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Kaplan at Helmetta, LLC v. Borough of Helmetta

L-2068-10 (N.J. Super. Law Div. 2010)

REDEVELOPMENT — A designated redeveloper may convert proposed age restricted residential units to non-age restricted market units under New Jersey’s conversion statute unless a municipality’s planning board continues to determine that the original specified use was the most appropriate one for the site and for the public good, and that the conversion would frustrate the intention of the initial redevelopment plan.

A property was in an area deemed in need of redevelopment pursuant to New Jersey’s Local Redevelopment and Housing Law (LRHL). The municipality solicited proposals for redevelopment of the area and subsequently adopted a redevelopment plan. The owner-developer submitted a plan that contemplated the construction of age-restricted residential units. The proposal was accepted by the municipality, and the developer was designated as the redeveloper. The property was to be divided into five parcels. Four were to contain the age restricted development. The approved plan included 225 age-restricted residential units, a 5,000 square foot recreation center for use by residents of the development, and a 3,000 square foot community center to be available to all residents of the municipality.

The developer later applied to the planning board to convert the age-restricted residential units to non-age restricted market units pursuant to the conversion statute. A revised concept plan was submitted reducing the number of units to 200 units. The revised plan required removal of two buildings from the previous plan in order to provide the additional 83 parking spaces needed to comply with code. To comply with the conversion statute, the developer agreed to set aside 20% of the units for low and moderate income housing.

The planning board held public hearings on the conversion application. As to parking, sewer, and potable water capacity, an engineer testified that modifications to the previous plan could be made to satisfy the requirements of the conversion statute. Another expert, a traffic engineer, testified that the revised parking lot complied with the applicable standards and that the overall traffic circulation patterns would remain the same. Lastly, a professional planner testified that the conversion plan would satisfy all of the zoning bulk requirements called for in the redevelopment plan. Nonetheless, at the conclusion of hearings, the planning board denied the conversion application. The developer filed for emergent relief, seeking a reversal of the board’s denial, but the Court affirmed the decision of the board. It held that the review of this denial of the conversion was no different from a reasonableness review of the grant or denial of a site plan, subdivision or variance acted upon by any authorized land use body. The Court further said that the criteria set forth in the conversion statute are no different from those required for a variance under the Municipal Land Use Law (MLUL).

The planning board had denied the application after finding it would be an impairment to the redevelopment plan. The Court recognized the unique history of the municipality entering into a redevelopment agreement with the developer to construct age-restricted residential units as part of the redevelopment. The property was originally zoned as light industrial, but because of the redevelopment agreement it now contained a residential element. The board had considered the municipality’s plan to construct age-restricted housing on the site and was within its right to determine that this specific use was the most appropriate one for the site and the public good, and that the conversion would frustrate the intent of that redevelopment plan. The Court concluded that the board’s findings were well supported and not unreasonable. In addition, the Court found that the developer’s conversion application could be considered a modification by one party to an existing agreement (i.e., the one where the developer and municipality had agreed on age-restricted housing), and that unilateral amendments to existing agreements to change material terms are not permitted.

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