Superior Court of New Jersey,
Appellate Division.
MIFCO, INC.,
Plaintiff-Appellant,
v.
TOWNSHIP COMMITTEE OF NEPTUNE and Township of Neptune, Defendants-Respondents.
Argued Dec. 10, 2008.
Decided March 17, 2009.
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Zoning
and Planning 414 
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414 Zoning and Planning
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Questions
remained as to whether a planning board acted arbitrarily, capriciously, or
unreasonably in deciding that a company's lot was in need of redevelopment.
Evidence permitted an inference that the board made an agreement with a
neighboring business owner and did not designate its lot as in need of
redevelopment. Further, the record did not contain any guidelines that the
board used to determine which lots needed redevelopment and which were
exempted. N.J.S.A. 40A:12A-5(d, e, h).
On appeal
from the Superior Court of New Jersey, Law Division, Monmouth County, Docket
No. L-702-07.
Paul V. Fernicola argued the cause for appellant (Paul V.
Fernicola & Associates, LLC, attorneys; Mr. Fernicola, of counsel; Robert
E. Moore, on the brief).
Gene J. Anthony argued the cause for respondents.
Before
Judges CUFF, FISHER and BAXTER.
PER
CURIAM.
*1 In this appeal, we review the trial
judge's determination that a resolution, which declared plaintiff's property to
be in need of redevelopment, was neither arbitrary, capricious nor
unreasonable. We reverse.
Plaintiff MIFCO,
Inc. is the owner of property located on Highway 35 in Neptune Township (Block
559, Lots 2 and 3) where plaintiff has operated the Midway Ice and Fuel Oil
Company for approximately seventy years. By resolution dated June 13, 2005, the
Township's governing body authorized the Planning Board to investigate whether
an area on both sides of the North Channel of the Shark River Inlet, which
included, among others, plaintiff's property, exhibited the characteristics of
an area in need of redevelopment as defined by the Local Redevelopment and
Housing Law, N.J.S.A. 40A:12A-1 to -73. FN1
FN1.
Of particular importance here is N.J.S.A. 40A:12A-5, which states in relevant part:
A delineated area may be determined to be in need of
redevelopment if, after investigation, notice and hearing ... the governing
body of the municipality by resolution concludes that within the delineated
area any of the following conditions is found:
(a) The generality of buildings are substandard, unsafe,
unsanitary, dilapidated or obsolescent, or possess any of such characteristics,
or are so lacking in light, air, or space, as to be conducive to unwholesome
living or working conditions.
....
(d) Areas with buildings or improvements which, by reason
of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack
of ventilation, light and sanitary facilities, excessive land coverage,
deleterious land use or obsolete layout, or any combination of these or other
factors, are detrimental to the safety, health, morals, or welfare of the community.
(e) A growing lack or total lack of proper utilization of
areas caused by the condition of the title, diverse ownership of the real
property therein or other conditions, resulting in a stagnant or not fully
productive condition of land potentially useful and valuable for contributing
to and serving the public health, safety, and welfare.
....
(h) The designation of the delineated area is consistent
with smart growth planning principles adopted pursuant to law or regulation.
The
Planning Board authorized T & M Associates to investigate the area FN2
and render a report. Public hearings were conducted on December 5 and 20, 2006.
At the end of the second hearing date, the Planning Board adopted a resolution
recommending the study area to be in need of redevelopment except for certain
lots within the area that were only declared in need of rehabilitation. As for
the excepted lots, the resolution declared that “in making its recommendation
for an area in need of rehabilitation, the Planning Board made no conclusions
or findings as to whether [the excepted lots FN3]
either meet or do not meet the statutory criteria for an area in need of
redevelopment.”
FN2.
Specifically, T & M was authorized to investigate Block 550, Lots 8-22; all
of Block 554; Block 555, Lots 7-16; Block 558, Lots 1 .03, 1.12-14.12, 15.14,
16.13, 17.13, 18.13, 19.13, 20.13, 21.13 and 22.13; all of Block 559; all of
Block 559.01; and Block 563, Lots 1 and 2.
FN3.
The lots that were excepted from redevelopment and declared in need of rehabilitation
were Block 559.01, Lots 4-8, and Block 555, Lot 15.
Of those
lots excepted from the Planning Board's finding of a need for redevelopment
were businesses on the west side of Route 35, known as Mac's Bait and Tackle
Shop (Block 555, Lot 15) and Jack's Rib and Ale House (Block 555, Lots 7-14 and
16), and one business on the east side of Route 35, known as Pilot Electric
Company (Block 559.01, Lots 4-8). Both Pilot Electric's property and
plaintiff's property are located on and consume the entirety of a small
area-described as a teardrop-shaped island-surrounded by Route 35 and Railroad Avenue,
which is depicted in the following reproduction of part of a map included in T
& M's report FN4:
FN4.
