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Concerned Citizens of Princeton, Inc. v. Mayor and Council of the Borough

June 30, 2004

CONCERNED CITIZENS OF PRINCETON, INC., JAMES FIRESTONE, HERBERT HOBLER, HENRY LANDAU, MARK J. LEUCHTEN, RICHARD STRAZZA, AND HERBERT TUCHMAN, PLAINTIFFS-APPELLANTS/CROSS-RESPONDENTS,
v.
MAYOR AND COUNCIL OF THE BOROUGH OF PRINCETON, DEFENDANT-RESPONDENT/CROSS-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Mercer County, L-0062-03.

Before Judges Havey, Fall and Hoens.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: May 24, 2004

Plaintiffs Concerned Citizens of Princeton, Inc., James Firestone, Herbert Hubler, Henry Landau, Mark J. Leuchten, Richard Strazza, and Herbert Tuchman appeal from an order entered in the Law Division on April 14, 2003, granting summary judgment in favor of defendant, Mayor and Council of the Borough of Princeton. The order dismissed their complaint in lieu of prerogative writs challenging defendant's designation of certain municipally-owned properties located in the central business district of the downtown area of Princeton as constituting an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law (LRHL), N.J.S.A. 40A:12A-1 to -73. Defendant cross-appeals from the trial court's interlocutory order entered on February 25, 2003, denying its motion to dismiss plaintiffs' complaint as untimely.

We affirm substantially for the reasons articulated by Assignment Judge Linda R. Feinberg in her comprehensive written opinions issued on February 21, 2003, and March 31, 2003. We conclude that the trial court properly applied its discretion in concluding that the interests of justice warranted enlarging the period of time within which plaintiffs could challenge the action of the Borough Council in determining that the municipally-owned property constituted an area in need of redevelopment under the LRHL.

On the merits, we reject plaintiffs' contention that the Borough Council was limited to consideration of the criteria set forth in N.J.S.A. 40A:12A-5(c) when determining whether municipally-owned property constitutes an area in need of redevelopment under the LRHL. We hold that the governing body of a municipality considering whether an area consisting in whole, or in part, of municipally-owned lands should be designated as an area in need of redevelopment, may consider whether any of the criteria set forth in N.J.S.A. 40A:12A-5 have been established by substantial credible evidence. Here, there was substantial credible evidence in the record supporting the Borough Council's determination that the municipally-owned properties constituted an area in need of redevelopment pursuant to the criteria set forth in N.J.S.A. 40A:12A-5(d) and -5(e).

We further conclude that the terms"blighted area," as used in N.J. Const., Art. VIII, § 3, ¶ 1, and"an area in need of redevelopment," as used in the LRHL, are synonymous. Therefore, the designation of an area in need of redevelopment under the LRHL is the equivalent of a blight designation. The legislative history of the LRHL reflects the intent of the Legislature that the LRHL encompass a broad range of circumstances in determining whether an area is in need of redevelopment. The relative affluence of a municipality or its residents is irrelevant in that calculus as long as the determination that an area is in need of redevelopment meets the criteria set forth in N.J.S.A. 40A:12A-5 and is supported by substantial credible evidence.

The following discussion instructs our conclusions. Following nearly two decades of exploring various alternatives to the Borough's parking problems in the downtown area of Princeton, the Borough Council adopted a redevelopment plan that entailed construction of a five-story parking garage, a public plaza, and seventy-five housing units, twelve of which would be committed to affordable housing. The area determined to be in need of redevelopment consists of municipally-owned properties collectively constituting 2.13 acres, located between Wiggins, Witherspoon and Spring Streets. A public library and surface parking lot occupied those lands.

In 1980, the governing body commissioned the design of a master plan for the downtown area of Princeton that contemplated construction of a multi-level parking facility to replace the surface parking lot, which was adjacent to Spring Street. The central components of the 1980 master plan concerning the subject site were a library plaza, community housing, and the parking garage. That plan envisioned development of additional retail and residential space at that site, anchored by the proposed multi-level parking facility to accommodate 450 vehicles, and to be located at the southwest corner of the intersection of Spring and South Tulane Streets. To help defray the cost of the garage, it was proposed that 6,200 square feet of retail space be included in the development plan. These provisions of the 1980 master plan were not implemented; however, discussions regarding the need for additional parking in the downtown area continued.

On December 12, 1996, the Princeton Regional Planning Board adopted the"Princeton Community Master Plan," which reflected the need to address the parking problems in the central business district of the downtown area of Princeton. After studying the problem, the Master Plan Subcommittee of the Planning Board recommended construction of a parking facility on the subject, municipally-owned site.

