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Care of Tenafly, Inc. v. Tenafly Zoning Board of Adjustment

307 N.J. Super. 362, 704 A.2d 1032 (App. Div. 1998)

ZONING; CONFLICTS OF INTEREST—A zoning board member whose family owns property proximate to land that is the subject of an approval application cannot participate in the application process. The board’s approval is overturned even though there were enough impartial votes to grant a variance.

Site plan approval and a special reasons variance were granted for construction of a supermarket on a lot that was not zoned for a retail supermarket. Prior to the first public hearing before the municipality’s board of adjustment, a board member disclosed that his mother owned 95% of an entity that owned commercial property 50 feet from the lot. His sister owned the other 5%. The board’s attorney advised the board member there was no conflict of interest. During the 18 public hearings that followed, no party raised a conflict of interest claim. The board granted the variance, and the board member with the potential conflict voted in favor of granting the variance. Suit was filed by opponents of the supermarket and a judge concluded that the board member had an “absolute,” “disqualifying,” and “impermissible” conflict of interest which rendered the approvals voidable, since the grant of the variance would have a financial impact (“good, bad or whatever”) on the property owned by his mother and sister. Despite the honest disclosure of the potential conflict, the judge concluded that the potential for psychological influence and the potential that he may be a beneficiary under his mother’s estate required disqualification. On appeal, the supermarket argued misapplication of conflict of interest principles.

The Municipal Land Use Law states that a zoning board member is prohibited from acting “on any matter in which he has, either directly or indirectly, any personal or financial interest.” N.J.S. 40:55D-69. This is a fact-specific inquiry, and prior decisions have stated that the decisive factor is not actual conflict, but whether there is potential for conflict as a result of an interest not shared with other members of the public. N.J.S. 40A:9-22.5d states that no local government officer shall act in his official capacity in any matter where a member of his immediate family has direct or indirect financial or personal involvement that may reasonably be expected to impair his objectivity or independence. The fundamental question for the Appellate Division was whether the proximity of the mother’s property and the board member’s relationship to his mother had the capacity to impair his objectivity and “tempt him to depart from his sworn public duty.” The Court looked to prior similar cases for guidance, and found that the value of the property and the income generated therefrom (which was used by the mother to live on) would no doubt be affected by the grant or denial of the variance. Accordingly, the potential for psychological influence could not be ignored. Additionally, the board member testified that while the supermarket’s application was pending, he gave advice to his mother regarding the property, including the amount of rent to charge. The Appellate Division concluded that the board member’s participation in the application process was inconsistent with the spirit of impartiality that should govern board proceedings, and invalidated the board’s approvals. The Court further held that equitable factors favoring the applicant were not sufficient to defeat a conflict of interest, and that it was irrelevant that there were enough impartial votes to grant the variance.


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