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Heritage at Towne Lake, LLC v. Planning Board of the Borough of Sayreville

L-2522-10 (N.J. Super. Law Div. 2011)

ZONING; CONVERSION — A developer may convert its approvals for a age-restricted residential complex into a non-age restricted residential complex under New Jersey’s Conversion Statute even if only preliminary approvals had been issued and therefore it can do so where a final approval, subject to conditions, as been issued.

A developer owned part of a major subdivision approved for 260 single family lots. It subsequently amended its approved plan in order to construct 200 age-restricted residential units instead. It intended to use the municipality’s senior housing density bonus. Due to deteriorating economic conditions, the developer then amended its application and received approval for 184 age-restricted residential units. Several years later, it filed an application to convert the age-restricted units to non-age restricted units pursuant to New Jersey’s Conversion Statute, N.J.S.A. 45:22A-46.3 to -46.16. To comply with the Conversion Statute, twenty percent of the units were allocated for affordable housing.

In order to convert its earlier approval under the Conversion Statute, the developer needed to show that: (1) the site met the parking requirements for residential land uses under the converted development; (2) the recreational facilities had been revised, as needed, to meet the needs of a converted development; (3) the water supply systems and sanitary sewer systems were adequate, and if not, that the number of units would be reduced; (4) if there was insufficient parking, the number of units would be reduced accordingly; and (5) that, if additional parking was created, and it increased the amount of impervious cover by more than one percent, the storm water system calculations would be revised accordingly.

The developer’s experts testified that their client was seeking to convert the project from an age-restricted development because there was no longer a market for senior housing in the municipality and, as a result, the developer had been unable to secure construction financing. The developer’s engineer testified that, with the amendment to the development plan, the building footprints and elevations would remain unchanged and the changes would be to the interiors of the buildings only. Another engineer testified that the only change needed to the recreational facilities would be the replacement of bocce courts with a passive recreational space. A third engineer testified that there would be no significant change to traffic patterns as a result of the conversion, and that there would be sufficient parking spaces available.

Despite this testimony, the planning board denied the conversion application. The developer appealed, and the Court reversed. It found the developer had met its burden relative to the conversion and therefore the planning board’s denial of the application was unreasonable. The Court rejected the planning board’s argument that the developer, by lacking final approvals for the prior project, had failed to meet one of the statutory requirements for conversion. The board argued that the prior resolution approving the age-restricted community contained certain conditions that had not yet been met, therefore there really had been no approval. The Court rejected this argument, noting that New Jersey’s legislature allowed conversion even if only preliminary approvals had been issued. In this case, the planning board elected not to issue separate preliminary and final approvals, only a final approval subject to conditions. But, since the applicable statute allows a developer to convert with either preliminary or final approvals, this developer had met the standard for conversion.

The Court also rejected the planning board’s conclusion that the proposed development was contrary to the municipality’s zoning ordinance and master plan. It noted that Conversion Statute clearly states that the use, as approved and to be converted, is to be deemed a permitted use under the zoning ordinances. Further, there was no support for the planning board’s conclusion that conversion of the project would be a substantial detriment to the public good or that it would have substantially impaired the intent and purpose of the municipality’s master plan and zoning ordinance.

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