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Fanaro v. Borough and Council of South Bound Brook

November 14, 2007

ORESTE AND ERNA FANARO, TRUSTEES (ORESTE FANARO, DECEASED), PLAINTIFFS-APPELLANTS, AND FANARO PARTNERSHIP (ERNA FANARO, SUCCESSOR AND SOLE PARTNER), PLAINTIFF,
v.
BOROUGH AND COUNCIL OF SOUTH BOUND BROOK, JOINT PLANNING BOARD/ZONING BOARD OF ADJUSTMENT OF SOUTH BOUND BROOK, MATZEL & MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, LLC, AND M&M INVESTMENTS, LLP, DEFENDANTS-RESPONDENTS.
ORESTE AND ERNA FANARO, TRUSTEES (ORESTE FANARO, DECEASED), PLAINTIFFS, AND FANARO PARTNERSHIP (ERNA FANARO, SUCCESSOR AND SOLE PARTNER), PLAINTIFF-APPELLANT,
v.
BOROUGH AND COUNCIL OF SOUTH BOUND BROOK, JOINT PLANNING BOARD/ZONING BOARD OF ADJUSTMENT OF SOUTH BOUND BROOK, MATZEL & MUMFORD AT SOUTH BOUND BROOK URBAN RENEWAL, LLC, AND M&M INVESTMENTS, LLP, DEFENDANTS-RESPONDENTS.
BOROUGH OF SOUTH BOUND BROOK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
ORESTE FANARO AND ERNA FANARO, TRUSTEES, OR THEIR SUCCESSORS IN TRUST UNDER THE FANARO LIVING TRUST, JOHN FANARO, AND FANARO PARTNERSHIP, DEFENDANTS-APPELLANTS, AND STUART GREENWALD, HIS HEIRS, SUCCESSORS, AND ASSIGNS, SHALOR S. STRICKLAND, HIS HEIRS, EXECUTORS, AND ASSIGNS, LILLIAN EGANEY AND THOMAS EGANEY, KARL R. MEYERTONS, ESQ., AND UNITED STATES OF AMERICA, DEFENDANTS.
BOROUGH OF SOUTH BOUND BROOK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
ORESTE FANARO AND ERNA FANARO, TRUSTEES, OR THEIR SUCCESSORS IN TRUST UNDER THE FANARO LIVING TRUST, JOHN FANARO, DEFENDANTS-APPELLANTS, AND STUART GREENWALD, HIS HEIRS, SUCCESSORS, AND ASSIGNS, SHALOR S. STRICKLAND, HIS HEIRS, EXECUTORS, AND ASSIGNS, LILLIAN EGANEY AND THOMAS EGANEY, KARL R. MEYERTONS, ESQ., UNITED STATES OF AMERICA, AND FANARO PARTNERSHIP, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Somerset County, L-380-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 19, 2007

Before Judges Axelrad, Sapp-Peterson, and Messano.

These four appeals from judgments entered by the Law Division were argued before us back-to-back. We consolidate them for purposes of this opinion because they arise out of a challenge to a redevelopment plan in both a complaint in lieu of prerogative writs action and a condemnation proceeding. Plaintiffs are Oreste and Erna Fanaro, Trustees (Oreste Fanaro, Deceased) and Fanaro Partnership (Erna Fanaro, Successor and Sole Partner) (collectively plaintiffs).*fn1 They appeal three orders entered December 2, 2005, granting summary judgment in favor of defendants Borough and Council of South Bound Brook (Borough), Joint Planning Board/Zoning Board of Adjustment of South Bound Brook (Joint Board), Matzel & Mumford at South Bound Brook Urban Renewal, LLC, and M&M Investments (M&M) (all defendants collectively known as defendants), and a fourth order entered April 4, 2006, denying their motion to vacate the August 23, 2005 order appointing condemnation commissioners. We affirm the orders granting summary judgment as well as the order denying plaintiffs' motion to vacate the order appointing the condemnation commissioners.

The events leading up to the entry of the summary judgment proceedings and the order denying plaintiffs' motion to vacate the order appointing the condemnation commissioners began nearly ten years ago. On December 18, 1997, the Joint Board held a public hearing to determine whether the GAF Industrial site and certain properties adjacent thereto located within the Borough should be classified as an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law (LRHL), N.J.S.A. 40A:12A-1 to -73.

