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TSI Marlboro, Inc. v. Township of Marlboro Zoning Board of Adjustment


September 5, 2008


On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1623-04.

Per curiam.


Argued February 25, 2008

Before Judges Graves, Sabatino and Alvarez.

Defendant Marlboro Sports Center LLC (MSC or defendant) appeals from a final judgment of the Law Division reversing the grant of a use variance by the Marlboro Township Board of Adjustment (the Board) that allowed MSC to construct an indoor recreational facility and health club. MSC contends there was sufficient evidence in the record to support the Board's decision, and the trial court "improperly substituted its judgment for that of the zoning board." We agree. Accordingly, we vacate the judgment entered on September 12, 2006, and remand the matter to the Law Division for reconsideration and additional factfinding.

On October 21, 2002, MSC filed a bifurcated application*fn1

with the Board for a use variance to construct a recreational facility and health club on a 7.85 acre site located in a light industrial (LI) zone on the southwestern corner of Boundary Road and Vanderburg Road. The vacant property is designated as lots seven and eight, in block 360, on the Marlboro Township tax map. The Marlboro Township zoning ordinance permits recreational uses in the LI zone as conditional uses, but only if the facility is not for profit. Therefore, a non-profit facility, such as a YMCA or Jewish Community Center, would be conditionally permitted in the zone, but the for-profit status of MSC's proposed facility rendered it a non-permitted use.

During the course of seven public hearings, which took place between February 12, 2003, and December 3, 2003, the Board heard testimony and considered evidence from MSC's owners, Frank Calandrino and his brother, Stephen Calandrino, and MSC's engineer, planner, traffic expert, market expert, architect, and others. The Board also heard expert testimony and considered evidence presented by an objector, TSI Marlboro, Inc. t/a New York Sports Club (TSI or plaintiff), a potential competitor of MSC. Finally, the Board considered testimony and reports from its planner, Richard Cramer, and its engineer, Ernest Peters. No local residents addressed the Board in opposition to MSC's variance application.

The Board's resolution approving the use variance states the Board "found the testimony of [a]pplicant's witness, James Higgins, P.P. to be credible and [the Board concurs] with Mr. Higgins that this property is particularly suited for the proposed use." On September 3, 2003, Higgins testified as follows:

Q: . . . Would you go through [the special reasons] with the Board . . . and the background analysis?

A: Yes, surely. . . .

The surrounding uses: To the west you have industrial uses that are located in the industrial park. To the east of the site across Boundary Road you have a mixture of agricultural uses, farms as well as residential uses in Colts Neck. Directly to the north of the site across Vanderburg Road, you have the municipal soccer complex, which now has recently had a pool complex also constructed with it; and to the south of the site you have industrial uses, also located in Marlboro on Boundary Road.

I think that there are special reasons for the granting of the variance. And I say this because, first of all, a recreational use does in itself have a substantial public benefit. It doesn't rise to the level of an inherently beneficial use, but it is a use that does provide public benefit. . . .

The ordinance permits in this zone quasi-public buildings and recreational uses on the site. . . . [S]o I think the Zoning Ordinance has provided for this type of use in this zone and said this type of use is appropriate in this zone. In addition, the Master Plan also recognizes that this type of use . . . is appropriate in the zone . . . .

The size and the configuration of the site I think are ideal for the use. . . . This is a lot [that] will accommodate the large buildings and the adequate parking facilities.

The site is transitional-type site located between the industrial areas to the west and the south and the recreational and residential areas to the north and to the east, so that this site in my opinion is better suited to this type of use rather than an industrial use that would involve trucks, a warehousing use that would involve trucks, possibly 24-hour[s] a day . . . .

In addition, by locating this type of use in an industrial area, there's a certain synergy between this use and the industrial use. I think it's a benefit to the industrial zone in that the employees of the businesses in the industrial zone would be able to take advantage of this use and to provide for recreation, exercise, and so on; so that I think it's an actual benefit to the surrounding area.

The other point would be the fact that the site is located on two fairly heavily traveled streets so access to the site is not a problem, particularly with the suggestion that has been made by the Board as far as the connection on [Travelers Way].

With regard to negative impact, I don't think there's any significant negative impact either to surrounding properties or to the zone plan. The use itself, as I said, is a conditionally-permitted use in the zone. . . . The only difference is the ownership and operation being for-profit rather than quasi-public, but that doesn't affect the nature of the use itself. So the use I think is consistent with what's permitted in the area.

