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Southport Development Group Inc. v. Township of Wall

March 31, 1998

SOUTHPORT DEVELOPMENT GROUP, INC., A NEW JERSEY CORPORATION AND CLUB DEVELOPMENT GROUP, INC., A NEW JERSEY CORPORATION, PLAINTIFFS-APPELLANTS,
v.
THE TOWNSHIP OF WALL, TOWNSHIP COMMITTEE, AFFORDABLE HOUSING TRUST FUND AND THE WALL TOWNSHIP LAND USE OFFICER, DEFENDANTS-RESPONDENTS.



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

Before Judges Brochin, Wefing and Braithwaite.

The opinion of the court was delivered by: Wefing, J.A.D.

Argued: December 10, 1997

Decided:

Plaintiffs *fn1 appeal from the trial court's grant of defendants' cross-motion for summary judgment. After carefully reviewing the entire record in this matter, we are satisfied that the judgment for defendants should be affirmed but for reasons other than those expressed in the trial court's opinion, Southport Dev. Group, Inc. v. Township of Wall, 295 N.J. Super. 421 (Law Div. 1996).

We consider it necessary to set forth the factual background of this matter at some length so that the basis of our decision may be more easily understood. That factual background is, of necessity, somewhat detailed and is made more complicated by the fact that it requires consideration of the actions not only of these parties but of litigation between Wall Township (Wall) and other parties that was going on within basically the same time frame.

In July 1986, Wall passed Ordinance 18-1986 as part of its efforts to meet its Mount Laurel responsibilities to provide low and moderate income housing. Southern Burlington County NAACP v. Township of Mount Laurel, 67 N.J. 151, appeal dismissed and cert. denied, 423 U.S. 808, 96 S.Ct. 18, 46 L.Ed.2d 28 (1975) (Mount Laurel I) (developing municipalities are constitutionally required to provide a realistic opportunity for the development of low and moderate income housing); Southern Burlington County NAACP v. Township of Mount Laurel, 92 N.J. 158 (Mount Laurel II) (every municipality has an affirmative obligation to provide its fair share of affordable housing).

When Wall passed this ordinance, it had already been engaged in litigation for nearly two years with five separate builders who had sued the Township over its allegedly exclusionary zoning practices and who each sought a builder's remedy. These five lawsuits had been consolidated before Judge Serpentelli, one of the Judges designated to handle Mount Laurel litigation. This consolidated matter is referred to by the parties as the "Cove" lawsuit, after the first named plaintiff. We shall adopt that same designation. These plaintiffs were never parties to the Cove litigation.

Ordinance 18-1986 required that applications for residential development with a density greater than three units per acre which had not received final approval prior to July 1, 1986 had to provide for low and moderate income housing to obtain approval. The ordinance also specified that a builder could meet that obligation by "payment to the township of a sum of money in lieu of actual construction of the required low and moderate income housing units in an amount to be determined by a formula established by the township committee."

In September 1986, plaintiffs obtained variances from Wall to build town houses on two separate tracts where such use was otherwise not permitted. While each of the variances required that twenty percent of the units to be constructed be dedicated to low and moderate income housing, they also also provided, in nearly identical language, that "in the event that the Twp. of Wall adopts an ordinance which permits a monetary contribution in lieu of constructing Mount Laurel units, then the applicant will be permitted to either build the units or to make such cash contribution as required by the ordinance of Wall Twp."

Although neither the initial Ordinance 18-1986 nor the variances specified the amount of the contribution that would be called for in lieu of constructing Mount Laurel units, plaintiffs understood, from conversations with members of the Board of Adjustment and its attorneys, that it would range between $10,000 and $15,000 for each Mount Laurel unit they did not construct. Wall made no commitment, however, that the development fee would not exceed a certain amount.

In the autumn of 1987, plaintiffs were in communication with the New Jersey Department of Community Affairs seeking the Department's approval of the Public Offering Statement they intended to utilize in conjunction with the sale of these units. N.J.S.A. 45:22A-21 to -42. The Department, as part of its review, raised the issue whether the offering should reveal that certain of the units were intended as low and moderate income housing. On October 20, 1987, both Wall's attorney and the plaintiffs' attorney wrote to the Department, with copies to each other, to the effect that it was anticipated that the projects would not include such units but that the plaintiffs would instead be making a contribution to Wall through the Township's Affordable Housing Trust Fund. The letter of Wall's attorney refers to a contribution of $10,000 to $15,000 per unit. The letter of plaintiffs' attorney refers to a contribution between $60,000 and $90,000, computed upon the six Mount Laurel units that would not be built. Wall's attorney made no response to that estimate.

In December 1987, Wall passed ordinance 34-1987 which established the Wall Affordable Housing Trust Fund. Under this ordinance, developments which had received a variance after July 1, 1986 that provided for the possibility of a cash contribution to satisfy a Mount Laurel obligation could meet that obligation by paying "into the Affordable Housing Trust Fund of the Township of Wall the sum of $10,000 for each such unit constructed."

This ordinance, and its predecessor 18-1986, were part of a comprehensive effort by Wall to satisfy its Mount Laurel obligations through settlement of the Cove lawsuit, which had been proceeding in the normal course and which eventually ...


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