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Pinnacle Communities, Ltd. v. The Township of Springfield

A-6830-01T3 (N.J. Super. App. Div. 2004) (Unpublished)

ZONING; HARDSHIP—A hardship variance is to be granted upon a showing that compliance with the zoning ordinance would result in an exceptional and undue hardship by reason of exceptional topographic or physical features unique to a specific parcel, and not merely because an applicant’s proposed project would be more profitable than one that could be built without a variance.

A development company filed an application with a local planning board for preliminary site plan approval and related bulk variances under N.J.S.A. 40:55D-70(c)(1) and (2). It proposed to build four buildings with multiple residential condominiums. The proposed development area was located in a multifamily residential (MR) zone. Because of a steeply sloping terrain, the applicant proposed leveling part of the land, clustering the buildings around this leveled portion, and leaving many of the slopes untouched. Although the individual retaining walls would not exceed ten feet in height, they were to be terraced up the slopes, reaching an overall height of more than thirty feet.

The local zoning ordinance did not have a specific provision for retaining walls. However, in an MR zone, the ordinance limited the height of all buildings to thirty-five feet. Since the developer proposed to construct buildings over thirty-eight feet tall, it needed a variance. Furthermore, the ordinance stated that buildings in MR zones could not contain more than two and one-half stories, and precluded living quarters above the second story. Again, since the proposal was to build three-story buildings, with living quarters on the third floor, a variance was needed for this as well.

The applicant contended that its proposal represented a creative plan that made the best use of the land, with the least disruption. To demonstrate the benefits of the proposal, it submitted a sketch of an alternative development that could be built without needing any variances. It would, however, have required developing more land, leading to greater lot coverage.

The Court noted that the critical issue was the third story that was intended to be used as living space. The only other project in the community that had been built with three stories was approved an accommodation to encourage affordable housing. The board denied this particular application because no persuasive evidence had been presented to support such a variance. The applicant appealed, asserting that the board had acted arbitrarily and capriciously, which is the only way a court would be able to reverse such a decision because of the deference given to local land use boards.

The Court held that for the applicant to obtain a variance in this situation, it would have had to establish that compliance with the regulations would result in an “exceptional and undue hardship ... by reason of exceptional topographic conditions or physical features uniquely affecting a specific piece of property.” Furthermore, an applicant must satisfy both the positive and negative criteria. The positive criteria are predicated on an undue hardship caused by exceptional topography. Although the board found the topography in this case to be somewhat restricting, it also found that the applicant had not established that the topography created an undue hardship.

The lower court held that the two separate findings by the board were contradictory, and that the denial of the variances was arbitrary. The Appellate Court, however, disagreed. The only claim made by the applicant on the variance issue was that the project’s economics called for constructing three-story buildings with living quarters on the third floor. As admitted by the applicant’s vice-president, construction of two-story buildings would just be too costly. According to the Court, this did not serve to establish that the condition of the land was the source of the hardship. Accordingly, because unique topography was the primary reason for the variances, the Court believed that the board correctly denied the request.

In addition, the applicant had the burden to satisfy the negative criteria – that the construction of the third story would not negatively impact adjacent properties and would not impair the intent of the zoning ordinance. Here, there was only one other building in the MR zone with three stories and living quarters on the third floor. The lower court found that the board presented no evidence showing the variance would be detrimental to the surrounding area. The Appellate Division disagreed, finding the lower court’s analysis to be wrong because the burden was with the applicant, not the board. The applicant failed to show that granting the variance would not be detrimental.

The applicant also sought a variance under (c)(2) of the statute which is satisfied if the benefits of the deviation from the applicable zoning ordinance’s requirements substantially outweigh any detriment. A variance under (c)(2) is not based upon hardship, but rather must be rooted in the purposes of zoning and planning and must advance the purposes of the Municipal Land Use Law. Specifically, no (c)(2) variance should be granted when merely the purposes of the owner will be advanced. The approval must benefit the community. As previously stated, the only justification advanced by the applicant was its own economic interest, which is insufficient to justify a (c)(2) variance. The Court beleived that the proper question would be whether three-story buildings, with an occupied third floor, represent a better planning alternative than two-story buildings. The company had presented no evidence to answer this question.

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