DEVELOPERS DIVERSIFIED REALTY CORPORATION v. THE MOUNT LAUREL ZONING BOARD OF ADJUSTMENT

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0478-05T50478-05T5

DEVELOPERS DIVERSIFIED

REALTY CORPORATION,

Plaintiff-Respondent,

v.

THE MOUNT LAUREL ZONING

BOARD OF ADJUSTMENT,

Defendant-Appellant.

_________________________________________________

 

Argued December 12, 2006 - Decided May 3, 2007

Before Judges Kestin, Payne and Graves.

On appeal from Superior Court of New Jersey,

Law Division, Burlington County, L-1803-04.

Aileen F. Droughton argued the cause for

appellant (Traub Eglin Lieberman Straus,

attorneys; Jonathan S. Reed and Lori

Williams, on the brief).

Edward D. Sheehan argued the cause for

respondent (DuBois, Sheehan, Hamilton &

Levin, attorneys; Mr. Sheehan, on the brief).

PER CURIAM

In a November 2003 application to the Township of Mount Laurel Zoning Board of Adjustment (Board of Adjustment), Developers Diversified Realty Corporation (Developers), the developers of site within the Centerton Square Shopping Center for use as a COSTCO retail store, sought a use variance, pursuant to N.J.S.A. 40:55-70d, to enable it to construct a twelve-pump "gasoline fueling facility" on the same site as the store. In March 2004, Developers amended its application, pursuant to N.J.S.A. 40:55D-70(b), to contend alternatively that a proper interpretation of Mount Laurel's ordinance rendered the use either a permitted use or a permitted accessory use. Hearings were held on March 3 and April 7, 2004, and on May 5, 2004, the Board of Adjustment denied Developers' application, finding that the fueling station constituted a "motor vehicle service station" and that such a station was prohibited in the district. Developers' application for a use variance was denied.

Upon receipt of the Board of Adjustment's decision, the Developers filed an action in lieu of prerogative writs in the Chancery Division that challenged the Board of Adjustment's interpretation of governing zoning provisions as arbitrary and capricious. Following the denial of a court-authorized reapplication by Developers to the Board of Adjustment, the chancery judge granted summary judgment in favor of Developers, finding the use to be permitted or, alternatively, a permitted accessory use incidental to the principal use within the meaning of the ordinance. Having found a permitted use to exist, the judge did not address arguments regarding the Board of Adjustment's denial of a use variance. The Board of Adjustment has appealed. We remand for further proceedings in accordance with our opinion.

The site in question is located in a Major Commercial Planned Development District (MCPD District) as defined by Mt. Laurel Zoning Ordinance, Art. IV, 154-25A, which provides:

In Major Commercial Planned Development Districts, no building or other structure and no land shall be used, and no building or other structure shall be built, altered or erected to be used for any purpose other than that of:

(1) Retail sales, trade and other related business contained in a shopping center.

* * *

(27) Accessory use customarily incidental to any of the above uses, including but not limited to locker rooms, maintenance shops, meeting rooms, restaurants and sporting clubs, dressing rooms, first aid rooms, kitchens, lounges, lobbies and the like.

At the hearings before the Board of Adjustment, Developers contended that the use was a permitted retail sales use. In support of that position, it offered testimony by Russell Collins, COSTCO's real estate development manager for the Mid-Atlantic and the Northeast. Collins described COSTCO in the following fashion:

Costco is an upscale wholesale club. You have to have a membership in order to come in and shop. Several items in the building that we sell, we sell clothing, hard lines, bulk food, meats. We have a pharmacy. We have an optical department. We have a liquor store. We have a tire sales area and a tire installation area, full bakery.

According to Collins, COSTCO proposed to use approximately one percent of the entire shopping center site for its gasoline fueling facility, which he described as having three islands with four pumps each, a canopy, and a "controller enclosure," used for emergency communications and worker shelter. No services of any nature other than the pumping of gas would be provided. Fuel purchases could be made only by COSTCO members. Collins explained that approximately forty-five to fifty percent of COSTCO's stores had fueling facilities, and a plan was underway to convert older store sites to incorporate the use. Plans for every new store include a gasoline fueling facility.

