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Mountain Hill, L.L.C. v. Zoning Board of Adjustment of the Township of Middletown

September 10, 2008

MOUNTAIN HILL, L.L.C., PLAINTIFF-APPELLANT/CROSS-RESPONDENT,
v.
ZONING BOARD OF ADJUSTMENT OF THE TOWNSHIP OF MIDDLETOWN, DEFENDANT-RESPONDENT/CROSS-APPELLANT.
MOUNTAIN HILL, L.L.C., PLAINTIFF-APPELLANT/CROSS-RESPONDENT,
v.
ZONING BOARD OF ADJUSTMENT OF THE TOWNSHIP OF MIDDLETOWN, DEFENDANT-RESPONDENT/CROSS-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Monmouth County, Docket Nos. L-1964-04 and L-2811-03.

The opinion of the court was delivered by: C.L. Miniman, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued: January 22, 2008

Before Judges Stern, Collester and C.L. Miniman.

Plaintiff Mountain Hill, L.L.C. (Mountain Hill), appeals from a March 16, 2005, summary judgment in favor of defendant Zoning Board of Adjustment of the Township of Middletown (Zoning Board) in Mountain Hill's action in lieu of prerogative writs. The judge determined that Mountain Hill was required to obtain a use variance in order to construct driveways crossing the zone lines of its split-zoned property on Route 35 in the Township of Middletown. The judge also concluded that Mountain Hill was required to obtain a use variance in order to construct buildings straddling zone lines wherever the use to which the building would be put was not permitted in both zones. The Zoning Board cross-appeals from a summary judgment in favor of Mountain Hill determining that Mountain Hill could apply for a consolidating subdivision into one lot even though its property was split-zoned. We affirm the orders requiring a use variance for buildings straddling zone lines and permitting Mountain Hill to apply for a consolidating subdivision of its split-zoned property. We reverse the order requiring a use variance for driveways crossing the zone line of Mountain Hill's split-zoned property.

Mountain Hill also appeals from a portion of a June 20, 2005, summary judgment in another action in lieu of prerogative writs against the Zoning Board challenging its interpretation of the Planning and Development Regulations of the Township of Middletown (Development Regulations). The judge affirmed the Zoning Board's interpretation of the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163, and Middletown's Development Regulations as requiring the inclusion of parking garages in gross floor area when calculating floor-area ratio. The Zoning Board cross-appeals from a portion of that same summary judgment in which the judge reversed the Zoning Board's determination that surface-water retention ponds do not qualify as open space under its Development Regulations. We reverse the part of the order requiring inclusion of parking garages in gross floor area and affirm the part of the order permitting retention ponds to be included in open space.

I.

These are the second and third of four appeals by Mountain Hill argued before us on January 22, 2008, all of which relate to the property on Route 35 in Middletown that Mountain Hill seeks to develop.*fn1 There have been two prior decisions by us that also relate to the same property. See Mountain Hill, L.L.C. v. Middletown Twp., 353 N.J. Super. 57 (App. Div.), certif. denied, 175 N.J. 78 (2002) (Mountain Hill I); Mountain Hill, L.L.C. v. Middletown Twp., Nos. A-1968-01, A-2556-01 (App. Div. April 16, 2003) (Mountain Hill II). The first of the four appeals argued on January 22, 2008, presented an issue under the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21, the facts of which are not particularly relevant here. See Mountain Hill, L.L.C. v. Twp. of Middletown, 399 N.J. Super. 486 (App. Div. 2008) (Mountain Hill III). However, in Mountain Hill III we reviewed facts from Mountain Hill I and Mountain Hill II that provide background for this action and we incorporate them here. Id. at 489-91.

A.

Mountain Hill owns Lots 53-57, 59-73 and 75-81 in Block 825 and Lot 7.01 in Block 871 on the tax map of Middletown. The size of the combined lots is 137 acres. Mountain Hill submitted a conceptual plan to the Zoning Board on September 19, 2000, anticipating the need for a use variance with respect to a portion of the development project. The project had some proposed nonconforming uses in fifty-six acres of Mountain Hill's property located in the M-1 (light industry) zone, which does not permit residential uses, supermarkets or department stores. The balance of its property at the time, eighty-five acres, was located in the Planned Development (PD) zone, which permitted town centers and mixed uses.

Mountain Hill sought a bifurcated use variance to permit construction of four single-family homes and four apartments in the M-1 zone as part of the overall development project. Mountain Hill also sought a bifurcated use variance to permit a portion of a department store in the PD zone to extend into the M-1 zone. Public hearings on Mountain Hill's application were held on sixteen occasions from March 21, 2002, to May 22, 2003. In addition to other witnesses, Mountain Hill presented the testimony and report of Henry J. Ney regarding the traffic impact of the proposed application, which he compared with the traffic impact of a purported as-of-right plan, i.e., a plan that conformed to the Development Regulations and did not require any variances from the Zoning Board. Ney concluded that the proposed plan would have less impact than the as-of-right plan.

