July 2, 2010
RIDDHI SIDDHI ASSOCIATES, L.L.C. AND BART KHATIWALA, PLAINTIFFS-RESPONDENTS,
VOORHEES TOWNSHIP ZONING BOARD OF ADJUSTMENT AND MORI PROPERTIES, L.L.C., DEFENDANTS-APPELLANTS.
On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-406-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 18, 2010
Before Judges Parrillo and Lihotz.
Defendants Mori Properties, L.L.C. (defendant or Mori) and Voorhees Township Zoning Board of Adjustment (Board), appeal from a November 9, 2009 order of the Law Division setting aside use variances granted to defendant by the Board and memorialized in the Board's resolution. We affirm.
On April 14, 2008, Mori submitted an application for use and height variance relief pursuant to N.J.S.A. 40:55D-70(d)(1) and (6) to construct a hotel, restaurant, and banquet center on a 10.67 acre lot (the property), located within the Major Business (MB) Zoning District of Voorhees Township, with frontage on the east side of Route 73. Mori's application proposed a mixed-used plan, involving an attached multi-building configuration, including a 14,800 square foot four-story Hampton Inn Hotel, a 9,300 square foot banquet facility, and a 3,900 square foot meeting area to be utilized for pre-function or banquet gathering activities, together with a restaurant already on the premises. Mori's application required a use variance pursuant to N.J.S.A. 40:55D-70d(1), as while restaurants and banquet centers are permitted uses, hotels are not permitted on the east side of Route 73 in the MB zone, although hotels are allowed on the highway's western boundary. The application also required a height variance pursuant to N.J.S.A. 40:55D-70d(6), as the maximum height of structures in the MB zone is limited to forty feet.
The current MB zoning district has undergone various changes within the past five years. By way of background, when Mori first acquired the property on May 30, 2006, hotels were permitted on both sides of Route 73, consistent with the Township's Master Plan of 2005, which was adopted by Resolution 05-028 on July 13, 2005. Ordinance 85-06, adopted in April 2006, codified the recommendations in the 2005 Master Plan Reexamination Report and permitted hotels on both the east and west side of Route 73, stating that the purpose and intent of the MB zone was "[t]o provide for a wide range of business uses . . . along Route 73, recognizing the primary importance of the corridor as a business locus." At the time Ordinance 85-06 was adopted, the Township Committee was aware of the proposed Virtua Hospital project, as evidenced by the 2005 Master Plan Reexamination Report:
Although no formal applications have been made to the Township, it is reported that Virtua-West Jersey Health Systems is planning to develop a new hospital/medical complex on the west side of Route 73, between Route 73 and Dutchtown Road. . . . This land area totals approximately 100 acres on 30 existing lots. . . . Based on a review of available real estate records, it is evident that Virtua has already purchased at least 8 of these lots, totaling approximately 39 acres.
However, just three months after adopting Ordinance 85-06, the Township Committee, in July 2006, adopted Ordinance 90-06 to specifically eliminate hotels as a permitted use on the east side of Route 73. In adopting Ordinance 90-06, the Committee was responding to concerns about large-scale development raised by Sturbridge Lakes, a residential community located approximately one-half mile from the property. Ordinance 90-06 did not alter the previously stated purpose or intent of the master plan, which had been amended accordingly.*fn1
At the ensuing Board hearing, Mori argued that its proposed project would promote the public welfare as the site is suitable for this kind of development and will advance the public good by providing the Township with a facility to handle large private or business group functions, which are currently going to other municipalities, yet be located in an area where the road network can easily accommodate the additional traffic. The proposed hotel is essential to the overall proposal to ensure that the facility can attract groups from outside areas. Long-term guests will support the existing retail along the corridor and provide an incentive for other retail establishments to consider development in that general location.
Mori also stated that the proposed project is consistent with uses found in the MB zone and with adjacent municipalities' development along the Route 73 corridor, thereby rendering the variances sought as consistent with the intent and purpose of the master plan and zoning ordinance.