Collins additionally presented evidence from a publication by the International Counsel for Shopping Centers entitled "Centers Post Rapid Growth of Grocery Gas." The publication reported that Safeway planned to have approximately 300 fuel centers associated with its grocery stores. Collins testified that similar large-scale construction of fueling centers was reported by Albertson's, Kroger, Wal-Mart and others. He also quoted another publication that noted eleven billion dollars in annual gasoline sales at super centers such as COSTCO and Sam's Club, and that sales were expected to double by the end of 2005, at which time they would constitute twenty percent of the total United States retail gasoline market. Developers' counsel argued in support of the claim that the sale of gasoline by COSTCO was at least an accessory use: "[R]etail sales, particularly retail sales in super centers . . ., have changed the nature and the industry, and selling gasoline is now, I submit to you, customary and incidental to the operation of super centers."

At the time of the hearing in March 2004, Mount Laurel's zoning plan recognized Business Districts, in addition to MCPD Districts. Article VI 154-43B, codifying in part the use regulations applicable to Business Districts, specifically provided that "motor vehicle service stations" constituted a conditional use in such districts when authorized by the Planning Board. "Motor vehicle service station," in turn, was defined in a provision amended on December 1, 2003, after Developers' applications had been filed, as:

Any building, land area, or other premises, or portion thereof, used for the retail dispensing or sales of vehicular fuels; servicing and repair of trucks under 10,000 pounds, SUVs and automobiles; and including as an accessory use the sale and installation of lubricants, tires, batteries, and similar vehicle accessories. Public vending machines for food and drink are permitted. Towing shall be limited to towing to the station for repairs, not for storage. Selling of motor vehicles is prohibited.

[Article I, 154-5.]

In response to questions by Board of Adjustment members as to why the proposed gasoline fueling facility was not a motor vehicle service station that was a conditional use in a Business District but a prohibited use in a Major Commercial Planned Development District, Developers counsel noted that, of the functions enumerated in the definition, the fueling facility offered only gasoline. The sale of tires by COSTCO, the only other automobile service function in which COSTCO engaged, occurred in its main store, not its fueling facility. Counsel further noted that the recent amendment to the definition of motor vehicle service station in December 2003, which had occurred as part of a comprehensive revision to make the use of the term consistent throughout Mount Laurel's zoning ordinances, still described only a traditional station, not a fueling facility such as Developers proposed.

However, the Board of Adjustment did not accept any of Developers' arguments, and in a four to three vote, found the use to be prohibited. As we have previously stated, the chancery judge reached a different conclusion, determining that the use was permitted under Article IV, 154-35(1) as a retail sales facility and under -35(27) as an accessory use.

At oral argument before us, conducted on December 12, 2006, we queried counsel appearing for the Board of Adjustment regarding language of the 2003 amendment to the definition of motor vehicle service station and the absence of any specific reference to facilities such as that proposed by Developers. Counsel stated that the existing definition resulted from "clerical error," and that the definition had not been further amended following discovery of the error because of cost considerations.

Two and one-half weeks after oral argument had occurred, by motion filed on December 29, 2006, the Board of Adjustment sought leave to amend the record to include Ordinance 2006-8, adopted on June 19, 2006, but not previously referenced by the Board in its appellate papers. The ordinance made reference to a recommendation in the April 20, 2006 Master Plan Re-Examination Report, Chapter P, Land Use Plan, Section N, that (1) the sale and dispensing of motor vehicle fuels be prohibited in the Major Commercial District and Business Development Overlay Zone; (2) motor vehicle service stations be prohibited as a principal or accessory use in that zone; and (3) oil changes, tire changes and battery replacements be permitted in large retail facilities in the zone. It then amended Article IV, Major Commercial Planned Development Districts, 154-25, Use Regulations, Section A(1) to state:

(1) Retail sales, trade and other related business contained in a shopping center except that the sale and dispensing of vehicular fuels is prohibited. Motor vehicle service stations are prohibited as a principal use. Motor vehicle service stations are prohibited as an accessory use. Oil and tire changes and battery replacements are permitted uses in shopping centers.

