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Meadowlands Plaza Hotel, II, Inc. v. The Township of Fairfield

A-5435-01T3 (N.J. Super. App. Div. 2003) (Unpublished)

ZONING; CONTRACT ZONING—A court must consider the impact of the 1994 case barring contract zoning on settlement agreements made before that date.

A property owner claimed that a settlement agreement between the municipality and a prior owner that permitted the construction of an eighty five room hotel entitled it to add twelve rooms to its seventy room hotel. The lower court ruled that hotels were a non-conforming use and that adding rooms would extend a non-conforming use. It also noted that the prior litigation was over once the seventy room hotel was built and a certificate of occupancy was issued. By building a smaller hotel, the prior owner waived its right to build an eighty five room hotel or to add rooms to reach eighty five rooms. The property owner appealed, claiming that the lower court erred because the settlement made the construction of the hotel a permitted and conforming use, and that, the prior owner would not have settled the litigation if the use was deemed non-conforming because it would have been limited its ability to rebuild in the event of a casualty. The Appellate Division remanded the case to the lower court to determine the import of the settlement and the duration of its impact. It directed the lower court to determine if further implementation of the settlement agreement, by permitting the construction of additional rooms, was enforceable in light of a 1994 case that prohibited adoption of laws that have the effect of contract zoning and also whether that case had a retroactive effect.

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