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Coalition for Friendly Environmental Expansion, Inc. v. Borough of Magnolia

A-4138-09T4 (N.J. Super. App. Div. 2011) (Unpublished)

REDEVELOPMENT; DEEDS; RESTRICTIONS — Where a municipality has imposed a deed restriction on a property, it may vacate the same restriction when adopting a redevelopment plan, especially where there is no evidence that the restriction held any benefit to others.

A parcel of land was in need of redevelopment. It was also subject to a restrictive covenant barring construction of any building, or operating any business, within 200 feet of the south line of the tract. In 2005, the municipality awarded contracts to a redevelopment engineer, an attorney, and an economic development consultant for services in connection with redevelopment of the land. The municipality adopted a resolution allowing the planning board to investigate the need for redevelopment of the property and to hold a public hearing to determine whether it was in need of redevelopment. A public notice of the meeting was published in the municipality’s newspaper for two weeks and a “notice to affected property owners"was sent to all property owners in the area of the proposed redevelopment.

At the meeting, the planning board approved a proposed report and passed a resolution designating certain lots as part of the redevelopment area. The same day, the municipality passed another resolution vacating the deed restriction. In 2006, the municipality asked the planning board to investigate certain other lots that were in need of redevelopment. An amended redevelopment plan was submitted and the board adopted it. A developer submitted a site approval application to construct residential units on the property. The planning board approved the application, finding that it conformed with the zoning ordinance’s standards and with the redevelopment plan.

An environmental group challenged, inter alia, the municipality’s 2005 redesignation of the property as an area in need of redevelopment and also challenged the later amendment to the redevelopment plan. It also sought to set aside the 2005 release of the restrictive covenant. The lower court found each claim to be untimely. For the first count, even though the 45 day appeal time requirement could be relaxed, the court held that it was not manifestly in the interest of justice to do so. The group’s second claim was similarly untimely. Further, the lower court held that because it was the municipality that had imposed the restriction, it had the authority to vacate the same restriction, especially where there was no evidence that the restriction held any benefit for the environmental group.

The environmental group argued that because the subdivision and site plan approvals amended the redevelopment plan, and because it was challenging the redevelopment designation, its 2008 complaint was timely. However, the 2006 approvals were a consequence of the 2006 amendments to the redevelopment plan, and therefore the two claims were still untimely.

The decision to enlarge the time within which to file a prerogative writ is discretionary and courts use a standard requiring that it be “manifest that the interest of justice” to warrant an extension of the time for appeal. There are certain situations when this can be done, such as in an action that involves constitutional questions, ex parte determinations where there are important public issues, and where the reason for the delay is occasioned by reasonable reliance on information from the municipality provided in response to an inquiry.

The suit was filed more than three years later. The environmental group did not own property in the affected area and therefore it was only entitled to a general notice of redesignation under the Local Redevelopment and Housing Law. It received such a notice. In the past, courts have held that a notice in a municipality’s newspaper is sufficient notice to non-neighboring property owners. Additionally, the general and nonspecific harms identified by the group did not overcome the clear legislative preference that challenges to a redevelopment action should be promptly commenced. In addition, it wasn’t left without a remedy because it could still challenge implementation of the residential element of the redevelopment plan.

The Appellate Division also affirmed the lower court’s ruling that the challenge to the release of the restriction on the property was time barred. The environmental group had not demonstrated any evidence that the covenant was an issue of public importance. Therefore, the Court affirmed the lower court’s ruling that both actions were time barred.

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