I think there's a relationship between this use and surrounding uses. Particularly, you have the municipal recreational complex directly across Vanderburg Road from the site, so very definitely there's no negative impact on that. There would be no negative impact on the surrounding industrial uses. I think the use is not only compatible with them, I think that there is an interplay between the two, where there is a mutual benefit between the two, so for those reasons, I don't see any negative impact.

The Board's planner, Richard Cramer, provided the Board with two written reports and, on December 3, 2003, when asked to give his expert opinion, Cramer did not dispute the testimony provided by MSC's planner:

The [a]pplicant's planner offered [his] special reasons. I think that they stand on their own. The objector's planner tonight acknowledged that recreational use would be considered to advance the general welfare, and I don't argue with that. I think that most planners would look at recreational uses as advancing the general welfare.

As to its relationship to the zone plan, itself . . . and the master plan, one of the concerns of the township [in 1997] was stimulating the economic development of this area. They noted that light industrial was slow to develop, and they wanted to expand the types of uses that could be located in that area. So . . . that's something which the Board should take into consideration . . . .

And as to . . . distinguishing this particular location from other locations within the light industrial zone, I think it can be distinguished . . . . [I]t's opposite the municipal zone, which is developed for recreational uses. It sits at the edge of the light industrial district. It's not internal to it, and it's confined to really an edge location of that light industrial area so I think that that locational aspect does distinguish it from other lots that are zoned light industrial.

On December 3, 2003, by a six to one vote, the Board granted MSC's revised plans for "a [u]se [v]ariance to construct a 150' x 450' one and two-story building (91,550 s.f. total) to be utilized as a recreational/health club facility." The Board adopted a resolution memorializing its decision at a meeting on February 11, 2004. The resolution states the relief requested by MSC was granted "because special reasons exist and . . . the granting of this relief will not be a substantial detriment to the public good and will not substantially impair the intent and purpose of the Zone Plan and Zoning Ordinance." The resolution also specified: "No site plan approval is granted in connection with this bifurcated application; the applicant has received use of variance relief only." With regard to TSI, the sole objector, the resolution stated: "the Zoning Board finds that while the objector may be a 'taxpayer[,'] the objector's motive is to prohibit a competitor from entering the market and inhibiting New Your Sports Club['s] economic viability."

The Board also recognized "there are traffic issues with regard to Vanderburg Road and Boundary Road," and it granted the use variance subject to certain conditions, which included the following (1) MSC must apply to the Department of Transportation (DOT) for the installation of "a traffic light at the intersection of Route 79 and Vanderburg Road" and to "pay [its] pro rata share of installing the traffic light," if the application is approved by the DOT; and (2) MSC must "pursue an extension of [T]ravelers [W]ay" and, if an extension is approved, MSC must pay its pro rata portion of the improvements. In the event MSC "fails to secure either a traffic light at the intersection of Route 79 and Vanderburg Road or an extension of

[T]ravelers [W]ay" then the resolution requires MSC "to return to the Zoning Board for possible additional conditions to address the traffic issues."

On April 1, 2004, TSI filed a complaint in lieu of prerogative writs naming the Board and MSC as defendants. Plaintiff challenged the Board's decision to grant a use variance to MSC.

TSI's fourteen-count complaint alleged the initial public notice on the application was defective because it failed to include "all the use variances and other relief requested by the Applicant, including the mixed use variance required under Ord. Sec. 84-121" (count one); the second public notice was defective because it also failed to include notice of the required mixed use variance (count two); and the notice to the adjacent municipality of Colts Neck was insufficient (count three). Count four alleged the Board's proceedings violated the Municipal Land Use Law (MLUL) and the Open Public Meetings Act by holding frequent sidebars and private conversations.

Count five of the complaint alleged the principal of Applicant, Frank Calandrino, is currently being investigated by the Federal Bureau of Investigation ("the FBI") for allegedly making payments or providing consideration to a third party intermediary with the intent to improperly pay or give other consideration to a third party intermediary with the intent to improperly pay or give other consideration and/or favors to the Board members or other parties, in order to influence Defendant Board's decision and obtain approval for the application.

