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Washington Commons, LLC v. City of Jersey City

November 12, 2010

WASHINGTON COMMONS, LLC, PLAINTIFF-APPELLANT,
v.
CITY OF JERSEY CITY, MARIANO VEGA, JR, JERSEY CITY REDEVELOPMENT AGENCY, MEMBERS OF THE JERSEY CITY REDEVELOPMENT AGENCY AND MAYOR JERRAMIAH HEALY, THE CITY OF JERSEY CITY BOARD OF ADJUSTMENT, AND THE 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.

The opinion of the court was delivered by: Parrillo, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Submitted October 19, 2010

Before Judges Skillman, Parrillo and Yannotti.

Plaintiff, Washington Commons, LLC, appeals from an August 14, 2009 order of the Law Division enforcing defendant City of Jersey City Board of Adjustment's (Board) November 8, 2007 resolution requiring plaintiff to convey to defendant City of Jersey City (City) fee simple absolute title to seven affordable housing units for $1.00 per unit. For reasons that follow, we reverse.

The background to this matter has been extensively detailed in our earlier opinion affirming the dismissal of plaintiff's first prerogative writs complaint. Wash. Commons, LLC v. City of Jersey City, No. A-6560-06 (App. Div. Jan. 22, 2009), certif. denied, 199 N.J. 515 (2009). We reiterate and update those facts only as relevant here.

In early 2004, plaintiff sought variances from the Board for the construction of a fourteen story, sixty-eight unit residential building, as well as twenty-year tax abatements for each unit. The original plan contained sixteen fewer units than that which was submitted to the Board. On May 20, 2004, the Board approved plaintiff's variance, conditioned on making seven of the additional sixteen units affordable artist live/work units. Its memorializing resolution 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).

Thereafter, a dispute arose over the interpretation of the "negotiations" clause in the Board's May 20, 2004 resolution. The City contended plaintiff intended to donate the additional units to the City in order to satisfy a statutory "beneficial use" provision. Plaintiff, on the other hand, maintained that seven of the additional units were to be sold to the City at cost, namely $463,235.29 per unit. As noted, the Board's resolution was silent as to this issue, referring only to the existence of conditions to be negotiated.

On February 17, 2007, plaintiff filed a complaint in lieu of prerogative writs (Washington Commons I) challenging municipal action in refusing to purchase the seven affordable housing units at plaintiff's cost and in declining to issue certificates of occupancy to allow the remaining units to be sold to the general public. The Law Division granted the municipal defendants' motion to dismiss, finding plaintiff's claim time-barred as beyond the forty-five day limitation of Rule 4:69-6(a), having determined the cause of action accrued, at the latest, in October 2006, when "price" negotiations broke down. We affirmed, reasoning:

Viewed in this context, the court reasonably found that the prerogative writs aspect of plaintiff's claim accrued, at the very latest, in October 2006 when the parties reached an irretrievable impasse. And plaintiff having offered no reason to enlarge the 45-day period, the court properly found the prerogative writs counts time-barred.

Plaintiff's complaint in this regard also fails for want of exhaustion of administrative remedies. It bears repeating that plaintiff proceeded in the Law Division on the basis of the City's position in negotiations without any determination by the Board as to whether that position was consistent with the Board's May 20, 2004 resolution. Since the true matter in controversy concerned the interpretation of the resolution's "negotiations clause," we believe it was incumbent upon plaintiff to first make timely and appropriate application to the Board for clarification.

...

Not only did plaintiff fail to exhaust its administrative remedy before seeking judicial relief, it also refused to return to the Board upon the court's recommendation. This blatant bypassing of an obvious administrative remedy prevented any meaningful review of the critical matter at hand -- namely the construction of the Board's May 20, 2004 resolution -- and left plaintiff only the penultimate issue concerning the City's negotiating position, ...


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