After reviewing and approving the proposal by its Subcommittee, the Planning Board issued a report to the Borough Council on July 8, 1999, recommending construction of a multi level parking garage facility on that site, in conjunction with a new public library building. In October 1999, the Borough Council authorized Carl Peters, the Borough Engineer, and Lee Solow, its Regional Director of Planning, to conduct a comprehensive study of the parking conditions in the central business district. Peters and Solow publicly presented an analysis of parking supply and demand in the central business district to the Borough Council at its February 1, 2000 meeting, and to a meeting of the Planning Board on February 15, 2000.

On February 16, 2000, members of the public were invited to attend a February 22, 2000 Borough Council meeting to discuss downtown development issues. Notice of that meeting was published in several local newspapers. Consultants and professionals commissioned by the Borough appeared at that meeting, discussed development issues, and presented a survey and analysis of traffic movement in the downtown area.

On April 13, 2000, the Planning Board's Subcommittee issued a second report, concluding that the need for parking was critical and should be addressed prior to approving further development applications in the downtown area. The Subcommittee recommended retaining professionals to analyze the economic feasibility of constructing a public parking garage at the subject site.

Desman Associates was commissioned by the Borough Council to conduct a feasibility study for the construction of a parking facility on the subject site. Princeton Future, Inc., a citizens' group, submitted an alternative proposal. The proposals by Desman Associates and Princeton Future were presented to the Borough Council at its April 19, 2001 meeting.

In the interim, based upon two decades of study, the Princeton Public Library Trustees announced plans to build a new library facility on its existing site in the central business district based on a commitment by the Borough Council to provide additional parking to coordinate with the proposed opening of that new library facility.

The Borough Council retained the planning firm of Brown & Kenner Urban Design to work with the Borough and Princeton Future to prepare a plan that would include construction of a multi-level, publicly-owned parking garage and a public plaza with housing and retail stores. Brown & Kenner presented such a plan and report to the Borough Council and Planning Board in July 2001.

At its October 18, 2001 meeting, the Planning Board adopted the"Princeton Community Master Plan 2001 Reexamination Report," as the"Princeton Community's Master Plan." That plan concluded that construction of a new parking facility would stimulate and insure the economic vitality of the downtown area. The plan noted that the Borough Council was then considering whether a redevelopment plan pursuant to the LRHL would be appropriate for development of the subject area.

In December 2001, the Borough Council retained The Atlantic Group, an urban development consulting firm, to prepare a report addressing the feasibility of designating the subject, municipally-owned, 2.13-acre properties as an"area in need of redevelopment" pursuant to the LRHL. The Borough Council directed that, in addition to addressing the parking needs, The Atlantic Group should investigate the goal of additional residential housing, including affordable housing units.

Based on recommendations of The Atlantic Group, on January 8, 2002, pursuant to N.J.S.A. 40A:12A-6, the Borough Council passed a resolution authorizing and directing the Planning Board to conduct an investigation and hold a public hearing to determine whether the subject area qualified as an area in need of redevelopment pursuant to the LRHL. The Borough Council also issued a"Request for Qualifications" that invited design/building companies to state their interest in participating in the contemplated redevelopment, and to submit their qualifications. Five submissions pursuant to that request were considered by the Borough Council.

On January 21, 2002, the Planning Board released a report, prepared by The Atlantic Group, finding a need for redevelopment of that site under the LRHL. The report concluded that the proposed site qualified for redevelopment pursuant to N.J.S.A. 40A:12A-5(d) and -5(e). On February 7, 2002, the Planning Board conducted a publicly-advertised work session. In testimony given at that work session, Solow described the procedure for designating an area in need of redevelopment under the LRHL, and the role of the Planning Board in determining whether that designation should be made. Lawrence O. Houstoun, Jr., a professional planner and member of The Atlantic Group, testified regarding the report's recommendation for redevelopment under the LRHL, as did Patrick J. Henry, another principal of The Atlantic Group. Houstoun explained that the existing surface parking lot was in a state of obsolescence because it represented"yesterday's solutions" in a municipality such as Princeton, where"[s]tructured parking is now the standard."

Houstoun noted that downtown Princeton already had two multi- story parking facilities, which satisfy parking demands while allowing land to be utilized most efficiently. Houstoun explained that because the existing surface parking lot had been assembled over time, its irregular configuration limited the number of available spaces and inhibited"urban center uses."

Houstoun also stated that the lands were not fully productive, produced no tax revenue, and did not adequately support adjacent uses. He explained that by permitting private investment in some portions of the redevelopment project through residential or retail uses, while maintaining the dual purposes of providing more than the present parking supply and public open space, the municipality would be able to maximize the use and benefits of its property.

