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Tomu Development Company, Inc. v. Borough of Carlstadt

August 29, 2008

TOMU DEVELOPMENT COMPANY, INC., PLAINTIFF-RESPONDENT,
v.
BOROUGH OF CARLSTADT, AND PLANNING BOARD OF CARLSTADT, DEFENDANTS-APPELLANTS, AND NEW JERSEY MEADOWLANDS COMMISSION, DEFENDANT-RESPONDENT.
TOMU DEVELOPMENT COMPANY, INC., PLAINTIFF-RESPONDENT,
v.
BOROUGH OF EAST RUTHERFORD, AND PLANNING BOARD OF EAST RUTHERFORD, DEFENDANTS-APPELLANTS, AND NEW JERSEY MEADOWLANDS COMMISSION, DEFENDANT-RESPONDENT.
TOMU DEVELOPMENT COMPANY, INC., PLAINTIFF-RESPONDENT,
v.
BOROUGH OF CARLSTADT, PLANNING BOARD OF CARLSTADT, BOROUGH OF EAST RUTHERFORD, PLANNING BOARD OF EAST RUTHERFORD, DEFENDANTS-RESPONDENTS, AND NEW JERSEY MEADOWLANDS COMMISSION, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket Nos. L-5894-03 and L-5895-03.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted: April 9, 2008

Before Judges Axelrad, Payne, and Messano.

These three back-to-back appeals arise from two consolidated "builder's remedy" suits brought by plaintiff Tomu Development Company, Inc. (Tomu) alleging that two southern Bergen County municipalities, the Borough of Carlstadt (Carlstadt) and the Borough of East Rutherford (East Rutherford), and their respective planning boards,*fn1 engaged in patterns of exclusionary zoning that failed to address their Mount Laurel*fn2 affordable housing obligations. Because the land upon which Tomu proposed to build a development, including affordable housing, lay wholly within the statutorily created Meadowlands District, the New Jersey Meadowlands Commission (Meadowlands Commission) was joined as a party. See N.J.S.A. 13:17-11. The municipalities and Meadowlands Commission appeal from the orders declaring Tomu was entitled to a builder's remedy, allowing it to develop the site with an affordable housing component. The court's orders were based on its findings that the municipalities "failed to comply with their express obligations to provide realistic opportunities for affordable housing within their borders," the Meadowlands Commission "implicitly fostered the long-standing municipal failures through its benign neglect of the housing needs of the poor[,]" and that none of the defendants "demonstrated that the site is environmentally constrained, that construction of a high-density mixed-use project would represent bad planning," or that Tomu prosecuted the "action in bad faith." The municipalities also appeal from the order appointing a private person as a "Mount Laurel Implementation Monitor" to make all land use decisions for the two municipalities, including appearing before the Meadowlands Commission on their behalf. We affirm substantially for the cogent and comprehensive reasons articulated by Judge Jonathan Harris in his December 3, 2004 oral decision, November 10, 2005 written opinion, and May 19, 2006 oral decision and written opinion.

The subject property is an irregularly shaped plot of approximately 26.9 acres, with 4.9 acres in Carlstadt (block 136, lots 14 and 15) and 22 acres in East Rutherford (block 107.03, lots 2, 5, and 7*fn3 ). In Carlstadt only about 3.584 acres are developable uplands and in East Rutherford, 5.286 acres are developable uplands. The site is located at the terminus of Paterson Plank Road, on the banks of the Hackensack River and is separated from the Xanadu Development by the New Jersey Turnpike.

Tomu purchased the property from Riverview Associates in 1995. In 1989, contingent approvals were granted to permit construction of 350 residential units, of which 70 were required to be devoted to affordable housing, a 100-suite hotel, a 1,200-seat banquet facility, two restaurants, a fitness center, a multi-level parking facility, and a 240-slip marina. The conditionally approved plan included residential uses only in East Rutherford, with no housing in Carlstadt. The approvals lapsed in 1999, and Tomu appealed administratively.*fn4 The land upon which Tomu proposed to build the development, straddling the boundary between Carlstadt and East Rutherford, was located within the Commercial District and Waterfront Recreational zone of the Meadowlands District. A certain measure of residential use was permitted on all of Tomu's uplands until the 2004 amendment to the Meadowlands District's Master Plan, after commencement of the present action. The Amendment changed the zoning of the site from Waterfront Development to Waterfront Recreation, which did not allow for housing.

