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Powerhouse Arts District Neighborhood Association v. City Council of the City of Jersey City

413 N.J. Super. 322, 994 A.2d 1054 (App. Div. 2010)

REDEVELOPMENT; BLIGHT — Under the Local Redevelopment and Housing Law, an area designated in need of redevelopment is not indivisible and may be joined with other areas or parts of other areas already blighted for redevelopment purposes.

A municipal council designated a sizeable, largely vacant, though historically significant, industrial building as in need of redevelopment pursuant to the Local Redevelopment and Housing Law (LRHL). It envisioned the district was one that could provide ample and affordable living and working space for artists while preserving its historical character. Promptly after the redevelopment designation, the council adopted a redevelopment plan covering the designated area. Several adjacent lots were included in a redevelopment plan adopted twenty-nine years earlier. Three years later, developers proposed a plan amendment to create an arts center and the lots and to relax the existing height and density requirements to accommodate high-rise residential structures. Those structures would require demolition of some of the historic buildings on the adjacent lots. The planning board scheduled a public hearing on the amendment, and appropriate public notice was published in a local paper. At the hearing, the developer’s architect testified how the planned development would fit in with the surrounding area, and a professional planner testified about the extent to which the proposal was consistent with the municipality’s master plan to make middle-income residential units available. The municipal planner testified that even though the developer’s proposal would require destruction of historically significant buildings, the proposal’s benefits would outweigh the negative aspects, and were consistent with the overall purpose of the redevelopment plan. Opponents to the amendment, chiefly residents of the redevelopment area, testified to what they believed to be a drastic change to the envisioned redevelopment plan.

The board voted unanimously to recommend adoption of the amendment and submitted a proposed ordinance to the municipal council. The council approved the ordinance after a public hearing, setting forth reasons for the approval. The ordinance itself memorialized the council’s reasoning for adopting the amendment, specifically the need for more affordable housing for all eligible municipal residents.

A neighborhood association filed suit challenging the redevelopment plan amendment. It alleged that the amendment was so fundamentally contradictory to the original redevelopment plan adopted four years earlier that it should fail under any standard of review, and that the adjoining lots that were deemed blighted years earlier were improperly included under the plan without any evaluation of whether they remained in need of redevelopment. Following a hearing, the lower court upheld the amendment’s adoption and dismissed the complaint with prejudice. The association appealed.

The Appellate Division affirmed, holding that the standard of review applicable to decisions of broad application by a municipality, such as the amended redevelopment plan, was whether the adoption was arbitrary or capricious. The Court concluded the adoption of the amendment was neither arbitrary nor capricious based upon the exact findings underlying the decision because there was adequate support in the record, notably the testimonies of the developer’s architect and planning expert and the municipal planner.

The Court also disagreed with the association’s claim that the blighted classification of the adjoining lots became “stale” for purposes of including them in the amended plan for redevelopment. The Court concluded that, under the LRHL, an area designated in need of redevelopment is not indivisible and may be joined with other areas or parts of other areas already blighted for redevelopment purposes. The Court found that the association failed to demonstrate why the adjacent vacant lots no longer satisfied the statutory criteria to qualify as being in need of development, and so could not demonstrate that its inclusion was arbitrary, unreasonable or capricious.

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