In accordance with N.J.S.A. 40A:12A-6(b)(1), the Board caused a map to be prepared showing the boundaries of the proposed redevelopment area. In accordance with N.J.S.A. 40A:12A-6(b)(3), the Planning Board published notices scheduling a public hearing for February 21, 2002, on the issue of whether the proposed area should be classified as an area in need of redevelopment pursuant to the LRHL. On February 21, 2002, principals from The Atlantic Group appeared at the scheduled meeting; no one from the public attended or voiced opposition to the proposal. After conducting a hearing that outlined the proposed designation, the Planning Board unanimously recommended to the Borough Council that the subject site be designated as an area in need of redevelopment.

On February 26, 2002, the Borough Council passed a resolution designating the subject site as an area in need of redevelopment pursuant to N.J.S.A. 40A:12A-5(d) and -5(e) of the LRHL. On March 18, 2002, the Borough Council issued a"request for proposals," inviting five of the firms that had responded to the request for qualifications, to submit"financial and design ideas" for the proposed redevelopment.

On April 30, 2002, the Borough Council passed a resolution adopting a specific redevelopment plan and submitted it to the Planning Board for review. On June 6, 2002, the Planning Board conducted a public hearing regarding the redevelopment plan. There was testimony that the redevelopment plan was consistent with both the master plan and the State Development and Redevelopment Plan. At the conclusion of the hearing, the Planning Board voted to recommend adoption of the redevelopment plan by the Borough Council.

In June 2002, work commenced on the new library, and library officials informed the Borough Council that additional parking for library patrons would be needed by the end of 2003, the anticipated completion date. The Borough Council requested that two of the five building firms that had responded to the request for proposals, submit applications for"final, competitive analysis and negotiations." After reviewing the applications, the Borough Council made a preliminary selection of Nassau HKT Associates, LLC as its preferred developer/partner for the redevelopment project. On June 11, 2002, the Borough Council enacted an ordinance adopting the redevelopment plan, and passed a resolution selecting Nassau as the developer to complete the redevelopment project and to move forward with its design.

Nassau proceeded to develop specific engineering plans for the redevelopment project and, in November 2002, an engineering site plan and concept plan were submitted to the Planning Board for consideration. The proposed project consisted of a five- story parking garage containing approximately 500 parking spaces, a landscaped public plaza, and seventy-seven housing units, twelve of which would be committed to affordable housing. The project also entailed construction of two multi-story buildings that Nassau would lease from the Borough. Those buildings were to contain approximately 15,000 square feet of retail space on the ground level and approximately 75,000 square feet of residential space on the upper level. The lease and "payments in lieu of taxes" (PILOT) from Nassau, pursuant to N.J.S.A. 40A:12A-40, were to subsidize the operating costs of the parking garage and public plaza, and allow the Borough to maintain a reasonable parking fee structure.

Timely notices were published scheduling a public hearing before the Planning Board on the proposed site plan for the redevelopment project. On December 17, 2002, the Borough Council adopted an ordinance appropriating $13,500,000 for construction of the project, and authorizing the issuance of bonds and notes to fund the project. On December 19, 2002, the Planning Board conducted a public hearing and approved the site plan.

On January 9, 2003, plaintiff, a non-profit corporation that includes local merchants and residents who opposed the project, in an attempt to halt the project, filed petitions containing over 800 signatures with the Borough Clerk, challenging the bond ordinance and attempting to compel a referendum. Following rejection of their petitions, plaintiffs filed a complaint in lieu of prerogative writs in the Law Division against defendant on January 10, 2003, seeking a judgment declaring that the subject site was not blighted and not in need of redevelopment; compelling a public referendum on the project to be placed on the ballot at the next general election; and enjoining the Borough Council from proceeding with the bond sale and project.

On or about January 17, 2003, the defendant filed a motion to dismiss the complaint as being time-barred or, in the alternative, for summary judgment. On February 21, 2003, Judge Feinberg issued a written opinion and entered an order denying the motion to dismiss and, pursuant to R. 4:69-6(c), enlarging the forty-five day time limit contained in R. 4:69-6(a) within which a complaint in lieu of prerogative writs can be filed to challenge the designation of the subject site as an area in need of redevelopment pursuant to the LRHL. The court concluded that the interest of justice warranted the enlargement based upon the issue of public interest involved.

On March 13, 2003, in light of the contentions by plaintiff that defendant had acted in bad faith, the trial court exercised its discretion and permitted the defendant to supplement the record to include materials outlining the history leading up to the designation of the redevelopment area. On March 26, 2003, Judge Feinberg conducted a hearing on the motions for summary judgment filed by both parties. On March 31, 2003, the court issued a written decision, granting summary judgment in favor of defendant, dismissing plaintiffs' claims. A judgment memorializing that decision was entered on April 14, 2003.

The judge concluded that"the Borough acted well within its broad statutory authority to designate the study site as a redevelopment area, on the basis of the substantial credible evidence in the record." The judge stated that"plaintiffs cannot sustain their challenge merely by questioning the wisdom of the Borough or the Planning Board, or by suggesting alternative courses of action." The judge ruled that plaintiffs must"show that the particular designation made by the Borough is unsupported by substantial credible evidence, such that it is arbitrary or capricious."

