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Conifer Realty, L.L.C v. Township of Middle Zoning Board of Adjustment

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


September 9, 2011

CONIFER REALTY, L.L.C., PLAINTIFF-APPELLANT,
v.
TOWNSHIP OF MIDDLE ZONING BOARD OF ADJUSTMENT, DEFENDANT-RESPONDENT.

On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-667-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 18, 2011

Before Judges Cuff, Sapp-Peterson and Fasciale.

Plaintiff, Conifer Realty, L.L.C. (Conifer), is a commercial developer appealing the trial court order upholding the denial by the Township of Middle (Township) Zoning Board of Adjustment (Board) of plaintiff's request for use and bulk variances needed to construct affordable housing in the Township. We reverse and remand to the Board for reconsideration of the variance application in accordance with the analysis applicable to inherently beneficial uses, as set forth in Sica v. Board of Adjustment of Wall, 127 N.J. 152, 160-167 (1992).

In February 2009, Conifer submitted an application to the Board requesting use and bulk variances under N.J.S.A. 40:55D-70c and d. It proposed to construct affordable housing on a 9.6-acre tract of land it purchased. The property is in the shape of a trapezoid and fronts Railroad Avenue, a short street that intersects with the much longer Goshen Road on one end and Hand Avenue on the other. The property is surrounded, except for its frontage, by the Cape May National Wildlife Refuge ("Wildlife Refuge"), an undeveloped 11,500-acre preserve owned by the United States Fish and Wildlife Service.

The property is located within the Township's "suburban residential zoning district" (SR). The SR district is zoned for "moderate[-]density residential areas" and permits, as principal uses, "(a) [s]ingle-family detached dwellings" and "(b) [t]wo-family residential buildings, in sewered areas only." Middle Township Code § 250-11. The maximum density for single-family developments is 3.6 units per acre and 4.356 units per acre for two-family dwellings. In addition, the bulk requirements for this district call for a maximum height of thirty-five feet for any building. Middle Township Code § 250-12.

The Township's zoning code also contains an affordable housing component that "sets forth mechanisms by which developers shall provide for a fair share of affordable housing based on growth that is associated with development taking place within the Township[.]" The code outlines general provisions for constructing affordable housing, Middle Township Code § 250-56. Conifer's property and the proposed development plan is included in the Township's December 2008 Housing Element and Fair Share Plan (Fair Share) prepared in accordance with the Fair Housing Act of 1985, N.J.S.A. 52:27D-301 to -329.

In its plan submitted to the Board, plaintiff proposed to construct ninety units, consisting of a combination of two-story townhomes and one-story flats. The ninety units would be distributed among nine connecting residential buildings. Most of the ninety units would have individual entrances, but a few second and third-floor, one-bedroom flats would share common stairways. The resulting density of the plan would be 9.37 units per acre. The buildings' exteriors would be sheathed in vinyl siding and decorated with vinyl cedar shakes, in order to mimic the style of some of the nearby shore-house architecture.

The tallest point of all the buildings in the complex would rise to "just over" thirty-eight feet.

Each unit would have a private balcony or porch and each ground-built unit would be handicapped-accessible or adaptable. The units throughout the complex would be connected by walkways, engendering a residential, neighborhood feel. Finally, the development would feature energy efficient units and solar energy systems to generate electricity.

In its application to the Board, plaintiff sought numerous variances which would enable it to: (1) increase the units per acre that could be constructed; (2) increase the height limit of the buildings; (3) decrease the open space requirements for the units; (4) permit an increase in the size of the planned cul de sac; (5) allow the proposed parking lot to be closer to the buildings than required under the Township code; (6) allow the entrance to the complex parking lot to be less than the requisite 100 feet from the next intersecting street; (7) permit sidewalks adjacent to the parking curb; and (8) reduce the number of driveways connected to the property. As justification for the variances, plaintiff explained:

1. Middle Township has an affordable housing obligation of an amount in excess of 700 affordable housing units. This project will provide ninety (90) . . . units for rent with on-site management in a residential zone surrounded by preserved land and self-storage units. The project is close to the Cape May Court House shopping districts and will become a self[-]contained residential neighborhood.

