On appeal from the Superior Court of New Jersey, Law Division, Ocean County, L-1823-03PW (Docket No. A-5805-06T3); and the Superior Court of New Jersey, Law Division, Atlantic County, L-0307-05PW (Docket No. A-1563-07T2).
The opinion of the court was delivered by: Winkelstein, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Winkelstein, Yannotti and LeWinn.
In these consolidated appeals, the court is asked to determine the limits of a municipality's authority to condition development approvals on a developer's setting aside land to be used for common open space or recreational areas and facilities, or to pay an assessment in lieu of the set-aside. The New Jersey Shore Builders Association has challenged amendments to the Jackson Township Land Use and Development Code, and the Builders League of South Jersey has challenged amendments to the Egg Harbor Township Code, which require these exactions as a condition of development approvals for all sizable residential developments, not simply for approvals of "planned developments" as defined in the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163, which the parties agree may be conditioned on set-asides for common open space and recreational areas.*fn1
In the Jackson Township case, the trial court concluded that the ordinance requirements were beyond the authority granted to the municipality by the Legislature in the MLUL, and declared the ordinance to be ultra vires and unenforceable. In the Egg Harbor Township case, the trial court concluded that the exaction requirements were authorized by the MLUL and were valid and enforceable.
We conclude that the MLUL does not empower municipal governments to require developers to set aside land for common open space or recreational areas and facilities, except with regard to applications for planned developments as defined in the MLUL, see N.J.S.A. 40:55D-6 (defining planned developments), or to make payments in lieu of those set-asides. Accordingly, we affirm the order that the Jackson Township ordinance is ultra vires, and reverse the order that validated the Egg Harbor Township ordinance.
In May 2003, Jackson Township adopted Ordinance 06-03, which modified Section 109-178 of its municipal code. The ordinance provided that a minimum of 10% to 40% of a tract of land proposed for development, depending on the zoning district, "shall be set aside for open space." It also provided that "[w]ithin any development, a minimum of 50% of the open space area shall be land which can be developed for recreational use." In Section 109-178.1, the amendments established recreation standards for residential developments.
In 2006, Jackson Township adopted Ordinance 02-06, revising Section 109-178.1 and adding Sections 109-178.2 and 109-178.3. The revised section 109-178.1 states, in part, that all residential development must provide 12.5 acres of land to be used for recreational purposes per one thousand projected residents of the development "in accordance with the population standards for community parks, neighborhood parks and mini-parks set forth in section 109-178.2.B." Section 109-178.1 provides a table of "recommended standards for recreation facilities," setting forth each type of facility recommended per number of residents. The ordinance sets forth measurements for each area to be set aside, and includes a method for calculating the number of projected residents in a proposed development. When a developer cannot meet all of the provisions for recreational facilities, or by agreement with the planning board, the developer may "make a contribution in lieu of all or a part of the requirements . . ., by contributing to off-tract recreational improvements pursuant to the terms" of Section 109-178.2.
Section 109-178.2, "Developer Contributions for Off-Tract Improvements," states that "[s]eparate and apart from the provisions of N.J.S.A. 40:55D-42*fn2, as a condition of subdivision or site plan approval, the Planning [B]oard of Jackson Township shall require a developer to pay its fair share for off-tract open space and/or recreational land and improvements." The remainder of that section governs how those costs are calculated.
Section 109-178.3, also added in 2006, titled "Relationship Between Open-Space Requirement and Recreational Facilities," states:
Notwithstanding any provision to the contrary in Section 109-178 (open spaces), by satisfying the recreational facilities requirements of Sections 109-178.1 or 109-178.2, either by designing and constructing recreational facilities on site, by an in lieu contribution, or by a combination [thereof], a developer shall be deemed to have satisfied the requirement for usable, upland open space in accordance with section 109-178.A(4) and the open space set aside requirement of Section 109-178 shall be proportionately reduced for said development.
Shore Builders initially challenged the 2003 ordinance amendments, and subsequently amended its complaint to include the 2006 amendments. In May 2007, the trial court granted Shore Builders' summary judgment motion, finding Ordinances 06-03 and 02-06 to be ultra vires and unenforceable. In its written opinion, the court stated:
There is . . . no authorization under the MLUL (aside from planned unit developments, planned unit residential developments and residential clusters) to allow municipalities to require on-site set-asides of areas devoted to open space except to the extent that a municipality is prepared to compensate the developer for any lands on-site, which are mandated by its ordinance to be utilized for open space.
In 1992, Egg Harbor Township adopted Ordinance 20, which required a residential developer to set aside one-half acre for recreation and open space for each one thousand persons expected to reside in a proposed development. It also provided that the Township Code's requirements relating to construction of recreational facilities and total percentage of open space may be modified or waived by the planning board, if that board determined that "both the area local to the development and Egg Harbor Township's park and recreation needs would be better served by an agreed cash bequest to the designated parks and recreation budget." Approximately ten years later, the planning board adopted the "Revised Recreation and Open Space Element," which included an inventory of existing recreational facilities, provided a "needs analysis based on current population and population projections," and made recommendations for addressing recreational and open space needs.
Prior to 2004, Section 94-28D of the Township Code required developers to install recreational facilities in all residential developments that required those facilities, "on the land that has been set aside for recreational purposes." The Code provided a schedule of facilities to be determined by the number of dwelling units in a development; these facilities included tot courts, tennis courts, basketball grounds, play fields, and multipurpose areas. Section 94-28A(6) and Section 94-28G of the Code together provided that "[t]he developer shall have the option to post an off-tract assessment" in lieu of "[t]he requirements . . . relating to the construction of . . . recreation facilities and the total percentage of open space required within a development." A "cash bequest" would be made to "the designated parks and recreation budget."
In July 2004, Egg Harbor Township's governing body enacted Ordinance 41-2004 (Ordinance 41), which replaced portions of section 94-28A(6) of the Code with the following: "The Township shall have the option to require a developer to post an off-tract assessment." It also amended section 94-28A(8) to require "recreational opportunities" for all major residential developments, to be determined pursuant to a specific formula. The ordinance modified the number and type of recreational facilities required per number of dwelling units.
In October 2004, the Township enacted Ordinance 60-2004 (Ordinance 60), which again amended section 94-28A(6). It continued to give the Township the option to require a developer to post an off-tract assessment, pursuant to calculations as set forth in the ordinance, but in designated zoning districts it gave developers the option to post those assessments if the developer determined "that the on-site construction of active recreation facilities and/or ...