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Friends of Peapack-Gladstone v. Borough of Peapack-Gladstone Land Use Board

407 N.J. Super. 404, 971 A.2d 449 (App. Div. 2009)

ZONING; GRANDFATHERING — By law, a developer has five years of protection from intervening changes in zoning laws after obtaining its approvals and the five-year period can be tolled to take into account the adverse impact of litigation or government action if such has interfered with the developer’s ability to complete its project.

Neighbors challenged a settlement agreement between a municipality and a developer. It permitted the developer to build age-restricted homes on a property adjacent to a golf course. The developer originally received approvals to build “golf cottages,” but not as permanent residences. However, after delays in obtaining final approvals and building permits, the developer sought approval to develop age-restricted single family homes instead. At the time of the original application, the property was located in an R-2A zone and the builder could have built the intended number of single family residences. However, a subsequent zoning change to RR-5 zones included certain density requirements which required the developer to secure variances to build its intended number of homes. The developer’s application to modify was denied. The developer sued. While its suit was pending, the developer and municipality entered into a settlement that granted the approval. Notices were sent advising of a hearing to approve the settlement, and four hours of discussions were conducted, after which a vote was taken to approve the settlement. Neighbors challenged the settlement, arguing that it did not comply with the “Whispering Woods” requirements and also that it violated the Municipal Land Use Law. The lower court approved the settlement and the neighbors appealed.

The Appellate Division affirmed, noting that pursuant to the “Whispering Woods” line of cases, a land use board can settle disputes with a developer if the terms of the settlement are subject to “public presentation, a public hearing, and a public vote.” In this case, the Court found that the “Whispering Woods” criteria were met when the hearing was advertised to the public with appropriate notice; the notice summarized the key aspects of the settlement; it was open to the public and was well attended; there were open discussions; and there was a public vote memorialized with a detailed resolution explaining the rationale for approving the settlement. The Court rejected the neighbor’s argument that the settlement improperly allowed the developer to circumvent the stricter density requirements for an RR-5 zone without obtaining variances. It found that the developer was not required to obtain a variance because its prior approvals were protected from the change in zoning from R-2A to RR-5 and the development would have been permitted in the old R-2A zone.

By law, a developer has five years of protection from intervening changes in zoning laws after obtaining approvals. However, pursuant to N.J.S.A. 40:55D-21, the five-year period can be tolled to take into account the adverse impact of government action or litigation if the action interfered with a developer’s ability to complete the project. In this case, the Court found that there were significant intervening events that contributed to the developer’s inability to complete the project within the protected period. It noted that the municipality’s building department, at one point, refused to issue a building permit because of the building officials’ perception that the project was not being advertised in a manner consistent with its approvals. Additionally, lawsuits by the neighbors also prevented the developer from completing the project. Therefore, the Court found that the developer’s period of protection was tolled and no variance was required for the project.

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