520 VICTOR STREET CONDOMINIUM ASSN. v. RAYMOND PLAZA

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5655-10T3

520 VICTOR STREET CONDOMINIUM

ASSN., and SAWMILL CONDOS, LLC,

Plaintiffs-Appellants,

v.

RAYMOND PLAZA and TOWNSHIP OF

SADDLE BROOK ZONING BOARD OF

ADJUSTMENT,

Defendants-Respondents.

_____________________________________

October 8, 2013

 

Submitted September 9, 2013 Decided

 

Before Judges Yannotti, St. John and Leone.

 

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-3019-08.

 

Bannon Rawding McDonald & Mascera, attorneys for appellants (Gregory Mascera, of counsel and on the brief).

 

Sunshine, Atkins, Minassian, Tafuri & D'Amato, P.A., attorneys for respondent Raymond Plaza (Donald L. Minassian, on the brief).

 

Charles H. Sarlo, attorney for respondent Township of Saddle Brook Zoning Board of Adjustment.

 

PER CURIAM

Plaintiffs appeal from a judgment of the Law Division affirming the resolution of approval by Defendant, the Zoning Board of Adjustment ("Board") of the Township of Saddle Brook ("Township"), of an application for variances and development by Defendant, Mr. Raymond Plaza ("Plaza" or "the Applicant"). Plaintiffs raise numerous challenges to the Board's resolution, including its requirement of a $400,000 contribution by Plaza.

We conclude that the Board did not comply with N.J.S.A. 40:55D-42 or the pertinent Township ordinance when it required the $400,000 contribution. Accordingly, we reverse the Law Division's judgment in part, vacate the Board's approval of Plaza's application, and remand to the Board for reconsideration.

I.

Plaza's 2006 application sought permission to develop three multi-story residential buildings on a property on Fifth Street in the Township. He amended his application to limit eighty percent of the condominium units to persons at least fifty-five years old. Plaza's application was opposed by Plaintiff 520 Victor Street Condominium Association ("Plaintiff"), which operated an adjacent multi-family residential development called Saw Mill Commons.

Plaza sought to build these condominium buildings in the Township's Industrial Zoning District, which did not permit multi-family residential housing. Accordingly, Plaza's application sought a use variance as well as other variances.

The Board conducted hearings on Plaza's application throughout 2007. On December 11, 2007, the Board voted to approve the application. On March 3, 2008, the Board adopted a Resolution of Approval, making findings on fact and conclusions of law. The Board granted a use variance and other variances, and approved the site plan. The Board made the approval subject to sixteen conditions, one of which was that Plaza make the $400,000 contribution.

Plaintiffs filed in the Law Division a complaint in lieu of prerogative writs, seeking to void the Board's resolution. On June 17, 2011, after a two-day trial, the judge issued an order for judgment with a lengthy opinion dismissing the complaint with prejudice and affirming the Board's actions, finding they were not arbitrary, capricious, or unreasonable.

II.

Plaintiffs appeal the judge's affirmance of the Board's actions. "[W]hen reviewing the decision of a trial court that has reviewed municipal action, we are bound by the same standards as was the trial court." Fallone Props., L.L.C. v. Bethlehem Twp. Planning Bd., 369 N.J. Super. 552, 562 (App. Div. 2004). "[W]hen a party challenges a zoning board's decision through an action in lieu of prerogative writs, the zoning board's decision is entitled to deference." Kane Props., LLC v. City of Hoboken, 214 N.J. 199, 229 (2013). "[Z]oning boards, 'because of their peculiar knowledge of local conditions[,] must be allowed wide latitude in the exercise of delegated discretion.'" Price v. Himeji, LLC, 214 N.J. 263, 284 (2013) (quoting Kramer v. Bd. of Adjustment, 45 N.J. 268, 296 (1965)). "'The questions on appeal are only whether or not the action of the board was arbitrary, capricious or patently unreasonable, and whether it acted properly under the statute, that is, in accordance with the statutory standard.'" Paruszewski v. Twp. of Elsinboro, 154 N.J. 45, 54-55 (1998) (citation omitted).

III.

