to BYOB. He estimated that the turnover rate at the Black Whale was between an hour and an hour and one-half, resulting in two or three turns around in the course of an evening.

Schuster opined that Nugent's application did not require a parking variance, as he did "not believe there [was] any material change to the use" of the Boat House. Specifically, he noted that, because the Boat House would be removing 88 seats and replacing them with 30 seats and standing room for 58 patrons, effectively, "the square footage of the establishment is not being altered at all." As the Borough's ordinance "determines [parking requirements] on the basis of square footage[,]" no parking variance was necessary.

Schuster then addressed the issue of whether the Boat House would be considered a restaurant or bar, as section 212-23 of the Beach Haven Land Use Ordinance requires that a bar have one on-site parking space "for each 100 square feet of gross floor area," and a restaurant have one "for each 125 square feet." Quoting from the Beach Haven Ordinance, Schuster asserted that the Boat House, with a liquor license and bar, should still be considered a restaurant, which is defined as "[a] food establishment primarily selling prepared food for consumption on the premises." (Emphasis added). Conversely, he noted that a bar is defined as "[a]n establishment used primarily for the sale and dispensing of liquor by the drink to the general public for on-site consumption." He opined that "[h]aving 30 stools in a building that has 200 seats for people to sit and have a meal does not turn that restaurant into a bar."

Schuster concurred with Mr. Nugent and Magaziner that, in his experience, possessing a liquor license reduces a business's turnover rate by decreasing the number of patrons served, and that even when the renovations are completed, he expects the revenues from food served at the Boat House to its patrons to be approximately 75%, as required by the ordinance. However, regardless of what it is construed as, he presumed that moving the Black Whale's operations, which are located in a residential area to a general commercial area, is more advantageous than detrimental to the community.

As to the issue of parking, Schuster acknowledged that, while the Boat House has no off-street parking, the Black Whale has seven parking spaces. When questioned on whether the longer hours of operation at the Boat House would intensify the parking problem, he explained that "[i]t would seem so . . . except for the testimony of the operators [Mr. Nugent and Magaziner who] indicated that only a handful of people were there at the time."

In opposition to Nugent's application, plaintiff called Victor Furmanec, a licensed professional planner, as its sole witness. Furmanec testified that, if the Boat House were to remain open until 2:00 a.m., "the parking demand would increase over . . . what is currently used by the property." According to Furmanec, "a restaurant with a bar generates a demand for parking which is approximately 30 percent greater than a restaurant without a bar."

Furmanec opined that no variance could be granted pursuant to N.J.S.A. 40:55D-70c(1) as there was already "an existing use of the property." Likewise, under the "balancing test" of subsection c(2) of the statute, he stated that the proposed alterations to the restaurant would be more of a detriment than a benefit to the community. In addition to the parking issue, Furmanec stated that there would be a "substantial impact" as a result of the closing of the Black Whale, namely that the Boat House, by getting a liquor license, "would substantially increase the number of deliveries to the property."

Lastly, Furmanec explained that restaurants with bars receive "[c]omplaints in terms of litter generated" and that, due to the proposed extended hours of the Boat House, there would be more noise generated "when most people are sleeping." However, Furmanec conceded that he had not observed the Black Whale late in the evening to know how many patrons remained in the bar, and that he simply relied on industry standards.

On September 7, 2006, the Board adopted a resolution granting the application. The Board determined that Baldino's testimony at the 1996 hearings "was purely informational and not intended to be a condition binding [the Boat House's] hours of operation." Further, although the Borough's parking standards had been amended since the last variance, the Board found:

that the restaurant use has not changed; that the removal of [t]he Black Whale facility will reduce traffic; that the number of patrons at the Boat House will not increase; that a number of anticipated bar patrons in the late evening and early morning hours will not pose a new and independent parking problem[;] and that the overall impact on the applicant's integrated proposal, to [make] the changes to the Boat House, and subsequent closure of the Black Whale do not generate the need for additional parking[.]

