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Campus Associates L.L.C. v. Zoning Board of Adjustment of the Township of Hillsborough

ZONING; STANDING — The owner of land can appeal a land use board decision denying variances to a former contract purchaser because, in appeals from decisions of land use boards and applications for variances, standing is not limited to the applicant before the board and has been accorded to others, including objectors, and in limited circumstances to the municipal governing body and landowners in adjacent communities.

413 N.J. Super. 527, 996 A.2d 1054 (App. Div. 2010); June 4, 2010: A contract purchaser sought “development approvals to construct affordable housing units on [its] property pursuant to a public subsidy program known as the low income housing taxpayer program.” It then applied to the local zoning board “for a use variance and related bulk variances in order to construct” 84 residential units. The board denied the application. The contract purchaser decided not to pursue an appeal and terminated its contract. Concerned about its effect on its property, the property owner filed a complaint in lieu of prerogative writs challenging the board’s denial of the use variance application. The board moved “to dismiss the complaint for failure to state a claim upon which relief can be granted due to lack of standing.” In opposition, the property owner alleged that it was ready to develop the project and “either by itself or by reinstating the contract with [the original purchaser], or by contracting with another company specializing in this kind of development.” In fact, the original purchaser stated that it would be interested in pursuing the reinstatement of the purchase agreement if the landowner were successful in its appeal. The lower court, in finding that the landowner did not have standing, stated that the landowner “did not have ‘a sufficient stake and real adverseness [with] respect to the subject matter of the litigation.’” The lower court did not feel that the decision caused “any damage or pose[d] any possibility of future harm to the [landowner] or its interests.” It believed that the landowner could file its own application with the zoning board.

In response to the lower court’s decision, the landowner moved for reconsideration and to amend its complaint. It intended to “address the standing issue by stating that [it] has standing as [the] representative of eighty-four low income households that would benefit from the project and also as the owner of the property which [would] increase in value if the development [was] approved. The proposed complaint would have spoken of such expense to begin the process again and that any related delay could end the prospects for a successful project.”

The Appellate Division recited some of the rules behind the conflict of standing. It pointed out that standing “refers to the plaintiff’s ability or entitlement to maintain an action before the court.” It also pointed out that any “real party interest” is ordinarily entitled to that standing so long as it has “a sufficient stake and real adverseness with respect to the subject matter of the litigation [and a] substantial likelihood of some harm … in the event of an unfavorable decision. Ordinarily, “[a] financial interest in the outcome … is sufficient to confer standing.” Further, New Jersey courts “take a liberal attitude towards standing.”

New Jersey case law already showed that “in appeals from decisions of boards of adjustment on applications for variances, standing is not limited to the applicant before the board. Standing has been accorded to others, including objectors, and in limited circumstances, to the municipal governing body and landowners in adjacent communities. … Thus, the fact that the [landowner] was not the applicant [did] not necessarily deprive it of standing.” Here, the landowner would have been “directly affected by the variance application because ‘[v]ariances run with the land.’” As a result, if the board granted the variance, it would have benefited the landowner’s property. Even if the contract purchaser “did not go through with the project[, the] variance would still have provided an advantage to [the landowner’s] property, by allowing [the landowner] or its successors or, with its consent, other developers to construct affordable on the property consistent with the variance.” According to the Court, the converse was also true – when the variance application was denied, the landowner’s property “was denied this benefit.” Consequently, the landowner was held to be “the real party in interest with a sufficient stake in the outcome to confer standing.”

The Court was unhappy with the lower court’s “statement and the Board’s position that [the landowner could] start the application anew and then appeal any adverse decision in its own right” because that overlooked “the possible application of the doctrine of res judicata on a subsequent application.” The Court, having found that the landowner had standing in its own right, did “not address the question of whether [it] could have standing in a representative capacity for moderate income households.”

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