Plaintiffs' complaint did not mention the $400,000 contribution, but the issue was discussed at length before the Law Division. The judge rejected the argument "that this contribution in and of itself necessitates that this Court reverse all the approvals granted to the defendant by the Board," but stated that the "contribution does give this Court great concern." We conclude that the judge erred by failing to set aside the approval because the Board conditioned its approval on a contribution, which did not conform with the applicable laws and ordinance.

Here, the Board conditioned approval of the site plan on Plaza's contribution of $400,000 to pay for sanitary sewer, stormwater, and drainage improvements "off-tract."1 Whether a zoning applicant may pay for off-tract improvements is governed by the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163. Under N.J.S.A. 40:55D-39a, "[a]n ordinance requiring approval by the planning board of . . . site plans . . . may include . . . [p]rovisions for off-tract water, sewer, drainage, and street improvements which are necessitated by a . . . land development, subject to the provisions of [N.J.S.A. 40:55D-42]." N.J.S.A. 40:55D-42 states in pertinent part:

The governing body may by ordinance adopt regulations requiring a developer, as a condition for approval of a subdivision or site plan, to pay the pro-rata share of the cost of providing only reasonable and necessary street improvements and water, sewerage and drainage facilities, and easements therefor, located off-tract but necessitated or required by construction or improvements within such subdivision or development. Such regulations . . . shall establish fair and reasonable standards to determine the proportionate or pro-rata amount of the cost of such facilities that shall be borne by each developer or owner within a related and common area, which standards shall not be altered subsequent to preliminary approval.

To implement N.J.S.A. 40:55D-39 and 40:55D-42, the Township enacted Ordinance 206-111. Saddle Brook Twp., N.J., Ordinance 206-111 (2004). It provides the Board:

shall determine in writing that "the need for any off-tract improvement is necessitated by the proposed development application and . . . that properties outside the development will also be benefited by the improvements," id. at 206-111A(2)(a);

 

"shall specify the off-tract improvements which are necessary," ibid.;

shall "determin[e] the proportionate share of such improvement to the applicant," by utilizing the following formulas: "[t]he applicant's proportionate share [for sewer improvements] shall be equal to the ratio of the estimated daily flow, in gallons, to the maximum capacity of the facility," and for stormwater and drainage improvements "shall be in a ratio equal to the estimated peak surface runoff as proposed to be delivered into the existing system . . . to the maximum capacity of the existing system," with each ratio increased by 10% for contingencies, id. at 206.111A(3)(d)[1][c], [d];

 

shall "determine the pro-rata amount of cost to be borne by other owners of lands which will be benefitted by the proposed improvements," id. at 206.111A(3)(d)[2]; and

 

shall notify the Township Council "specifying the Board's recommendation of the estimated cost of [the improvements], the applicant's prorated share of the cost and possible methods or means to implement same," and "shall not grant final approval on the subdivision until all aspects of such conditions have been mutually agreed upon by the applicant and the Council" by written Council resolution, id. at 206-111A(2)(a)-(c).

"Because a municipality's power to effectuate planning schemes stems from legislative allowance, it must be exercised in strict conformity with the delegating enactment the MLUL," including N.J.S.A. 40:55D-42. Toll Bros., Inc. v. Bd. of Chosen Freeholders of Burlington, 194 N.J. 223, 243 (2008). Further, "[t]he Legislature carefully has circumscribed the power of planning boards by requiring that the power be exercised in conformity with standards set forth by ordinance." Longridge Builders, Inc. v. Planning Bd. of Princeton, 52 N.J. 348, 351 (1968).

Here, the Board failed to meet the requirements of N.J.S.A. 40:55D-42 or Ordinance 206-111.2 The Board did not calculate the $400,000 figure after determining the improvements necessitated by the proposed development, estimating the costs of those improvements, and applying the required formulas to ascertain the pro-rata share of Plaza and others. Instead, the $400,000 figure arose through offer, counteroffer, and negotiation.

