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Desai v. Board of Adjustment of the Town of Phillipsburg

April 22, 2003


On appeal from Superior Court of New Jersey, Law Division, Warren County, Docket Number WRN-L-199-95.

Before Judges Petrella, Lintner and Bilder.

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


Argued March 24, 2003

This matter returns to us after a remand of a prior appeal under docket number A-1144-99. The dispute arose out of the denial by the Board of Adjustment of the Town of Phillipsburg (Board) of the application by plaintiff Jagdish R. DeSai for a use variance for property located on Hudson Street in Phillipsburg. Plaintiff's application sought to expand the existing first floor commercial use and to convert the third floor into apartments.

Our earlier unreported opinion in this matter stated the salient facts which essentially were not in dispute, and we quote from that opinion:

... In September of 1994, plaintiff purchased a three-story brick building located at an intersection in the town of Phillipsburg. In March of 1993, the property's zoning designation was changed from "R-50(B)" and "R-75" to "R-50." "R- 50(B)" included single family residential units, multi-family residential units and neighborhood-type business establishments. "R-75" allowed for single family residential units, parks, playgrounds, churches, and temples. "R-50" restricted the area to only single family residential units.

Approximately four to five years prior to plaintiff's purchase, the building contained a pizza parlor on the first floor, three two-bedroom apartments on the second floor, and a large meeting room on the third floor. At the time of plaintiff's purchase of the property, the pizza parlor had been closed for approximately three years. It was disputed that the second floor was continuously used as three apartments. However, it was unclear when the use of the third floor ceased. Plaintiff spent approximately $105,000 on renovations.

In February of 1995, plaintiff applied to the Board of Adjustment for a use variance to operate a convenience store on the first floor of the building as a pre-existing non-conforming use, and to convert the third floor into two two- bedroom apartments. This application was denied. On April 13, 1995, plaintiff again appeared before the Board, this time requesting a use variance for a "beauty parlor/ice cream parlor" or a "pizza parlor/deli." This application was also denied.

Following this denial, plaintiff filed a complaint in the Law Division requesting the court to direct the Board to approve either of plaintiff's applications. One count of the complaint requested that the court declare that an inverse condemnation occurred by way of defendant's actions.

The court remanded the matter to the Board for further consideration of the issue of abandonment as to the first and third floors. On remand, the Board concluded that both floors had been abandoned as commercial uses and denied plaintiff's application.

Plaintiff returned to the Law Division which again remanded the case to the Board for consideration of appropriate uses for the first and third floors. The Board initially decided that plaintiff was permitted to occupy 1500 square feet of the first floor as a convenience store and to utilize the remaining 800 square feet as a small office or a small retail/commercial use. Plaintiff was also permitted to use the third floor for two two-bedroom apartments and to continue to operate the second floor as apartments. These terms were set forth in a settlement between the parties.

On March 11, 1999, the Board held a public hearing for testimony and public comment regarding the settlement. After strenuous objection by townspeople based on the lack of parking, the Board reversed its prior decision and refused to consider any other uses of the first and third floors.

Plaintiff again appealed the Board's decision. This time, the judge requested two appraisals from each party in anticipation of a ruling on inverse condemnation. The values in the appraisals ranged from $150,000 to $300,000. The court concluded that the actions of the Board amounted to inverse condemnation and ordered the Board to pay plaintiff $185,000 for the property. Although the court found that the Board had not acted improperly during the pendency of the matter, the judge awarded plaintiff $20,000 in delay damages, or $2,000 a month for ten months rent.

In our earlier opinion we said that the trial judge correctly concluded that inverse condemnation had occurred and that plaintiff was entitled to just compensation for his property. However, because of inadequate basis for appellate review we remanded the matter to the trial court for a hearing on the value of the property and more specific findings on delay damages. At a ...

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