The Board concluded that "the existing and contemplated use is clearly permitted in the [MC zone] and [does] not constitute a pre-existing [non-conforming] use." Accordingly, it approved the site plan application and granted a "variance to permit zero parking on[-]site where 67 parking spaces are required," subject, however, on the closure of the Black Whale.

On October 3, 3006, plaintiff filed an action in lieu of prerogative writs, seeking to reverse the Board's decision granting the development application. The court conducted a bench trial on February 1, 2008. At trial, plaintiff argued: 1) "that the applicant had failed to establish sufficient grounds for the granting of a variance from the parking requirements"; 2) that the Board failed to specify whether the parking variance was granted pursuant to N.J.S.A. 40:55D-70c(1) or c(2); and 3) the Board failed to make specific findings of fact grounded in the record supporting its decision. Nugent countered that no parking variance was required, but that "the granting of this variance by the Board sua sponte was gratuitous" in that "[i]t has no legal force and effect" because the use of the Boat House is staying "exactly the same."

On February 8, 2008, the trial judge issued a written opinion affirming the decision of the Board and dismissing the complaint. In rejecting plaintiff's arguments, the court reasoned:

The Board's findings of fact are found in the last paragraph on page 4 of the Resolution. The Board determined that because of the change in the parking requirements adopted by the governing body, it was necessary to review a variance consideration. This particular fact is well documented in the transcript of the proceedings. The Board then determined that there would be a reduction in traffic because of the demolition of the facility known as the "Black Whale[."] It also determined that the number of patrons at the Boat House would not increase, thus there would be no need for additional parking.

The findings of fact, based upon the consideration of the credibility of the witnesses[,] was supported by the hearing record.

The [p]laintiffs'[] assertion [was] that the Board did not indicate under what provision of N.J.S.A. 40:55D-70[c] the application was considered. The [p]laintiff[] in its [b]rief suggests to the [c]ourt that, in fact, the Board approached this application under the provisions of N.J.S.A. 40:55D-70[c(2)]. Thus, it is incumbent upon the [c]ourt to determine whether or not there is a record to justify the granting of the variance under the provisions "cited above[."] The granting of a variance under "[c](2)" is rooted in the purpose of zoning and planning and must advance the purposes of the municipal land use law. The grant must benefit the community in that it represents a better zoning alternative for the property and may not be granted merely to advance the purposes of the owner. Thus[,] the focus in a "[c](2)" case is not whether the current zoning ordinance creates a hardship on the owner warranting a relaxation to standard, but on the characteristics of the land that presents an opportunity for the improved zoning and planning that will benefit the community. . . .

The granting of the variance in this particular case is rather trivial and could be granted without substantial detriment to the public good[, and] without substantially impairing the intent and purpose of zone plan and the zoning ordinance. The record reflects that there will be no additional square footage in floor space to the restaurant that is to be added. In addition, there will be a total reduction in the number of seating capacity in the two or three block area encompassed by the two structures. I recognize that the Land Use Board did not make these determinations with specificity in their Resolution of Approval[,] but the [c]ourt has the inherent power to do so. . . .

In addition, subparagraph [h] of N.J.S.A. 40:55D-2 reflects that the purpose of the act is to encourage the free flow of traffic throughout a municipality. Recognition in the reduction of a number of seats available to the public logically would reduce the traffic in the neighborhood.

Finally, the [p]laintiff asserts that the Land Use Board and the [a]pplicant failed to address the issue of the need of a variance for the requirement of a loading area. There is no indication from the municipal land use officer that such variance was required nor was there any indication from the municipal engineer who had renewed the plans that such was required. Because this particular structure was in existence for some period of time and that no loading area was required, no variance is required to continue the exact status of the site.

Thus, the [c]ourt's determination is that the actions of the Land Use Board were neither arbitrary [nor] capricious and, therefore, the [c]omplaint is dismissed.

[(Internal citations omitted).]

II.