At a Board hearing, Plaza's engineer noted the area's preexisting flooding and sanitary sewer problems, and mentioned two reports prepared by the Board's engineer: the 2004 Capacity Analysis report (the 2004 report) and the 2005 North Fifth Pump Station report (the 2005 report).3 Plaza's engineer said the 2005 report estimated the system upgrades to address the existing sewer problems would cost $250,000 to $325,000. Plaza's engineer said Plaza had looked at the report, was "aware that there are some sewer issues in the area," and "would, as a good-nature effort, agree to contribute $200,000 to the Municipality for some sewer infrastructure repairs . . . to fix a Township problem," namely the "sanitary sewer issues within the North Fifth Street area."

At subsequent hearings, Plaza's engineer restated Plaza's offer as a "contribution to the Township in the amount of $200,000 to be utilized to repair sanitary sewer lines where the Township sees fit," whether "in the vicinity of the site or throughout the municipality." Plaza's engineer made clear that the $200,000 was not based on any tests, but was simply "a donation to the municipality." The Board's engineer confirmed the $200,000 offer was a subject of negotiation, and there had been no counteroffer. The Board's chairman replied: "It's an offer, all it is is an offer. We might tell them we need 400,000." Thereafter, the Board's engineer recommended that Plaza make a "$400,000 contribution," Plaza instructed his counsel to offer $400,000, and the Board required $400,000 as a condition of approval.4

Plaza candidly concedes that it "would be naive to think that [the $400,000] was not considered, at all, by the Board Members in their deliberations." Indeed, shortly before approving Plaza's application, a Board member explained:

there is a substantial contribution being made and conditioned upon his application, I don't want to stress any unnecessary influence upon that contribution, as the counsel instructed us not to, but, you know, that is a sizable contribution towards the improvements of the property which affects the entire community and the surrounding neighborhood. And I think that can't be ignored.

 

The $400,000 contribution raises the concerns that underlie the strict requirements of the MLUL and Ordinance 206-111. See Nunziato v. Planning Bd. of Edgewater, 225 N.J. Super. 124, 134 (App. Div. 1988) ("The intolerable spectacle of a planning board haggling with an applicant over money too strongly suggests that variances are up for sale."). First, those requirements are designed to "safeguard against municipal duress to procure otherwise unlawful exactions" from developers. Toll Bros., supra, 194 N.J. at 251. Second, the requirements recognize that "'[a] developer's voluntary contribution to defray the cost of a municipal obligation, should not be permitted to influence or affect municipal zoning decisions.'" Id. at 250 (quoting Swanson v. Planning Bd. of Hopewell, 149 N.J. 59, 66 (1997) (Stein, J., concurring)). Accordingly, courts must be "'extremely sensitive to the threat presented by unlawful exactions imposed by a municipality on developers whether the developers are reluctant or enthusiastic participants in the transaction.'" Ibid.

The Law Division judge, after reviewing the record before the Board and listening to counsel's arguments, distinguished Nunziato and concluded that the $400,000 was not an improper offer and that the Board and Plaza "acted in good faith in negotiating this contribution." We need not determine the accuracy of that conclusion because the Board, in mandating the $400,000 contribution, did not comply with several key requirements of the MLUL and Ordinance 206-111. See Pond Run Watershed Ass'n v. Twp. of Hamilton Zoning Bd. of Adjustment, 397 N.J. Super. 335, 361-64 (App. Div. 2008) (vacating a zoning approval because of an improper contribution even though "the parties had acted in good faith").

A.

First, the Board never determined that any sewerage and drainage improvements were "necessitated" by the proposed development. N.J.S.A. 40:55D-42; Ordinance 206-111A(2)(a). Instead, the Board agreed with its engineer's opinion that:

The Applicant has met or exceeded all existing, state, county and local requirements with regard to the provision of adequate sanitary sewer and water utility connections to the site. The Applicant has met an additional requirement to have no additional impact on the current drainage concerns in the neighborhood. The Applicant has met all State stormwater design requirements. Any continued flooding will not affect any of the residents in the neighborhood any worse than currently.

 

[citations and quotation marks omitted.]

 

The Board further found that "the proposed development will not impact the flooding in the area," and noted that the increased sanitary sewer flow from the development would be de minimis for the area, and would not warrant a flow study. The Board's engineer testified that the development would have no negative impact on stormwater drainage, and that the Township had adequate sewer design capacity for the proposed development.

