Real Property & Environmental Law Alert : New Jersey, New York, Pennsylvania & Delaware Lawyers & Attorneys for Real Estate Development & Environmental Law

The questions that arise with nearly all new legislation are: (1) when will the law go into effect and (2) who will be required to adhere to the newly promulgated rules and regulations. The Bill as written will contain a four month grace period after its enactment. Therefore, a shopping center constructed prior to the expiration of the grace period will not be obligated to comply with the Bill. The Bill also exempts developers who have filed a site plan application with the applicable municipality prior to the expiration of the grace period. Developers should be aware that the site plan application need only be filed, not approved prior to the expiration of the grace period.

Non-compliance with the Bill will result in penalties to a shopping center owner in an amount of $500 for the first offense and $1000 for all subsequent offenses. The enforcing agency is intended at this time to be the New Jersey Division of Taxation who will have the power to file an action for injunction in the Superior Court to restrain the operations of a shopping center in the event the shopping center owner habitually violates the provisions of the Bill.

The Bill will require developers to evaluate the cost of such “electric vehicle charging stations,” which are defined as an “electric recharging point complete with electric vehicle supply equipment that is capable of providing level 2 charging for plug-in electric motor vehicles,” in connection with their overall budgets for their project. Level 2 equipment which provides charging through a 240 V, AC plug, can take 3 to 8 hours to reach a full charge, adding about 25 miles of range per hour of charging time, depending on the vehicle. Moreover, municipalities, professional planners and land use attorneys may be faced with the issue of whether the Bill impacts municipal parking ordinances and how they are interpreted by local land use boards. For example, if five (5%) of a shopping center’s parking area must be dedicated to EVs, it is conceivable that a municipality may require a developer to provide additional parking spaces for non-electric vehicles to compensate for the lost spaces.

Some other issues that may arise from the Bill are as follows:

• Developers will need to account for the charging stations in overall square footage of the property in terms of what can be utilized for retail space versus parking and ancillary uses/structures.
• Traffic experts may have to opine before local land use boards with respect to the impact the charging stations will have on trip generation at the property as vehicles that may not have entered the shopping center in the ordinary course may now enter the site for the purpose of charging their vehicle.
• The definition of “shopping center development” is fairly vague and simply states that the property be a commercial development with a building or series of buildings with 100 or more parking spaces. Depending on the definition of “commercial development” within a municipality’s zoning ordinance, an argument could be made that the Bill applies to more than just the ordinary retail shopping center, but also to office and/or other commercial developments that normally would not be categorized as a shopping center.

After introduction of the Bill by Senator Linda R. Greenstein (D) of New Jersey Legislative District 14 on March 21, 2011, the Bill was referred to the Senate Environment and Energy Committee. It will be interesting to see if the Bill will move forward as proposed, require amendments, or lack the requisite votes to be passed into law. However, it does seem to be part of a growing “green” trend. Google recently added the location of EV charging stations to its maps and is testing wireless charging stations at its own headquarters in California. The Department of Energy has created a data center on the locations for alternative fuels, including charging stations to serve the plug-in community.

* Photo courtesy of Paul Martin Eldridge - freedigitalphotos.net.

Jason R. Tuvel is an Associate in the Gibbons Real Property & Environmental Department.

Although this statute may seem clear on its face, it does raise some questions for land use attorneys and developers.

• First, what if a property satisfies the acreage and ownership requirements, does the sole use contemplated for the property need to be a renewable energy facility (i.e. a solar farm)?
• Second, can a renewable energy facility be deemed an accessory use or structure to a principal use that is pre-existing on the subject property?
• Third, does the renewable energy facility have to produce energy to a certain amount of users or can it be for a single user?

All of these questions remain unanswered as the development of renewable energy facilities in New Jersey remains in its infancy. This land use attorney foresees litigation over these unanswered questions on the horizon as local land use boards and zoning officials will have to make critical determinations on whether “use variances” are required despite the fact that the MLUL has been amended to facilitate the development of these types of projects.

Land use attorneys should be aware of this recent amendment to the MLUL because it supersedes municipal zoning laws which may not expressly permit renewable energy facilities in the zone where the subject property is located. Developers seeking out properties for their next solar project should always keep in mind that if a property satisfies the criteria set forth in N.J.S.A. 40:55D-66.11, the land use approval process may become a lot easier and possibly more resistant to challenges on an appeal of the approval by a third-party objector.

Jason R. Tuvel is an Associate in the Gibbons Real Property and Environmental Department.

Wal-Mart’s 2009 development application for the renovation of the existing store was approved by the Planning Board. Thereafter, an objecting third-party appealed the Planning Board’s decision to the Superior Court claiming that the approval was invalid because the applicant did not apply for, and the Planning Board did not grant, a bulk variance authorizing the pre-existing parking area setback non-conformity that would remain in existence at the site. The Superior Court upheld the Planning Board’s decision.

