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Commercial Realty and Resources Corp. v. First Atlantic Properties Co.

Decided: February 4, 1991.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 235 N.J. Super. 577 (1989).

For modification and affirmance -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Stein, and Garibaldi. For reversal -- None. The opinion of the Court was delivered by Stein, J.


Since 1924, when the Legislature first authorized municipalities to adopt zoning ordinances, L. 1924, c. 146, municipal boards of adjustment have been empowered to grant variances from zoning regulations. Preserved in the Municipal Land Use Law (MLUL), L. 1975, c. 291, the variance power is currently codified in subsections c and d of N.J.S.A. 40:55D-70, which impose different standards to govern the grant of the discrete classes of variances authorized by the respective subsections. One of the significant distinctions between subsection c and d variances is that the latter can be authorized only by boards of adjustment, whereas municipal planning boards, in the course of approving subdivisions, site plans, or conditional uses, are empowered to grant subsection c-type variances. See N.J.S.A. 40:55D-60.

In this case the Neptune Planning Board, attempting to exercise that statutory authority, granted the application of respondent First Atlantic Properties Co. (First Atlantic) for site-plan approval of a five-story, forty-four-foot high hotel, concurrently granting respondent's appeal for a variance from the two-story, thirty-foot height limitations imposed by the Neptune Zoning Ordinance. Neptune, N.J., Zoning Ordinance § 3.1(A) (Jan. 31, 1977).

Plaintiff Commercial Realty and Resources Corp. (Commercial Realty), instituted this suit challenging the Planning Board's action. The Law Division set aside the Board's approval,

concluding that variances from zoning-ordinance height restrictions are cognizable only under subsection d of N.J.S.A. 40:55D-70, and hence beyond the authority of planning boards. In a reported opinion, 235 N.J. Super. 577, 563 A.2d 866 (1989), the Appellate Division reinstated the Board's approval of both the site plan and height variance. The Appellate Division concluded that in the absence of "clear evidence that the municipality * * * intended * * * [that] zoning board jurisdiction be construed to be exclusive," a municipal planning board is empowered to grant variances from height restrictions in conjunction with its site-plan-review authority. Id. at 592, 563 A.2d 866. The court also concluded that the Planning Board's determination to grant the variance was sustainable. Id. at 596, 563 A.2d 866.

We granted Commercial Realty's petition for certification, 118 N.J. 224, 570 A.2d 978 (1989).


First Atlantic contracted to purchase a 2.8-acre tract on State Highway 66 in Neptune Township, located in the light-industrial (1-L) zone, apparently the least restrictive of the six commercial-type zones established by the Township zoning ordinance. See Neptune, N.J. Zoning Ordinance § 3.1(A). Hotels were permitted uses in the 1-L zone, which imposed a general height limitation of two stories and thirty feet and a six-story, ninety-foot limitation on office buildings. Hotels were also permitted in the Commercial Service and Executive Service zones, commercial zones more restrictive than the 1-L zone, but in which the height limitation was six stories and ninety feet.

First Atlantic applied to the Township Planning Board for site-plan approval of its proposal to erect a five-story, forty-four-foot-high, 133-room hotel, to be operated by its parent company, Susse Chalet of New Hampshire. Simultaneously, First Atlantic sought variances from the 1-L zone height limitation of two stories and thirty feet. Although asserting that it

required no variance from the ordinance's parking requirements, contending that the 1.25 spaces per-room standard applicable to other commercial zones did not apply in the 1-L zone, First Atlantic also applied protectively for a variance from that requirement, proposing 144 rather than 166 parking spaces.

The applicant's witnesses described the proposed hotel, one of thirty-eight Susse Chalet properties existing or under construction, as a limited-service, high-quality hotel servicing primarily commercial customers at rates twenty-five to fifty percent lower than those offered by competing chains. The rooms would not be accessible directly from the exterior parking area, but could be reached only from a central corridor system described as providing enhanced security for patrons. No restaurant, food service, or meeting-room facilities were to be provided. Although based on past experience the chain's hotels adequately serviced guests and staff by providing .8 parking spaces per room, the plan submitted to the Planning Board contemplated 144 parking spaces, substantially more than the anticipated need.

With respect to the height variance, a professional planner engaged by First Atlantic testified that he found it difficult to reconcile the 1-L zone's two-story, thirty-foot height limitation on hotels with its six-story, ninety-foot height limitation on office buildings. The witness stated that a four-story office building, approximately forty-four to fifty-feet high, was under construction on Route 66 near the site of the proposed hotel, and that other buildings in the immediate vicinity exceeded the thirty-foot height limitation on hotels. Noting the similar exterior appearance of the proposed five-story hotel, which was to be erected with a brick facade, and that of permitted, six-story office buildings, the planner questioned whether the Township had intended the 1-L zone's height limitation to apply to hotels. The planner also observed that in his experience, a two-story limitation on hotels was unrealistic. Observing that the appearance and configuration of the proposed hotel were appropriate for the surrounding area, he anticipated that the hotel would be

complementary to the existing commercial uses in the area and to the future commercial development that was likely to occur.

The Planning Board approved the site plan and related variances, subject to conditions set forth in its resolution, concluding that the proposed hotel would "further and promote development in the municipality consistent with the * * * Land Use Ordinance." The resolution's only acknowledgment of the statutory criteria for a subsection c(2) variance occurs by virtue of the Board's "adoption" of the conclusions of the applicant's planner, which include the opinion that no detriment to the master plan or zoning ordinance would result from the grant of the height and parking variances, and that the "benefits" accruing from the variances were substantial because of the compatibility of the proposed use with the development in the surrounding area.

As noted, the Law Division set aside the Board's action, reasoning that because height variances are cognizable only under subsection d of N.J.S.A. 40:55D-70, the Planning Board's ancillary authority to grant subsection c-type variances, see N.J.S.A. 40:55D-60a, was inapplicable. The Appellate Division reversed, concluding from its review of the Neptune Zoning Ordinance that there was no specific height limitation regulating hotels in the 1-L zone, nor any evidence that the municipality regarded the variance sought as one over which the Board of Adjustment's jurisdiction was exclusive. 235 N.J. Super. at 592, 563 A.2d 577. Accordingly, the court concluded that the required height variance was cognizable under subsection c of N.J.S.A. 40:55D-70, and hence within the jurisdiction of the Neptune Planning Board. Id. at 592-93, 563 A.2d 866. The Appellate Division also found sufficient evidence in the record to satisfy the affirmative criteria applicable to a c(2)-type variance:

The lot to be developed by a "motor inn" was part of a major subdivision of 54 acres located on the highway and near the Garden State Parkway. The entire

development was part of a plan referred to at the planning board hearing as a "Corporate Center."

Respecting the height variance and its relationship to the development, the corporate center was designed to attract business from outside the community. The "motor inn" was targeted to such a commercial traveler, a budget facility, with no frills. There was testimony that the motor inn as designed promoted internal security (as opposed to a two-story motel, with outside access stairways) in order to meet the demonstrated security needs of such travelers, often women. Thus, the record supported a conclusion that ...

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