Instead of basing the contribution on the impact of the development, the Board justified the contribution primarily on preexisting flooding and sewage problems. The Board stated:

The Applicant has volunteered to make a contribution to the Township for off-site tract improvements in the amount of $400,000, which the Board finds is a fair and reasonable estimate of its pro-rata share based upon the recommendations of the Board's Engineer and the [2004 and 2005] reports commissioned by the Township . . . .

The 2004 and 2005 reports, prepared before Plaza's 2006 application, could not have determined what sewer and drainage improvements would be "necessitated or required by the construction" of Plaza's development, as required by N.J.S.A. 40:55D-42.

The Board's engineer also focused on the preexisting flooding and sewer problems in the area. He stressed that stormwater inflow, infiltration of ground water into deteriorating sewer lines, and sump pumps emptying ground water into the sanitary sewers had already caused "the failure of the sanitary sewer collection system." He stated that Plaza "has provided the necessary sanitary sewer capacity and public water capacity assurances but these do not resolve the localized flooding and inflow and infiltration sewer concerns experienced in the area during heavy rain events," which "is not a condition that was created by this applicant." He also detailed issues with the existing stormwater drainage system, which was affected by sediment buildup and prone to flooding.

To address the sanitary sewer problem, the Board's engineer recommended that Plaza construct an extension of the North Fifth Street pump station force main from Sylvan Street to Market Street, to eliminate three ninety-degree turns and "enable the force main to operate at peak capacity," at a total estimated cost of $275,000. To address the stormwater drainage problem, the engineer recommended that Plaza provide a "donation of $125,000 to the Township of Saddle Brook for the design and construction of 'future' stormwater improvements and stormwater maintenance activities." The Board determined that Plaza would not construct the sanitary sewer improvement, but instead:

shall make a contribution of $400,000 to the Township of Saddle Brook for its pro rata share of off-site tract improvements, to include: (i) $275,000 to fund the design and construction of an off-site sanitary sewer improvement to provide for an extension of the North Fifth Street pump station force main from Sylvan Street to a point on the northern side of Market Street; and (ii) $125,000 for the design and construction of off-tract stormwater improvements and stormwater maintenance activities.

These improvements were largely justified to fix the preexisting flooding and sewage problems. The Board's engineer testified that, he "went overboard" by requesting a sanitary sewer improvement "that would eliminate and completely remediate any surface discharge of raw sanitary sewer in the area," rather than requesting only that Plaza "provide adequate sanitary sewer capacity for the project." He similarly testified that the future stormwater improvements were "[a]bove and beyond" any negative impact from the development, and addressed stormwater problems which were "the Township's responsibility to correct."5

The Board required Plaza to fund these improvements, moreover, even as it acknowledged the testimony of Plaza's expert that the development would alleviate rather than exacerbate the existing problems. Plaza's expert described how the development would reduce impervious coverage, restore the wetland buffer area, filter sediment, increase stormwater storage, and reduce stormwater flow. Plaza also offered to use a camera to inspect the sewers and water-jet them to remove sediment, increasing their capacity.

"[A] municipality may only demand contributions for off-tract improvements 'that [are] necessitated by the development itself, or [are] a direct consequence of the development.'" Toll Bros., supra, 194 N.J. at 244 (quoting Holmdel Builders Ass'n v. Twp. of Holmdel, 121 N.J. 550, 571 (1990)). Indeed, courts "have 'traditionally required a strong, almost but-for, causal nexus between off-site public facilities and private development in order to justify exactions.'" Ibid. "It follows that a planning board violates the MLUL when a condition unrelated to the needs generated by a development is imposed . . . ." Id. at 230. To the extent the Board required Plaza to fix preexisting problems and pay for repairs to the Township infrastructure not necessitated by the development itself, the Board's resolution "exceeds [its] authority under the MLUL and is therefore invalid." N.J. Builders Ass'n v. Bernards Twp., 108 N.J. 223, 224 (1987).