On appeal, plaintiff argues that the Board erred in granting the development application because: 1) it not only failed to state whether it granted the parking variance pursuant to N.J.S.A. 40:55D-70c(1) or c(2), but it also failed to set forth the criteria it considered in assessment of the application; 2) it improperly determined that the criteria necessary for the grant of the variance were met by the elimination of the Black Whale; and 3) the Board's findings in its memorializing resolution "were not sufficiently specific and failed to address plaintiff's evidence."

On appeal from a decision of a municipal board on zoning and planning matters, the trial court is limited to determining whether the Board's decision was arbitrary, capricious or unreasonable. Cell South v. Zoning Bd. of Adjustment, 172 N.J. 75, 81 (2002); Kramer v. Bd. of Adjustment, Sea Girt, 45 N.J. 268, 296 (1965). A local board's decision is presumed valid and the party challenging the decision has the burden proving otherwise. Cell South, supra, 172 N.J. at 81. In reviewing a local decision, the court must determine whether the board followed the statutory guidelines and properly exercised its discretion. Burbridge v. Mine Hill Twp., 117 N.J. 376, 385 (1990).

The rationale of limited appellate review is that local officials are generally more familiar with their municipality's interests and as "the proper representatives of its people are undoubtedly the best equipped to pass initially on such applications for variance." Kramer, supra, 45 N.J. at 296 (quotations and citation omitted). Stated differently, the principle of deference is based on "a pragmatic assumption that local boards . . . ordinarily will not grant variances that would be substantially detrimental to neighboring properties or that are incompatible with the zoning plan, nor will they deny variances where the proofs incontestably establish . . . need for variance relief and demonstrate no threat to the neighborhood or zone plan." Lang v. Zoning Bd. of Adjustment, 160 N.J. 41, 58 (1999).

Yet, "a court is not bound by an agency's determination on a question of law . . . and the court's construction of an ordinance under review is de novo." Fallone Prop. v. Bethlehem Twp. Planning Bd., 369 N.J. Super. 552, 561 (App. Div. 2004) (citations omitted). The standard of review is the same for both the Law Division and the appellate tribunal. Id. at 562; see also Bressman v. Gash 131 N.J. 517, 528-29 (1993).

We have considered each of plaintiff's arguments in light of the record and applicable law and conclude that none of them are of sufficient merit to warrant discussion in a written opinion. We affirm substantially for the reasons expressed by the trial court in its written opinion of February 8, 2008. R. 2:11-3(e)(1)(A) and (E). Nevertheless, we add the following comment.

Plaintiff argues that a c(2) variance may only be granted "if it represents a 'better zoning alternative for the property' in question, not some other property," (quoting Kaufmann v. Planning Bd. for Warren Twp., 110 N.J. 551, 563 (1988)). Plaintiff contends that the property did not receive a benefit from the grant of the variance; but rather the Board improperly considered "hypothetical benefits that might accrue to residents adjacent or near to the Black Whale restaurant from the closing of that restaurant and converting the use of that property to residential."

A c(2) variance allows for a deviation from "certain dimensional requirements when the purposes of the [Municipal Land Use Law (MLUL)] would be advanced, the benefits of the deviation would substantially outweigh any detriment, and the relief can be granted without substantial detriment to the public good and without substantial impairment of the zone plan." Id. at 553. "By definition, . . . no c(2) variance should be granted when merely the purposes of the owner will be advanced." Id. at 563. Rather, the local board shall consider "the characteristics of the land" and decide whether they "present an opportunity for improved zoning and planning that will benefit the community." Ibid. (emphasis omitted). Accordingly, the question before us is whether the Board, based on the record before it, acted unreasonably in concluding that the grant of the variance from the on-site parking requirements would advance the general purposes of the MLUL and not adversely impact either the neighborhood or the zoning plan. Pullen v. Twp. of S. Plainfield, 291 N.J. Super. 1, 7-8 (App. Div. 1996).

