THE GREAT ATLANTIC & PACIFIC TEA COMPANY INC v. BOROUGH OF CLOSTER PLANNING BOARD

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

A-1421-13T3

THE GREAT ATLANTIC &

PACIFIC TEA COMPANY,

INC.,

Plaintiff-Appellant,

v.

BOROUGH OF CLOSTER PLANNING BOARD

and ASPI & BAKTAHVER IRANI,

Defendants.

_________________________________________

JESSE ROSENBLUM,

Plaintiff-Appellant,

v.

ASPI K. IRANI, BAKTAHVER IRANI, and

BOROUGH OF CLOSTER PLANNING BOARD,

Defendants,

and

BOROUGH OF CLOSTER,

Defendant-Respondent.

__________________________________________

CRAIG MARTIN, KATHLEEN & COLLEEN

MCPARTLAND, HEATHER MICHAELS, and THE

GREAT AMERICAN ATLANTIC AND PACIFIC TEA

COMPANY, INC.,

Plaintiffs,

v.

BOROUGH OF CLOSTER,

Defendant-Respondent.

_________________________________________

March 23, 2015

Argued November 12, 2014 Decided

Before Judges Messano and Ostrer.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket Nos. L-5301-09, L-11117-09, L-5192-09, L-0060-10 and L-5818-10.

John J. Segreto argued the cause for appellant Great Atlantic & Pacific Tea Company (Segreto, Segreto & Segreto, attorneys; Mr. Segreto, of counsel and on the brief).

Jesse Rosenblum, appellant pro se.

Edward T. Rogan argued the cause for respondent Borough of Closter (Edward Rogan & Associates, L.L.C., attorneys; Mr. Rogan, of counsel; JoAnn Riccardi, on the brief).

PER CURIAM

In these consolidated appeals, plaintiffs, The Great Atlantic and Pacific Tea Company, Inc. (A&P), and Jesse Rosenblum seek review of the October 7, 2013 order of the Law Division that dismissed with prejudice their respective complaints in lieu of prerogative writs against defendant, Borough of Closter (Closter). We set forth the factual background which is largely undisputed.

In July 2007, Joseph Lipari, a private developer hired by owners of property in a commercial development, Closter Plaza, met with the mayor of Closter; John Lignos, chairman of the Planning Board of the Borough of Closter (the Board); and the acting township manager. Lipari initiated the meeting to discuss possible renovation of a vacant store in Closter Plaza that formerly housed a Stop & Shop supermarket. Closter Plaza occupied more than sixteen acres and included sixty-nine separate tax lots. Pursuant to Closter's zoning regulations, Closter Plaza was contained within the District 3 Business Area, an area of approximately 44.68 acres in which the regulations permitted a maximum of 40,000 square feet for retail establishments.

Lipari told the officials he was negotiating with potential tenants for the building, including Whole Foods, which contemplated operation of a supermarket. The officials encouraged Lipari, expressing a desire not only to add a tenant, but also to improve store facades and parking facilities at Closter Plaza. A concept plan for the project included a proposed 40,000 square foot supermarket, and Lipari presented the plan to Whole Foods, which expressed interest. In May 2008, Whole Foods executed a memorandum of understanding regarding a potential lease at Closter Plaza. Lipari testified during his deposition that he discussed with Whole Foods the necessity for a zoning variance if the size of the store exceeded 40,000 feet. Eventually, the supermarket proposed by Whole Foods approximated 43,600 square feet.

Lipari met again with the same public officials to inform them that Whole Foods had signed a letter of intent. Two other meetings occurred later in 2008, between Lipari, Lignos and the mayor. The mayor testified in her deposition that they "may have" discussed the fact that Whole Foods "need[ed] more than forty thousand square feet . . . so therefore [they] would like the Council to amend the Ordinance."

Lignos testified at his deposition that in June 2008, the Ordinance Subcommittee of the Board recommended that the Board in turn recommend to Closter's governing body that the maximum square footage in District 3 be increased. At the July 2, 2008, meeting of the Board, there was discussion of the proposal, including recognition of the fact that if the ordinance remained unchanged, any application seeking site plan approval of a proposed development exceeding 40,000 square feet would need to be referred to the Zoning Board of Adjustment. The mayor, a member of the Board, expressed her belief that the Board was the appropriate body to implement the "vision[]" for Closter. In the end, the Board passed a resolution stating "the current maximum square footage limitation . . . is insufficient to meet the needs of modern retailers and current business models," and recommended that Closter "adopt an [o]rdinance . . . eliminat[ing]" the size limitation on stores in the district.

