Case Law Summaries

Mount Olive Complex v. Township of Mount Olive

• Opinion Date: June 4, 2001
• Real Property Law
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MOUNT LAUREL—Where there is a significant change in facts or law, a municipality may modify a Mount Laurel judgment of compliance providing that the modification is suitably tailored to the changed circumstance.

In the 1970’s, a group of developers assembled more than 1,000 acres of land and secured approval for a Planned Unit Development (PUD) consisting of commercial and industrial development together with more than 3,000 mixed residential units. By the late 1970’s, Section I of the PUD, consisting primarily of approximately 800 residential units, had been constructed. However, at this time, the municipality repealed the PUD ordinance and re-zoned the balance of the undeveloped property to allow only three single-family residential units per acre. Several years later, the developers decided to move forward with developing the balance of their parcels in accordance with the modified zoning classification. One of the developers’ constraints was the need to increase the capacity of the existing wastewater treatment plant. Consequently, a developer applied for and received a Discharge Allocation Permit (DAC) to discharge treated wastewater into a nearby river. The municipality had not approved the proposed wastewater treatment plant expansion and advised the developer to proceed at its own risk. The developer’s engineer had estimated the treatment plant expansion to cost approximately $22 million. After delay in moving forward with the construction of the expansion, the DAC approval expired. During this same time period, and as a result of the Mount Laurel litigation, the municipality settled with a group of plaintiffs by entering into a consent decree whereby the municipality would allocate its fair share of low and moderate income residential units to be constructed. Part of this allocation included the construction of low and moderate income homes within the developer’s parcel. The developer consented to this allocation. Also, during the same time period, the municipality’s planning consultant advised the municipality that large portions of the developer’s parcel were environmentally sensitive and recommended that the parcel be re-zoned to permit only one residential unit per two acres. Consequently, the municipality began a comprehensive review of its master plan. A report of the municipality’s findings stated that it was important to “concentrate much of the new development in areas already served by sanitary sewer, potable water, and modern roads.” Thereafter, the municipality re-zoned the developer’s parcel once again to permit only one residential unit per five acres. The developer sued the municipality seeking to validate its rights under the initial PUD approval and thereafter filed a second suit demanding a builder’s remedy. The two suits were consolidated. The lower court denied the developer’s request for a builder’s remedy, concluding that the developer was not a “major player” in the settlement of the Mount Laurel litigation that resulted in the low and moderate income homes being allocated to its parcel. However, the lower court invalidated the municipality’s re-zoning as “just enormous overkill” and gave the municipality one year to enact an ordinance compliant with the lower court’s findings. The developer appealed, arguing that the municipality ignored its constitutionally-mandated obligation to provide affordable housing in accordance with the Mount Laurel settlement. The Appellate Division began by explaining that “the overriding issue in a Mount Laurel case is whether a municipality has created a realistic opportunity for the construction of its fair share of the region’s needs for affordable housing.” It went on, “a developer is entitled to a builder’s remedy if: (1) it succeeds in Mount Laurel litigation, (2) it proposes a project with a substantial amount of affordable housing, and (3) the site is suitable, that is, the municipality fails to meet its burden of proving that the site is environmentally constrained or construction of the project would represent bad planning.” The developer argued that, but for its agreement to accept a certain portion of the low and moderate income housing units within its parcel under the Mount Laurel settlement, the settlement would not have gone forward. The Court thought this logic to be too speculative. Furthermore, the Appellate Division concluded that the developer would nonetheless not be entitled to a builder’s remedy because it did not prove that the land use regulations in place at the time of suit failed to provide the requisite realistic opportunity for satisfaction of the municipality’s fair share. After the lower court reached its decision, but before this appeal, the Council on Affordable Housing (COAH) had granted the municipality substantive certification finding that the municipality had satisfied its fair share obligation. The Appellate Division recognized that the COAH’s approval is virtually conclusive and rebuttable only by clear and convincing evidence. The developer sought to have this evidence suppressed. The Appellate Division denied the developer’s motion on the basis that the certification was not evidence but rather a quasi-judicial determination by a State agency for which the court may take judicial notice. The developer also argued that the municipality had no right to unilaterally re-zone its property after it had settled on the allocation of low to moderate income units on the developer’s parcel. The Court, relying on Toll Bros. Inc. v. Township of West Windsor, 334 N.J. Super. 77 (App. Div. 2000), held that “to modify or terminate a Mount Laurel consent decree, the movant must establish that a significant change in facts or law warrants revision of the decree and that the proposed modification is suitably tailored to the changed circumstance.” On this precedent, the Court declined to remand “since our independent review of the record satisfies us that the [municipality’s] revisions of its zoning ordinance subsequent to the 1985 judgment of compliance meets the standards” justifying modification of the judgment. It reasoned that the settlement achieved its purpose because the municipality agreed to allocate its fair share of low and moderate income housing. Additionally, there had been significant changes in the legal landscape, including wetlands regulation, which worked against the developer’s argument. Lastly, the developer delayed enforcing the settlement, and was subject to changes in zoning. On these bases the Court affirmed the lower court’s judgment denying the developer a builder’s remedy.

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