The specific area under review included portions of seven blocks. The area contained five underused industrial properties as the focus of the plan, as well as approximately two dozen well-maintained small business or residential properties which adjoin the arterial roadways that led to the industrial properties. The total area comprised a triangular parcel fronting Main and Washington Streets and the Delaware and Raritan Canal known as the Triangle Area. Plaintiffs own three properties located within the Triangle Area. Two lots (Lots 4.01 and 5.02) are owned by the plaintiff-trust and one lot (Lot 5.01) is owned by the plaintiff-partnership.

At the hearing, the Joint Board heard testimony from the Borough Planner, Dennis W. Hudacsko (Hudacsko); the Borough Code Enforcement Officer, William Boyle; and three property owners:

Charles Egan, Al Doimi and Oreste Fanaro (Oreste). Oreste wanted to know what was going to happen with his property and was told by the Joint Board Chairman, "I think at this point nobody knows. It's going to be part of the planning process if this goes through tonight. I think we've already answered that we don't know at this point." Those in attendance at the hearing were also told that the area in question was in "desperate need of help[,]" the goal of the project was to "benefit the property owners who [were] responsible in the handling of their properties[,]" it was not the "intent of the Mayor and Council . . . [to] drive anybody out of town[,]" and that the process would be lengthy and subject to public hearings along the way. At the conclusion of the hearing, the Joint Board designated the Triangle Area, including plaintiffs' properties, as a redevelopment area.

On January 10, 1998, the Borough adopted a resolution designating the Triangle Area as the area comprising the geographic boundaries proposed for redevelopment known as the Industrial District Redevelopment Area (IDRA). N.J.S.A. 40A:12A-5. Thereafter, on June 9, 1998, the Borough passed Ordinance 8-98, which adopted the Preliminary Plan prepared by Hudacsko dated February 10, 1998 and the May 1998 revised version. The Preliminary Plan did not include the acquisition of plaintiffs' properties. Rather, the plan called for the acquisition of the four underused properties. Although the Preliminary Plan stated that the "remaining properties . . . can be expected to prosper without any redevelopment action[,]" it also made clear that the plan is strictly "preliminary in nature" and would be "refined and replaced" once a developer was selected. Plaintiffs, at that time, did not appeal the designation of their properties as part of the IDRA under the newly-adopted Ordinance 8-98.

At some point in 2003, defendant M&M, a development company, became involved in the redevelopment project and eventually took over as its designated developer, under the direction of David Fisher, M&M's Vice-President. On January 18, 2005, the Joint Board held a public hearing to (1) address proposed amendments to the Borough's "Master Plan,"*fn2 (2) determine whether the amended Preliminary Plan was consistent with the Master Plan, and (3) determine whether the proposed zoning plan was also consistent with the Master Plan. Although notice of the January 18, 2005 hearing was duly published, when the presentations on the Master Plan Triangle Redevelopment Amendment commenced, no member from the general public was present. Later, when the public was invited to comment on the proposed amendments, no one stood to speak, and the Joint Board then unanimously voted to approve the proposed amendment resolutions (Final Plan). The Final Plan expanded the redevelopment area "beyond the original underused parcels to include the entirety of Block 57 . . . in order to address parking and circulation design issues." The Final Plan also called for acquisition of certain small businesses in the area referred to as "Parcel F," which included plaintiffs' properties:

The new Parcel F is a group of four properties (Block 57, Lots 4.01, 5.01, 5.02 and 6[)]. These properties were cited as lacking sufficient off-street parking. Unless these properties are redeveloped, the continued parking deficiencies will have a detrimental effect on the pattern of land use proposed by this sub-plan.

On January 25, 2005, the Borough adopted the Final Plan through the passage of Ordinance 05-01.

On February 3, 2005, M&M applied to the Joint Board for certain approvals related to the Final Plan, which included acquisition of plaintiffs' properties. The hearing for this application was scheduled for February 15, 2005, but was rescheduled to March 15, 2005. On March 14, 2005, plaintiffs filed a Complaint in Lieu of Prerogative Writs in the Law Division (first action). The complaint alleged that inclusion of plaintiffs' properties in the redevelopment plan was unnecessary (First Count); economic development was not a valid public purpose for acquisition of their properties (Second Count); the manner in which the redevelopment lands were selected violated the New Jersey State Constitution (Third Count); and M&M tortiously interfered with plaintiffs' contractual relationships (Fourth Count). In May 2005, defendants filed their answers to the complaint.

On June 3, 2005, the Borough filed a verified complaint in the Law Division (second action) instituting condemnation proceedings against plaintiffs. On June 8, 2005, Judge Ross issued an order granting the Borough immediate possession of plaintiffs' properties, directing that the estimated compensation of $841,000 be deposited into court, and permitting the Borough to deposit additional compensation upon filing of an Amended Declaration of Taking. In a separate order ...


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