July 7, 2010
WACHOVIA BANK, N.A., PLAINTIFF-RESPONDENT,
PLANNING BOARD OF THE BOROUGH OF WESTWOOD AND BOROUGH OF WESTWOOD, DEFENDANTS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-6403-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted June 15, 2010
Before Judges Fisher and Reisner.
Defendants, the Borough of Westwood and the Borough Planning Board (Board)*fn1, appeal from an August 8, 2008 trial court order reversing the Board's denial of plaintiff Wachovia Bank's site plan application with variances, and from a March 11, 2009 final judgment issued after Wachovia agreed to the dismissal of certain additional claims not pertinent to this appeal.*fn2 We reverse the trial court's orders, thus reinstating the decision of the Board.
Wachovia sought to construct a bank building in the central business district (CBD) zone of Westwood Borough. The structure would measure 4025 square feet, on a 51,564 square foot property formerly occupied by a car dealership; the latter consisted of a 15,000 square foot building, which the applicant proposed to demolish. The proposed bank would have two drive-through transaction lanes, a drive-through ATM lane, and a bypass lane. The applicant designed the site to accommodate a small public park, and a second permitted use on the property, in the form of a large amount of long-term commuter parking. Both the bank and the drive-through feature were permitted uses in the CBD at the time the Board considered the application. Municipal public parking was also a permitted use provided the municipality agreed to accept the parking lot for its purposes. There is no dispute on this record that the CBD zoning allows for two principal permitted uses on a single property.
In denying the application, by a vote of five to four, the Board considered that the lot was large enough that the applicant should have been able to build a structure that completely conformed to the zoning ordinance in terms of its placement on the property. In particular, the Board found no justification for building the structure with a two-foot setback from the sidewalk instead of the twenty feet required by the zoning ordinance. The Board also reasoned that the proposed large amounts of commuter parking would add no benefit to the downtown:
Working with a blank slate on the site after demolition of the existing building presents no difficulty to the applicant in complying with a conforming setback and such has been acknowledged by the applicant in testimony. The board finds no aesthetic benefit provided by a building of the proposed size surrounded by a vast expanse of macadam to serve general parking.
Additionally, there is no evidence in the record for a need for parking in that area or the numbers proposed and applicant makes no mention of the CBD study that was conducted by the Borough in its making of its unfounded assumption. While there was a hypothetical benefit proposed to benefit a small group of commuters and shoppers through off street parking, any benefit to the community at large or to the CBD zone under a C(2) analysis was speculative at best.
There is also no nexus shown between any parking that might go in that area and its impact in promoting a pedestrian environment which would be encouraging to the business community.... The Board is skeptical that the parking associated with the proposed use of a bank would generate pedestrian traffic that would revitalize the downtown.... Further this hypothetical benefit to a limited group of people is not shown to outweigh any detriment that might occur due to lost revenues to the town from restricted commercial development on the site to warrant such an extreme variance.
... [I]t was apparent throughout the hearing that the applicant could readily comply with the zoning requirements of the Borough.
Regarding applicant's obligations under N.J.S.A. 40:55D-70(C)2, the testimony did not support and did not persuade the Planning Board that granting [the] variances were warranted.... There is no benefit particularly to the setback to anyone but the Bank....
... Finally, there is detriment in locating the building in the front yard, particularly... in the absence of specific testimony as to the mitigation of the effect of the encroachment.
[With respect to waiver requests] there is no reason that the applicant cannot satisfy the footcandle requirements of the zoning code in respect to an approximately one acre site.
In its complaint in lieu of prerogative writs, Wachovia contended that the Board pressured Wachovia into withdrawing a virtually variance-free application, persuaded it to instead propose a series of different applications that required variances to satisfy the Board's expressed concerns, and then denied the final application. While the Board has not provided us with the complete record of the application, the transcript of the Law Division hearing does not support Wachovia's contention.
At the May 30, 2008 oral argument before the trial court, Wachovia's attorney represented to the trial court that after Wachovia submitted its first application, the Borough was in the process of adopting an ordinance prohibiting banks with drive-through teller lanes. In an effort to "deter the Borough Council from voting on that ordinance," Wachovia decided to revise its plans to address "a need for parking in Westwood." Therefore, Wachovia "submitted a revised plan with... public parking..., and our strategy worked to the extent that [the] Borough Council allowed that ordinance to die."*fn3 The Board's attorney likewise represented to the judge that the Board did not ask Wachovia to add public parking to its application.
The judge asked why Wachovia did not give the Board the option of either voting on the original plan, which Wachovia represented was virtually variance-free, or voting on the later plan with conditions including the Borough's agreement to the parking arrangement. Wachovia's counsel indicated that there was "no  groundswell of support" for the original plan, which had been abandoned in the give and take of discussion with the Board and its planner. However, he contended that prior to the formal vote on the application, there was "a change of heart among five Board members" concerning the revised plan.
The attorney cited to a straw poll that the Board took at the March 22, 2007 meeting, indicating that the members preferred the version with very little setback.*fn4 However, he admitted that one member, who eventually voted against approval, was absent that night. At the Law Division oral argument, the Board's attorney contended that once Wachovia began changing its application to add various options, the Board became hopelessly split on which options it preferred. However, the members agreed that the plans were not "fully engineered" and they were not comfortable with the fact that the applicant was insisting that they vote on the application at the April 26, 2007 meeting. He also contended that there was no study showing a need for parking in this area.