The judge rejected plaintiffs' contention that redevelopment is limited to blighted areas and, therefore, not appropriate in Princeton, stating

Concerned Citizens ask this Court to engraft another restriction on the plain words of the LHRL. However, as the case law demonstrates, the LRHL has been liberally and flexibly interpreted precisely so that it can be adapted to meet the diverse redevelopment needs of all New Jersey municipalities.

The trial judge also rejected plaintiffs' interpretation of the LRHL as limiting redevelopment of public land to the criteria set forth in N.J.S.A. 40A:12A-5(c). To the contrary, the judge found that"the Borough was not limited in its decision of whether the study area qualified as one in need of redevelopment to the subsection (c)." The judge stated that the plain language of the LRHL and the applicable case law make clear that municipally-owned land can be designated for redevelopment pursuant to any one of the seven subsections set forth in N.J.S.A. 40A:12A-5, including subsections (d) and (e) as applied by the Borough Council. The judge explained:

[Plaintiffs] mistakenly contend that subsection (c) is the only appropriate section under which the Borough could have designated the study area as one in need of redevelopment. The statute does not require that municipally owned land be subject to redevelopment only through that section, rather it remains one of seven sections that can be utilized by a municipality in contemplation of redevelopment. In fact the pre-amble to section N.J.S.A. 40A:12A-5 states that the study area can be designated as one in need of redevelopment pursuant to any of the sub-sections.

The judge also found that defendant's"reliance upon the conclusions of a redevelopment consultant, The Atlantic Group, was entirely proper." The judge observed that"there is no requirement that an individual preparing a report regarding a redevelopment be qualified as an expert." Notwithstanding, the judge found Houstoun and Henry were"qualified to render an opinion as experts in urban development regarding Princeton Borough's redevelopment plan." Concluding that plaintiffs had not satisfied their burden, the judge granted summary judgment dismissing the complaint.

On appeal, plaintiffs present the following arguments for our consideration:

POINT 1

THE COURT MUST REVERSE AND REMAND THE LAW DIVISION RULING BECAUSE THE LAW DIVISION (1) PURPORTED TO GRANT"SUMMARY JUDGMENT" FOR THE DEFENDANTS WHICH DID NOT FILE A MOTION FOR"SUMMARY JUDGMENT" ON THE MERITS AND (2) FAILED TO CONSIDER ANY OF THE UNDISPUTED MATERIAL FACTS SUBMITTED BY PLAINTIFFS IN SUPPORT OF THEIR MOTION FOR SUMMARY JUDGMENT.

POINT 2

THE DEFENDANT'S EFFORTS TO DEFEND THE LAW DIVISION'S ERRORS ARE MERITLESS, MISLEADING, AND BASED ON ERRONEOUS STATEMENTS OF THE RECORD.

POINT 3

THE LAW DIVISION FAILED TO CONDUCT THE EVIDENTIARY HEARING WHICH WAS MANDATED BY THE SUPREME COURT AND IMPROPERLY PERMITTED THE DEFENDANT TO SUPPLEMENT THE RECORD AT THE ELEVENTH HOUR WITHOUT HOLDING A LYONS HEARING IN WHICH BOTH PARTIES WOULD HAVE BEEN PERMITTED TO SUPPLEMENT THE RECORD.

POINT 4

THIS IS THE SECOND TIME IN THE PAST YEAR THAT THIS SAME LAW DIVISION COURT HAS COMMITTED THE SAME OR SIMILAR SERIOUS AND REVERSIBLE ERRORS.

POINT 5

DEFENDANT USED THE WRONG SECTION OF THE LRHL TO INVESTIGATE THE MUNICIPAL PARKING LOT SITES.

POINT 6

BECAUSE THE ATLANTIC GROUP REPORT DID NOT PRESENT RELEVANT AND USEFUL FACTS TO SUPPORT ITS CONCLUSIONS, IT REPRESENTS WORTHLESS"NET OPINION" TESTIMONY WHICH DOES NOT PROVIDE THE"SUBSTANTIAL EVIDENCE" REQUIRED TO SUPPORT A"BLIGHTED AREA" DESIGNATION.

On cross-appeal, defendant argues:

POINT ONE

THE TRIAL COURT ERRED IN WAIVING THE 45-DAY FILING LIMITATION SET FORTH IN RULE 4:69- 6(a) AND RULING THAT THE COMPLAINT CHALLENGING THE"AREA IN NEED OF REDEVELOPMENT" DESIGNATION WAS NOT TIME BARRED.

A. The trial court improperly concluded that plaintiffs had raised an issue of sufficient public importance to warrant ...


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