We have added color to the reproduction in order to better illustrate the
teardrop-shaped island; Pilot Electric's property is in blue, plaintiff's
property in red.
Plaintiff
filed a timely complaint in lieu of prerogative writs seeking to set aside the
resolution that declared plaintiff's property in need of redevelopment.
Plaintiff asserted that the factual record failed to support a finding that its
property was in need of redevelopment and, also, that defendants' actions were
arbitrary, capricious and unreasonable because Pilot Electric's property was
excepted from redevelopment despite the allegation that its location and
condition is essentially indistinguishable from plaintiff's.
In
considering plaintiff's contentions, the trial judge accurately recognized that
“[t]he power to declare an area in need of redevelopment is granted to local
governing bodies in order to correct housing, commercial and industrial
deterioration which is not likely to be corrected by private action,” citing N.J.S.A. 40A:12A-2(a). The judge also observed that the Planning Board found
that plaintiff's property met the criteria set forth in N.J.S.A. 40A:12A-5(d), (e) and (h).
*2 In examining the record to determine
whether there was evidence to support the Planning Board's finding, the trial
judge concluded that the subsection (e) criteria were not met because the Planning
Board relied upon an interpretation of subsection (e) struck down by our
Supreme Court in Gallenthin v. Borough of Paulsboro, 191 N .J. 344, 924 A.2d 447 (2007). Because defendants have not
cross-appealed, we need not consider that point further.
In
considering the Planning Board's application of subsection (d), the trial judge
distinguished Spruce Manor Enterprises v. Borough of Bellmawr, 315 N.J.Super. 286, 717 A.2d 1008 (Law Div.1998), upon which plaintiff greatly relied both
then and now, and held that unlike Spruce Manor Enterprises,
the problems associated with the subject property are
easily determined from an external inspection of the property. The subject
property is a nonconforming parcel in a size of only .39 acres. An external
view of the property illustrates that it is overcrowded with numerous
refrigerated storage containers, fuel tanks, trucks, vans and other heavy
equipment on the premises. Given the small size of the property, the intensity
of the land use, and the substantial amount of ingress and egress into the site
from a major highway (Highway 35) the subject property posed a threat to the
public health and safety. In this situation, there was no need for an internal
inspection [as in Spruce Manor Enterprises ] in order to assess the
external hazards the property posed to the public.
The Township of Neptune's planner visited
the site of Midway Oil and Fuel Co., inspected the property and testified that
due to the above mentioned reasons, the subject property satisfied criteria “d
.” In addition, the Township's Redevelopment Study and Preliminary
Investigation Report, pre-pared by T & M Associates, established the same.
As a result, the Board had sufficient evidence to conclude that the
[p]laintiff's property satisfied the criteria set forth in N.J.S.A. 40A:12A-5(d).
We concur
in this determination substantially for the reasons contained in the trial
judge's written decision quoted above.FN5
FN5.
Because only one of the subsections set forth in N.J.S.A. 40A:12A-5 needed to be met in order to uphold the redevelopment
determination, we need not consider the trial judge's decision regarding the
application of subsection (h) here.
That would
ordinarily be the end of the matter. However, as we have observed, plaintiff
has claimed that its property was treated differently in that it received a
redevelopment designation whereas other allegedly similarly-situated properties
received only a rehabilitation designation. N.J.S.A. 40A:12A-14 states in relevant part that an area “may be determined to
be in need of rehabilitation if the governing body of the municipality
determines by resolution that there exists in that area [certain] conditions.”
Those conditions are:
(1) a significant portion of structures therein are in a
deteriorated or substandard condition and there is a continuing pattern of
vacancy, abandonment or underutilization of properties in the area, with a
persistent arrearage of property tax payments thereon or (2) more than half of
the housing stock in the delineated area is at least 50 years old, or a
majority of the water and sewer infrastructure in the delineated area is at
least 50 years old and is in need of repair or maintenance; and (3) a program
of rehabilitation, as defined in [N.J.S.A. 40A:12A-3], may be expected to prevent further deterioration and
promote the overall development of the community.
*3 [Ibid.]
As we have
mentioned and illustrated, plaintiff's property is located on the southern
half, and Pilot Electric's property is located on the northern half, of the
teardrop-shaped island between Route 35 and Railroad Avenue. In considering
plaintiff's disparate treatment theory, we acknowledge that it does not
necessarily follow that the proximity of plaintiff's property to Pilot
Electric's excepted property alone requires similar treatment, but an analysis
of the disparate treatment argument must start with recognition of the fact
that T & M's report made similar findings that both Pilot Electric's and
plaintiff's properties were in need of redevelopment.