In support of the application, Mori's principal, Dr. Rajendra Patel, testified that he believed there was a need for a hotel along Route 73, based on his experiences as a community member and as a cardiologist with nearby Virtua Hospital. Patel stated that there was a "tremendous need" to have a hotel in town to house the family members of surgery patients from Virtua Hospital, which was in the midst of construction during the time Mori applied to the Board, as well as visitors attending local functions. Patel, however, was unable to quantify this demand and acknowledged that there were already two hotels in Voorhees, with one - SpringHill Suites - located nearby on Laurel Oak Road.
Derek Sylvester, an expert in hotel management, testified that the occupancy rate at SpringHill Suites was in excess of seventy-three percent and, as such, the market could support another hotel in the area. Despite another nearby hotel - The Indian Cultural Center - and one proposed and approved directly across the street on the west side of Route 73 near Dutchtown Road, Sylvester nevertheless opined that there was a need for a hotel on the proposed site because Virtua would be more than a local hospital but a regional medical center. Sylvester stated that the hotel "would fit [a] unique niche because it's slightly larger than some of the facilities in the area." He concluded that "[t]he hotel would provide . . . clean, attractive, appealing accommodations for travelers up and down . . . Route 73, . . . [and for] residents of [the] community, businesses within the community and the surrounding community and . . . the hospital and . . . its visitors, as well as guests from the catering facility."*fn2
Peter Tyson, a hotel industry consultant, summarizing a market and feasibility analysis from April 2007, testified that a hotel along the east side of Route 73 was needed in light of the Virtua Hospital project, despite the other hotel approved for construction on the west side of Route 73 and the struggling economy, which has negatively affected the hotel industry by between five and ten percent. Nevertheless, in his opinion, there was still enough demand for hotel lodging that the proposed project was sustainable, assuming that the economy would eventually improve. Tyson did admit, however, that if the Virtua project were not approved and completed, he would not recommend that a hotel be built along the east side of Route 73. Although aware that the Virtua project included a residential component, Tyson did not place great weight on that fact in forming his opinion, even though it would influence how great a need he believed existed for a new hotel.
Thomas Scangarello, P.P., Mori's planner, testified that the proposed hotel was not an inherently beneficial use. However, its construction would be compatible with the hospital, which is an inherently beneficial use, as well as with the neighborhood and other uses in the area. Scangarello opined that the planned hotel is aesthetically pleasing, an improvement to that site, and fits into a ten acre lot:
Well, the special reasons that justify the hotel include, number one, as I said before, the fact that we feel the site is particularly well-suited for the hotel given the proximity of what's going on across the street, given the fact that there's a restaurant and a banquet facility to be built behind it. We feel that these special reasons also promote the purposes of zoning. The purposes of zoning being that we're promoting a very desirable visual environment. We're doing something that is in keeping and providing sufficient light, air and open space because we're not covering a lot of the site.
We feel that Route 73 is no longer a . . . road that is something that you just travel on to get from one point to the other. By virtue of approvals that have gone on in this area and across the street, what we find happening is that Route 73 is becoming a . . . place where people want to go to be to the hospital, be to this facility and other facilities.
While acknowledging that the current version of the master plan did not allow for hotels on the east side of Route 73, Scangarello had "done research back to master plans that go before the 2005 re-examination report and could not find any particular justification for eliminating hotels on . . . the east side of the highways." He surmised that the governing body had not considered this kind of joint banquet/hotel facility when they eliminated hotels as a permitted use. He believed that had the governing body been aware of the Virtua Hospital project, a hotel on the east side of Route 73 would have been permitted.
Scangarello also testified that existing buffers, such as wetlands, would not be disturbed, further supporting his opinion that the site was particularly suitable for the hotel. When asked to address potential negative impacts, Scangarello stated that any increase in traffic was insignificant.*fn3 Though the hotel would be forty-six feet in height, it did not "look like a higher roof[,]" and Mori could not build the hotel to only forty feet because that would limit it to just three stories.
