The opinion of the court was delivered by: LaVECCHIA, J.
On certification to the Superior Court, Appellate Division.
The core issue in this appeal is whether a zoning ordinance increasing the minimum lot size for permitted residential development of an extensive tract of land along the northern perimeter of Warren Township ("Township") is valid as applied to plaintiff's property. Secondarily, the appeal presents the question whether a taking of plaintiff's property has occurred irrespective of whether the ordinance is valid as applied. The trial court concluded that the zoning ordinance was arbitrary, capricious, and unreasonable as applied, and that a taking of property without compensation had occurred. The Appellate Division reversed on both issues. We granted certification, 165 N.J. 489 (2000), and now reinstate the trial court's determination invalidating the zoning ordinance because it is arbitrary, capricious, and unreasonable as applied to plaintiff's property. We hold further that plaintiff has no cognizable claim that it experienced a temporary taking during the period in which it successfully challenged the ordinance.
In December 1986, plaintiff, Pheasant Bridge Corporation, purchased 28.98 acres of land in Warren Township zoned to permit single-family homes on a minimum lot size of one-and-one-half acres. That allowed plaintiff to enjoy a yield of eight to fifteen subdivided lots on its land. Starting in 1987, it sought to develop the property for residential subdivision in accordance with the existing ordinance. As a first step, plaintiff resolved an issue involving sewerage capacity for the development. A lawsuit against the local sewerage authority ultimately was settled after plaintiff paid $42,000 to secure participation in a reserved sewerage capacity program.
While plaintiff was pursuing development, the Warren Township Planning Board adopted a Town Master Plan in January 1990 that included a recommendation for the adoption of an environmental protection zone (EP-250) within the township. That zone included:
Areas of significant (severe) economic constraints. . . . The unit yield shall be determined on non-environmentally constrained land at one unit per six acres. . . . Acres of accessible, and contiguous buildable uplands which are greater than 20 acres are considered appropriate for uses other than strictly large lot single-family residential or a hamlet. Appropriate conditional uses could consist of nursing homes, small scale retirement facilities, and recreation facilities for which additional density might be granted. Areas of severe environmental constraints should be preserved as undisturbed open space, although agricultural areas with significant wood lots (with a minimum of 50 acres) would be appropriate for golf courses or some other larger scale recreational use, provided that wooded areas are preserved to the greatest extent possible.
The primary constraints found in this zone:
0-1 foot depth to seasonal high table water;
Wetlands and wetlands buffers;
100 and 500 year flood plains.
In 1993, plaintiff sought subdivision approval, but the Township adopted an ordinance creating the EP-250 zone in December 1993 before the application was perfected. That zone encompassed plaintiff's land as well as 778 other acres along the township's northern perimeter.
Section 16-9 of the ordinance listed the purpose of the EP- 250 agricultural-residential environmental protection district as follows:
This zone includes areas of significant environmental constraints, as identified on the Environmental Constraints Map contained in the adopted Master Plan of Warren Township dated January 22, 1990. Development standards encouraged clustered single-family dwellings. Areas of accessible, and contiguous buildable uplands which are greater than 20 acres are considered appropriate for uses other than strictly large lot single-family residential or clustered single-family dwellings. Conditional uses consist of nursing homes, retirement facilities, private membership, non-profit and recreation facilities.
Section 16-9 increased the minimum lot size from the one-and-one- half acres allowed under the previous ordinance to a minimum lot size of six acres. Under the new ordinance plaintiff could develop no more than four lots on its land, rendering the project economically unfeasible in plaintiff's view. This action ensued. The trial court held that the EP-250 zone was facially valid. The court determined that the minimum lot size was justified due to subsurface rock formations that would require one to 3.95 acres to provide for adequate individual septic systems because of the high water-table concerns. The court deferred to the Township's judgment that additional regulation was needed in view of the combination of environmental factors including flood plain, steep slopes, seasonable high water, and wetlands present throughout the EP-250 zone. It reasoned that the multiplicity of those factors supported enactment of the EP- 250 zone. Indeed, plaintiff does not contest the validity of the zoning ordinance in respect of the other 778 acres that constitute the tract carved out by the Township along its northern border.
On the other hand, the court noted that there was evidence to support the view that the ordinance was arbitrary and capricious as applied to plaintiff's property. Nonetheless, the court concluded that that issue was better left to the Board of Adjustment for consideration in a variance application and determined not to reach the as-applied issue until after plaintiff made such an application.
On appeal, the Appellate Division affirmed the facial validity of the ordinance but remanded the matter to the trial court with the direction to consider the constitutionality of the ordinance as applied to plaintiff's property, and whether application of the ordinance constituted an uncompensated taking of plaintiff's property.
On remand, the trial court held that the EP-250 zoning was arbitrary as applied to plaintiff's property because the environmental concerns generating the creation of the EP-250 zone factually were inapplicable to plaintiff's property. The court had intimated as much in its first decision but expanded on its reasons for now holding that the ordinance was arbitrary, capricious, and unreasonable as applied. The trial court also held that a taking of ...