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MIFCO, Inc. v. Township Committee of Neptune

A-3059-07T2 (N.J. Super. App. Div. 2009) (Unpublished)

REDEVELOPMENT — A municipality, when deciding that some properties are in need of redevelopment while others are only in need of rehabilitation, must support its decision to treat similarly-situated properties differently.

Two properties were situated within a municipality. The municipality’s planning board designated one property to be in need of redevelopment and the other to be only in need of rehabilitation, including one owned by an electric company. The owner of the property designated as “in need of redevelopment” sued the municipality claiming that the board’s approval of a resolution declaring its property “in need of redevelopment” was arbitrary, capricious, and unreasonable.

The lower court upheld the municipality’s determination. It ruled that the power to declare an area “in need of redevelopment” is granted to local governing bodies. It also held that the property met the statutory criteria for such a designation. Further, it noted that the board had sufficient evidence presented to it to conclude that the property satisfied the statutory criteria.

On appeal, the Appellate Division reversed and remanded the matter to the lower court. The Court agreed with the property owner that its property may have been treated differently than similarly-situated properties that received only a rehabilitation designation. It noted that the record demonstrated a great number of similarities between the owner’s property and the property owned by an electric company, other than some “brief and conclusory testimony” by a firm hired by the board to conduct a study of its redevelopment plan. The Court found that the record permitted an inference that the evidence before the planning board had been “tailored” to conform to an agreement struck between the electric company and the board rather than by the facts as originally presented by the firm hired to conduct the study of the redevelopment plan. Further, the Court noted that the record failed to disclose any guidelines the planning board utilized in excepting only some lots from the declaration of redevelopment. In its remand to the lower court, the Court asked for a determination as to: (i) the circumstances that led to the electric company being excepted from the declaration; and (ii) whether proper guidelines existed and were applied by the board in distinguishing between the two properties.

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