At the conclusion of evidence, the Board unanimously approved Mori's application. Specifically, the Board found that Mori had adequately demonstrated that there were special reasons for the grant of both use and height variances, as the proposed hotel promoted the general welfare in that it was well-suited to the location and compatible with the needs and demands generated by the Virtua Hospital project. Additionally, the Board found that the application would not result in a substantial detriment to the public good, as any traffic generated would be insignificant, and there would be little or no detrimental impact on the residences near the development. Though the hotel was not a permitted use provided for in the master plan, the Board found that Mori had reconciled its proposal with the purpose behind the master plan, as the hotel would have an inconsequential impact on neighboring residential developments.
With regard to the height variance, the Board also found that an additional six feet was compatible with the surrounding development, including the hospital, which was in excess of 100 feet tall, and the proposed hotel on the other side of Route 73, which was approved at a height of more than fifty feet. Mori's six-foot height variance would not be a substantial detriment to the public good and would not impair the intent and purpose of the master plan.
In sum, the Board found that the applicant had met both the positive and negative criteria for both the use variance and the height variance and had provided the necessary enhanced quality of proof needed to demonstrate that the use variance and the height variance were not inconsistent with the intent and purpose of the Master Plan and the Zoning Ordinance.
The Board's decision was memorialized as Resolution No. 08-045, and was adopted on December 11, 2008.
Plaintiffs, Riddhi Siddhi Associates, L.L.C. (Riddhi) and Bart Khatiwala filed a complaint in lieu of prerogative writs against the Board and Mori on January 26, 2009. Riddhi is a company with its principal offices located in Voorhees and Khatiwala is a resident of the Township. Plaintiffs alleged, among other things, that Mori failed to satisfy the positive and negative criteria required for each variance request; that the Board impermissibly usurped the power of the municipality's governing body by granting a use variance in violation of the Township's ordinance prohibiting hotels on the east side of Route 73; and that Resolution No. 08-045 failed to articulate how the Board's purported findings of fact supported its conclusions of law.
After considering the evidence and hearing argument, the Law Division judge rendered a bench decision on October 21, 2009. As a threshold matter, the court found that plaintiffs, as taxpayers residing in the Township, had standing under N.J.S.A. 40:55D-4, and had timely filed their complaint. On the substantive issues, the court set aside the Board's variance grants, finding the action arbitrary, capricious, and unreasonable. Fully acknowledging the great deference that is accorded to boards of adjustments, the judge focused on the fact that the Township "acted affirmatively and unequivocally to eliminate hotels as . . . a permitted use on the east side of 73."
It is thus beyond dispute that the planning board and governing body in adopting the updated master plan amendment and zoning ordinance to establish the medical hospital complex considered the integration of this use within the Route 73 corridor, considered and addressed the specific subject of lodging, and did not make hotels a permitted us along the east side of Route 73. This is confirmed by the zoning board of adjustment['s] own resolution in this case.
At paragraph 17 at page 10 of the resolution the zoning board stated when the 2006/2007 amendments to the master plan creating the medical campus overlay, which allowed for the Virtua Hospital project, the planning board and Township committee took a second look at the Route 73 corridor and still did not allow a hotel use . . . to be a permitted use at this site. Thus, the Board's own resolution establishes that the Virtua Medical Complex was not a game-changer, which the defendants urge.
The governing body was aware of the project that was being actively developed when it eliminated hotels along the east side of Route 73, revisited the Route 73 corridor when the medical hospital overlay was developed, specifically considered lodging, yet chose not to re-establish hotels as a permitted use along the east side of Route 73.
In this case the applicant did not present proofs of any substantial change along the Route 73 corridor or in the neighborhoods abutting the Route 73 corridor since the adoption of ordinance 90-06 and ordinance 110-07. In the absence of proof of a substantial change the zoning board's decision is a subrogation to itself of the planning and zoning powers which by statute are to be exercised by the planning board and the governing body.
The zoning board in granting this variance, in essence, said to the governing body you made a mistake in eliminating hotels along the entire side of . . . Route 73, and we are taking a step to correct that mistake. The zoning board does not have such authority. In this case the zoning board overstepped it's authority. If the line for eliminating hotels was drawn at a wrong spot, it is for the governing body to eliminate it, . . . not for the zoning board to eliminate it in the absence of a demonstration of substantial change.
