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Cottage Emporium, Inc. v. Broadway Arts Center

April 16, 2010

COTTAGE EMPORIUM, INC., T/A RAINBOW LIQUORS, GOPAL PANDAY, KAVITA PANDAY,*FN1 THE LIGHTHOUSE INSTITUTE FOR EVANGELISM D/B/A THE LIGHTHOUSE MISSION, REVEREND KEVIN BROWN, CGR HOLDING CORP., L.L.C. AND CARLOS RIVERA, M.D., PLAINTIFFS-APPELLANTS,
v.
BROADWAY ARTS CENTER, L.L.C., A NEW JERSEY LIMITED LIABILITY COMPANY, CITY OF LONG BRANCH, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, MAYOR AND COUNCIL FOR THE CITY OF LONG BRANCH, AND STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS.
CITY OF LONG BRANCH, PLAINTIFF-RESPONDENT,
v.
LIGHTHOUSE MISSION, INC., LIGHTHOUSE INSTITUTE FOR EVANGELISM AND KEVIN BROWN, INDIVIDUALLY, DEFENDANTS-APPELLANTS, AND CITY OF LONG BRANCH, MICHELE FARR DELISA, ARLENE JEAN KEARLY, FIRST UNION NATIONAL BANK, GERARDO ERKALINO, MOORING TAXASSET GR, L.L.C., STATE OF NEW JERSEY, AND LONG BRANCH SEWERAGE AUTHORITY, DEFENDANTS.
CITY OF LONG BRANCH, PLAINTIFF-RESPONDENT,
v.
GOPAL PANDAY, KAVITA PANDAY, AND COTTAGE EMPORIUM, INC.,*FN2 DEFENDANTS-APPELLANTS, AND CITY OF LONG BRANCH AND LONG BRANCH SEWERAGE AUTHORITY, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket Nos. L-1786-06, L-4778-07 and L-0307-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 15, 2010

Before Judges Lisa, Baxter and Alvarez.

Appellants are owners and tenants of commercial properties in the Broadway Corridor, which is a section of the City of Long Branch (the City) that, in 1996, the City's governing body (Council) declared to be in need of redevelopment. Later that year, the City adopted a redevelopment plan that included the Broadway Corridor. The City took no further action toward redevelopment of the area until 2002, when it adopted a superseding ordinance, which again included the Broadway Corridor. In 2005, the City named defendant Broadway Arts Center (BAC) as the redeveloper.

After the Law Division upheld the validity of the blight designation and the redevelopment plan for the Broadway Corridor in 2007, the City filed condemnation actions against appellants' properties in 2008. The judge again upheld the validity of the blight designation and redevelopment plan and appointed condemnation commissioners.

Appellants argue that the trial court erred by (1) finding substantial evidence to support the City's determination that the area was in need of redevelopment; (2) finding that the condition of the zone in question (study area) satisfied the requirements of N.J.S.A. 40A:12A-5(a), (c), (d) and (e); (3) finding that appellants' challenges to the blight designation and redevelopment plan were time-barred; (4) denying their requests for pretrial discovery concerning the allegedly conflict-ridden relationship between the City and its chosen redeveloper, BAC; (5) failing to find a violation of appellant The Lighthouse Mission's rights under the Federal Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA); and (6) failing to find that the inclusion of their properties in the redevelopment zone violated their civil rights and tortiously interfered with their contractual rights and prospective economic advantage.*fn3

We conclude that the City's designation of the study area properties as in need of redevelopment does not satisfy the heightened standard made applicable to such determinations by the Supreme Court's decision in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007). Therefore, because the record does not contain substantial evidence to support the City's findings under any of the subsections upon which it relied, we reverse the judgment appointing condemnation commissioners and vacate the declarations of taking.

We recognize, as we will discuss in this opinion, that the redevelopment study on which the City relied in 1996 when it declared the area in question blighted was prepared long before Gallenthin was decided. Although we attribute to these cases pipeline retroactivity of the Gallenthin holding, we conclude that the City should be afforded the benefit of a remand to permit it to amplify the record in an effort to meet the Gallenthin standard. Harrison Redev. Agency v. DeRose, 398 N.J. Super. 361, 420 (App. Div. 2008). As to appellants' remaining claims, we reject The Mission's contention that the trial court committed reversible error in its findings regarding RLUIPA. We decline to consider appellants' contentions regarding the denial of pretrial discovery and their claims of conflict of interest, tortious interference and violation of civil rights, as our disposition of this appeal renders such issues moot.