Judge Skillman’s opinion in Cortesini leaves no doubt that a subdivision or site plan approval may be challenged if an applicant fails to obtain a necessary variance. However, as the Court points out, the initial approvals that failed to properly identify and grant the parking area setback variance were not challenged on this issue within the 45-day period following publication of notice of the decision under New Jersey Court Rule 4:69-6.

The third-party objector attempted to circumvent the 45-day appeal period that had long ago lapsed on the 2001 and 2002 approvals by arguing that since Wal-Mart applied for amended site plan approval in 2009 the issue was re-opened. In support of such argument, the objector noted that Wal-Mart was required to obtain a variance authorizing the continuation of the non-conformity of its existing parking lot based on the parking area setback requirement.

The Court’s ultimate rejection of the objector’s argument is predicated on several key facts:

•  The location of the 46 new parking spaces proposed by Wal-Mart’s 2009 site plan application will not violate the parking area setback requirement;
• The existing parking spaces that fail to conform with the parking area setback requirement are all located a substantial distance from the parts of the store where the renovations authorized by the amended site plan approval will be constructed;
• In 2001, the Planning Board noted in its resolution of approval that the layout of the parking area was “consistent with good site design and layout, proper planning, and efficient land use utilization”; and
• The Planning Board’s resolution of approval in 2009 in connection with the development application supported the findings in the 2001 resolution of approval by stating that the existing parking area, including the nonconformity with the setback requirement is “an existing condition that is functioning well and will not have any detrimental impact to the zone plan.”

Based on these facts, the Court made the following conclusions of law:

• There is no basis for arguing that a variance is required because the improvements proposed are not within the vicinity of the parking area setback violation and therefore the existing non-conformity will not be enhanced or affected by the 2009 development application;
• The findings in the Planning Board’s 2001 and 2009 resolutions of approval lead the Court to infer that had the applicant applied for a variance for violating the parking area setback requirement, the Planning Board would have granted the variance; and
• The objector’s claim that a variance is required authorizing the continuation of the non-conformity of the existing parking lot with the parking area setback requirement constitutes a collateral attack on the 2001 and 2009 development approvals.

The outcome of the Cortesini case provides some clarity to developers and land use attorneys on the grey area of how to deal with pre-existing non-conformities and variance conditions that should have been addressed by prior land use applications.

In this land use attorney’s view, the case stands for the proposition that, so long as the proposed development does not impact the pre-existing condition, the applicant need not apply and obtain a variance for its continuation. However, it would be prudent to ensure that the record at the land use board level clearly covers this point through expert witness testimony. Doing so will allow a court reviewing the record de novo to have factual evidence to support a determination that a variance was not required in connection with the new application.

What should a developer take away from this case? - The importance of zoning due diligence. Zoning due diligence and the review of prior land use approvals will most likely uncover the existence of a pre-existing non-conforming condition. Such knowledge will facilitate not only the presentation of a new land use application, but can be significant in negotiating the value of the subject property because a pre-existing non-conformity can have a negative impact on future development.

Jason R. Tuvel is an Associate in the Gibbons Real Property and Environmental Department.

Turns out there were two Notices. Berwind published the first notice and the second, later Notice, was published by the Township. Problem was the Township only advised the Citizens of the later, Township publication date. As a result, based on Berwind’s earlier publication date, they filed their appeal six days past the appeal period and into the period of repose. Apparently, no one read the “official” newspaper.

Berwind argued that it is entitled to repose as of the 46th day, because not only did it publish first, it also followed the guidance provided in the 2004 Appellate Division opinion of Cohen v. Thoft by promptly e-mailing verification of the publication date to the Township. Berwind’s e-mail even calculated the expiration date for appeal to assist the Township, only to be notified weeks later by a local newspaper, that its site plan approval had been challenged in Superior Court by Citizens. So much for developer self-help!

Hopewell Township did not explain the source of its misinformation and its counsel argued that municipalities cannot be burdened with the obligation to provide correct information concerning the appeal period where a developer publishes the Notice. After all, the objector could read the “official” newspaper and / or find the notice on-line. Thou shalt not rely on City Hall?

The Supreme Court can look to Cohen for some guidance, but not entirely. The Appellate Division in Cohen extended the appeal period three days in a purely private dispute between adjoining landowners due to what may have been perceived as misleading shenanigans by the developer. In Cohen, the developer obtained a variance and published a Notice of Decision the next day, but did not advise the municipality it had done so, and thereafter failed to correct the municipality when it indicated its subsequent intent to publish. The neighbor’s appeal was timely filed - but only under the second, municipal publication date.