The conclusion by the zoning board of adjustment that the proposed development is not inconsistent with the intent and purpose of the master plan and zoning ordinance is arbitrary, capricious and unreasonable. Accordingly, the granting of the use variances as to Mori Properties is hereby set aside. [(Emphasis added).]
Mori and the Board appeal, raising the following issues:
I. THE LOWER COURT'S DECISION SHOULD BE REVERSED BECAUSE THE ZONING BOARD DID NOT ACT IN AN ARBITRARY, UNREASONABLE OR CAPRICIOUS MANNER BY APPROVING THE APPLICANT'S USE VARIANCES AND, LIKEWISE, THE BOARD DID NOT USURP THE COMMITTEE'S EXCLUSIVE POWER TO ZONE BY GRANTING SUCH VARIANCES.
II. THE TRIAL COURT ERRED IN FINDING THAT THE APPLICANT FAILED TO MEET THE NEGATIVE CRITERIA UNDER N.J.S.A. 40:50D-70(D) AND, LIKEWSIE, THE TRIAL COURT WAS IN ERROR WHEN IT DETERMINED THAT THE APPLICANT FAILED TO PRESENT PROOF THAT ANY SUBSTANTIAL CHANGE OCCURRED IN THE SURROUNDING AREA SINCE ADOPTION OF ORDINANCE 90-06 AND ORDINANCE 110-07.
We disagree and affirm substantially for the reasons stated by Judge Orlando in his oral opinion of October 21, 2009. We add, however, only the following comments.
Pursuant to the Municipal Land Use Law, N.J.S.A. 40:55D-1 to -163, municipalities are empowered to adopt zoning ordinances within the context of their master plans. N.J.S.A. 40:55D-62. Local authority to grant variances from zoning ordinances is governed by N.J.S.A. 40:55D-70d, which states that a board of adjustment shall have the power to:
In particular cases for special reasons, grant a variance to allow departure from regulations pursuant to article 8 of this act to permit: (1) a use or principal structure in a district restricted against such use or principal structure . . . (6) a height of a principal structure which exceeds by 10 feet or 10% the maximum height permitted in the district for a principal structure.
The statute further provides:
No variance or other relief may be granted under the terms of this section, including a variance or other relief involving an inherently beneficial use, 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 ordinances.
[N.J.S.A. 40:55D-70 (emphasis added).]
An applicant satisfies the requirements of subsection (d) when it submits sufficient proofs to the Board to satisfy the positive and negative criteria. Cell S. of N.J., Inc. v. Zoning Bd. of Adjustment of West Windsor Twp., 172 N.J. 75, 82 (2002). To satisfy the positive criteria, an applicant must show that there are special reasons for the proposed use and that it promotes the general welfare, as where "'the proposed site is particularly suitable to the proposed use.'" Ibid. (quoting New Brunswick Cellular Tel. Co. v. S. Plainfield Bd. of Adjustment, 160 N.J. 1, 6 (1999)). As to satisfying the negative criteria, the applicant must establish that 1) "'the variance can be granted without substantial detriment to the public good,'" and 2) if not an inherently beneficial use, then with "'an enhanced quality of proof[,]'" that the variance will not substantially impair the "'intent and purpose'" of the relevant zone plan and zoning ordinance. Ibid. (quoting New Brunswick Cellular Tel. Co., supra, 160 N.J. at 6).
"The standard for establishing the 'positive' criteria is contingent upon the type of variance at issue." Id. at 83 (citing Coventry Square, Inc. v. Westwood Zoning Bd. of Adjustment, 138 N.J. 285, 298-99 (1994)). As noted, a heightened standard of proof is required when the proposed use is not inherently beneficial, Coventry Square, supra, 138 N.J. at 298-99 (citing Sica v. Bd. of Adjustment, 127 N.J. 152, 155 (1992)), and there is a stricter test for establishing special reasons when the applicant is proposing a non-permitted use. Burbridge v. Mine Hill Twp., 117 N.J. 376, 393 (1990).