In quoting Kaufmann, plaintiff fails to include the first half of the sentence, which provides in full: "The grant of an approval must actually benefit the community in that it represents a better zoning alternative for the property." Supra, 110 N.J. at 563. (emphasis added). Plaintiff cites no authority for the proposition that a c(2) variance must benefit only the property in question, rather than as stated in the statute, only "relat[e]" to it. N.J.S.A. 40:55D-70c(2). To the contrary, we have held that "a [(c)(2)] variance cannot be considered in isolation, but must be considered in the context of its effect on the development proposal, the neighborhood, and the zoning plan." Pullen, supra, 291 N.J. Super. at 9.

In Pullen, the appellant argued that a c(2) variance "should be granted only where the benefits derived solely from the requested deviation substantially outweigh any detriment caused thereby." Id. at 8 (emphasis added). In rejecting that argument, we noted that the appellant's reading of the c(2) statute "overlook[ed] the entire thrust of that provision." Id. at 8-9. Rather, we stated that "[t]he focus under a c(2) variance analysis is 'on the characteristics of the land that present an opportunity for improved zoning and planning that will benefit the community.'" Id. at 9 (quoting Kaufmann, supra, 110 N.J. at 563). Accordingly, we held that a local board is permitted to consider benefits stemming from the entire proposal. Ibid.

Here, the land use development application before the Board sought site plan approval and a variance from parking requirements to install a bar within the existing restaurant building without increasing the intensity of the use or expanding the footprint of the building. After making the aforestated findings of fact, the Board granted the development application, subject to the following:

The approval is subject to the discontinuance of the restaurant owned by the applicant and known as the "Black Whale[."] That is to say, there shall be a cessation of operations at the Black Whale prior to the use of the liquor license at the Boat House. Further, the applicant agrees to demolish the Black Whale facility in accordance with the Beach Haven Code. In doing so, it should be noted that the applicant has made this a part of its application and the relief being granted to the applicant is predicated on the representations, conditions and stipulations of the applicant. . . .

It cannot be disputed that the variance from the parking requirements relate to the property; and that the use of the property is benefited by permitting an expansion of service to the patrons of the restaurant. Nor can it reasonably be disputed that the elimination of the Black Whale restaurant from an otherwise residential neighborhood will eliminate any noise or disturbances that might be associated with the operation of the restaurant from the residential area. Such benefits advance the purposes of zoning by promoting "the public health, safety, morals and general welfare" of the community. N.J.S.A. 40:55D-2a. In addition, the closing of the Black Whale will reduce traffic flow in the residential area. N.J.S.A. 40:55D-2h. When the benefits to the property and the properties surrounding the existing Black Whale restaurant are totaled, the Board found that they substantially outweighed any detriment that could occur from the deviation from the on-site parking requirements. In fact, the Board did not find any detriments. We conclude that the Board's determination is grounded in the record and affirm.

 
Affirmed.

In its decision, the court also rejected Nugent's argument that a variance from the on-site parking requirements of the Borough's Land Use Development ordinance was not required, deferring to the Board's decision on the issue. Because the record indicates that the nature of the use of the building will remain a restaurant under the Borough's Land Use ordinance, that there will be no expansion of the footprint of the building, nor intensity of use of the facility, we have reservations concerning the trial court's ruling affirming the Board's decision that a variance was necessary. See Dresner v. Carrara, 69 N.J. 237, 239-40 (1976) (holding that, where a property has been used for a certain business purpose with no on-site parking for years prior to passage of an ordinance requiring on-site parking, the use of the property without parking becomes a legally protected nonconforming use); Wawa Food Mkt. v. Planning Bd. of Ship Bottom, 227 N.J. Super. 29, 37-38 (App. Div.) (holding "where the nature and intensity of the business remains the same, continued use of the property without off-street parking is protected as a nonconforming use"), certif. denied, 114 N.J. 299 (1988). However, because Nugent did not cross-appeal, we do not address the issue on the merits.

At oral argument plaintiff acknowledged that the Board granted the variance from the Borough's on-site parking requirements pursuant to N.J.S.A. 40:55D-70c(2). Plaintiff also conceded that the use of the Boat House after the addition of the bar will remain a "restaurant" as defined under the Borough's Land Use Ordinance.

(continued)

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A-3229-07T3

July 22, 2009