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Toll Bros., Inc. v. Planning Board of the Township of Mt. Olive

A-2023-04T2 and A-2836-04T2 (N.J. Super. App. Div. 2006) (Unpublished)

ZONING; APPROVALS; EXTENSIONS —Where a development contains more than fifty acres, a planning board is required to engage in a balancing test to determine whether the applicant should be granted an extension of protections from zoning changes, especially where an applicant has diligently pursued all other required governmental approvals, but has experienced delays in obtaining those approvals.

In May of 1989, a municipal planning board granted a developer preliminary and major subdivision approval for the development of approximately 80 acres of land into a residential community. The grant of these approvals was conditioned on: (1) construction of a potable water system; (2) construction of an on-site sanitary sewer system; (3) construction of certain road improvements; and (4) approval by the United States Army Corp of Engineers of a nationwide permit and a letter of jurisdiction regarding the freshwater wetlands that were a part of the subject property. These preliminary approvals were scheduled to expire in May of 1992. Before the expiration of the preliminary approvals, the Legislature passed the Permit Extension Act, N.J.S.A. 40:55D-130 to -136, pursuant to which the planning board granted a ten year extension of protections against changes in the general terms and conditions of the preliminary major subdivision and site plan approvals. As a result, the approvals were scheduled to terminate in June 2002. Following a change in law, in March of 1994, the New Jersey Department of Environmental Protection (DEP) assumed responsibility from the Army Corps of Engineers for enforcing the wetlands regulatory provisions of the Federal Clean Water Act. In December of 1994, the DEP voided the exemption from obtaining a freshwater wetlands or open fill permit previously granted by the Army Corps of Engineers. Needing a new permit, the developer applied to the DEP for a wetlands permit. After the DEP denied the application, litigation ensued and the developer and the DEP eventually reached a settlement which amended the development plan by: (i) providing for a reduced number of housing units; (ii) splitting the project into two phases; (iii) providing for DEP to extend permits for the construction of the sanitary sewer system; and (iv) extending the permit issued by the Bureau of Safe Drinking Water. Because the settlement changed the development plan, the developer was required to obtain planning board approval of the changes made to the development plan. The planning board approved the changes in the development plan and, in August 2000, granted revised preliminary major subdivision and site plan approval. In February 2002, the developer received final major subdivision and site plan approval. The final approval was conditioned on the developer providing an interconnect from the proposed water system to one serving an existing development. Unable to locate an adequate supply of water, the developer sought a new permit from the Bureau of Safe Drinking Water. The developer remained current in its permits and renewal applications. In May 2003, the Bureau of Safe Drinking Water issued a permit to construct, scheduled to expire May 16, 2006. The original wastewater treatment plant permit had expired by this time. This required the developer to apply for a new wastewater treatment plant permit. The new permit was issued and, coupled with an extension, was scheduled to expire on August 15, 2005. Thereafter, the planning board denied the developer’s application for an extension of its final subdivision and site plan approvals, which were set to expire February 2004.

When the planning board granted preliminary site plan and major subdivision approval, it conferred upon the developer the assurance that the approvals would remain valid for a period of three years, even if the ordinance changed. The developer was entitled to apply for extensions of both the preliminary site plan and major subdivision approvals, each generally not to exceed two years. Where a subdivision involves more than 50 acres, as was the case here, an extension in excess of three years can be granted for a subdivision approval. In deciding whether to grant an extension of a final site plan approval, a planning board must weigh: (i) the public interest in implementing the zoning changes; (ii) the developer’s interest in extending its protection; and (iii) the circumstances under which the need for the extension arose. Further, a planning board must grant an extension of both major subdivision and final site plan approvals for a period not to exceed one year if a developer was prevented from starting construction due to delays beyond its control. In such cases, the developer must demonstrate that: (1) it applied for, and diligently pursued, all legally required approvals; (2) other governmental agencies delayed the granting of the approvals; and (3) those delays prevented the developer from continuing with the development. Because this particular development contained more than 50 acres, the planning board was required to engage in a balancing test to determine whether the developer should be granted an extension of protections from zoning changes. Because the Appellate Division agreed with the lower court’s findings that the developer actively and diligently pursued all required governmental approvals, the government delayed in granting those approvals, and those delays prevented the developer from proceeding with construction, the Court ruled that the planning board’s denial of the developer’s requested extensions of its subdivision and site plan approvals was arbitrary and capricious.

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