In his August 8, 2008 opinion, the trial judge concluded that in denying the application, the Board acted in an arbitrary and capricious manner. The judge found that Wachovia's first application was fully conforming, except for a de minimis variance to accommodate a 65% lot coverage instead of the 60% required by the zoning ordinance.*fn5 He further found that Wachovia's next two applications resulted "from the active participation of the Board and its consultants and the willingness of Wachovia to accommodate the Board's requests." The judge specifically found that the front yard setback variance "was required because the Board wanted the building closer to the street. The Board also had safety concerns with having a driveway in front of the bank."
In fact, the Board's own planner suggested that placing the building closer to the street would be more in keeping with the character of the area which was "predominantly developed with buildings lining the street which provide a building edge and establish a strong pedestrian connection." The Board's planner also indicated his approval of the redesigned drive-through lane, which was facilitated by placing the building closer to the property line.
The judge further noted that the Borough's December 1, 2005 Master Plan Reexamination Report, which the Board had adopted, referred to a shortage of public parking in the CBD. Moreover, he found that during the course of the hearings, the applicant produced unrebutted expert testimony supporting the need for parking:
The Board never objected to the concept of Wachovia providing public parking. At some point during this long and drawn out process the Planning Board should have notified Wachovia that it was not interested in the public parking and would not be willing to grant the variances made necessary to accommodate the public parking on the property.
While acknowledging the deference ordinarily due to a planning board's decisions, the judge found that in this case "the Board's decision was unsupported by any competent testimony or evidence in the record to rebut the position advanced by Wachovia's experts." The Board also ignored the testimony of its own planner, who "testified that the reorientation of the building was appropriate." The judge further considered the undisputed expert testimony that the unique shape of the property made it difficult to provide adequate setbacks, particularly while providing significant amounts of parking. The judge found no evidence in the record to support the Board's determination that "the proposed development was an underutilization of the Property" in terms of "lost revenues to the town from restricted commercial development on the site."
He also found that "non-accessory public parking" of the type Wachovia proposed, was a permitted use in the CBD zone, provided that "an easement or license is given to the Borough." Such an easement was a proposed condition of Wachovia's application. The judge found that Wachovia had not offered the public parking, either to the Borough or to the Board, as an "unlawful exaction or quid pro quo" for granting the variances. Rather, it was offered as an integral part of the plan, because Wachovia perceived in good faith that the parking would satisfy a public need.
The judge therefore reversed the denial of Wachovia's application, "conditioned upon the Borough of Westwood accepting an easement or license from Wachovia for public parking on the site." As a matter of equity the court also held that the application should not be subject to a later-enacted ordinance prohibiting drive-through tellers.
Like the trial court, we must defer to the Board's decision unless it is arbitrary and capricious, bearing in mind the Board's expertise. See Sica v. Bd. of Adjustment, 127 N.J. 152, 166-67 (1992).
A local zoning determination will be set aside only when it is arbitrary, capricious or unreasonable. Even when doubt is entertained as to the wisdom of the action, or as to some part of it, there can be no judicial declaration of invalidity in the absence of clear abuse of discretion by the public agencies involved. [Kramer v. Bd. of Adjustment, 45 N.J. 268, 296-97 (1965)].
We agree with the trial judge's observation that this is a close case, and we have carefully considered his thoughtful opinion. However, having reviewed the transcript of the Board hearing, as well as the Board's resolution, we find ourselves unable to agree with the trial judge's decision.
There is no evidence supporting Wachovia's claim that the Board induced Wachovia to abandon its first, conforming application, in favor of an application that required several variances. The record supports the Board's finding that, for reasons unconnected with any action by the Board, Wachovia withdrew its initial application in favor of an application that required assorted variances.
The record also supports the view that the Board was split on whether to approve the application. While the Board's planner tried to cooperate with the applicant in making various suggestions, the Board was not bound by its planner's opinions or suggestions. The Board members were also under no obligation to state in advance their views on the parking proposal, particularly if they were not unanimous in their views. Their responsibility was to decide the application when the hearings were complete. The record also contains sworn testimony from an objector, who had a planning degree, detailing problems with the application.
Addressing what we perceive to be the Board's central objection to the application, we find nothing arbitrary in the Board's policy judgment that a large commuter parking lot was not a particularly desirable use for this major chunk of the Borough's central business district. Therefore, we will not second-guess the Board's conclusion that the applicant's offer to create a commuter parking lot did not justify allowing Wachovia to build a bank two feet from the property line instead of twenty feet back as the zoning ordinance required. We also find nothing arbitrary or unfair in the Board's statement of the obvious - Wachovia had a huge piece of property to work with and could easily have submitted a completely conforming application for its bank. In fact, Wachovia's expert engineer admitted that but for the commuter parking spaces, he could create a design that would not even require a variance from the impervious cover limitation.
Finally, although this appeal is not moot, several practical observations are in order. First, Wachovia has no further interest in this application. Second, after the Board denied the application, the Borough Council enacted an ordinance prohibiting drive-through banking in the CBD zone, thus implying its disapproval of this application and those like it. Third, in view of the Borough's position on that issue, it is inconceivable that the Borough would have agreed to the parking lease or easement which was a condition of Wachovia's application.