3. Middle Township's affordable housing obligation is approximately 700 units or more. The Township needs such housing. However, available land zoned for such densities is nonexistent.

4. This project will supply more than [ten percent] of the Township's affordable housing need.

The Board conducted public hearings on May 7 and June 11, 2009. Plaintiff presented testimony on its behalf from its vice president, architect, engineers, and traffic specialists. Residents from the area, as well as representatives from the Wildlife Refuge, the American Littoral Society, Delaware Bayshore Program, and the New Jersey Audubon Society, voiced their concerns or opposition to the proposed development.

On August 13, 2009, the Board adopted a resolution denying the variances, finding that the proposed development's density significantly exceeded the 3.6 units per acre for single-family dwellings, and the 4.356 units per acre for two-family dwellings under the zoning code or ordinance, noting also that "Section 250-53g of the Zoning Ordinance states that no density shall be increased by affordable housing." The Board found:

No traffic study was presented by the applicant other than an analysis of traffic based upon observation on February 9, 2009. Applicant's engineer stated that the analysis was adjusted for summer traffic but no actual observations were made. Testimony from various residents in the neighborhood as to their actual observations of traffic in the area contradicted the applicant's engineer as to the volume of traffic. Additionally, an objector's engineer noted that [eighty to ninety percent] of the vehicle trips entering and exiting the site would pass through the four-way stop controlled sign at the intersection of Mechanic Street, Goshen Road, and Dias Creek Road. The Board notes that intersection is a critical and difficult intersection because of the irregular angles of the intersection of the three roads. The Board is concerned with the hazards that could be created at that intersection by increased traffic levels from the proposed development.

In addition, the Board noted that the development would increase the traffic along Mechanic Street, which it described as a narrow street where the Township Hall, Police Station, County Library, County Board of Elections, Township Public Works facility, and many businesses are located. The resolution also noted that plaintiff acknowledged that two vehicles could not pass on that portion of Mechanic Street near the proposed development if there are vehicles parked on either side of the street. The Board expressed its concern that additional traffic resulting from the proposed development would have an adverse impact upon traffic patterns in this area. Finally, the Board credited the testimony of the environmental advocates who testified that the proposed development would adversely impact the Wildlife Refuge and its habitat.

Plaintiff instituted an action in lieu of prerogative writs against defendant appealing the denial of the variances. Following a hearing, the court issued a written opinion in which it first found that the Board applied the improper legal standard in its evaluation of plaintiff's application. Nonetheless, the court upheld the denial of the variances, concluding that even under the inherently beneficial use legal standard, plaintiff failed to meet the negative criteria required by N.J.S.A. 40:55D-70. The court did not address the denial of plaintiff's application for bulk variances, concluding that the issue was moot in light of its decision affirming the denial of the use variances.

On appeal, plaintiff raises the following points for our consideration:

POINT I

THE EVIDENCE COMPELLED A FINDING THAT PLAINTIFF SATISFIED THE STATUTORY STANDARDS FOR THE GRANT OF THE VARIANCES. THE BOARD'S DENIAL OF THE VARIANCES MUST THEREFORE BE REVERSED.

A. THE EVIDENCE CONCLUSIVELY ESTABLISHED BOTH THE POSITIVE AND NEGATIVE CRITERIA.

B. THE BOARD FAILED TO BALANCE THE BENEFITS OF AFFORDABLE HOUSING AGAINST ANY PERCEIVED DETRIMENT FROM THE PROJECT, AS REQUIRED BY SICA.

POINT II

THE BOARD ERRED IN DENYING THE MINOR HEIGHT VARIANCE.

POINT III

SINCE THE PROJECT IS NEITHER A PLANNED DEVELOPMENT NOR A CLUSTERED DEVELOPMENT, THE TOWNSHIP MAY NOT IMPOSE AN OPEN SPACE REQUIREMENT ON IT. THE BOARD'S DENIAL OF AN OPEN SPACE VARIANCE IS THUS MEANINGLESS. TO THE EXTENT A VARIANCE IS REQUIRED, THE BOARD ERRED IN DENYING IT.