I.

The first group of appellants is the Lighthouse Institute for Evangelism, which is located at 162 Broadway, and which operates under the name of The Lighthouse Mission under the auspices of its minister, Reverend Kevin Brown, who resides on the premises. The second group of appellants consists of CGR Holding Corporation, L.L.C., which owns a property at 9 Memorial Parkway, just south of Broadway, in which appellant Carlos Rivera, M.D. operates his medical practice.

Appellants' properties are located in the portion of the redevelopment zone known as the Broadway Corridor. Spanning an area of eighty-six acres, and consisting of 134 commercial properties and 154 residential properties, the Broadway Corridor is dissected by Broadway, one of the City's principal commercial thoroughfares. Broadway runs in an east-west direction.

The Broadway Corridor is bordered on the east by Second Avenue and Long Branch Avenue, on the north in an irregular fashion in part by Lewis Alley, and then continuing in a westerly direction to Seventh Avenue and ending at the abandoned Conrail railroad tracks. The abandoned railway tracks are outside the Broadway Corridor, but are immediately adjacent to its westernmost edge. At its southern edge the Broadway Corridor's boundary is in an irregular shape and traverses Jane Street and Chelsea Avenue. At its eastern edge, the Broadway Corridor does not abut the shoreline, but is instead adjacent to areas designated Oceanfront North and Oceanfront South. We shall discuss the City's treatment of Oceanfront North and Oceanfront South later in this opinion.

On July 26, 1994, Council adopted a report prepared by the City's Planning Department, in which the Planning Department reexamined the City's Master Plan. The 1994 report noted that the 1988 Master Plan had established as a goal for the Central Business District (CBD), which included Broadway, the "removal of deterioration and overall upgrading of physical environment" by using a "combined public-private action program [that would] secure new stores in the CBD." The 1994 report observed that the stated need to remove deteriorated buildings from the business district, and to upgrade the overall physical environment, was necessitated by the CBD's "unattractive and deteriorating physical condition," a "linear pattern of stores along Broadway with less than optimum clustering of compatible shops," and a "lack of stores with strong regional drawing power."

After Council completed its 1994 re-examination of the City's Master Plan, on August 8, 1995, the City adopted a resolution authorizing its Planning Board to conduct a preliminary investigation to determine whether all or part of the City's waterfront property should be designated as an area in need of redevelopment pursuant to N.J.S.A. 40A:12A-6(a). The study area included properties from Seven Presidents Park to South Takanassee Lake and Broadway.

In accordance with Council's resolution, the Planning Board directed the City's Planning Department to commence an investigation of the study area, in conjunction with the planning firm Thompson and Wood and an urban development consulting firm known as The Atlantic Group. Their resulting January 1996 report (1996 Report) divided the study area into three sections: (1) Oceanfront South; (2) Oceanfront North; and (3) The Broadway Corridor. The 1996 Report described the Broadway Corridor in the following terms:

This area suffers from its historic location near the blighting effects of the abandoned Jersey Southern railroad right-of-way, the shift of traffic to Ocean Boulevard, the shift of shopping to Route 36 locations outof-town and decades of public and private neglect and inadequate reinvestment. Similarly, the nearby industrial area, with obsolete buildings oriented to the abandoned rail right-of-way, deters residential development and discourages maintenance in nearby blocks.

The 1996 Report concluded that the Broadway Corridor satisfied the statutory criteria for "an area in need of redevelopment" and "should be designated as same." The 1996 Report also concluded that the "Oceanfront North" residential area met the statutory criteria for an area in need of redevelopment, while the "Oceanfront South" residential area did not.

Before analyzing each of the subsections of N.J.S.A. 40A:12A-5(a), (c), (d) and (e), the Planning Department and its consultants prepared a survey of the condition of the 237 parcels of land within the Broadway Corridor.*fn4 To accomplish that task, the Planning Department used the city and state building codes to devise six assessment criteria:

* Broken windows

* Deteriorating paint

* Falling, rotten, exterior columns

* Cracked, chipped masonry veneer

* Siding, walls, roof, stairs, porches, balconies and other structural parts showing evidence of deterioration

* Gutters, leaders, drains, window frames and doors showing evidence of apparent defects.

