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Monroe Properties, LLC v. City of Hoboken

May 30, 2008

MONROE PROPERTIES, LLC, PLAINTIFF-RESPONDENT,
v.
THE CITY OF HOBOKEN, THE CITY OF HOBOKEN ACTING AS THE REDEVELOPMENT AGENCY AND TARRAGON/URSA REDEVELOPMENT PARTNERSHIP, LLC, DEFENDANTS-APPELLANTS.
HOBOKEN PARKS ORGANIZATION AND FUND FOR A BETTER WATERFRONT, PLAINTIFFS-RESPONDENTS,
v.
THE CITY OF HOBOKEN, THE MAYOR AND COUNCIL OF THE CITY OF HOBOKEN AND TARRAGON/URSA REVELOPMENT PARTNERSHIP, LLC, DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket Nos. L-1451-05, L-1473-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 5, 2007

Before Judges Parker, R. B. Coleman and Lyons.

Defendants Tarragon/Ursa Redevelopment Partnership, LLC (Tarragon) and the City of Hoboken (the City)*fn1 appeal from a January 13, 2006 order invalidating the City's adoption of a resolution and a corresponding Memorandum of Understanding (MOU) between the City and Tarragon. The trial court determined that the resolution was arbitrary, capricious and unlawful because the City and/or the Hoboken Redevelopment Authority (HRA) did not take the proper steps under the Local Redevelopment and Housing Law (LRHL), N.J.S.A. 40A:12A-1 to -49 to effectuate the MOU. After reviewing the record in light of the contentions advanced on appeal, we affirm the order of the trial court.

On February 2, 2005, the City passed Resolution #15-1777, also called Resolution #8,*fn2 authorizing it to enter into an MOU with Tarragon in connection with the possibility of redevelopment of certain properties within a study area adjacent to the City's Northwest Redevelopment Area (NWRA). That study area is bounded on the north by 14th Street, on the south by the boundary of the Northwest Redevelopment Area and the proposed school facilities project of the New Jersey School's Construction Corporation, and on the west by the right of way line by the Hudson Bergen Light Rail Transit System. The study area contains approximately 10.75 acres of land.

On February 16, 2005, the City's mayor, David Roberts, executed the MOU between the City and Tarragon. The MOU contains, among other things, the following provisions:

Section 2.01. Preliminary investigation of the Study Area. Within one hundred eighty (180) days, the City shall initiate a preliminary investigation of the Study Area in accordance with the LRHL to determine whether it is a redevelopment area according to the criteria set forth in N.J.S.A. 40A:-12A-5.

Section 2.02. Preparation of Redevelopment Plan. The City shall engage a professional planner to prepare a redevelopment plan for the Study Area that shall be referred to the Planning Board for its review and recommendations in accordance with N.J.S.A. 40A-12A-7(e) if, following the preliminary investigation of the Planning Board, the City determines that the Study Area is an area in need of redevelopment.

Section 2.03. Funding for planning activities. At the request of the City, the Developer agrees to contribute into an escrow account held in favor of the City a sum not to exceed $80,000 towards the preliminary investigation, and planning studies to be used in considering whether the Study Area is an area in need of redevelopment and, the preparation of a redevelopment plan for the Study Area ("Authorized Expenses").

Section 3.03. Land Use Specifications. Should the City adopt a redevelopment plan that provides for a type and density of development that, in the Developer's judgment, is not adequate to support the economic feasibility of the dedication of land and construction of the community center and public pool, the Developer may elect to avoid its obligations set forth in Sections 3.01 and 3.02 above in which event either party shall have the option to terminate this MOU without incurring any liability hereunder.

Section 4.01. Negotiation and entry into Redevelopment Agreement. Upon the determination that the Study Area is an area in need of redevelopment and the adoption of a redevelopment plan in accordance with this MOU, the City and the Developer shall negotiate in good faith a Redevelopment Agreement for the planning, replanning, construction or undertaking of the redevelopment project.

Section 5.01. Exclusivity of MOU. The designation of the Developer as the redeveloper of the Study Area is intended by the parties to vest in the Developer the exclusive right and obligation to negotiate in good faith a Redevelopment Agreement for the Study Area. The City expressly agrees not to deal with any other potential redevelopers with respect to the Study Area during the term of this MOU.

Section 5.02. Duration of MOU. This MOU shall remain in full force and effect until the earliest of:

(1) The Study Area is determined not to be in an area of redevelopment;

(2) A date of three (3) years from the adoption of the Redevelopment Plan for the Study Area;

(3) Mutual agreement of the parties to terminate.

(4) As otherwise provided in this Agreement.

The subject resolution had been adopted at a regularly scheduled meeting of the City Council. That meeting began with an opening statement by Mayor Roberts, discussing the City's budget and his open spaces initiative. Mayor Roberts was followed by counsel for Monroe, who objected to the resolution on the grounds that the City had not followed the LRHL. Several others in attendance expressed their views in favor of or in opposition to the proposed resolution and the MOU, after which the Council adopted the resolution by a 6-2 vote. The resolution recited, among other things, the following:

WHEREAS, in an effort to facilitate redevelopment for a portion of this area [adjacent to the NWRA], the City is desirous of obtaining private participation for the funding and performance of the processes set forth in the Local Redevelopment and Housing Law.

WHEREAS, the Developer [Tarragon] has presented the City with a Concept Plan that includes residential and commercial development projects, open space, parks and recreational and other public facilities in an effort to meet the City's needs, goals and objectives for the Study Area; and

WHEREAS, the Developer has demonstrated its qualifications to participate as a redeveloper in accordance with the LRHL in connection with the clearance, replanning, ...


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