POINT IV

THE BOARD'S JUSTIFICATIONS FOR DENYING THE VARIANCES ARE PRETEXTUAL, CONTRARY TO THE RECORD AND BASED ON SIGNIFICANT MISINTERPRETATIONS OF LAW.

POINT V

THE TRIAL COURT ERRED BY FAILING TO REVIEW THE RECORD TO DETERMINE IF THE BOARD'S CONCLUSIONS WERE SUPPORTED BY SUBSTANTIAL CREDIBLE EVIDENCE AND BY REFUSING TO GIVE CONSIDERATION TO THE FACT THAT THE PROJECT'S NINETY UNITS OF AFFORDABLE HOUSING ARE A KEY ELEMENT OF THE FAIR SHARE PLAN.

A. DENSITY.

B. TRAFFIC.

C. THE WILDLIFE REFUGE.

It is well-settled that variances should be granted sparingly and with great caution. Kinderkamack Rd. Assocs., L.L.C. v. Mayor & Council of Borough of Oradell, 421 N.J. Super. 8, 21 (App. Div. 2011). Therefore, courts considering an appeal of the denial of a grant of a variance must give greater deference to that determination than to the grant of a variance. Nynex Mobile Commc'ns Co. v. Hazlet Twp. Zoning Bd. of Adjustment, 276 N.J. Super. 598, 609 (App. Div. 1994). Moreover, our Court has stated that "'[v]ariances to allow new nonconforming uses should be granted only sparingly and with great caution since they tend to impair sound zoning.'" Burbridge v. Governing Body of Twp. of Mine Hill, 117 N.J. 376, 385 (1990) (quoting Kohl v. Mayor of Fair Lawn, 50 N.J. 268, 275 (1967)). Additionally, "because of their peculiar knowledge of local conditions, [boards of adjustment] must be allowed wide latitude in the exercise of the delegated discretion." Medici v. BPR Co., 107 N.J. 1, 23 (1987) (quotation omitted).

In the present matter, in our review of the denial of the variances, we employ that same deferential standard employed by the trial court. Charlie Brown of Chatham, Inc. v. Bd. of Adjustment of Chatham, 202 N.J. Super. 312, 321 (App. Div. 1985). We limit our review to a determination of whether the Board's decision was arbitrary, unreasonable, or capricious. Med. Ctr. at Princeton v. Twp. of Princeton Zoning Bd. of Adjustment, 343 N.J. Super. 177, 198 (App. Div. 2001).

Arbitrary and capricious decision-making is evidenced by determinations predicated upon unsupported findings. Witt v. Borough of Maywood, 328 N.J. Super. 432, 442 (Law Div. 1998), aff'd, 328 N.J. Super. 343 (App. Div. 2000). "Prudence dictates that zoning boards root their findings in substantiated proofs rather than unsupported allegations." Cell S. of N.J., Inc. v. Zoning Bd. of Adjustment of W. Windsor Twp., 172 N.J. 75, 88 (2002). However, we are mindful that we must not substitute our judgment for that of a local zoning board. Id. at 81.

The issuance of use variances is governed by N.J.S.A. 40:55D-70d which, in pertinent part, states:

In particular cases for special reasons, grant a variance to allow departure from regulations . . . to permit: (1) a use or principal structure in a district restricted against such use or principal structure, (2) an expansion of a nonconforming use, (3) deviation from a specification or standard . . . pertaining solely to a conditional use, (4) an increase in the permitted floor area ratio . . ., (5) an increase in the permitted density . . . or (6) a height of a principal structure which exceeds . . . the maximum height permitted in the district for a principal structure . . ..

Plaintiff's request for a use variance falls under N.J.S.A. 40:55D-70d(1) or (5) because the proposed development failed to comport with the prescribed uses for the Township's SR district. The proposal also exceeded the district's maximum density.

N.J.S.A. 40:55D-70d 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 purpose of the zone plan and zoning ordinance.

