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Meridian Hospitals Corporation v. Borough of Point Pleasant

325 N.J. Super. 490, 739 A.2d 999 (App. Div. 1999)

ZONING; HOSPITALS; VARIANCES—A board’s suggestion that the grant of a variance be conditioned upon a hospital agreeing to maintain its current level of services is not a legitimate land use objective.

A non-profit entity owned and operated a hospital. It was located in the “hospital” zone, “which permits hospitals and various accessory uses, but specifically excludes nursing homes. The facility is surrounded by the Manasquan River and residential zones consisting of single-family, detached housing units on individual lots.” The hospital was licensed as an acute-care facility. However, it had been on the decline for a number of years and, at the time its zoning board application was heard, only 50 of its 330 licensed beds were staffed and in use. Two floors of the building had been essentially vacant for two years. Consequently, the hospital planned to lease those two floors for use as a nursing home. Approval from the New Jersey Department of Health & Senior Services was obtained. Upon advice of the municipal zoning officer, the hospital applied for a special reasons variance. Testimony at the board hearing was to the effect that no changes were required to the exterior of the building and that patients would not have access to the streets or sidewalk, nor were additional parking spaces be needed. Further, ancillary support, such as food service, engineering, and maintenance would be provided to the nursing home’s patients by the hospital. “When pressed by Board’s members and objectors to the hospital’s plan to decommission its acute-care facility, [it was] acknowledged that [the hospital] was studying a proposal to convert the hospital from an acute-care facility to an urgent-care facility.” The applicant’s testimony was to the effect that a nursing home is an “inherently beneficial use,” and that “reuse of the vacant third and forth floors of the hospital would have a ‛positive impact on both the hospital and the [municipality].’” Further, although nursing homes were permitted in residential zones, the residential zones were fully developed and it was not feasible to demolish existing structures for the purpose of constructing a nursing home facility. The board denied the application. “Instead of focusing on the positive and negative criteria associated with the proposed nursing home use, the Board stressed [the hospital’s] plan to phase out acute care at the hospital.” In particular, the board ruled that “conversion of hospital beds for nursing home beds is part of a systematic dismantling of hospitals services… .” Further, it felt that use as a hospital was more inherently beneficial than use as a nursing home. The lower court upheld the zoning ordinance as drawing a reasonable distinction between hospitals and nursing homes and agreed with the board that the “public interest at stake” was the “potential elimination of a permitted hospital use.” The Appellate Division, however, believed that the board’s denial of the hospital’s variance application was an attempt to compromise the hospital’s statutory right to consolidate its health-care facility based on regional demand for services and cost-saving considerations. “[P]reservation of the hospital’s acute-care facility may indeed be [the municipality’s] goal. However, the Board exceeded its zoning powers by focusing on this public interest, rather than on the strict positive and negative considerations associated with the nursing home proposal itself.” The hospital’s decommissioning plan was subject to the strict scrutiny of the Department of Health & Senior Services pursuant to the Health Care Facilities Planning Act and its attendant regulations. Pursuant to the statutory procedure, it was the role of the State agency, not the board of adjustment, to determine whether the phase-out of acute care at the hospital was acceptable and consistent with state law. Consequently, the board’s suggestion that the grant of the variance to the hospital be conditioned upon the hospital agreeing to maintain the present level of services at the hospital was not intended to carry out a legitimate land-use objective. “Its purpose was to thwart [the hospital’s] application to consolidate its health services, not to mitigate specific concerns about the proposed nursing home use.” A zoning board cannot impose conditions on a special reasons variance that would intrude upon subject matter exclusively within the jurisdiction of a state agency.


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