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Fallone Properties, L.L.C. v. Bethlehem Township Planning Board

369 N.J. Super. 552, 849 A.2d 1117 (App. Div. 2004)

ZONING; OPEN SPACE—A planning board’s interpretation of a cluster ordinance to preclude use of conservation easements as a make up for an open space shortfall is reasonable.

A property owner submitted an application to the local planning board for preliminary major cluster subdivision approval under which the tract of land would be divided into residential lots. The municipality had an ordinance that required about 80 acres of the tract to remain as open space. The owner proposed the creation of an open space lot of about 63 acres, and the placement of conservation easements on the end of the lots to make up the difference.

At the hearing that followed, the planning board suggested that three lots be eliminated and be added to the open space. The application would then have been within two to three percent of complying with the ordinance and any slight deficiency could be satisfied through conservation easements. The owner refused to modify its application, and the board denied the application.

The applicant sued, and the Law Division, disagreeing with the board, held that the ordinance could have been interpreted to permit the owner to satisfy the open space shortfall through the use of conservation easements. For that reason it held that the board’s decision was both arbitrary and capricious. It also found that the board violated the Open Public Meetings Act (OPMA) by reaching its decision in an executive session.

On appeal, the Appellate Division held that the board’s decision was both reasonable and consistent with the ordinance. The ordinance required a seventy percent set-aside on a single, self-contained lot. The owner’s property did not comply. The owner argued that the board’s past practice of permitting other applicants to make up shortfalls through the use of conservation easements undermined its decision. The Court disagreed, finding that earlier departures from the general rule involved only de minimis shortfalls that were easily remedied through conservation easements. In addition, the Court noted that when conservation easements had been used to make up shortfalls, variance applications were required. In this case, the owner chose not to request one. Therefore, the Court held that the board made a reasonable decision that the owner’s application did not satisfy the ordinance.

The Appellate Division also rejected the lower court’s holding that the board’s decision was void under the OPMA. At the time the board was considering the owner’s application, it was also negotiating with the owner to settle another pending litigation. After a full public hearing on the merits of the application, the board went into executive session to consider the other matter. The board only rejected the application once returning from the session. The Court found that this came under the “pending litigation” exception, which allows a public body to exclude the public from all or part of a meeting in which the body discusses pending litigation.

The Appellate Division reversed the lower court’s decision, and held that the board’s decision was reasonable in its rejection of the owner’s application.

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