Generally, satisfaction of N.J.S.A. 40:55D-70d requires an applicant to fulfill positive and negative criteria. Sica, supra, 127 N.J. at 156. Establishing the positive criteria justifying the issuance of a variance is met "when that applicant can demonstrate that the 'use promotes the general welfare because the proposed site is particularly suitable for the proposed use.'" Cell, supra, 172 N.J. at 84 (quoting Medici, supra, 107 N.J. at 4).

Satisfaction of the negative criteria element "require[s] proof that the variance 'can be granted without substantial detriment to the public good' and that it 'will not substantially impair the intent and the purpose of the zone plan and zoning ordinance?'" Sica, supra, 127 N.J. at 156. The first inquiry under the negative criteria focuses on the potential effects of the variance on the surrounding properties. The "board of adjustment must 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." Medici, supra, 107 N.J. at 22 n.12 (internal quotation and citation omitted).

Satisfaction of the second prong of the negative criteria analysis normally requires the applicant also "demonstrate through 'an enhanced quality of proof . . . that the variance sought is not inconsistent with the intent and purpose of the master plan and zoning ordinance.'" Smart SMR of N.Y., Inc. v. Borough of Fair Lawn Bd. of Adjustment, 152 N.J. 309, 323 (1998) (quoting Medici, supra, 107 N.J. at 21). This so-called enhanced standard articulated in Medici guards against "'arbitrary action and untrammeled administrative discretion.'" Medici, supra, 107 N.J. at 22 (quoting Ward v. Scott, 11 N.J. 117, 126 (1952)). This reflects the policy concern that "'because of their peculiar knowledge of local conditions[, boards of adjustment] must be allowed wide latitude in the exercise of [variance] discretion[,]'" zoning change is most appropriately accomplished legislatively, rather than through excessive and arbitrary use of variance discretion. Id. at 23 (quoting Kramer v. Bd. of Adjustment, Sea Girt, 45 N.J. 268, 296 (1965)). Where, however, the proposed used is inherently beneficial to the community, Medici's enhanced standard is relaxed. Smart SMR, supra, 152 N.J. at 323.

When a variance is considered under the inherently beneficial use standard, satisfaction of the negative criteria requires a consideration of "the relationship between the benefits and burdens of the grant of the variance." Sica, supra, 127 N.J. at 163. What is required is a balancing of the positive and negative criteria. Smart SMR, supra, 152 N.J. at 324.

Although N.J.S.A. 40:55-70d does not expressly require a balancing of the positive and negative criteria, the need for balancing is implicit in the statutory requirement that the grant of a variance must be 'without substantial detriment to the public good[,]' . . . . Fairly read, the requirement that a detriment be substantial necessitates a balancing of positive and negative criteria. [Sica, supra, 127 N.J. at 164 (quoting Medici, supra, 107 N.J. at 22 n.12).]

Under this relaxed standard, "[t]he facts of each case will demonstrate the extent to which an inherently beneficial use compensates for its adverse effect[.]" Id. at 165.

In the present matter, the Board applied the enhanced standard, finding that "[plaintiff] has not presented case law which has held that a privately-owned, low or moderate income housing development is considered an inherently beneficial use." The trial court, relying upon Homes of Hope, Inc., v. Eastampton Township Land Use Planning Board, 409 N.J. Super. 330 (App. Div. 2009), concluded that affordable housing is an inherently beneficial use. There is sound support for the trial court's conclusion in this regard.

Affordable housing is a recognized inherently beneficial use. Sica, supra, 127 N.J. at 165 (citing DeSimone v. Greater Englewood Hous. Corp., 56 N.J. 428, 442 (1970)). Affordable housing developments have been described as inherently beneficial uses in a variety of circumstances. See Homes of Hope, supra, 409 N.J. Super. at 336 (explaining the inherently beneficial nature of affordable housing is not vitiated if a township has already met its unit obligations under the Fair Housing Law); Holmdel Builders Ass'n v. Twp. of Holmdel, 121 N.J. 550, 568 (1990) (explaining, despite the expansive scope of municipal zoning powers, that power is subject to the general welfare and "[h]ousing needs are clearly related to the general welfare under the zoning laws."); S. Burlington Cnty. N.A.A.C.P. v. Twp. of Mount Laurel, 67 N.J. 151, 179 (stating "[i]t is plain beyond dispute that proper provision for adequate housing of all categories of people is certainly an absolute essential in promotion of the general welfare required in all local land use regulation."), cert. denied, 423 U.S. 808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975).