T & M
found that the buildings on Pilot Electric's property were, as the trial judge
restated, “in a state of disrepair with dilapidated and unsanitary conditions”;
T & M also found that Pilot Electric's property “is nonconforming”-as was
plaintiff's-in that “it totals 0.82 acres where a minimum lot size of 1.15
acres (50,000 square feet) is required.” Obviously, in light of the fact that
these properties are adjacent and surrounded by the same roadways, T & M's
comments regarding ingress and egress, and the heavy flow of traffic in the
area, as well as the property's nonconforming size-all of which were
circumstances relied upon in finding plaintiff's property in need of redevelopment-would
seem equally applicable to Pilot Electric's property.
In short,
the record demonstrates a great number of similarities between plaintiff's and
Pilot Electric's properties, and the only basis referred to by the trial judge
for distinguishing between plaintiff and Pilot Electric was some brief and
conclusory testimony, which was provided by T & M's representative at the
hearing on December 20, 2006, that the property on the northern half of the
teardrop-shaped island permitted an opportunity to redevelop other properties
in a manner consistent with the Township's master plan. The judge viewed this
testimony as supporting the contention that “[p]laintiff's property is located
on the southern end of the island lending it to integration with a critical
area of the development plan, specifically the reconfiguration of Highway 35.”
The judge found that this rendered the nature of plaintiff's property, for
purposes of redevelopment, “distinct and unique” from Pilot Electric's property
to the north. We do not share the judge's view that the record sufficiently
demonstrates a legitimate distinction between plaintiff's and Pilot Electric's
properties.
Indeed, we
are particularly concerned about the change in the thrust of T & M's presentation
once counsel for Pilot Electric, at the commencement of the second hearing,
indicated to the Planning Board that he “had an opportunity to talk to [T &
M's representative] for about four or five minutes beforehand, and we were just
discussing a possible resolution to our situation” that might eliminate his
need to cross-examine T & M's representative. Later, T & M provided the
brief testimony that the trial judge referenced in his written opinion, and
counsel for Pilot Electric sought a ruling regarding “our situation” before he
waived cross-examination of T & M.
*4 That is, the record suggests that-at or
around the time plaintiff's counsel rigorously cross-examined T & M's
representative, which was frequently interrupted by the mayor, who is also an
attorney, and the Planning Board's attorney FN6-Pilot
Electric was pursuing an agreement to exclude its property from redevelopment.
Ultimately, after T & M's view of the need for redevelopment of the entirety
of the teardrop-shaped island changed by the end of the December 20 hearing,
the Planning Board concluded that Pilot Electric's property was not in need of
redevelopment.
FN6.
Plaintiff asserts that the process was also tainted by the rancorous exchanges
between and among the township's mayor, plaintiff's counsel and the Planning
Board's attorney. Although none of those participants engaged in the type of
civility we would hope would be exhibited in such proceedings, after carefully
reviewing the transcript of the hearing, we find insufficient merit in
plaintiff's argument on this point to warrant discussion in a written opinion. R.
2:11-3(e)(1)(E).
Having
carefully reviewed this record, we are not satisfied that the Planning Board
did not act arbitrarily, capriciously or unreasonably in treating plaintiff's
property differently from Pilot Electric's property. First, the record permits
an inference that the evidence before the Planning Board, regarding the properties
in the teardrop-shaped island, was tailored to conform to an agreement struck
between Pilot Electric and the Planning Board rather than the facts as
originally presented by T & M's report. Certainly, there is no substantial
evidence to overcome what the record plainly reveals in this regard. Concerned Citizens of Princeton, Inc. v. Mayor and
Council of Princeton, 370 N.J.Super. 429, 452, 851 A.2d 685 (App.Div.), certif. denied, 182 N.J. 139, 861 A.2d 844 (2004). Moreover, the record before the Planning
Board is largely bereft of any understanding about the guidelines the Planning
Board may have utilized in excepting some lots, but not others, from the declaration
of redevelopment.
Accordingly,
we remand to the trial court for a determination as to the circumstances that
led to Pilot Electric being excepted from the declaration of redevelopment. The
judge should also ascertain whether proper guidelines existed and were applied
by the Planning Board in distinguishing between these properties. If it is
found that there were no reasonable or property guidelines for such a
distinction, the trial judge should remand for the development of standards,
and a principled evaluation by the governing body of the determination of
plaintiff's property as in need of redevelopment upon the application of those
standards.
Reversed
and remanded.
N.J.Super.A.D.,2009.
Mifco,
Inc. v. Township Committee of Neptune
Not
Reported in A.2d, 2009 WL 668930 (N.J.Super.A.D.)
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