We recognize that the Board need not "compute with precision" the extent to which off-tract improvements are a direct consequence of a development. F & W Assocs. v. Cnty. of Somerset, 276 N.J. Super. 519, 528-29 (App. Div. 1994). However, the Board failed to make any computation of the extent to which these improvements were necessitated by the development, rather than by the preexisting problems.6

The judge acknowledged that Plaza's contribution was intended to address a preexisting flooding problem "unrelated to the property's development." The judge noted that "the sewer system within the area had the capacity to accept the flow from the new project and that the current flooding problems in the area would not be exacerbated by this application [which] would ameliorate to some extent the flooding in the area."

The judge nonetheless upheld the contribution, reasoning that the $400,000 "would address problems that exist and would continue into the future which would directly [a]ffect the proposed development even if not directly caused by this development." The judge stated that "the subject property would be adversely affected if the issues of flooding and sewer line backup were not addressed as these problems directly impact the defendant's property and its development."

It is conceivable that replacing the warehouses currently occupying the property with a condominium complex containing a hundred or more residents might necessitate greater control over any flooding and sewage backups affecting the property. However, the Board made no findings that the development would itself be affected by flooding and sewage backup, or that the improvements to be funded by the $400,000 were necessary to prevent such impact on the development itself. The Board thus failed to establish the required "causal nexus between the conditions imposed and the needs created by the development." Toll Bros., supra, 194 N.J. at 246.

B.

Second, in ordering Plaza to pay "$125,000 for the design and construction of off-tract stormwater improvements and stormwater maintenance activities," the Board failed to "specify the off-tract improvements which are necessary," or to "specify[] . . . the estimated cost of" those improvements. Ordinance 206-111A(2)(a), (b). The Board's engineer conceded that the choice had not yet been made which of the potential "future" stormwater improvements would be funded, and that he could provide no cost estimates for those improvements. The Board's lack of specificity regarding the "future" stormwater improvements, and the absence of proof of how the $125,000 contribution was calculated, violates Ordinance 206-111, and fails to show that the unspecified improvements are "reasonable and necessary" under N.J.S.A. 40:55D-42. See Pond Run, supra, 397 N.J. Super. at 360.

The judge acknowledged that the Board required "off-tract sewer improvements, which have not been clearly identified at the time of the application," and which "could encompass the entire or a significant portion of the town." The judge excused this lack of specificity by stating that the $400,000 could be spent "as the borough engineer deemed it appropriate." Such lack of specificity, however, is impermissible under Ordinance 206-111 and is incompatible with the MLUL.

C.

Third, the Board did not apply Ordinance 206-111's "fair and reasonable standards to determine the proportionate or pro-rata amount of the cost of such facilities that shall be borne by each developer or owner within a related and common area." N.J.S.A. 40:55D-42. Rather, the Board simply found that Plaza's $400,000 contribution "is a fair and reasonable estimate of its pro-rata share . . . based upon the recommendations of the Board's Engineer and the [2004 and 2005] reports." As noted above, those reports predated Plaza's application, so they could not estimate the development's pro-rata share. The Board's engineer also did not estimate the pro-rata share of these improvements by allocating their total costs between Plaza and other owners of land who will benefit from the improvements. Neither the Board nor its engineer used the formulas specified in Ordinance 206.111A(3)(d) to determine "[t]he applicant's proportionate share" for sewer, stormwater, or drainage improvements, or to "determine the pro-rata amount of cost to be borne by other owners of lands which will be benefitted by the proposed improvements."

Indeed, the nature of the improvements confirms that the Board failed to make a proper determination of Plaza's pro-rata share. The Board did not specify the "future" stormwater improvements or their estimated cost, making it impossible to determine the pro-rata share of Plaza and any other landowners that might benefit. Further, the Board imposed on Plaza the entire $275,000 estimated cost of the sanitary sewer improvement, but no one claims that Plaza would be the only landowner who would benefit from that improvement.