There was discussion of the proposed change during the July 23, 2008, meeting of the mayor and council. The mayor indicated that Whole Foods was "coming [in] with a plan" that exceeded the 40,000 square foot limit. Several council members expressed concerns, and it was noted that the Board was in the process of conducting a reexamination of Closter's master plan. In the end, the council approved introduction of an amendment to the zoning regulations increasing the maximum square footage for retail uses in the zone to 45,000. In September, however, the proposed ordinance was withdrawn.

On March 4, 2009, the Board adopted the "2008 Master Plan Reexamination" report. The report decried the "tired image and presence of [] marginal retailers in the downtown and [] underutilization of Closter Plaza," and noted any limitation on the size of retail space "could stymie development altogether, leaving Closter Plaza to drag along in its current weak and somewhat obsolescent state." The report contained a specific recommendation that Closter

[c]ontinue to work with the developers of Closter Plaza . . . in establishing a market-driven plan for its revitalization, focusing on the quality of design and its economic and visual compatibility, and its functional integration with the downtown. Allow the market to determine the tenancy and size of the anchor and satellite stores.

Another section of the report, however, noted "the existence of marginal or underutilized and vacant retail stores [was] an indication that there [was] too much retail space to serve the population that shops in Closter."

On April 22, 2009, the council passed Ordinance No. 2009:1036 (the 2009 Ordinance) that increased the maximum square footage for retail uses in the district from 40,000 to 45,000 square feet. The next day, Lipari's principals filed their site plan application with the Board.

On June 12, A&P and four individual plaintiffs filed a complaint in lieu of prerogative writs seeking, among other things, to set aside the 2009 Ordinance because it "was not adopted in conformance with the procedural requirements of the Municipal Land Use Law [the MLUL]."1 Rosenblum filed his complaint challenging the ordinance in August.

Meanwhile, at the Board's work session on July 1, chairman Lignos recused himself stating "he [had been] in private meetings" regarding the development that "other board members were not at," and because "both the Board attorney and the Borough attorney agreed that [his recusal] would be best." On October 28, the Board voted to approve the proposed site plan that included a 43,681 square foot Whole Foods supermarket.

On April 28, 2010, however, concerned that the 2009 Ordinance would be invalidated as a result of the council's failure to submit the proposed ordinance to the Board for review, see N.J.S.A. 40:55D-26, the council introduced Ordinance No. 2010:1066 (the 2010 Ordinance), which was essentially identical to the 2009 Ordinance and increased the maximum permitted square footage for a retail store in the district to 45,000.2 The proposed ordinance was submitted to the Board, which determined it was "not inconsistent with the Master Plan" and recommended adoption by the Council.

On June 8, 2010, Rosenblum filed a second amended verified complaint against Closter and the Board. Three days later, A&P filed a new complaint against Closter only, challenging the 2010 Ordinance and alleging violations of the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21 (the OPMA).3 The cases were consolidated, and the judge subsequently denied cross motions for summary judgment, concluding there were "triable issues of material fact" in two respects: (1) "whether the retail square footage increase, as . . . effectuated by the 2009 and 2010 Ordinances, is inconsistent with the Master Plan"; and (2) whether the private meetings held before passage of the ordinances violated the OPMA.

Plaintiffs' planning expert, Michael F. Kauker, testified solely as to the repealed 2009 Ordinance.4 Kauker asserted the ordinance was "inconsistent with the Master Plan," which "implie[d] . . . there [wa]s an imbalance between residentiary zone line and the plan zoned for retail uses with too much layout of the zone for retail use." Kauker also testified that passage of the 2009 Ordinance was spot zoning, since the ordinance benefitted only one property, i.e., Closter Plaza. Because the average lot size in the district was 9583 feet, the 45,000 foot limit would not be "uniformly applied throughout the zone."

On cross-examination, however, Kauker admitted his "average lot size theory" was simply a "methodology[,]" and the previously-existing 40,000 square foot limit was susceptible to the same analysis and criticism. Kauker also acknowledged that the 2009 Ordinance neither increased nor decreased the amount of retail space in the district. In his report admitted in evidence at trial, Kauker stated that he did not take issue with the "effect" of the ordinance but, rather, "the way in which [it] was repromulgated."5

In a written opinion that followed trial, the judge concluded that the 2010 Ordinance "d[id] not conflict directly or indirectly with the Master Plan," noting that Kauker admitted "a status quo of commercially designated lands [wa]s maintained[,]" and the amendment "d[id] not . . . expand the geographic area of any existing commercial zones to include additional land." The judge further reasoned that allowing for a new maximum limit on square footage supported the master plan's intended purpose of "'revitaliz[ing] [Closter's] commerce within its business zone.'"