In August 2003, Tomu filed exclusionary zoning complaints against the municipalities and thereafter the Meadowlands Commission, seeking a builder's remedy for permission to construct 988 residential units, divided equally between the two municipalities. The development proposal was thereafter redefined to consist of 420 housing units (360 market rate units and 60 affordable rental units) in East Rutherford, and an additional 420 housing units (340 market rate units and 80 affordable rental units) in Carlstadt, located in two mid-rise buildings, plus approximately 38,000 square feet of "ancillary development" of limited commercial, recreation, and environmental facilities.

On October 14, 2004, the Meadowlands Commission filed a motion for summary judgment seeking to dismiss Tomu's builder's remedy. It contended that Tomu had ample opportunity to construct the seventy affordable housing units on the site but failed to do so and that the newly adopted Master Plan and regulations appropriately concluded the site was not deemed suitable for residential uses. The Meadowlands Commission also argued it should be dismissed from the action, primarily based on the claim that Tomu failed to exhaust administrative remedies against it. The municipalities filed cross-motions for partial summary judgment seeking to determine their Mount Laurel construction obligations as zero and to set their rehabilitation obligations, and to dismiss Tomu's builders remedy claim. Tomu also filed a motion for partial summary judgment, seeking a declaration that the municipalities' land use ordinances failed to comply with their Mount Laurel obligations to provide a reasonable opportunity for low and moderate income housing within their borders. Tomu additionally sought the appointment of a Special Master to assist the court and parties in fashioning constitutional compliance.

Following argument on December 3, 2004, and memorialized in orders on that date, the court granted Tomu's motion, declaring Carlstadt's and East Rutherford's land use ordinances were unconstitutional for failing to provide a realistic opportunity for the provision of their fair shares of low and moderate income housing. It further ordered that an attorney, Robert T. Regan, be appointed as the Special Master to assist the municipalities in complying with their Mount Laurel obligations. The court also denied the Meadowlands Commission's and municipalities' cross-motions. The municipalities filed appeals from these orders, which pursuant to Tomu's motion, we dismissed as interlocutory on March 16, 2006 (A-2373-05T5).

On February 1, 2005, Tomu filed a motion with supporting certifications seeking entry of a "scarce resources" order, asserting the land and infrastructure needed for affordable housing was scarce in the municipalities. Carlstadt filed several certifications in opposition to the motion. Following oral argument, the court requested a Special Master's report on the issue, which was completed on April 13, 2005. Carlstadt and the Meadowlands Commission each moved for an order rejecting some of the Master's recommendations. On May 13, 2005 the court entered an order declaring that land, public potable water supply, and sewerage capacity constituted scarce resources in Carlstadt and East Rutherford, including the parts of those municipalities that lay in the Meadowlands District under the jurisdiction of the Meadowlands Commission. The court restrained the municipalities from approving any new use of or access to those scarce resources without court approval, unless the uses fell within certain exceptions.

On June 13, 2005, the Special Master issued his report and recommendations to the court regarding the builder's remedy issue. The Meadowlands Commission moved for reconsideration of the court's denial of summary judgment, or, alternatively, for holding the litigation in inactive status until completion of pending administrative actions, which the court denied.

Judge Harris conducted a nine-day bench trial on the consolidated complaints from August 8 through November 3, 2005. In addition, he viewed the property in the presence of the attorneys under the procedures of Morris County Land Improvement Co. v. Township of Parsippany - Troy Hills, 40 N.J. 539, 548-49 (1963). On November 10, 2005, the court issued a thirty-page opinion, concluding that Tomu had proved its entitlement to a builder's remedy and that its lands in East Rutherford and Carlstadt may be developed with the proposed mixed-use project because the municipalities failed to meet their obligations to provide realistic opportunities for affordable housing within their borders and the Meadowlands Commission "implicitly fostered" those municipal failures through its "benign neglect of the housing needs of the poor." The court further held the land use regulations of the municipalities remained invalid and unconstitutional insofar as they continued past exclusionary practices, and directed the municipalities to immediately prepare comprehensive compliance plans and appropriate zoning and planning legislation to meet their affordable housing obligations. An order was entered on November 28, 2005.

On February 28, 2006 and April 10, 2006, Carlstadt and East Rutherford, respectively, filed their affordable housing compliance plan documents and sought approval of the plans and judgments of repose that would protect them from builder's remedy litigation. The Special Master thereafter filed a report analyzing the Carlstadt and East ...


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