Under the MLUL, it is "'impermissible to saddle the developer with the full cost where other property owners receive a special benefit from the improvement.'" Toll Bros., supra, 194 N.J. at 245 (quoting Longridge Builders, supra, 52 N.J. at 350); accord Divan Builders, Inc. v. Planning Bd. of Wayne, 66 N.J. 582, 603 (1975); see also Swanson, supra, 149 N.J. at 65 (Stein, J., concurring). Furthermore, the pro-rata shares of the developer and other landowners must be calculated both to "'protect[] a developer from paying a disproportionate share of the cost of improvements that also benefit other persons,'" and "'to insure that other landowners do not enjoy a free ride at the expense of another's toil.'" Toll Bros., supra, 194 N.J. at 244-45 (citation omitted). We acknowledge that the municipality has a degree of flexibility in determining the cost of improvements. Id. at 245. However, the Board failed to apportion the costs between Plaza and other landowners benefitting from the improvements, and thus violated the MLUL and Ordinance 206-111.

The judge nonetheless ruled that Plaza was being required to pay his pro-rata share, because it was "based on the plaintiff's own estimate that the cost would be $4,000,000." Plaintiff's expert testified that the site was not suitable for Plaza's development, because it already experienced frequent flooding and sanitary sewer overflows. He also testified that the proposed $400,000 contribution would not "cover one tenth of the cost" of all of the improvements required for the storm and sanitary sewers. The judge reasoned that, given "the opinion of the plaintiff's expert that it would cost in the neighborhood of $4,000,000 to alleviate the flooding and sewerage problems in this area, how could the $400,000 be considered arbitrary," as it "would represent only 10%."

Plaintiff's expert, however, was not addressing the cost of the improvements necessitated by the proposed development, but the cost of all the storm and sanitary improvements required by the Fifth Street area. He did not do a cost estimate, did not state what the total cost would be for those improvements, and did not estimate the pro-rata share of Plaza and other benefitting landowners. Moreover, the Board's engineer had already proposed the $400,000 figure before Plaintiff's engineer offered this snippet of testimony. Finally, in setting Plaza's contribution, the Board did not rely on Plaintiff's expert, whom it criticized because he "could not provide specifics" on the sewer upgrades needed for additional development in the area.

D.

Thus, we find that the Board violated these requirements of the MLUL and the Township ordinance in requiring the $400,000 contribution. We therefore conclude that the $400,000 contribution is invalid.

The judge recognized that "the parties may have acted without legal authority," but he felt that the situation was analogous to Township of Marlboro v. Planning Board of Holmdel, 279 N.J. Super. 638 (App. Div.), certif. denied, 141 N.J. 98 (1995). The judge reasoned that here, like Marlboro, the contribution was not "a blatant quid pro quo" for the approval, was negotiated in "good faith," was related to a "legitimate land use concern," had a "reasonable relationship" and "direct nexus" to "municipal burdens," and was not "arbitrary." See id. at 643-47. The judge stated that, in light of Marlboro, he "could find no justification for voiding the approval which included the contribution of $400,000." In Marlboro, we ruled that the above-quoted factors left us "no justification for voiding the approvals which included the illegal [contribution]," but we did void the illegal contribution. Id. at 647. Marlboro provides no basis for refusing to void the unlawful $400,000 contribution.

IV.

We must next consider the effect of the invalidity of the contribution on the Board's approvals. We would normally determine whether the contribution was "a relatively minor factor," id. at 643-44, or was of "sufficient importance that the board might have chosen to deny the application, on legitimate grounds, without it," Pond Run, supra, 397 N.J. Super. at 363. We need not do so, because the Board's resolution dictates that the approval must be vacated.

The Board's resolution provided:

NOW, THEREFORE, BE IT RESOLVED by the Board of Adjustment that a use variance (FAR variance if deemed applicable), requisite bulk variances, and preliminary and final site plan approval to permit the development . . . be and hereby is GRANTED for the reasons set forth hereinabove, subject to the following conditions, which shall, as applicable, require complete compliance, as applicable, before a certificate of occupancy can be issued:

* * *

3. The Applicant shall make a contribution of $400,000 . . . .

 

[underlining added.]

 

The Board's resolution thus made the $400,000 contribution "a condition for approval of a subdivision or site plan" under N.J.S.A. 40:55D-42. The Board's argument to the contrary is irreconcilable with the language of its resolution, and would leave its demand for $400,000 without any statutory basis.