The judge also concluded that "the [m]ayor's meetings with business people to encourage the growth of commerce within the town [did] not constitute or amount to a violation of the OPMA" because "[a]t no time did the governing body have an effective majority [present] in violation of the OPMA." Lastly, the judge rejected any claim "that [the 2010 Ordinance] was passed solely to allow for a Whole Foods to be built, [or] . . . that 'spot zoning' was in play here." The judge entered the order under review dismissing plaintiffs' complaints, and this appeal followed.

A&P argues that the procedural history detailed above, the inconsistency between the Master Plan and the 2010 Ordinance and Kauker's unrebutted expert testimony lead to an inescapable conclusion Closter engaged in "a textbook example of impermissible spot zoning." It also argues that the private meetings the mayor, Lignos and others had with Lipari violated the OPMA. Rosenblum essentially echoes these arguments in his brief.6

We have considered these contentions in light of the record and applicable legal standards. We affirm.

Although plaintiffs cite passages in the judge's opinion as evidence of her resolution of factual disputes, we view the issues presented as purely legal in nature. As such, we accord no deference to the Law Division's interpretation of the applicable statutes and review the matter de novo. See Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.").

We begin by stating some basic principles,

[m]ost fundamental is that a zoning ordinance is insulated from attack by a presumption of validity. The party challenging the ordinance bears the burden of overcoming that presumption. Reviewing courts should not be concerned over the wisdom of an ordinance. If debatable, the ordinance should be upheld.

[Rumson Estates, Inc. v. Mayor & Council of Fair Haven, 177 N.J. 338, 350-51 (2003) (quotation marks and citations omitted).]

Therefore, "the delegation of zoning authority to municipalities shall be liberally construed in a municipality's favor." Id. at 351 (citation omitted). When reviewing a challenge to a zoning amendment, a court's role is "strictly circumscribed." Pheasant Bridge Corp. v. Twp. of Warren, 169 N.J. 282, 289 (2001), cert. denied, 535 U.S. 1077, 122 S. Ct. 1959, 152 L. Ed. 2d 1020 (2002).

"Nevertheless, the power to zone cannot be wielded arbitrarily[,]" Riya Finnegan LLC v. Twp. Council, 197 N.J. 184, 192 (2008), and municipalities "must act 'in strict conformity' with the MLUL." Mahwah Realty Assocs. v. Twp. of Mahwah, 430 N.J. Super. 247, 259 (App. Div. 2013) (quoting Nuckel v. Little Ferry Planning Bd., 208 N.J. 95, 101 (2011)). In the seminal case of Manalapan Realty, supra, the Court held that even when an application is pending, the ability of "a municipality [to] change its zoning ordinance . . . is beyond question. This is so even if the ordinance is amended in direct response to a particular application." Id. at 378-79. What matters is that the "amendment is consistent with the [MLUL]." Id. at 379.

The MLUL provides

The governing body may adopt or amend a zoning ordinance relating to the nature and extent of the uses of land and of buildings and structures thereon. Such ordinance shall be adopted after the planning board has adopted the land use plan element and the housing plan element of a master plan, and all of the provisions of such zoning ordinance or any amendment or revision thereto shall either be substantially consistent with the land use plan element and the housing plan element of the master plan or designed to effectuate such plan elements . . . .

[N.J.S.A. 40:55D-62a.]

By generally requiring a zoning amendment to be consistent with the master plan, this section of the MLUL "connotes a recognition by our Legislature of the importance of comprehensive planning." Riya Finnegan, supra, 197 N.J. at 192.7

"'[S]pot zoning is the antithesis of . . . planned zoning.'" Id. at 196 (quoting Palisades Props., Inc. v. Brunetti, 44 N.J. 117, 134 (1965)).

In the case of spot zoning, the owner of a particular parcel seeks to reap the benefit of a zoning decision, by special ordinance or by variance, which treats his or her property more favorably than the comprehensive plan would allow, to the detriment of the larger community or the immediate neighbors.

[Id. at 198-99.]

See also Jennings v. Borough of Highlands, 418 N.J. Super. 405, 425 (App. Div. 2011) (noting a municipality engages in spot zoning when it uses "the zoning power to benefit particular private interests rather than the collective interests of the community").

