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BMIA, LLC v. Planning Board of the Borough of Belmar

February 4, 2008


On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-1537-05.

Per curiam.


Argued September 24, 2007

Before Judges A. A. Rodríguez and C. S. Fisher.

BMIA, L.L.C. (BMIA), the owner of the Belmar Mall, appeals from the dismissal of its action in lieu of prerogative writs. The action challenged the adoption by the Mayor and City Council of the Borough of Belmar (collectively "the Governing Body" or "Belmar") of a resolution accepting the recommendation of the Borough of Belmar Planning Board (Board) to designate an area of the Borough as an "Area in Need of Redevelopment" pursuant to the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -49 (LRHL). We reverse the dismissal of BMIA's action.

These are the relevant facts. The Governing Body directed the Board to investigate whether a certain area, identified as the Transit Village Study Area (TVSA), met the statutory criteria set by the LRHL, to qualify as a Redevelopment Area.

The Borough retained a consultant, Schoor DePalma, Inc., to aid in this investigation. David Roberts of Schoor DePalma performed the investigation and offered the following opinion with respect to TVSA: (1) the lack of proper utilization of the property causes a "not fully productive condition of land;" (2) the lack of investment in TVSA "prevents outside developers, investors, or current property owners from making significant improvements" to the land; and (3) "create[s] an unattractive environment for private investment of any significant commercial or residential development." Roberts opined that the criteria that "are pertinent to this redevelopment investigation are [the] statutory criteria [found in N.J.S.A. 40A:12A-5a, -5d and -5e]."

With respect to the Belmar Mall, the Schoor DePalma investigation report concluded that: (1) "the former ACME supermarket retail space is undersized for modern supermarket standards and so the space is not being properly utilized for maximum economic benefits[;]" (2) any replacement supermarket retailer would have to rely on the Borough's public parking spaces rather than providing a private lot for its customers to the expense of the Borough; (3) the Belmar Mall has an obsolete layout for a strip mall adjacent to a train station platform; (4) the one-story rentable floor area causes the property to be underutilized in comparison to the potential of a two or more story structure; (5) the location of the parking lot opposite from pedestrian traffic on Main Street causes customers to have to walk across a parking lot to access the stores, creating a dangerous condition and requiring more effort than necessary to reach the stores; and (6) the store fronts are only clearly visible from the parking lot and not the street and the rear of the Belmar Mall faces out to the railroad tracks showing trash dumpsters, utility meters, utility poles and boarded windows to the passengers in the railroad cars. Hence, the Schoor DePalma report concluded that BMIA's property's faulty and obsolete layout satisfies the criteria set forth in N.J.S.A. 40A:12A-5d and -5e of a blighted area.

The Board held one public hearing and recommended that the Governing Body declare the area "in need of redevelopment." BMIA participated at the hearings and objected to such designation. BMIA sought an order to show cause, alleging that the Board made a decision before BMIA had presented all relevant information. On the return date, the parties negotiated a consent order reopening the hearing. At the additional hearings, BMIA presented expert testimony from Kenneth Ochab, a professional planner, and from Donald M. Moliver, Ph.D., a New Jersey certified real estate appraiser and a real property valuation expert. Both experts opined that: 1) the majority of the real property within the TVSA did not meet any of the criteria outlined in N.J.S.A. 40A:12A-5; 2) real estate property values have increased significantly across the Borough, specifically within the TVSA; and 3) private investments of hundreds of thousands of dollars have been spent improving the Belmar Mall and other commercial properties in the TVSA. At the conclusion of the hearings, the Board voted to recommend that the Governing Body adopt the Board's finding that the TVSA was in a state of blight and was, therefore, an area in need of redevelopment as defined by the LRHL.

BMIA then brought an action in lieu of prerogative writs, alleging that the Board's construction and application of the LRHL were constitutionally deficient. BMIA added a claim that the Governing Body and Gale Belmar, L.L.C. (Gale) had violated the LRHL by entering into a redevelopment agreement before the Governing Body had adopted a redevelopment plan by ordinance. Subsequently, the Governing Body adopted a resolution accepting the Board's recommendation and ordering the preparation of a redevelopment plan.

Following a bench trial, the judge issued a written opinion that, among other things, sustained the validity of the designation of the TVSA as an area in need of redevelopment and the redevelopment agreement between the Governing Body and Gale. BMIA appealed from the July 10, 2006 order dismissing its action in lieu of prerogative writs. We granted the application by the National Federation of Independent Business Legal Foundation (Foundation) to appear as amicus curiae.

BMIA contends that the "judge misapplied the standard of review." We agree and conclude that the proper standard here involved a narrow legal construction of the LRHL and compelled the setting aside of the "in need of redevelopment" designation.

A rebuttable presumption exists that a municipal body has properly exercised its discretion. Pheasant Bridge Corp. v. Twp. of Warren, 169 N.J. 282, 289-90 (2001); Harvard Enter., Inc. v. Bd. of Adjustment, 56 N.J. 362, 368 (1970). However, the municipal body's decision may be revoked when it is proven that the findings on which the decision is based are not supported by the evidence before the municipal body. Infinity Outdoor, Inc. v. Delaware and Raritan Canal Comm'n, 388 N.J. Super. 278, 288-89 (App. Div. 2006) (citing Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)).

A crucial element in determining the sufficiency of the evidence is whether the court below correctly interpreted the statutory criteria. In the landmark case of Gallenthin Realty Dev., Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007), which was decided almost a year after ...

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