Based on visual inspection, which was conducted only from the exterior of the buildings, and which was recorded by a photographic inventory, the structures were assigned a condition of "good" if the building was free from all forms of deterioration listed above, "fair" if the building had no more than two deficiencies, or "poor" if the building had three or more.

Applying that rating system, forty-eight buildings in the Broadway Corridor (or 20%) were assigned a rating of "good"; seventy-four (or 31%) were found to be in "fair" condition; and sixty-eight (or 29%) were found to be in "poor" condition. The remaining forty-seven properties (or 20%) were vacant land. Of the 237 parcels in the Broadway Corridor, the City owned twenty-four, eight of which were vacant parcels. Many of the remaining sixteen were in poor condition.

Turning to the statutory criteria, the 1996 Report made findings to support its conclusion that subsections (a), (c), (d) and (e) of N.J.S.A. 40A:12A-5 were satisfied. In particular, on the basis of the six assessment criteria and the photographic survey we have described, the 1996 Report concluded that the Broadway Corridor satisfied the subsection (a) redevelopment criterion that "[t]he generality of buildings" were in sufficiently "substandard" or "dilapidated" condition "as to be conducive to unwholesome living or working conditions." The Report justified that finding by pointing to the survey's conclusion that only twenty percent of the buildings in the Broadway Corridor were in "good condition."

In its analysis of subsection (c), the 1996 Report focused on "unimproved vacant land that has remained so for a period of ten years prior to the adoption of the resolution, and that by reason of its location, remoteness, lack of means of access to developed sections or portions of such municipality, or topography, or nature of the soil, is not likely to be developed through the instrumentality of private capital." The Report observed that land vacant for ten or more years in the Broadway Corridor totaled 12.79 acres, or fifteen percent of the total area. The Report observed that "[t]his large amount of long term vacant land in a moderate size city is a very clear and significant indicator" that private capital alone was unlikely to develop that land. The 1996 Report did not determine the reasons for the vacancy rate, such as remoteness, topography, or soil conditions, nor did the Report distinguish between "vacant" properties that consisted merely of an undeveloped parcel of land and "vacant" properties that consisted of an empty building. The Report made no effort to address the requirement of subsection (c) that such vacancy be attributable to the specific causes mentioned there. Instead, the 1996 Report merely commented that:

Industrial properties which once were adequately served by the now abandoned Jersey Southern Railroad are today confined to use by trucks in a series of residential and commercial streets unsuited to today's standards for manufacturing and distribution facilities. Direct highway access is required to save time. Large trucks require abundant roadway to make turns. Special zoning to encourage this type of development was adopted several years ago and proved unsuccessful. The entire HTLI Zone is unsuitable for private development because of inadequate road access, i.e. "remoteness" and "lack of means of access."

For the N.J.S.A. 40A:12A-5(d) criterion of conditions that are "detrimental to the safety, health, morals, or welfare of the community," the 1996 Report noted the dilapidation of the buildings and the obsolete location of the Broadway Corridor. It described the obsolescence and dilapidation as follows:

The Broadway Corridor was an historic route to the oceanfront, the ferry piers, amusements and hotels. With the passage of time, public investments in Route 36 and Ocean Boulevard took vehicular traffic away from Broadway. Stores closed, buildings were demolished, and the strength of the businesses remaining diminished, reducing Broadway's commercial strip as a destination. Moreover, many of the buildings with retail space are obsolete in terms of their physical arrangements, in contrast to the requirements of modern merchandising. Chain stores and strong independents want high traffic counts, which Broadway no longer has. Today's retail renters want stores with more window space, rather than the long narrow stores built 75 or more years ago.

The Report commented that the Broadway Corridor's notably poor showing in the photographic survey, also described as the "commercial area image analysis," reflected "major problems in terms of parking lots, facades, vacant lots and buildings, street trees [sic], sidewalk conditions, and graffiti." Those conditions kept the area from being "the kind of commercial environment that a prospective business operator will consider for running a profitable enterprise." The study declared that those conditions "have remained for more than five years, with the result that high vacancy rates and marginal enterprises predominate." The Report noted that ...


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