At a hearing on October 15, 2002, the Zoning Board addressed an issue that arose at earlier hearings respecting the as-of-right plan on which Ney relied. The Zoning Board previously determined that the reliability of Ney's opinion respecting the traffic impact of the proposed development depended on the accuracy of his assumption that the purported as-of-right plan conformed to the Development Regulations. There were two areas of concern addressed at the October 15, 2002, meeting: the accuracy of Mountain Hill's calculation of the floor-area ratios for each zone, which excluded a multi-story garage from gross floor area, and the inclusion of four storm-water retention basins in the calculation of the open-space ratios. The retention basins would be graded out of the existing property with a clay layer installed to assist in preserving the wet nature of the basins. The basins would be filled with natural surface-water runoff and would be covered with topsoil and grass before being filled with water. If the runoff was insufficient to keep the basins filled, the water level would be maintained through supplemental piping. The design of the basins would be graduated with a ledge for safety purposes. Each basin would have a fountain to discourage algae growth. From the surface of the land, a person would see only water, grass and the fountains and could not see any of the pipes or other drainage structures.

Anthony P. Mercantante, the Township Planning Director, had earlier advised the Zoning Board that:

It makes no sense from a Planning Standpoint to count parking garages towards Floor[-]Area Ratio (FAR). Floor[-]Area Ratio is designed to limit the intensity of a devel-opment. Parking garages do not generate traffic, they simply accommodate it. Park-ing garages are generally considered to be favorable uses since they result in a more efficient use of land and resources than surface parking. Including them in the FAR would in fact virtually ensure that they would never be built. Why would anyone give up Floor Area that is leasable and that generates revenue in favor of parking spaces in a multi-level garage which generate nothing and are in fact extremely expensive to build?

He also pointed out that the "Spy House Harbor" development and the AT&T project in Middletown both had multilevel parking garages and they were not included in the floor-area ratios. He further pointed to the "Performance Commercial Development" regulation, which permits a greater floor-area ratio when parking garages are included where the development meets other performance criteria. He stated, "Obviously it would be illogical to give a bonus that would immediately be eliminated with the inclusion of the parking garage."

With respect to open space, Mercantante opined that the MLUL "is quite vague on this issue." He suggested that one reasonable way to . . . consider this issue could be to consider retention basins or ponds as counting towards open space, since such areas can clearly be made an aesthetic and environmental feature of a development that contributes to the development as well as the community. On the other hand, detention or dry basins generally serve little or no potential value as open space since they are not easily accessible to the public and are not often an aesthetic feature.

With respect to floor-area ratio, Section 16-2.2 of the Development Regulations defines quite a number of terms used in Section 16. It states that "'Floor[-]Area Ratio' means the ratio of the gross floor area to the lot area as determined by dividing the gross floor area by the lot area." Middletown Twp., N.J., Development Regulations § 16-2.2. "Floor" is defined as "a story of a building." Ibid. The term "floor area, gross" is defined as:

[T]he sum of the gross horizontal areas of the floor or several floors of a building measured between the outside face of exterior walls. In the case of residential structures, such area shall be finished in accordance with the requirements of the building code. Any cellar, garage, crawlspace, unfinished attic or space of any nature, or accessory building shall not be included. Any space with a clear ceiling height of four feet or more, but less than the minimum ceiling height prescribed in the building code for the type of building concerned shall not be included when in excess of ten percent of the floor area which complied with such prescribed ceiling heights. [Ibid.]

Section 16-2.2 defines garage as: "a detached accessory building or portion of a main building for the parking or temporary storage of automobiles." It also provides that:

"Vertical Parking Garages" means a multi-level structure constructed for use as a facility for vehicular parking or storage.

The levels can be above or below grade or both but in no case shall exceed the maximum height limitation for the district in which it is located. [Ibid.]

Section 16-6.19 regulates the design of "commercial garages." Commercial garages in the M-1 and PD zones are accessory buildings. Section 16-6.19(A)(3) provides that "[a]n accessory commercial or industrial building garage shall be fully enclosed and have a full roof covering all parking spaces." Additionally, Section 16-6.19(A)(3)(b) provides that "[n]o portion of more than one level shall be above ground." "Residential garages" are regulated by Section 16-6.19(B), the specific provisions of which are not relevant here.

Counsel to the Zoning Board observed that the issue of floor-area ratio did not affect the proposed development but did affect the as-of-right plan because it included a vertical parking garage. He advised that the MLUL defined floor-area ratio as "the sum of the area of all floors of buildings or structures compared to the total area of the site." N.J.S.A. 40:55D-4. Counsel stated that the Development Regulations attempted to amend that MLUL definition by defining gross floor area in a manner inconsistent with the MLUL. He opined that divergence from a definition in the MLUL was not permitted and that a parking garage is a building that has floors, based on a footnote in our opinion in Commercial Realty and Resources Corp. v. First Atlantic Properties Co., 235 N.J. Super. 577, 583 n.5*fn2

(App. Div. 1989), modified, 122 N.J. 546 (1991). Thus, he concluded that parking garages must be included in calculating the floor-area ratio. Although the Zoning Board considered Mercantante's opinion that garages were not intended to be included in the floor-area ratio, one member stated that the statute was very clear and inconsistent with that opinion. Thereafter, one member moved "that parking garages, multilevel garages, structures are structures and that is from the statute, so it[] clearly . . . should be part of FAR." The motion was unanimously approved.