The Appellate Division in Hopewell Citizens' was not persuaded by the Citizens arguments. The Appellate Division opinion, issued in January 2010, denied expansion of the appeal period, determining that enlargement was not justified because the issues barred by the expiration of the appeal period did not present important constitutional law or of public interest matters, or settle ex-parte or informal opinions of legal issues made by administrative officials. Counsel for Hopewell Citizens' strongly disagreed with the Appellate Division’s view and cited the Supreme Court to the extensive environmental issues that Citizens allege were given short shrift by a Planning Board that held 5 public hearings in 19 business days, allegedly to avoid new environmental regulations concerning a stream located on the property.

Whether the Supreme Court will disagree with both trial and appellate court decisions, which ruled against the requested six-day extension, is an open question. The ultimate result will inevitably compare the facts of Cohen to those in Hopewell Citizens' and determine whether a municipally misinformed, but public interest oriented, group of objectors can prevail at the expense of a diligent and fully compliant large project developer whose repose was so abruptly halted. Stay tuned.

Nancy A. Lottinville is Counsel to the Gibbons Real Property & Environmental Department.  Howard D. Geneslaw, a Director in the Gibbons Real Property & Environmental Department, assisted in the preparation of this post.

In analyzing the adequacy of the notice, the court stated that the mention of the building being located in an historic district amounted to “basic information that would help an ordinary person determine whether to object to the application or seek additional information.”

Another fact that the court relied upon in its decision was that the Planning Board of Hillsborough Township did not know that the building was located in a historic district until after taking action to approve the application for site plan approval to construct a 6,700 sq. ft. office building where a single family home built in 1897 currently exists. The Planning Board learned of the historic district issue only when debating the language of the approving resolution.

This case raises some very notable issues for land use attorneys and developers.

• First, must the zoning district and possibly a historic overlay district (or any overlay district for that matter) be included in the notice for the public hearing?
• Second, is it the applicant’s responsibility, either through its lawyer or design professional, to alert and educate the municipality of its own zoning information?

The key take-away for this case is that an applicant should always err on the side of caution when drafting its public notice. It is better to be overly inclusive than omit a piece of information that may come back to invalidate the entire proceeding after a time consuming and expensive litigation process. In addition, that over-inclusiveness may at times require the applicant to bring certain zoning issues to a land use board’s attention even where the board’s own professionals have failed to identify the issue. Doing this may save the applicant a lot of time and money in the long run, and could prevent an appeal by an objector.

Jason R. Tuvel is an Associate in the Gibbons Real Property and Environmental Department.

Plaintiffs submitted an application to the Ulster County Legislature seeking to include the two parcels of land in Ulster County Agricultural District No. 2 and filed an application with the Town Planning Board seeking approval of Plaintiffs’ proposed use of the property within the A-1.5 zoning district.

The Town Building Inspector

Although Plaintiffs had received prior confirmation from the Planning Board Chairperson that the proposed use was “agricultural” and therefore permissible, the Town’s Building Inspector visited the premises and issued a letter to the Planning Board concluding that although the winery is permissible, the retail sale of wine from the house would require a variance from the Zoning Board of Appeals since the Town Code only permits the retail sale of agricultural products grown on the same lot from a road stand. Despite this determination, the Building Inspector later changed his determination finding that the winery was not a permissible agricultural use, and therefore a variance must be obtained from the Zoning Board of Appeals (“ZBA”).

More bad news followed when Plaintiffs withdrew their application after being contacted by a representative of the Ulster County Legislature that suggested they withdraw their application due to public opposition despite a favorable recommendation from the Ulster County Agriculture and Farmland Protection Board. Plaintiffs believed the actions of Building Inspector were the result of undue influence by the Ulster County District Attorney for his own personal and economic reasons and that the action by the legislative representative was motivated by similar reasoning.

The ZBA

Plaintiffs appealed the determination of the Building Inspector to the ZBA. Plaintiffs submitted various documents in support of their appeal, including:

• a favorable letter from the New York State Commissioner of Agriculture and Markets confirming that the proposed use of the property constituted a “farm operation,”
• a determination from the Town Assessor that nine acres of Plaintiffs property would qualify for an agricultural exemption and
• a favorable interpretation from the Ulster County Planning Board.

Despite this documentation, the ZBA unanimously voted to deny Plaintiffs’ appeal. Plaintiffs challenged the ZBA’s decision in an Article 78 proceeding that was unsuccessful at both the Supreme Court and later at the Appellate Division, Third Department.

The Federal Court Filing

Plaintiffs subsequently commenced suit in federal court alleging numerous constitutional violations including:

• a violation of their federal right to petition the government for the redress of grievances,
• procedural and substantive due process violations and
• equal protection violations.