When evaluating the first prong of the negative criteria test, "the statutory focus is on the variance's effect on the surrounding properties." Medici v. BPR Co., 107 N.J. 1, 22-23 n.12 (1987); Coventry Square, supra, 138 N.J. at 299; Cell South, supra, 172 N.J. at 83. The Board should "'evaluate the impact of the proposed . . . [use] variance upon the adjacent properties and determine whether or not it will cause such damage to the character of the neighborhood as to constitute substantial detriment to the public good[.]'" Cell South, supra, 172 N.J. at 83 (quoting Coventry Square, supra, 138 N.J. at 299).
In determining whether the second prong of the negative criteria has been satisfied, the applicant must show that the variance will "not 'substantially impair the intent and the purpose of the [master] plan and zoning ordinance[.]'" Lang v. Zoning Bd. of Adjustment of North Caldwell, 160 N.J. 41, 57 (1999) (quoting Medici, supra, 107 N.J. at 21). In other words, the applicant must prove that "the grant of the variance can be reconciled with the zoning restriction from which the applicant intends to deviate." Ibid.; see also Eagle Group of Princeton v. Zoning Bd. of Adjustment of Hamilton Twp., 274 N.J. Super. 551, 562 (App. Div. 1994) ("[A] board must 'reconcile the proposed use variance with the zoning ordinance's omission of the use from those permitted in the zoning district.'") (quoting Medici, supra, 107 N.J. at 21).
The applicant's proofs and the board's findings that the variance will not "substantially impair the intent and purpose of the zone plan and zoning ordinance," N.J.S.A. 40:55D-70(d), must reconcile the proposed use variance with the zoning ordinance's omission of the use from those permitted in the zoning district. For example, proof that the character of a community has changed substantially since the adoption of the master plan and zoning ordinance may demonstrate that a variance for a use omitted from the ordinance is not incompatible with the intent and purpose of the governing body when the ordinance was passed. Reconciliation on this basis becomes increasingly difficult when the governing body has been made aware of prior applications for the same use variance but has declined to revise the zoning ordinance. [Medici, supra, 107 N.J. at 21-22 (footnote omitted).]
[t]he nature of the proofs offered to achieve reconciliation of the proposed variance with the zoning ordinance will depend on the circumstances of each case. . . . Similarly, the needs and character of an entire community may be altered by extrinsic factors, such as the proximity of major highway construction or commercial development in adjoining municipalities. Such circumstances may create a demand for uses, such as hotels, that were not anticipated when the ordinance was last revised. These examples are offered merely to illustrate, and not to exhaust, the nature of the proofs that could be offered to reconcile a proposed use variance with the provisions of the zoning ordinance. [Id. at 22 n. 11.]
On this score, the governing body is required to periodically reevaluate master plans, zoning ordinances, and annual reports of recommendations from boards to insure that a township's master plan and zoning ordinance reflect contemporary needs and conditions. N.J.S.A. 40:55D-89.
Thus, the mandatory re-examination by the planning board of the master plan and zoning ordinance, at least every six years, is intended to inform the governing body of the need for revisions in the plan and ordinance based on significant changes in the community since the last such reexamination. Similarly, the annual reports by boards of adjustment summarizing variance requests throughout the year and recommending amendments to the zoning ordinance are designed to avoid successive appeals for the same types of variance by encouraging the governing body to amend the ordinance so that such appeals will be unnecessary. When an informed governing body does not change the ordinance, a board of adjustment may reasonably infer that its inaction was deliberate. [Medici, supra, 107 N.J. at 20-21.]