The Board's resolution thereafter provided:

In the event that any conditions are held to be invalid, unenforceable, or unlawful, the entire approval granted herein shall be unenforceable. It is the intent of the Board that the approval granted herein shall not be approved if any condition is invalid, and that the conditions are not severable from the approvals granted herein.

Therefore, we must vacate the Board's approval of Plaza's application.

Accordingly, we remand the matter for reconsideration by the Board, to make a new determination on the merits of Plaza's application. See Pond Run, supra, 397 N.J. Super. at 363. In making that determination, the Board may utilize the record generated in its 2007 hearings, with all parties having an opportunity to supplement that record to reflect any developments since December 11, 2007.

As noted above, there were indications in the reports and testimony of the Board's engineer that the proposed development would necessitate some off-tract improvements. Accordingly, we will permit the Board to reconsider whether any improvements are necessitated by the development, to receive additional evidence on such improvements, and to determine whether a contribution may be required, but it must do so only in strict compliance with N.J.S.A. 40:55D-42 and Ordinance 206-111.

V.

Plaintiffs additionally argue that the Board erred by: removing a Board Member from the consideration of this application;finding that a Floor Area Ratio variance was not required; failing to address the merits of each of the variances it issued;and usurping the authority of the governing body in not considering its prior refusals to rezone the property, and in by considering the Board's Master Plan which the governing body had not adopted. We reject these additional arguments for substantially the reasons set forth in the judge's thorough opinion. See R. 2:11-3(e)(1)(A) and (E).

Finally, Plaintiffs argue that the Board ignored a proposed ordinance. When the Board voted to approve Plaza's application on December 11, 2007, the Township Committee had before it a proposed ordinance to limit the density of any residential units to fifteen units per acre. That proposed density ordinance was approved on December 20, 2007, and took effect on January 16, 2008.

Under the "time-of-decision rule," the Board properly declined to consider the proposed density ordinance because it had not been adopted when the Board approved Plaza's application. Britwood Urban Renewal, LLC v. City of Asbury Park, 376 N.J. Super. 552, 569-70 (App. Div. 2005); cf. Willoughby v. Planning Bd. of Deptford, 306 N.J. Super. 266, 279 (App. Div. 1997) (reversing an approval granted after an amendment to an ordinance had been adopted but before it became effective).

Because we are vacating the Board's approval and remanding for reconsideration, the now-passed density ordinance might apply on remand if the time-of-decision rule still governed changes in zoning ordinances. E.g., Eastampton Ctr., LLC v. Planning Bd. of Twp. of Eastampton, 354 N.J. Super. 171, 196-200 (App. Div. 2002). However, the Legislature has made the time-of-decision rule inapplicable to zoning ordinance changes by enacting N.J.S.A. 40:55D-10.5, which provides:

Notwithstanding any provision of law to the contrary, those development regulations which are in effect on the date of submission of an application for development shall govern the review of that application for development and any decision made with regard to that application for development. Any provisions of an ordinance, except those relating to health and public safety, that are adopted subsequent to the date of submission of an application for development, shall not be applicable to that application for development.

 

Because N.J.S.A. 40:55D-10.5 became effective on May 5, 2011, we must consider its impact here. Cf. CBS Outdoor, Inc. v. Borough of Lebanon Planning Bd./Bd. of Adjustment, 414 N.J. Super. 563, 577 n.5 (App. Div. 2010) (declining to apply N.J.S.A. 40:55D-10.5 because it was not yet effective).

The time-of-decision rule still applies to statutory changes. Beim v. Hulfish, 427 N.J. Super. 560, 573-74 (App. Div. 2012). Under that rule, "when legislation affecting a cause is amended while a matter is on appeal, an appellate court should apply the statute in effect at the time of its decision." State, Dep't of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 498 (1983). "'The purpose of the principle is to effectuate current policy.'" Pizzo Mantin Grp. v. Twp. of Randolph, 137 N.J. 216, 235 (1994) (quoting Kruvant v. Mayor of Cedar Grove, 82 N.J. 435, 440 (1980)).7

The Legislature plainly intended that N.J.S.A. 40:55D-10.5 would prevent a zoning ordinance passed after an application was filed from governing that application, unless the ordinance was related to health and public safety. No one contends that the new density ordinance is related to health and public safety, or contests that it was enacted after Plaza's application was filed and indeed approved. Though we have vacated that approval and remanded for reconsideration, the new density ordinance is inapplicable to the application on remand under the now-effective N.J.S.A. 40:55D-10.5.