The Defendants, which were comprised of the Town of New Paltz, the Zoning Board of Appeals for the Town of New Paltz and its individual members, as well as Susan Zimet, a representative in the Ulster County Legislature and The County of Ulster, moved to dismiss Plantiffs’ complaint. In light of the legal principles set forth above, the Court granted Defendants’ motion to dismiss since Plaintiffs had failed to apply for a variance from the ZBA to permit the proposed winery and associated sale of wine.

The lesson to be learned from all of this is that just like grapes need to be ripened for wine, so too must claims be ripened prior to being adjudicated. No matter how doubtful a favorable decision may appear to be, in order for claims to be ripe for review, it is critical that a final decision first be obtained or that facts be plead to overcome the high burden of establishing that such an application would have been futile. Luckily for Plaintiffs, all is not lost. The Court dismissed their claims without prejudice to their right to refile in the event they are unsuccessful in their variance application.

Jennifer M. Porter is an Associate in the Gibbons Real Property and Environmental Department.

The Act Does Not Apply to All Permits

The Act does not apply to other statutes, including the:

• "Keystone Opportunity Zone, Keystone Opportunity Expansion Zone and Keystone Opportunity Improvement Zone Act,"
• "The Underground Utility Line Protection Law," and
• certain other permits issued by the Pennsylvania Department of Transportation.

The Act also does not apply to permits with expiration dates determined by federal law, or to administrative consent orders and enforcement actions for a permit subject to the extension period.

How Long is a Permit Extended?

Under the Act, a permit granted under an applicable statute and having an expiration date after December 31, 2008 may have its expiration date extended until July 1, 2013, regardless of whether the permit was issued before or after the extension period. The Act does not shorten the life of a permit with an expiration date after July 1, 2013.

How Can You Find Out If the Act Applies to Your Permit?

The permit holder can request verification, subject to a fee, from the issuing agency of the existence of a valid permit and its expiration date, but must identify the permit in question and its anticipated expiration date. The issuing agency must tell you in writing within 30 days of receiving your request:

1. whether you have a permit;
2. its expiration date; and
3. stating any issues related to the validity of the permit.

Except in Philadelphia and Pittsburgh, the failure of the issuing agency to respond within 30 days will result in the "deemed affirmation of the existence of the [permit] and the expiration date set forth in the request."

In the City of Philadelphia, in order to exercise its right to extend the permit under the Act, the permit holder must provide the issuing agency with notice of its intent to extend the permit and pay the agency a fee equal to fifty percent of the original application fee, not to exceed $5000. Elsewhere, the issuing agency may charge a fee up to twenty five percent of the original application fee, but no more than $5000, to extend the Permit.

Permits granted pursuant to the MPC are protected from changes in a "zoning, subdivision or other governing ordinance or plan," such that those changes will not affect the permit holder’s right to begin or complete the activities authorized by the permit during the extension period. The extension period is further extended for the length of litigation, including appeals, concerning permits issued under the MPC that prevent the completion of the work authorized by the permit.

The Act brings Pennsylvania into line with New Jersey which enacted its own permit extension legislation in 2008. The Act gives needed flexibility and time to developers who may be facing financial challenges in the current economy. At a minimum, permit holders should consider verifying the viability of permits, and extending them as required, now so they will be in a position to proceed when market conditions warrant.

Alfred R. Fuscaldo is a Director in the Gibbons Real Property and Environmental Department.

Campus had standing to bring the challenge the Board’s decision, said the Appellate Division, because as the owner of the land, it was directly affected by the denial of the variance, which if granted would run with the land. Regardless of whether Richman actually went forward with the project, the variance would be of great benefit to the land and to Campus, which could pursue the project on its own or with another developer. Conversely, the denial of the variance application harmed Campus by denying it this potential advantage.

The Appellate Division distinguished an earlier decision upon which the Board relied, Spinnaker Condominium Corp. v. Zoning Board of Sea Isle City, 357 N.J. Super. 105 (App. Div. 2003).  Spinnaker involved the denial of a variance to a telecommunications company that wanted to install an antennae on a building to address a gap in its coverage. In that case, the court held that the landowner did not have standing to appeal the denial because the variance sought was "unique to the applicant." The owner was not a telecommunications company, and so could not install the equipment on its own, and the variance sought required the board to consider whether the particular applicant really needed the variance to fill a coverage gap. Such factors were unique to the applicant, said the Campus Associates court, while the factors to be considered with Richman's application were specific to the property.

Campus Associates is good news for landowners. If a development partner chooses not to appeal an adverse municipal decision, then in most circumstances the landowner can pick up the torch and avoid the expense and delay of another application process.

Paul M. Hauge is an Associate in the Gibbons Real Property and Environmental Department.