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Million Bucks, Inc. v. Borough of Seaside Park Zoning Board of Adjustment

November 10, 2009


On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-1621-08.

Per curiam.


Argued October 19, 2009

Before Judges Lisa, Baxter and Alvarez.

Plaintiff, Million Bucks, Inc., doing business as Sawmill Café (the Sawmill), was issued a cease and desist letter on February 7, 2007 by the Borough of Seaside Park Zoning/Code Enforcement Officer, Geoffrey N. Schwartz, who asserted that the Sawmill was operating a discothèque or nightclub on the second floor of the premises, in violation of the approvals granted by the Borough for a restaurant/tavern operation, and in violation of applicable Borough ordinances prohibiting nightclubs. The Sawmill appealed that determination to defendant, Borough of Seaside Park Zoning Board of Adjustment (Board). After ten public hearings on the Sawmill's appeal had been conducted, but before the Board rendered a final decision, the Sawmill filed a complaint in lieu of prerogative writs in the Law Division, alleging, among other things, that eight of the nine members of the Board should be disqualified because they were officers or members of the Taxpayers Association of Seaside Park (TASP), which for several years had been arguing that the Sawmill was being operated as a nightclub, rather than as a restaurant, which was the very issue before the Board.

The Law Division, in orders of November 5, 2008 and January 13, 2009, required the recusal of five of the Board's nine members on conflict of interest grounds, but declined to disqualify the other four. The judge also denied the Sawmill's request that the proceedings be voided and required to start anew, and rejected the Sawmill's motion for Schwartz's disqualification. We reject the judge's conclusion that mere membership in TASP was not sufficient, by itself, to require recusal of those members. We therefore reverse that portion of the judge's January 13, 2009 order. We also reverse the judge's order that the proceedings need not start anew. We do, however, affirm the judge's conclusion that Schwartz need not be disqualified. Last, in light of our determination that membership in TASP should have disqualified member Kenneth Deshay, we need not decide the alternate ground for his removal that the Sawmill argues. We thus affirm in part and reverse in part.


Plaintiff Sawmill Café, located on the Boardwalk in Seaside Park, is a restaurant that is also permitted to offer entertainment. Although the proceedings that are the subject of this appeal occurred in 2008, we pause to discuss two earlier proceedings that have a bearing on the Zoning Board hearings. In 2002, the owner of the Sawmill, Stephen D'Onofrio, filed an application with the Planning Board for approval of his plan to demolish the existing building and replace it with a structure that required variances for land coverage, lot depth and building height. During the February 26, 2002 hearing, Geoffrey N. Schwartz, the same person who later issued the cease and desist letter, participated in the Planning Board hearing in his capacity as a member of the Zoning Board. Significantly, during that hearing, D'Onofrio was asked by a member of the public whether he intended to offer any live entertainment on the second floor, to which D'Onofrio responded that although he did not presently intend to "hav[e] any type of entertainment up there," he did not want to exclude the possibility of such entertainment at some point in the future. After considerable discussion of that subject, Schwartz, along with the other members, voted in favor of granting all three variances.

The second proceeding to have a bearing on the Sawmill's appeal to the Zoning Board occurred on June 24, 2004, when the Mayor and Council conducted a hearing to consider the Sawmill's application to renew its Alcoholic Beverage Control retail consumption license. During the public portion of the meeting, the president of TASP, Tom Hourihan, addressed the Mayor and Council, explaining that at its June 18, 2004 meeting, TASP, which consisted of 650 dues-paying members, approved a plan to distribute fliers*fn1 opposing the liquor license renewal. The membership also voted to retain an attorney to represent its interests. At the June 24, 2004 license renewal hearing, Hourihan argued that the Sawmill was adversely affecting the quality of life in Seaside Park:

The fliers were distributed, calling for everyone to have their voices heard, both pro and con, recognizing that the quality of life as far as our community and our taxpayers are concerned was being affected by the presence of the [Sawmill]*fn2 or the people who are attending the [Sawmill] in this community.

We are also affected by the cost of providing police protection at the Sawmill . . . that lea[ve]s ninety percent of the entire community . . . unguarded and [un]protected when all of . . . the policemen are up there attending to incidents associated with the Sawmill.

We personally would like this to be a success . . . but we don't want to have it on the terms that exist today. We want it to be a successful operation without all of the hullabaloo associated with it and the diminishing of the quality of life for the residents . . . .

The attorney hired by TASP addressed the Mayor and Council, arguing that the Sawmill was being operated as a nightclub. The comments of TASP's attorney echoed a persistent theme in TASP's 2004 newsletter. Although the newsletters addressed matters that would typically be of concern to residents and taxpayers, such as taxes, the municipal budget, beach fees and the dissolution of the Central Regional School District, the most persistent topic, and the one that evoked the most passionate, and at times vitriolic, treatment, was the Sawmill and the license renewal proceedings pending before the Mayor and Council.

Specifically, the May 2004 newsletter, under a headline "Sawmill Saga Continues," noted that TASP was in the process of preparing a legal position on the matter and its "membership" was "very upset at both the manner [in which] this business is being run and the additional costs incurred in maintaining public safety for the premises." The September 2004 newsletter announced that "[t]he owners of the Sawmill suffered a few setbacks recently," noting that the certificate of occupancy had been rescinded for failure to meet building code requirements. The newsletter also expressed concern about the slow pace of the proceedings before the State Division of Alcoholic Beverage Control concerning the Sawmill's liquor license.

The June 24, 2004 liquor license renewal hearing was contentious, with eighteen members of the public addressing the Mayor and Council. Most expressed the view that the Sawmill was being operated not only as a restaurant, but also as a nightclub, in violation of Borough ordinances. The remarks by TASP member John Vanna typify the tone of the public comments:

MR. VANNA: This is my opinion. I believe it is important to recognize why we are really here tonight. It is not because a liquor license is up for renewal, that process with the Sawmill has been almost routine for years. The reason we are here tonight is because there's a credibility issue now . . . that threatens the strategic direction of this town.

. . . . [The owner] did not become successful by being stupid. . . .

The true intention of the applicant has been and continues to be concealed from the governing body. [F]rom the out[set] the intention of the Sawmill owners was to create exactly what it has become, a large scale nightclub seeking to compete year-round with the clubs in Seaside Heights and consequently ...

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