The Board's rejection of plaintiff's proposal as not an inherently beneficial use due to plaintiff's status as a commercial developer improperly shifted the focus of its evaluation from the proposed use of the property to the status of the developer. The focus of the inquiry is whether the proposal furthers the general welfare, not whether the undertaking is one that is not-for-profit or a commercial enterprise. See Sica, supra, 127 N.J. at 165 (explaining the first step in the inherently beneficial use analysis is identification of the public interest at stake). Medici acknowledged that "certain commercial uses may inherently serve the general welfare[.]" 107 N.J. at 18; See also Sica, supra, 127 N.J. at 160-61 (interpreting Medici to exclude all inherently beneficial uses from the enhanced quality of proof standard). Further, in Jayber Inc. v. Municipal Council of West Orange, 238 N.J. Super. 165, 174-75 (App. Div.), certif. denied, 122 N.J. 142 (1990), we held that a commercial operator of a congregate care, senior citizen housing facility was entitled to a use variance because the use "both advances the senior citizen housing purpose of N.J.S.A. 40:55D-2(l) and is also, beyond debate, an inherently beneficial use in that it promotes the general welfare." In sum, the commercial character of plaintiff should not inform the basis of the Board's decision to apply the enhanced standard analysis of plaintiff's variance application. Therefore the trial court properly applied the relaxed inherently beneficial use standard. Smart SMR, supra, 152 N.J. at 323.

Once the relaxed standard is applied to an evaluation of a variance application, "[t]he facts of each case will demonstrate the extent to which an inherently beneficial use compensates for its adverse effect[.]" Sica, supra, 127 N.J. at 165. Minimal negative effects, however, are insufficient to render an inherently beneficial use substantially detrimental. Ibid. The Sica Court prescribed a four-step "scheme as a general guide to municipal boards when balancing the positive and negative criteria[,]" ibid., in inherently beneficial use cases:

First, the Board should identify the public interest at stake.

Second, the Board should identify the detrimental effect that will ensue from the grant of the variance.

Third, in some situations, the local board may reduce the detrimental effect by imposing reasonable conditions on the use.

Fourth, the Board should then weigh the positive and negative criteria and determine whether, on balance, the grant of the variance would cause a substantial detriment to the public good. [Id. at 165-66.]

Although the trial court correctly concluded that the proper standard by which to evaluate plaintiff's application was the relaxed standard, it accepted the Board's findings which, in large measure, were conclusory and unsupported by substantial, credible evidence in the record. For example, the Board found detrimental, the fact that the proposed development would have a density of 9.37 units per acre, which significantly exceeded the 3.6 units per acre for single-family dwellings, and 4.356 units per acre for two-family dwellings allowed under the zoning ordinance. The Board noted "[t]he purpose of the SR [d]istrict is to provide for moderate[-]density residential areas as a transition between rural areas and more densely[-]settled places . . . . The proposed [ninety]-unit development on the subject tract cannot be considered transitional development."