Importantly, "'[a]n ordinance enacted to advance the general welfare by means of a comprehensive plan is unobjectionable even if the ordinance was initially proposed by private parties and these parties are in fact its ultimate beneficiaries.'" Powerhouse Arts Dist. Neighborhood Ass'n v. City Council, 413 N.J. Super. 322, 334 (App. Div. 2010) (quoting Taxpayers Ass'n of Weymouth Twp. v. Weymouth Twp., 71 N.J. 249, 262, republished as corrected, 80 N.J. 6 (1976), cert. denied sub nom. Feldman v. Weymouth Twp., 430 U.S. 977, 97 S. Ct. 1672, 52 L. Ed. 2d 373 (1977)), certif. denied, 205 N.J. 79 (2011); see generally William M. Cox & Stuart R. Koenig, New Jersey Zoning & Land Use Administration 821 (2014).

We reject plaintiffs' contention that the 2010 Ordinance was inconsistent with the master plan. A specific recommendation of the reexamination report was that the zoning regulations in Closter Plaza should "[a]llow the market to determine the tenancy and size of the anchor and satellite stores." The report further explained that "most modern supermarkets will only build new stores that are substantially larger than those built 10 to 20 years ago," and placing limitations on the size might "interfere with the natural market forces . . . needed to drive this development." The report further noted that "[t]he strategy that should be adopted [] is to work with the current owners, or with prospective developers, in encouraging latent market[] forces to develop the type of retail center . . . probably a community shopping center most likely anchored by a modern supermarket with a group of satellite stores."

Since increasing the maximum permissible square footage of retail establishments in the zone was not inconsistent with the master plan, plaintiffs' argument that the ordinance was spot zoning rests solely upon their claim that the amendment was driven by discussions with a specific developer who stood to benefit. Our case law has consistently held, however, those facts alone do not prove that a zoning amendment resulted in illegal spot zoning.

For example, in Weymouth Township, supra, the governing body enacted two ordinances, "[t]he net effect of" which was, in part, to constitute the defendant's land as "a zoning district . . . restricted to use for mobile home parks . . . or to any use permissible in an R-A Rural Residential District." 71 N.J. at 260. It was the defendant-property owner who suggested "that his land be rezoned for use as a trailer park," an arrangement that benefited him economically. Id. at 262. Upholding the ordinances against a taxpayer challenge, the Court stated

These isolated facts do not present a prima facie case of "spot zoning." Moreover, the uncontradicted testimony of the municipal officials established that, prior to the adoption of these ordinances, the planning board and the governing body gave conscientious consideration both to the appropriateness of [the ordinance] and the effect of this use on the general well-being of the community. The law requires no more.

[Ibid.]

In Gallo v. Lawrence Township, 328 N.J. Super. 117, 119-120 (App. Div. 2000), the municipality was conducting a reexamination of its master plan and contemplating reclassification of a zone's requirement regarding lot size. A developer submitted a subdivision application indicating his property was contained in a particular zone, proposed but as of then not yet enacted. Id. at 120. The municipality's planning officials indicated that undersize lot variances would be needed under the existing zoning regulations. Id. at 120-21.

The town council discussed the possibility of creating three "sub-zones" within the district, each with varying area requirements. Id. at 121. It considered the developer's specific parcel, and, "at the request of the developer," the planning board recommended that the parcel be placed in a particular sub-zone. Ibid. The ordinance was enacted reflecting this revision. Id. at 122.

The Law Division judge rejected the plaintiffs' challenge to the ordinance as "spot zoning," id. at 127, noting that the plaintiffs failed to produce evidence that the township intended to provide the developer with a benefit "to the detriment of all other land owners in and around this zone," while the township offered sufficient evidence of its "legitimate purpose" in enacting the ordinance as part of its reexamination plan. Id. at 128. We affirmed specifically agreeing with the judge's analysis. Ibid.

Here, the 2010 ordinance modified the maximum square footage permitted in the district from 40,000 to 45,000 square feet. It did not, as the trial judge properly noted, redefine the zone to increase the amount of land subject to permitted retail uses, nor did it amend the regulation so as to now permit a use incompatible with prior permitted uses in the zone. The decision to amend the regulation to permit a modest increase in the maximum square footage was supported by the reexamination report, which noted that strict restrictions on the size of stores in the district "could stymie development [] leaving Closter Plaza to drag along in its current weak and [] obsolescent state." Moreover, contrary to plaintiffs' assertions, the process by which the 2010 Ordinance was enacted demonstrates that Closter debated the change at public meetings and gave careful consideration to the issue.