With respect to the open-space ratio, Section 16-2.2 provides in pertinent part that

"Open Space" means any parcel or area of land or water essentially unimproved and set aside, dedicated, designated or reserved for public or private use or enjoyment or for the use and enjoyment of owners and occupants of land adjoining or neighboring such open space . . . .

It also defines "open space, unoccupied" in pertinent part as an unoccupied area including natural and man-made water courses, streams, lakes, ponds, and grassed, wooded, or landscaped areas, open to the sky on the same lot with a principal and/or accessory building. [§ 16-2.2]

Lakes and ponds are also defined by Section 16-2.2:

"Lakes and Ponds" means natural or man-made bodies of water which normally contain or retain water for extended periods. Ponds are bodies of water with a surface area, measured under ten year storm conditions, of two acres or less. Lakes are bodies of water with a surface greater than two acres, measured under ten year storm conditions. The shoreline of a lake or pond is measured at the perimeter of the surface of water under ten year storm conditions, as certified by the applicant's licensed land surveyor, and approved by the Municipal Engineer. [Ibid.]

The section goes on to provide that the "open[-]space ratio" is "a measure of the inverse intensity of land use. It is arrived at by dividing total amount of open space within the site by the site area." Ibid.

At the October 15, 2002, meeting, the Zoning Board's counsel again advised that the definition of open space in the MLUL could not be changed by local ordinance. The MLUL defines "open space" as follows:

"Open-space" means any parcel or area of land or water essentially unimproved and set aside, dedicated, designated or reserved for public or private use or enjoyment or for the use and enjoyment of owners and occupants of land adjoining or neighboring such open space; provided that such areas may be improved with only those buildings, structures, streets and off[-]street parking and other improvements that are designed to be incidental to the natural openness of the land. [N.J.S.A. 40:55D-5.]

The Board's counsel further advised that it was for the Zoning Board to decide what "essentially unimproved" meant and to determine whether the retention basins were open space under the MLUL. He pointed to Section 16-6.28(C)(3) of the Development Regulations, which excludes flood-control basins and public drainage ways from Section 16-6.28 governing public open spaces and common open spaces, as supporting the exclusion of the retention basins from all open spaces. One board member then made "a motion that we make an interpretation and that interpretation is necessary." When asked "[w]hat is the interpretation," that board member stated, "The way I'm reading this from what Mr. Vella just read, I'm reading that open space, that this is an improved area based on what Mr. Vella read and that it is not considered open space." Following a vote, the motion was adopted.

On November 12, 2002, counsel for Mountain Hill wrote to the Zoning Board's chairman protesting the resolution of both motions. He argued that the Zoning Board could only interpret the Development Regulations, not rewrite them, and that the Zoning Board should have given weight to Mercantante's opinions as he had been interpreting the Development Regulations for eight years.*fn3 Counsel asserted that Mountain Hill was creating a "man[-]made pond," which is specifically included as unoccupied open space. He argued that the Zoning Board "ignored the plain language of its [regulation], ignored its planners and ignored prior precedent in other applications." He contended that the Zoning Board erred in only relying on the advice of its attorney, two words in the MLUL taken out of context and Section 16-6.28 of the Development Regulations, which had no relevance to the issue at all.

With respect to floor-area ratio, Mountain Hill's counsel raised similar concerns about the basis for including garages and pointed out that the definition of "floor area, gross" in the Development Regulations specifically excluded garages from the calculation of floor area. He argued that the Zoning Board had no authority to conclude that the Township Committee violated the MLUL in adopting its Development Regulations and that its conclusion was "reversible error." He then withdrew the testimony of Ney respecting traffic impact and advised the Zoning Board that Mountain Hill would not produce him for further testimony.

Ultimately, the Zoning Board's members voted to deny Mountain Hill's application for a bifurcated use variance. A resolution was adopted on June 23, 2003, which memorialized the Zoning Board's May 22, 2003, decision. In denying the application, the Zoning Board considered whether the as-of-right plan was truly as-of-right. To make that determination the Zoning Board interpreted the open-space requirements of the MLUL and the definition of "floor area, gross" in Section 16-2.2 of the zoning regulations. The Zoning Board concluded that the storm-water management facilities in the as-of-right plan did not qualify as "open space" under the MLUL. It further concluded:

An analysis of the construction, maintenance and purpose of the SWMF*fn4 by the Board led to the conclusion that the SWMF is clearly not "essentially unimproved", which is essential requirement for area to be "Open Space". The Board finds that there is a need to make substantial alterations to the land to create the SWMF. Further, the SWMF are designed solely for the purpose to accommodate the impervious areas of the site and not designed to accommodate the natural openness of the land. Based on these characteristics, the Board determined that the SWMF are not Open Space and should not be part of the Open Space requirement. [Resolution, In the Matter of Case #4481, Application of Mountain Hill, L.L.C., ¶ 6.]

It also concluded that the square footage of the commercial vertical parking garage in the PD zone on the as-of-right plan had ...


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