Redevelopment agreements are the tool used to memorialize the respective obligations of the redeveloper and the municipality to effectuate a redevelopment project. Often, a concept plan has been agreed upon, but changes to the site-specific zoning embodied in the redevelopment plan are necessary in order for the project to advance. In an unpublished decision earlier this year, the New Jersey Superior Court, Appellate Division, ruled in Fieldstone Associates, L.P. v. Borough of Merchantville, A-1239-13T3, that the municipality cannot be contractually compelled to adopt such amendments.
The Borough of Merchantville, located in Camden County, designated portions of its downtown as an “area in need of redevelopment” and adopted a redevelopment plan. Following an RFP process, the Borough designated Fieldstone Associates, L.P., as the redeveloper and the parties entered into a redevelopment agreement which provided that “Redeveloper, in cooperation with Borough shall prepare documentation for amendments to the Redevelopment Plan deemed necessary by the Redeveloper to develop the Redevelopment Project in accordance with the Concept Plan.” It went on to explain that the “Borough has approved the Concept Plan for Redeveloper’s proposed redevelopment for the Project Site being in compliance with the intent of the Redevelopment Plan and Borough shall amend the Redevelopment Plan to establish zoning standards, including bulk regulations to permit development of the Project without the requirement of variances or waivers, consistent with the approved Concept Plan.” The Redevelopment Agreement also provided that the Borough and Redeveloper “shall cooperate with each other in all respects and shall use their best efforts to effectuate the purposes of this Agreement.” In particular, the Borough was obligated to “examine its master plan to the extent required to conform to the Redevelopment Plan,” and “consider the adoption of zoning with respect to the Project Area consistent with the Amended Redevelopment Plan…In the event that economic market or site conditions render the Redevelopment Project impractical or unfeasible, the Borough and Redeveloper shall cooperate to revise the Redevelopment Plan and Concept Plan to permit the uses and bulk standards reasonably necessary to develop an economically feasible redevelopment project….”