The fact that Lipari's principals, and ultimately Whole Foods, benefitted from the zoning amendment is not cause for us to strike it down as impermissible spot zoning. Even if the 2010 Ordinance was enacted in response to suggestions from Lipari or Whole Foods, it was consistent with the master plan reexamination report and therefore did not result in the elevation of private interests over those of the public at large. We affirm on this issue.

Plaintiffs also argue that the 2010 Ordinance should be struck down because the private meetings between Lipari and various public officials violated the OPMA. We again disagree.

The OPMA reflects the Legislature's "clear statement of New Jersey's public policy 'to insure the right of its citizens to have adequate advance notice of and the right to attend all meetings of public bodies at which any business affecting the public is discussed or acted upon in any way.'" McGovern v. Rutgers, 211 N.J. 94, 99 (2012) (quoting N.J.S.A. 10:4-7). Notably, a "[m]eeting," as used in the OPMA, "does not mean or include any such gathering attended by less than an effective majority of the members of a public body." N.J.S.A. 10:4-8(b)(1).

We have held, in the context of a municipal planning board, that ex parte meetings by two board members and a staff engineer with a developer did not violate the OPMA because, among other reasons, there was no "effective majority." Neu v. Planning Bd. of Twp. of Union, 352 N.J. Super. 544, 554 (App. Div. 2002) (OPMA not violated where two of the nine planning board members met ex parte with engineer regarding site application). Here, the meetings Lipari had with Lignos and the mayor involved neither an effective majority of the Board nor the municipal council.

Plaintiffs cite our decision in South Harrison, Township Committee v. Board of Chosen Freeholders, 210 N.J. Super. 370 (App. Div.), certif. denied, 104 N.J. 372 (1986), for support to the contrary. There, two meetings were held by members of the freeholder board to discuss a new county landfill. Id. at 373. At the first, held on December 10, 1984, five Democratic board members participated, along with consultants and the county planner. Ibid. The second meeting occurred the next day and was attended by three members of the board, as well as a freeholder-elect, consultants and the planner. Ibid.

We noted that "[t]he statutory definition of meeting does not cover any gathering attended 'by less than an effective majority.'" Id. at 376 (quoting N.J.S.A. 10:4-8(b)). We concluded that the first meeting "attended by . . . a majority of the Board" violated the OPMA. Ibid. Plaintiffs seize upon a later portion of the opinion in which, considering whether a subsequent meeting cured the illegality, we stated: "we reject any notion that the December 27 and 28 meeting 'cured' the illegal meetings of December 10 and 11." Id. at 378 (emphasis added).

From this, plaintiffs contend the OPMA is violated even if less than an effective majority of a public body meets to discuss public business. We reject such a strained reading of our decision because it contorts the essential holding of the case. "[T]hese meetings, particularly the December 10 meeting attended by the effective majority of the Board," violated the OPMA. Id. at 375 (emphasis added). Nothing similar occurred here.

Affirmed.

1 The MLUL is codified at N.J.S.A. 40:55D-1 to -163.

2 The 2010 Ordinance repealed the 2009 Ordinance.

3 We are advised that to the extent the complaints named other parties or sought additional relief, the issues were resolved prior to trial and are not before us.

4 Kauker's testimony was limited to the contents of his report, which was issued prior to passage of the 2010 Ordinance. However, since the two ordinances were identical in terms of their impact on the zoning regulations, we consider the evidence as applicable to both, as did the judge.

5 Rosenblum was called as a witness by Closter but there is no need to recount his brief testimony.

6 Rosenblum advances several other arguments for the first time in his reply brief. We refuse to address them. See e.g., Goldsmith v. Camden Cnty. Surrogate's Office, 408 N.J. Super. 376, 387 (App. Div.) (noting the impropriety of raising an issue for the first time in a reply brief), certif. denied, 200 N.J. 502 (2009).

7 We also have noted that the statute "permits a governing body to adopt an amendment to a zoning ordinance inconsistent with the master plan if a 'majority of the full authorized membership of the governing body' votes for it," and "the governing body's reasons 'for so acting' [are] expressed 'in a resolution and recorded in its minutes.'" Willoughby v. Wolfson Group, Inc., 332 N.J. Super. 223, 226 (App. Div.) (quoting N.J.S.A. 40:55D-62a), certif. denied, 165 N.J. 603 (2000).