Count five further alleged that Frank Calandrino had invoked his Fifth Amendment right against self-incrimination and failed to answer questions before a grand jury regarding such payments or other attempts to influence Board members. This count contended the Board's decision was null and void based on the conflict of interest of any Board members "who accepted any payment or consideration from the Applicant, either directly or indirectly, or was approached and/or persuaded to vote in favor of the application by an intermediary, whether or not any payment was made, who had discussions outside of public hearings on this case." Count six relied on the same allegations to assert that the Board's decision was null and void based on "the Appearance of Impropriety."

Count seven alleged the Board's decision to approve a use variance was arbitrary, capricious and unreasonable. Count eight claimed MSC failed to satisfy an enhanced burden of proof because the uses proposed in its application were permitted in other "commercial and business" zones in the Township of Marlboro.

In counts nine and ten, plaintiff alleged the Board's decision had ignored the "unrefuted" testimony of plaintiff's planning expert and its traffic expert that the use presented a substantial detriment to the zone plan. In count eleven plaintiff claimed the Board's decision was arbitrary, capricious, and unreasonable because the Board failed to impose requirements for off-site improvements as a "condition" of the approval.

Count twelve alleged the Board's finding that the "property was particularly suited for the proposed use" had no basis in fact; count thirteen alleged the application was "substantially inconsistent with the zone plan and zone scheme"; and count fourteen claimed the Board's decision was based on "unsworn testimony or information not provided 'under oath'" because the Board "failed to swear in all witnesses and persons providing information and/or facts and/or testimony."

On August 4, 2004, MSC filed an answer. The record does not contain the Board's answer to plaintiff's complaint.

Almost two years later, on April 12, 2006, the court granted MSC's request for leave to file an amended complaint. In count fifteen of the its amended complaint, plaintiff stated: "on February 10, 2005 Frank A. Calandrino entered a guilty plea to [a federal charge of] obstruction of justice in connection with the FBI's investigation of the use variance." In addition, plaintiff alleged that during Calandrino's plea hearing he testified he had agreed to tape record a meeting with a person, whom the United States Attorney later identified as Vincent Carbe, but when plaintiff tried to depose Calandrino, his brother Steven Calandrino, and Carbe, on the circumstances of attempts to influence the Board's decision, they all invoked the privilege against self-incrimination. Plaintiff alleged these actions give "rise to an adverse inference that Marlboro Sport[s] Center's agents attempted to unlawfully corrupt and influence consideration of the use variance application," and it claimed that MSC should not be allowed "to obtain the benefit of the variance granted on December 3, 2003."

In May 2006, MSC and the Board filed answers to plaintiff's amended complaint and, according to the Board's attorney, the court permitted limited discovery regarding plaintiff's amended complaint, which included "the propounding of interrogatories on each of the Board members inquiring as to whether, at any time, any individual offered them money or other consideration in exchange for a favorable vote with respect to MSC's variance application. Each and every Board member unequivocally answered in the negative."

During the bench trial on August 28, 2006, the judge informed the parties and their attorneys that he had driven past the site "on two different days," and he observed the lots "were for sale with a use variance for building a sports center." He "sense[d]" that the sign had been there "for a fairly long time." He also drove by plaintiff's facility and another one in Marlboro. The judge noted both were large facilities. He then questioned the cost to construct defendant's facility:

I did not see anyone from the Board or anybody else asking how much the cost was going to be of this proposed large building that was going to be built. It's, you know, quite large, it had a lot of things in it, and it seemed to me that the first thing you want to know is not do I get a variance but can I afford to put it up. That question was never asked.

Another thing that occurred to me that no one asked who were the people that LLC were besides the two Calandrinos. Who else is in it? And who really owns it? And again, you know, who's got the money? . . . I didn't see anything like that. And it would help to decide whether we do this or we don't do it.

The judge wanted to see a copy of the LLC papers filed with the Secretary of State and the deed to the property. When informed by defendant's attorney that Frank and Steve were the only members of the LLC, the judge stated, "those two together don't have enough money to put the place up. But maybe there will be people with money who will join them."

When informed that the Calandrinos had purchased the property, the judge responded:

I hear what you say. I just, for the life of me, this is a big thing, going to put it up, it's going to take a lot of money to put it up. And the Board was floating along asking other things, you know, that really weren't terribly pertinent. When the first thing, I would do on the Board is say, where do you guys come from and where is the money going to come from?