Since zoning boards are intimately familiar with local conditions, characteristics, and neighborhood interests, they, rather than the courts, are "best equipped" to determine the merits of a variance application. Med. Ctr. at Princeton v. Twp. of Princeton Zoning Bd. of Adjustment, 343 N.J. Super. 177, 198 (App. Div. 2001). "'[T]he law presumes that boards of adjustment and municipal governing bodies will act fairly and with proper motives and for valid reasons.'" Klug v. Bridgewater Twp. Planning Bd., 407 N.J. Super. 1, 12 (App. Div. 2009) (quoting Fallone Properties, L.L.C. v. Bethlehem Twp. Planning Bd., 369 N.J. Super. 552, 560-61 (App. Div. 2004)). "Because a [board's] actions are presumed valid, the party 'attacking such action [has] the burden of proving otherwise.'" Cell South, supra, 172 N.J. at 81 (quoting New York SMSA Ltd. P'ship v. Bd. of Adjustment of Twp. of Bernards, 324 N.J. Super. 149, 163 (App. Div.), certif. denied, 162 N.J. 488 (1999)). As such, "[a] court will not substitute its judgment for that of a board 'even when it is doubtful about the wisdom of the action[,]'" absent a clear abuse of discretion. Id. at 81-82 (quoting Cellular Tel. Co. v. Zoning Bd. of Adjustment of Harrington Park, 90 F. Supp.2d 557, 563 (D.N.J. 2000)). By the same token, however, "it is 'essential that the board's actions be grounded in evidence in the record.'" Klug, supra, 407 N.J. Super. at 13 (quoting Fallone, supra, 369 N.J. Super. at 562). And while it is true that "the Legislature has vested discretionary authority in boards of adjustment to grant or deny variance applications," Eagle Group, supra, 274 N.J. Super. at 561, there is a "strong legislative policy favoring zoning by ordinance rather than by variance." Medici, supra, 107 N.J. at 23. Thus, "'[v]ariances to allow new nonconforming uses should be granted only sparingly and with great caution since they tend to impair sound zoning.'" Burbridge, supra, 117 N.J. at 385 (quoting Kohl v. Mayor of Fairlawn, 50 N.J. 268, 275 (1967)).
Here, in its attempt to reconcile Mori's proposed hotel with the master plan and ordinance, the Board found that Mori had satisfactorily established that hotels were explicitly removed as a permitted use in July 2006 because the Township Committee had not anticipated the need for a hotel in light of the inchoate Virtua Hospital project. We disagree and find just the opposite. The Virtua Hospital project, though not fully realized at the time of the July 2006 amendments, had made significant steps toward its construction; in fact, the Virtua Hospital project was recognized even earlier than July 2006 when the Committee addressed that prospect in the 2005 master plan, wherein it was recognized that Virtua West Jersey Health System was in the process of compiling a massive assemblage of lands on Route 73 with the ultimate purpose of constructing a new, state-of-the-art medical campus. In finding to the contrary, the Board apparently relied solely on the testimony of Scangarello, who stated that he had "done research back to master plans that go before the 2005 re-examination report and could not find any particular justification for eliminating hotels on . . . the east side of the highways." However, such broad and conclusionary statements, not founded on actual facts, do not support the Board's finding that a hotel on the east side of Route 73 is not inconsistent with the master plan. An enhanced quality of proof requires "clear and specific findings" by the Board. Medici, supra, 107 N.J. at 21. Such specific and substantiated findings were absent here.
The Board also found that Mori had reconciled the proposed hotel with the master plan and ordinance by explaining that the purpose to omit hotels as a permitted use along the east side of Route 73 was to prevent large scale development that would impact the Sturbridge residential community. Thus, the Board reasoned that as the Sturbridge development was over six-tenths of a mile away from the proposed hotel site, "the uses on the property would have little if any impact on those developments and the reasons for not allowing this type of use at the subject property would not be impaired since the residential developments would not be effected negatively by the proposed use." Again, we find the Board's reasoning unconvincing and that the applicant's proofs fail to meet the requisite "enhanced quality" needed to sustain the non-inherently beneficial use.
Contrary to defendant's argument, there has been no significant change to the character of the area that would justify departure from the July 2006 decision to eliminate hotels as a permitted use on the east side of Route 73 in the MB zone. Clearly, at the time Ordinance 90-06 was adopted, the Township Committee was motivated by expressed concern over the proximity of the Sturbridge development to a potential hotel on the east side of Route 73 in the MB zone. That specific concern has not changed nor has it been adequately addressed by defendant's proofs. While evidence that neighboring communities would not suffer substantial detriment may satisfy the first prong of the "negative" criteria analysis, it by no means conclusively proves that the sought-for variance will not substantially impair the intent and purpose of the zone plan and zoning ordinance. We conclude, as did the Law Division judge, that the record here lacks a satisfactory reconciliation between the requested variance and the governing body's determination to omit hotels as a permitted use on the east side of Route 73 in the Township's MB zone.