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Downtown Residents for Sane Development v. City of Hoboken

Decided: July 5, 1990.


On appeal from Superior Court, Law Division, Hudson County.

Pressler, Long and Landau. The opinion of the court was delivered by Landau, J.A.D.


Downtown Residents for Sane Development (Residents), plaintiffs in an action in lieu of prerogative writs, appeal from a summary judgment entered in favor of defendants The City of Hoboken (City), The Council of the City of Hoboken (Council) and defendant-intervenor Applied Development Associates, Inc. (Applied). Residents challenge the Observer Highway Redevelopment Plan (Plan) adopted in April 1988 by the City Council after extensive hearings and litigation.

Applied, the redeveloper, was permitted to intervene as a defendant by consent. Documents submitted in a related but not congruent suit before the same trial judge were made part of the present record, because the cross motions for summary judgment in both suits were heard and decided at the same time.

We begin by stating Residents' burden in a matter of this nature. A presumption of validity and constitutionality attends every legislative decision. In order for Residents to prevail in setting aside the questioned Plan, the legislative decisions made must be more than debatable, they must be shown to be arbitrary or capricious, contrary to law, or unconstitutional. See Hutton Park Gardens v. Town Council of West Orange, 68 N.J. 543, 564, 350 A.2d 1 (1975); Kozesnik v. Montgomery Tp., 24 N.J. 154, 167, 131 A.2d 1 (1957). Thus, even though every motion for summary judgment must be considered under the demanding test of R. 4:46-2, as interpreted in Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 110 A.2d 24 (1954), in order for Residents to have survived summary judgment the undisputed facts and disputed facts of record, if believed, must together have been sufficient to sustain

a finding of arbitrary or unlawful action. It is not enough to show that the legislative determinations were debatable.


Applied and its affiliated entities have been successful developers and managers of approximately 1,500 units of subsidized housing in the City of Hoboken since 1972 when the Hoboken City Council declared a 20-block area blighted pursuant to N.J.S.A. 40:55-21.1 to 21.14 (The Blighted Area Act). During that time Hoboken and the blighted area have experienced substantial revitalization. In October of 1987, following extensive public input and planning board review, the City adopted a Redevelopment Plan primarily for three city-owned parcels on Observer Highway at the south end of the area covered by the declaration of blight. The parcels are also at the southern border of the City. The Plan expressed a purpose, not merely to continue the blight remediation program, but also to address an urgent need for affordable housing in the City. Litigation ensued, and following further public hearings, the City adopted the present Redevelopment Plan on April 6, 1988. Its objectives were similar.

Acting in its capacity as the redevelopment agency pursuant to N.J.S.A. 40:55C-12, the City Council designated Applied as redeveloper. Applied, together with the City, had secured a major federal Housing Development Action Grant (HODAG) in 1986. The HODAG was premised on commencement of construction of 115 affordable housing units no later than September 28, 1988. Applied was nonetheless required to participate in the competitive process for designation by submitting a proposal. After the Council adopted the Redevelopment Plan in April 1988 and designated Applied, serious environmental and other problems threatened to block the two-site 415 unit project contemplated. Indeed, Hartz Industries, Applied's original coventurer, dropped out and Applied continued as sole designee as of December 1988.

Applied finally secured environmental approvals necessary to enable it to commence work on one 115-unit affordable housing project on Observer Highway, barely in time to meet the federal HODAG deadline.

A Hudson Street 300-unit project was also approved for development by Applied. It is proposed that it will contain 145 market rate units, 30 low income units, and 120 affordable controlled middle income units. Under the Land Disposition Agreement which governs transfer of the Observer Highway unit property to Applied, it is required to construct 53 low income units in this project, except that 30 may be built at Hudson Street if that project is developed, subject to approval of the Mayor and Council.

Hudson Street's affordable units cannot be converted to condominium status for fifteen years. The 115-unit Observer Highway Project cannot be so converted for twenty years. Significantly for Hoboken, no real estate tax abatements were proposed or given for the projects.

The revitalization in the area of blight includes a neighborhood immediately adjacent to the Observer Highway Project. The project was required to be designed so that the tallest portions abut closely the north side of a wide road known as Observer Highway, away from the residential areas to the north. There are open railroad yards on the southern side of Observer Highway.

It is not disputed that on September 11, 1987 Applied's principal sponsored a boat ride attended by approximately 275 tenants and employees of Applied, as well as by seven of the nine City Council members. A number of competing developers were also in attendance. During the boat ride, a model of the proposed project was on display, and the project architect, who had designed the Battery Park City Project, was also present. During the boat ride ...

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