Even if N.J.S.A. 40:55D-10.5 had not been enacted, we doubt that the new density ordinance would govern Plaza's application on remand under the time-of-decision rule. Application of "the time-of-decision rule is not automatic." Pizzo Mantin, supra, 137 N.J. at 235. "A court must balance the municipality's zoning interest against the developer's degree of reliance on the old [ordinance] and its entitlements of right," ibid., considering the equities of the case, Kruvant, supra, 82 N.J. at 442-45.

Here, Plaza's application was filed almost seven years ago, and was addressed in extensive hearings and prolonged litigation. See id. at 443. Plaza and the Board acted in reliance on existing ordinances allowing higher densities. See Urban Farms, Inc. v. Franklin Lakes, 179 N.J. Super. 203, 220-23 (App. Div. 1981). Furthermore, Plaintiffs are the only party seeking to invoke the new fifteen-unit-per-acre ordinance, but Plaintiffs' Saw Mill Commons has a density of twenty-five units per acre, exceeding the twenty-two units per acre which the Board found appropriate for Plaza's development. Finally, the remand here is not due to density problems. Based on these equities, we doubt it would be appropriate to apply the now-passed ordinance on remand even if the time-of-decision rule still governed. See also N.J.S.A. 40:55D-49.

 

 

VI.

The Law Division's judgment is reversed in part, the Board's approval is vacated, and the matter is remanded to the Board for further consideration of Plaza's application in accordance with this opinion.

Reversed in part, vacated, and remanded.

1 "'Off-tract' means not located on the property which is the subject of a development application nor on the closest half of the abutting street or right-of-way." N.J.S.A. 40:55D-5.

2 Plaza claims that Ordinance 206-111 requires a second ordinance which was never passed, but he misreads 206-111's prefatory language, which simply paraphrases N.J.S.A. 40:55D-39 and 40:55D-42. Plaza admits Ordinance 206-111 was not "followed to the letter."

3 The parties have not provided us with a copy of those reports.

4 Plaza blames Plaintiff for the $400,000 contribution because it demanded action to correct existing flooding and sanitary sewer problems. The record shows, however, that only after Plaza offered $200,000 and the Board's engineer recommended $400,000 did Plaintiff's engineer testify that $400,000 would not "cover one tenth of the cost" of all of the improvements needed to fix those problems, and recommended that Plaza be required to bond the full cost.

5 In response to public comments about the existing flooding problems, a Board commissioner asked a member of the public: "If the applicant never existed and the town was trying to fix the problem, where do you think the money would come from?" The Board's chairman advised: "Out of your pocket."

6 For this reason, we cannot uphold the $400,000 contribution based on the occasional statements in the record suggesting these improvements were necessitated to some extent by the proposed development. The Board's engineer stated that the improvements were not only a cure for existing problems but also might be "essential to the success" of Plaza's proposed development. He reported that "[u]nder significant rainfall conditions" "the municipal sanitary sewer system has an inadequate capacity to accommodate the proposed Project," and that the "improvements will provide the necessary assurances that the area sanitary sewer system can effectively handle the sanitary sewer flow generated by the project site without concern for system operating concerns due to stormwater inflow and infiltration into the sanitary sewer system and will ensure that all negative impacts of the Project site fill on the elevation of flooding events will be eliminated." He also testified that Plaza "has an obligation to do some of the cleaning" of the storm sewers "in order to protect their site."

7 Commentators suggest N.J.S.A. 40:55D-10.5 was passed because "municipalities have abused the time of decision rule in order to adopt reactive ordinances rather than rely on proper planning." Cox & Koenig, New Jersey Zoning and Land Use Administration, 28-3.5 (2013). Plaza argued below that the proposed ordinance was a reaction to his application.