Hopewell Borough v. Hopewell Township

New Jersey Superior Court Appellate Division·Decided August 21, 2025·No. A-3086-22·Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

DOCKET NO. A-3086-22

HOPEWELL BOROUGH, a political subdivision of the State of New Jersey, PENNINGTON BOROUGH, a political subdivision of the State of New Jersey, PAUL ANZANO, individually, and JAMES DAVY, individually,

Plaintiffs-Appellants,

v.

HOPEWELL TOWNSHIP, a political subdivision of the State of New Jersey and COURTNEY PETERS-MANNING, in her official capacity as Mayor, MICHAEL RUGER, in his official capacity as Deputy Mayor, DAVID CHAIT, in his official capacity as Committeeperson, KEVIN KUCHINSKI, in his official capacity as Committeeperson, UMA PURANDARE, in her official capacity as Committeeperson, U.S. HOME AT HOPEWELL PARC URBAN RENEWAL, LLC, and U.S. HOME CORPORATION,

d/b/a LENNAR, Defendants-Respondents, and FAIR SHARE HOUSING CENTER,

Defendant/Intervenor-

Respondent.

Argued October 1, 2024 – Decided August 21, 2025 Before Judges Gooden Brown and Smith.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-0497-22.

Walter R. Bliss, Jr. argued the cause for appellants (Law Offices of Joseph C. Tauriello, PC, and Law Offices of Walter R. Bliss, Jr., attorneys; Joseph C.

Tauriello, Walter R. Bliss, Jr., and Virginia Kerr, of counsel and on the briefs).

Steven P. Goodell argued the cause for respondents Hopewell Township, Courtney Peters-Manning, Michael Ruger, David Chait, Kevin Kuchinski, and Uma Purandare (Parker McCay PA, attorneys; Steven P. Goodell, of counsel and on the brief; Alexis C.

Smith, on the brief).

Timothy M. Prime argued the cause for respondents U.S. Home at Hopewell Parc Urban Renewal, LLC, and U.S. Home Corporation (Prime & Tuval LLC, attorneys; Timothy M. Prime, on the brief).

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William S. Fairhurst argued the cause for respondent Fair Share Housing Center (Fair Share Housing Center, attorneys; William S. Fairhurst, on the brief).

PER CURIAM Plaintiffs appeal the trial court's order dismissing their complaint in lieu of prerogative writs. Plaintiffs challenged defendant Hopewell Township's (Township) adoption of Ordinance 22-1766, which, among other things, approved a financial agreement between co-defendants Township and U.S. Homes (Lennar) under the Long Term Tax Exemption Law (LTTEL), N.J.S.A. 40A:20-1 to -22. The agreement facilitated Lennar's construction of more than a thousand units of housing and provided for a thirty-year property tax exemption with a payment-in-lieu of taxes schedule. After the Township adopted the ordinance, plaintiffs sued to block the project, alleging that the Township's adoption was arbitrary and capricious. During the court's case management of the ensuing litigation, it issued an order barring discovery except for presentation of expert opinion testimony by each party. After a bench trial, the court found the Township was not arbitrary and capricious in adopting the ordinance, which satisfied the provisions of the LTTEL.

Plaintiffs allege the trial court committed error when it denied plaintiffs discovery and then misapplied the LTTEL. We affirm.

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I.

A.

In 2015, Township filed a declaratory judgment action, seeking to have its affordable housing plan deemed compliant. After multiple parties intervened, the Township entered into a series of settlement agreements between 2017 and 2019. In 2019, the Township obtained an order from the trial court declaring the property designated for residential development was an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law (LRHL), N.J.S.A. 40A:12A-1 to 40A:12A-49.

After the execution of redevelopment agreements 1 and subsequent litigation to resolve municipal sewer service for the project, in October 2021, Lennar applied for a thirty-year long term tax exemption to cover all development phases of the project. On January 24, 2022, the Township introduced Ordinance

1 First, the Township adopted an ordinance designating Block 93, Lots 5.01 and portions of 5.02 and 6.02 as areas in need of redevelopment, then adopted legislation authorizing corresponding redevelopment plans. The plans incorporated both market rate and affordable housing elements. After approving the plans, the Township next designated Lennar as the redeveloper for the Block 93 properties, then entered into two redevelopment agreements with Lennar, one for the north portion of the site and one for the south-east portion of the site. The north-site redevelopment agreement, the location of Lennar's proposed affordable housing development, is the subject of this litigation.

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22-1766, which authorized the financial agreement with Lennar. After proper notice, the Township conducted a public hearing on February 22, 2022. The hearing was attended by the Township's governing body, redevelopment counsel, financial and redevelopment experts, and the public, which included officials from neighboring communities. According to the record, several Hopewell Township committee members including Mayor Courtney Peters- Manning, Deputy Mayor Michael Ruger, Committee member Kevin Kuchinski, Committeeman David Chait, and Committeewoman Purandare, spoke in support of the payment in lieu of taxes (PILOT) 2 agreement at the public hearing.

At the hearing Township officials discussed the statutory purposes and benefits of PILOTs authorized under the LTTEL, particularly in the context of affordable housing. Some members of the public stated their opposition, pointing out the impact of long-term PILOT agreements on school tax revenue. Public officials from Pennington and Hopewell Boroughs also attended and voiced opposition to the PILOT, but they did not present expert testimony at that time. After the hearing, members of the Township Committee expressed their

2 To encourage investment, municipalities and developers may enter into financial agreements that provide tax exemptions on land and improvements, as authorized by the LTTEL, N.J.S.A. 40A:20-1 to -22. These agreements typically take the form of payments in lieu of taxes (PILOTs).

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support for the ordinance, emphasizing the role of the agreement in facilitating affordable housing, redeveloping an underutilized site, and mitigating the tax burden on existing residents. The Township Committee unanimously adopted the ordinance.

On March 15, 2022, the Township and Lennar executed the financial agreement3 which established the terms of the PILOT, as authorized in the ordinance. The agreement set forth the duration of the PILOT, the annual service charge applied, and the general obligations of the parties. The financial agreement between the Township and Lennar included three sections pertinent to our review.

Section 9.01, titled Relative Benefits of the Project, provides:

In accordance with the Long Term Tax Exemption Law, specifically N.J.S.A. 40A:20-ll(a), the Township hereby finds and determines that this Agreement is to the direct benefit of the health, safety, welfare and financial well-being of the Township and its citizens despite the tax exemption granted hereunder. The Property is currently underutilized. The Project will redevelop the site with a mix of approximately 1,077 residential units consisting of apartments, townhomes, stacked townhomes, condominiums and single family homes, subject to Article III of the Redevelopment

3 We note that the financial agreement, not set forth in its entirety in this opinion, contains a comprehensive recital of the development project history. Because that history is part of the record we have reviewed in deciding this matter, we see no need to recite all of it here.

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