The judge observed that the Calandrinos "always had an answer" for the Board. "But all they were armed with is a layout, not a building -- you're not going to build anything from that layout. It's just a sketch." Apparently referring to the for sale sign, the judge said the sign "told me that these people are not going to build it. They want somebody else to take it." The judge also noted that Colts Neck received notice but "[n]ot a person from Colts Neck argued against it" and he believed "the reason . . . was because they thought it was for a different thing."

The judge was of the view that the only benefit for the town was "to . . . the tax pot," because "the rest of the town, for the most part probably won't go near it because a lot of people don't want to go and get strong or something. So it doesn't make the whole town better."

The judge also noted that while he was investigating the area, it was "okay going to the right" but it was "pretty difficult" to make a left turn "because the cars are coming back and forth." He stated: "traffic is a problem," and he concluded "there is going to be more cars on the road, a lot more, because of this use."

After review the written reports prepared by the Board's planner and its engineer, the court stated: "so all of the people who give information to the Board did their part, both their planner and their engineer. And they all kept saying look out." The court made no mention, however, of Cramer's or Peters's supportive testimony to the Board, which occurred almost one year later, after MSC had presented evidence to the Board at seven hearings.

As to whether MSC satisfied the negative and positive criteria, the court stated:

I don't really see much by way of special reasons. There are lots of these places around, no doubt about that. I think Mr. Higgins was saying oh, it'll be very nice for the people over in Colts Neck. It doesn't have anything that's too lovely as far as the area is concerned. And that area was not supposed to be, you know, specially reasoned, I don't think. It was limited to the light industrial.

So put this sports center in the area that is supposed to be an industrial area is making it look not so good, I think. You know, it's just, for the sake of what they're trying to do, putting it there may be a cheap little place, I said it, to do it. But it's not a special reason. They should probably do it someplace else.

So I don't think that has been met. Despite all of the efforts of Mr. Higgins to reel it around that place so that it's special for some reason. He was very articulate, and he spent a lot of time, he came back the next time and was talking about it. But all of what he said as far as I could read was that something like this is not zoned to put it there. And if it's not zoned to be put there, then it's not a special reason. . . .

Also . . . if you have a use variance, as had been given here, we have to make sure that it will not substantially impair the intent and the purpose of the zone plan and the zoning ordinance. And if anyone ever came smack up against this, that's what this place is. It is . . . substantially impairing the intent and the purpose of the plan and the zoning ordinance.

So for those reasons and those reasons alone, I find that the actions of the Board were not in accordance with the law, and therefore, their use variance should be, what will I say, taken out, whatever.

The trial judge made no findings concerning (1) the defective notice allegations in counts one, two, and three of plaintiff's amended complaint; (2) the allegations of conflict of interest and corruption in counts five, six, and fifteen of the amended complaint; or (3) the allegation that the Board failed to swear in witnesses in count fourteen of the amended complaint. These unresolved issues must be addressed on remand.

In its appeal from the judgment entered by the Law Division, MSC contends the court "failed to accord any deference whatsoever to the Zoning Board's findings and, instead improperly applied a de novo standard of review by engaging in its own weighing of the credibility and substance of the proofs presented by MSC." We find this argument persuasive. Indeed, the judgment entered by the Law Division on September 12, 2006, states the court reviewed the Board's decision "de novo on the record."

Under the MLUL, N.J.S.A. 40:55D-1 to -163, a zoning board of adjustment is empowered "[i]n particular cases and for special reasons" to grant variances that will permit "a use or principal structure in a district restricted against such use or principal structure." N.J.S.A. 40:55D-70(d)(1). However, no variance may be granted under the MLUL "without a showing that such variance or other relief can be granted without substantial detriment to the public good and will not substantially impair the intent and the purpose of the zone plan and zoning ordinance." N.J.S.A. 40:55D-70(d).

To obtain a variance, an applicant must satisfy both the "positive" and "negative" criteria of the statute. Nextel of N.Y., Inc. v. Borough of Englewood Cliffs Bd. of Adjustment, 361 N.J. Super. 22, 37 (App. Div. 2003); Ne. Towers, Inc. v. Zoning Bd. of Adjustment of W. Paterson, 327 N.J. Super. 476, 487 (App. Div. 2000). A use such as a school or hospital, by its "inherently beneficial" nature, is considered to provide the special reasons necessary to satisfy the positive criteria. Ibid.

