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Baltica Construction Co. v. Planning Board of Township of Franklin

Decided: February 5, 1988.


On appeal from the Superior Court of New Jersey, Law Division, Somerset County.

Havey and Stern. The opinion of the court was delivered by Havey, J.A.D.


[222 NJSuper Page 429] Plaintiff Baltica Construction Company, Inc., was granted a ten-lot subdivision approval by defendant planning board of the Township of Franklin (board). As a condition to approval the board required plaintiff to bear the entire cost of installing an off-site water line. Plaintiff protested the condition and instituted the present suit to compel the board to allocate plaintiff's pro-rata share of the improvement cost. The trial judge dismissed the complaint, concluding that plaintiff was precluded from recovering the cost in excess of its pro-rata share because it installed the improvement before judicial resolution of its challenge to the board's action. We now reverse. We conclude that under N.J.S.A. 40:55D-42, a developer is not barred from recovery if it protests the planning board's refusal to allocate costs and institutes suit within one year from the time it "pays"

for the improvement by installing it. We therefore remand to the Law Division for further proceedings.

Plaintiff was granted subdivision approval at the board's meeting of October 16, 1985. As a condition to the approval, plaintiff was required to install a water line along Elizabeth Avenue in Franklin Township approximately 1,900 feet from the subdivision to an existing municipal water main at Amwell Road.*fn1 While plaintiff was prepared to install individual wells, it agreed at the October 16, 1985 meeting to extend the water line, providing the board allocate the cost of installation in a manner that plaintiff bear only its pro-rata share. The board refused to make a pro-rata allocation.

On November 6, 1985 the municipal engineer advised the board that the water line should be 16 inches as called for by the township's Water Master Plan, "with an agreement for reimbursement by the Township as others connect to the line." The township's director of planning instructed the board that a 16-inch pipe was necessary "to accommodate future development along the entire length of [Elizabeth Avenue]." At a November 20, 1985 board meeting, plaintiff presented evidence that an 8-inch pipe was adequate to service the subdivision. Nevertheless, plaintiff accepted the condition that a 16-inch pipe be installed but again insisted the board adhere to the township's off-site improvement ordinance which required the board to make specific findings as to whether the 16-inch pipe would benefit properties other than the subdivision and, if so, to fix plaintiff's pro-rata share of the improvement cost. No further action on plaintiff's request was taken by the board. It apparently was the board's view that pro-rata allocation and

reimbursement to plaintiff were decisions to be made by the mayor and council.

On December 3, 1985, prior to construction of the line, plaintiff instituted the present action against the board seeking to compel the board to allocate the cost of the water line. By letters to the mayor and council dated December 18, 1985 and January 2, 1986, plaintiff requested reimbursement for the excess cost. After the request was denied, plaintiff amended its complaint on February 28, 1986 adding the mayor and council as party defendants. Sometime in February 1986, plaintiff began construction of the line.

At the bench trial, plaintiff produced evidence that a 6-inch or 8-inch pipe was adequate to serve the subdivision, that the cost differential between an 8-inch and 16-inch pipe was approximately $37,500, and that the ten-lot subdivision would utilize only 6.25 percent of the total flow from the 16-inch pipe. Plaintiff also established that existing one-acre zoning in the area would permit 49 buildable lots contiguous to the water line from the subdivision to Amwell Road, all capable of tying into the line. According to plaintiff, its subdivision represented only 24.85 percent of the total land abutting the water line. The township engineer testified the properties abutting the line could tie into the line but were not required to do so because the township had no mandatory tie-in ordinance. The engineer also noted that, in his view, a 10-inch pipe was necessary for fire-fighting purposes.

Robert Paulus, defendants' real estate appraiser, testified that, in his opinion, the properties abutting the water line did not increase in value by virtue of the water-line installation. He stated he attempted without success to find sales within the township in order to compare values of lots with and without public water. He therefore premised his opinion primarily on the fact that tax assessors in adjoining municipalities had advised him they did not increase tax assessments on lands having public water.

The trial judge found plaintiff's subdivision could have been serviced with an 8-inch line. He nevertheless entered judgment for defendants, concluding that any benefits to adjacent landowners resulting from the water-line installation "[are] too speculative to allow a determination that plaintiff is entitled to a reimbursement from them." The judge also concluded that plaintiff was precluded from recovering the excess cost of the improvement because it did not wait for judicial resolution of the dispute before installing the improvement.

Plaintiff first contends that the 16-inch water line mandated by the board exceeded that which was necessitated by its ten-lot subdivision, and thus it is entitled to recover the cost of the line in excess of its pro-rata share.

It is now well-settled that the expense of installing off-site improvements may be imposed upon a developer as a condition to subdivision approval, including the installation of water and sewer lines. N.J. Bldrs. Ass'n v. Bernards Tp., 108 N.J. 223, 236 (1987); Divan Builders v. Planning Bd. Tp. of Wayne, 66 N.J. 582, 596 (1975); Ellis v. Larchmont Pharmacy Plaza, Inc., 208 N.J. Super. 359, 364 (App.Div.1986). The Municipal Land Use Law (MLUL) expressly authorizes the governing body, by ordinance, to impose such costs. See N.J.S.A. 40:55D-42. However, the cost assessment shall be limited to the developer's:

The off-site ordinance must establish:

Thus, imposition of the cost of improvements on a developer "must be accompanied by provisions for partial reimbursement if the improvement specially benefits property other than that of the ...

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