Yet, as plaintiff argued before the trial court, the Township included, in its Fair Share Plan submitted to the Council On Affordable Housing (COAH) in December 2008, the proposed ninety-unit development. The court rejected this argument, noting the Board properly concluded that the fact that the project was included in the Fair Share Plan was not dispositive on the issue of its approval. However, the import of the submission is not that the proposal's inclusion in the Fair Share Plan means that approval of the plan was a fait accompli. Rather, the significance of the inclusion of the proposal in the Fair Share Plan, which was adopted by the Township Planning Board less than one year before the Board denied the variances, is that the Township presumably submitted the proposal in good faith, well aware of the proposed density. Consequently, rejection of the proposal based upon the same density numbers included in its Fair Share Plan becomes a factor in the court's overall determination whether the Board acted arbitrarily or unreasonably in denying the variance, since the Township Council had not yet amended its zoning code. The Fair Share Plan described the proposed development as follows:

Conifer, LLC proposes to construct a 100 percent affordable [ninety]-unit apartment complex consisting of family rental units for very low, low or moderate income households. The 9.9[-]acre property (Block 56.01, Lot 46) [is] located along Railroad Avenue in Cape May Court House.

Conifer, L[LC] has option on property[.]

The property is located within the SR Suburban Residential zone district. It has frontage and site access [on] Railroad Avenue. The property is located within the Cape May Court House approved sewer service area and public water is available. A zone amendment will be adopted to support the proposed affordable housing project.

Likewise, the court accepted the Board's concerns related to the environmental impact on the Wildlife Refuge, which surrounds most of the property. Once again, the representations contained in the Fair Share Plan strongly suggest that any adverse impact upon the surrounding environment resulting from the proposed development was of no concern to the Township Planning Board in December 2008 when it submitted its Fair Share Plan:

There are no known wetlands, C1 waters or floodplains that impact the property. Adjacent properties are owned by the U.S. Department of Fish & Wildlife. An NJDEP wetlands letter of interpretation ("LOI") will be provided as part of the site development process. According to secondary source NJDEP data (dated 2007), the site is not located within any Natural Heritage Priority Site. Similarly, there are no areas affected by the NJDEP Coastal Critical Environmental Sites (dated July 5, 2005). According to the NJDEP Landscape Project (version 2.1) the majority of the site contains State Endangered Forest (rank 4) and Grasslands for Priority Species (rank 2). The NJDEP has also recently identified other habitats for threatened and endangered species on the adjacent property, which would require buffers that may affect development of this site. There are no other know site constraints.

The Board's dismissive treatment of its representations in its Fair Share Plan bespeaks a cavalier approach to its affordable housing obligation, which we cannot ignore.

In addition, the Board adopted the concerns expressed by Howard Schlegel, from the Wildlife Refuge, Jessica Knox from the American Littoral Society, and Christina Frank from the New Jersey Audubon Society, who expressed their concerns or opposition to the development on behalf of their respective organizations. Schlegel read from a prepared statement that he testified was "scrutinized by the solicitor at my regional office." He also testified that he did not review the site plans for the proposal. Likewise, Knox and Frank failed to articulate the bases for their conclusions that the proposal would adversely impact the surrounding Wildlife Refuge and habitat. These opinions, which were conclusory and without factual support and proffered by non-experts, became part of the Board's factual basis for concluding that the environmental impact upon the surrounding environment would be substantial.

Turning to the traffic issues, the Board found the one-day site study of the traffic conditions conducted in February 2009 by plaintiff's traffic expert, Nicholas Verderese, together with other traffic data compiled, insufficient to allay its concerns regarding the traffic patterns. There was contrary testimony regarding the traffic conditions provided by members of the public. Clearly, the Board was free to reject plaintiff's evidence, as it apparently did.

The Sica Court has directed local boards, when balancing positive and negative criteria of inherently beneficial uses, to determine whether the application would benefit from the imposition of reasonable conditions that may reduce the detrimental effect. There was some inquiry of plaintiff at the hearings as to whether the number of units could be reduced. plaintiff's response was that it would not be economically feasible to do so. However, there is no indication that the Board sought to impose any reasonable conditions that might otherwise address its concerns. Sica, supra, 127 N.J. at 165-166.

To summarize, apart from applying the wrong legal standard, the Board's findings were largely conclusory and not supported by substantial, credible evidence in the record. Therefore, the resulting denial of the use variances was arbitrary and unreasonable. We reverse the denial and remand for consideration of the variance application under the relaxed inherently beneficial standard.

Reversed and remanded to the Board for further proceedings consistent with this opinion. We do not retain jurisdiction.

20110909

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