The Board claimed that the amended ordinance was controlling under the time of decision rule, Kruvant v. Mayor and Council, Tp. of Cedar Grove, 82 N.J. 435, 440 (1980), and that it dispositively prohibited the use proposed by Developers.

In a supplemental brief submitted, by leave granted, in opposition to the Board of Adjustment's motion, Developers argued that Ordinance 2006-8 was not properly adopted. Developers additionally argued that if the ordinance were determined to be valid, it would not serve the public interest and it would be inequitable to apply the time of decision rule to bar Developers' right to construct its gasoline fueling facility. See Urban Farms, Inc. v. Borough of Franklin Lakes, 179 N.J. Super. 203, 221 (App. Div.) (requiring consideration of the public interest served by the amendment), certif. denied, 87 N.J. 428 (1981); Riggs v. Tp. of Long Beach, 101 N.J. 515, 521 (1986) (recognizing equitable considerations in applying the time of decision rule). By order dated February 6, 2007, we granted the Board of Adjustment's motion to supplement the record, but did not address the parties' substantive arguments.

Subsequently, on March 12, 2007, the Board of Adjustment again moved to supplement the record to include Mount Laurel's Master Plan, adopted on May 11, 2000, the Master Plan Six-Year Re-Examination, dated April 20, 2006, Resolution R-2006-15/Master Plan Six Year Re-Examination, dated May 11, 2006, and a copy of the Planning Board resolution recommending Ordinance 2006-8. Developers opposed the motion and again raised procedural objections to the adoption, claiming that the ordinance was void as the result of lack of the notice required by N.J.S.A. 40:55D-62.1 and the secretive process by which the master plan was amended, and addressing arguments by the Board of Adjustment that notice was not required. We granted the Board of Adjustment's motion to supplement the record in an order dated April 4, 2007.

We regard the issues raised by the parties in support of and in opposition to the validity and application of Ordinance 2006-8 to be significant in nature. However, because those issues arose only after the chancery judge had issued his opinion and while this appeal was pending, we now remand the matter to the Chancery Division to permit consideration of the procedural objections raised by Developers to the adoption of Ordinance 2006-8, the applicability of the time of decision rule in the circumstances of this case, and any other procedural or substantive objections Developers may have to the amended ordinance, together with any further supplementation of the record required in these contexts.

 
Remanded for further proceedings in accordance with this opinion. Jurisdiction is not retained.

In her certification, counsel for the Board of Adjustment conceded that she was first notified of the existence of the ordinance on December 22, 2006.

Application of the time of decision rule has been the subject of extensive scholarly comment. See, e.g., Heather B. Sanborn, Striking an Equitable Balance: Placing Reasonable Limits on Retroactive Zoning Changes After Kittery Retail Ventures LLC v. Town of Kittery, 58 Me. L.Rev. 601 (2006); Karen L. Crocker, Note, Vested Rights and Zoning: Avoiding All-or-Nothing Results, 43 B.C.L.Rev. 935 (July 2002); John J. Delaney, Vesting Verities and the Development Chronology: A Gaping Disconnect?, 3 Wash. U.J.L. & Pol'y 603 (2000); Gregory Overstreet and Diana M. Kirchheim, The Quest for the Best Test to Vest: Washington's Vested Rights Doctrine Beats the Rest, 23 Seattle U.L.Rev. 1043, 1045 (Spring 2000); John J. Delaney and Emily J. Vaias, Recognizing Vested Development Rights as Protected Property in Fifth Amendment Due Process and Takings Claims, 49 Wash. U.J. Urb. & Contemp. L. 27 (Summer 1996).

(continued)

(continued)

11

A-0478-05T5

 

May 3, 2007