But non-inherently beneficial uses generally must show that "the use promotes the general welfare because the proposed site is particularly suitable for the proposed use." Smart SMR of N.Y., Inc. v. Borough of Fair Lawn Bd. of Adjustment, 152 N.J. 309, 323 (1998) (quoting Medici v. BPR Co., 107 N.J. 1, 4 (1987)). That determination focuses on whether the general welfare is served by implementation of the proposed use because the special characteristics of the property either render the propose use "peculiarly fitted" for the particular location, or create "undue hardship" such that the property cannot be adapted reasonably to a permitted use. Stop & Shop Supermarket Co. v. Bd. of Adjustment of Springfield, 162 N.J. 418, 431 (2000); Kohl v. Mayor of Fair Lawn, 50 N.J. 268, 279 (1967); Medici, supra, 107 N.J. at 17 n.9. Satisfaction of the negative criteria requires "an enhanced quality of proof" and "clear and specific findings" by the Board that granting the use variance would not be "inconsistent with the intent and purpose of the master plan and zoning ordinance." Medici, supra, 107 N.J. at 4; Ne. Towers, Inc., supra, 327 N.J. Super. at 488.

"[T]he law presumes that boards of adjustment . . . will act fairly and with proper motives and for valid reasons." Kramer v. Bd. of Adjustment, Sea Girt, 45 N.J. 268, 296 (1965). The party challenging the decision bears the burden of proving otherwise. Ne. Towers, Inc., supra, 327 N.J. Super. at 493. Through the MLUL, the Legislature has placed the discretionary authority to render variance determinations with the local boards, which possess unique knowledge of the local conditions.

Kramer, supra, 45 N.J. at 296. A reviewing court may not substitute its own judgment for a board's factual determinations. Ibid. A zoning board's decision is entitled to "substantial deference" from a reviewing court and must only be reversed when "arbitrary, unreasonable, or capricious." N.Y. SMSA, L.P. v. Bd. of Adjust., 370 N.J. Super. 319, 331 (App. Div. 2004). That deference is greater when a court reviews a denial of a variance, rather than a grant. Nynex Mobile Comm'ns Co. v. Hazlet Twp. Zoning Bd., 276 N.J. Super. 598, 609 (App. Div. 1994). A board's decision is entitled to the same deference from appellate courts. Bressman v. Gash, 131 N.J. 517, 529 (1993); Charlie Brown of Chatham, Inc. v. Bd. of Adjust., 202 N.J. Super. 312, 321 (App. Div. 1985).

With these principles in mind, we conclude the judgment entered by the court must be vacated because the record does not support the trial court's findings, and the court erred by reviewing the Board's findings and the record de novo. To a large extent, the court based its decision on its own investigation of the site, and unsupported assumptions regarding the financial status of the Calandrinos. The court overlooked the extensive information that MSC presented to the Board in the form of expert reports and testimony, and it dismissed MSC's cooperation with the Board and its experts as "always [having] an answer" for the Board. The court apparently concluded that MSC was "not going to build anything" based on the "sketch" it provided to the Board, and the court determined that the recreational facility proposed by MSC would not "make the whole town better" because "a lot of people don't want to go and get stronger or something."

The court also erred in its treatment of the reports from the Board's traffic and planning experts. Nothing in those reports states, in effect, "look out." They merely provided the Board with relevant background information and presented issues the Board might want to address and resolve when considering the application. In addition, the court failed to consider Cramer's and Peters's testimony which supported MSC's application; it dismissed Higgins's testimony even though the Board found him to be credible; and the court erroneously determined MSC failed to establish special reasons for a variance because "if it's not zoned to be put there, then it's not a special reason."

Given these unsupported findings and conclusions by the Law Division, we vacate the judgment entered on September 12, 2006. Because the trial judge conducted his own investigation and made credibility findings, we direct that the remand proceedings be conducted by a different judge. Due to the passage of time, the parties shall be permitted to supplement their submissions to the trial court if they elect to do so.

To summarize: (1) we vacate the judgment reversing the grant of a use variance by the Board and remand the matter to the Law Division, and (2) pursuant to Rule 1:7-4, the remand court must make specific findings of fact and conclusions of law on all of the critical issues, including the allegations of defective notice, conflict of interest and corruption, and failure of the Board to swear in witnesses, as well as any other unresolved issues raised by MSC on its appeal and TSI on its cross-appeal.

Vacated and remanded. We do not retain jurisdiction.

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