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Washington Commons, LLC v. City of Jersey City

January 22, 2009

WASHINGTON COMMONS, LLC, PLAINTIFF-APPELLANT,
v.
CITY OF JERSEY CITY, MARIANO VEGA, JR, JERSEY CITY REDEVELOPMENT AGENCY AND JOHN DOES 1-20, MEMBERS OF THE JERSEY CITY REDEVELOPMENT AGENCY AND MAYOR JERRAMIAH HEALY, THE CITY OF JERSEY CITY BOARD OF ADJUSTMENT, CITY OF JERSEY CITY DEPARTMENT OF HOUSING, ECONOMIC DEVELOPMENT AND COMMERCE, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-894-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 17, 2008

Before Judges Parrillo and Lihotz.

Plaintiff, Washington Commons, LLC, appeals from the June 14, 2007 order of the Law Division dismissing its action in lieu of prerogative writs against defendants City of Jersey City (City), Mayor Jerramiah Healy, City Council President Mariano Vega, the Jersey City Redevelopment Agency, the Jersey City Zoning Board of Adjustment (Board), and the Jersey City Department of Housing, Economic Development and Commerce, and from the court's further order of August 9, 2007 denying plaintiff's motion for reconsideration. For the following reasons, we affirm.

The facts and procedural history may be summarized as follows. In early 2004, plaintiff applied to the Board for major site plan approval and variances pursuant to N.J.S.A. 40:55D-70(c)(1), (c)(2) and (d) for the construction of an 11-story, 52-unit residential building at 311 Washington Street in Jersey City.*fn1 The Board approved the application conditioned on plaintiff building 68 units for residence instead of the 52 units originally proposed, and further, of those 16 additional units, seven were to be affordable artist live/work units. This condition was integral to the grant of the Section 70(d) variance because the Board considered the seven affordable units to be "an inherently beneficial use," which satisfies the positive criteria. The Board's resolution further provided that the seven units were to be conveyed to "the City or its designated agent, which at this time is the [Jersey City Redevelopment Corporation], for rental to low and/or moderate income certified artists in accordance with such terms and conditions as are negotiated by [plaintiff] and the City . . . ." (emphasis added).

Apropos to this latter point, prior to the Board's May 20, 2004 hearing on plaintiff's application, Claire Davis, the supervising planner for the City and secretary to the Board, prepared and submitted a Planning and Zoning Report (Report) to the Board on May 16 and 17, 2004, in which she stated that "the applicant proposes dedicating and conveying to the City seven (7) units . . . . The additional height and density proposed for this project provide the financial incentive to enable the developer to dedicate the 'affordable' units at no monetary cost to the City." Plaintiff was provided a copy of the Report, and did not challenge it. Moreover, at the hearing itself, which plaintiff attended, Kathryn Klanderman, speaking on behalf of Pro-Arts, a local arts organization, testified that, after reviewing the plaintiff's proposed plans, "[w]e are very pleased that the developers are offering seven well-designed affordable artists' live/work spaces; that they're giving them to the arts district, as they have no requirement to do so." Once again, plaintiff lodged no objection.

Nonetheless, after approvals were obtained, a dispute arose over the interpretation of the "negotiations" clause in the Board's resolution, with plaintiff insisting that "price per affordable housing unit" was included within its scope and that the price would be plaintiff's cost per unit ($463,235.29). By March 2005, plaintiff had already begun construction of the 14-story residential building and later that year, on June 21, 2005, had applied to the City for a twenty-year tax abatement pursuant to N.J.S.A. 40A:20-14(a). In fact, it was at a subsequent meeting concerning the tax abatement that City Council President Vega demanded of plaintiff that the seven units be donated to the City or its application would not be approved. Consequently, the tax abatement application was then tabled pending resolution of ongoing negotiations. However, by October 2006, negotiations ceased and no agreement had been reached.

In apparent response to a January 10, 2007 letter from the Mayor offering $200,000 for each of the seven units and further advising that plaintiff "would have been allowed to construct a maximum of 52 units in 11 stories," plaintiff filed an action in lieu of prerogative writs against the municipal defendants. Its complaint alleged, in four counts, that defendants: (1) acted arbitrarily and unreasonably in both failing to approve a twenty-year tax abatement and failing to approve payments for the seven affordable housing units at cost price to plaintiff; (2) interfered with plaintiff's prospective economic rights; (3) negotiated in bad faith; and (4) denied plaintiff due process. Thereafter, defendants moved to dismiss plaintiff's complaint and plaintiff cross-moved to strike from the Board's resolution any reference to building seven low income housing units and to compel the City to issue sixty-eight twenty-year tax abatements. Plaintiff also cross-moved to file a notice of late claim with regard to its tort claim, as it never filed a notice of claim.

Following argument, the court granted defendants' motion to dismiss, finding plaintiff's complaint was time-barred for two reasons: (1) the prerogative writs claim (count 1) was not filed within 45 days of accrual of the cause of action, Rule 4:69-6(a), which would have been either August 2005 when the City demanded the seven units be donated or at the latest October 2006 when negotiations terminated; and (2) no notice of the tort claim (count 2) was filed within 90 days, N.J.S.A. 59:8-8. As to the latter, the judge further declined to extend the time for filing because he found the Board's action neither arbitrary, capricious, nor unreasonable. As to the former, the judge held that plaintiff should first exhaust its administrative remedy before the Board. In denying plaintiff's later motion for reconsideration, the court added that the third count was repetitive of the first count, and was therefore dismissed for the very same reason, and that, as to the fourth count, there was no evidence of any due process violation, as plaintiff had been present at all Board hearings and actively participated in the process. Plaintiff then filed this present appeal, raising the following issues:

I. THE COURT BELOW ERRED IN REFUSING TO GRANT THE RELIEF SOUGHT BY PLAINTIFF; IN THE ALTERNATIVE THE COURT SHOULD HAVE GRANTED A PLENARY HEARING TO RESOLVE THE ISSUES.

II. THE COURT BELOW ERRED IN RULING THAT THE PLAINTIFF'S CLAIM WERE TIME- BARRED.*fn2

Plaintiff never returned to the Board as suggested by the Law Division judge. Instead, during the pendency of this appeal, at its regular meeting on November 8, 2007, the Board decided its May 20, 2004 resolution required plaintiff to donate the seven affordable housing units to the City and that price was never intended to be a term to be negotiated.*fn3 In response, on December 24, 2007, plaintiff filed a second complaint in lieu of prerogative writs (Washington Commons II) challenging the Board's November 8, 2007 "clarification." Defendants then filed a motion to dismiss, supported by the certification of Claire Davis and her Planning and Zoning Report. By order of April 11, 2008, the court dismissed this complaint on res judicata grounds, finding that because plaintiff did not exhaust its administrative remedies before the Board, and further that the Board's so-called "clarification" had actually been the Board's position all along, nothing had changed in the relationship between the parties since Washington Commons I.*fn4 In other words, the impasse in negotiations between the City and plaintiff existed prior to the Board's "clarification," and thus, plaintiff's claims remained time-barred because it should have filed a complaint in lieu of prerogative writs in August 2005, or at the latest, October 2006. Tellingly, the court added that upon reviewing the additional proofs adduced in Washington Commons II, there would be little doubt in my mind that the decision of the conveyance for a dollar a piece would in fact be my conclusion. The Planner's report which was the basis of the action of the Board of Adjustment was something they relied upon. It was something that was in my opinion and experience had to have been provided to Mr. Colling, to the architect, to the attorney.

And furthermore I'm satisfied from the additional transcript that I've now seen regarding the testimony of the person from the arts community that everyone that was there expected ...


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