IN THE MATTER OF A USE VARIANCE APPLICATION SUBMITTED AS PART OF FILE NO. 17-239 MEPT LINCOLN CROSSING LLC/LINCOLN GATEWAY – NEW BLDG/ VARIANCE BLOCK 451.01, LOT 14.011, IN THE TOWNSHIP OF NORTH BERGEN AND BLOCK 155, LOTS 1.03, 1.04 AND 6, IN THE TOWN OF SECAUCUS (NEW JERSEY SPORTS AND EXPOSITION AUTHORITY)

• Court: New Jersey Superior Court Appellate Division
• Decided: August 4, 2020
• Docket: A-1391-18T3
• Status: Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-1391-18T3

IN THE MATTER OF A USE VARIANCE APPLICATION SUBMITTED AS PART OF FILE NO. 17-239 MEPT LINCOLN CROSSING LLC/LINCOLN GATEWAY – NEW BLDG/ VARIANCE BLOCK 451.01, LOT 14.011, IN THE TOWNSHIP OF NORTH BERGEN AND BLOCK 155, LOTS 1.03, 1.04 AND 6, IN THE TOWN OF SECAUCUS. _______________________________

Argued November 21, 2019 – Decided August 4, 2020

Before Judges Suter and DeAlmeida.

On appeal from the New Jersey Sports and Exposition Authority.

Joseph B. Fiorenzo argued the cause for appellant Towers Associates, Ltd. (Sills Cummis & Gross, PC, attorneys; Joseph B. Fiorenzo, of counsel and on the briefs).

Eric D. Mc Cullough argued the cause for respondent MEPT Lincoln Crossing, LLC (Waters Mc Pherson, Mc Neill, PC, attorneys; Eric D. Mc Cullough, of counsel and on the brief). Frederick William Alworth argued the cause for respondent New Jersey Sports and Exposition Authority (Gibbons PC, attorneys; Frederick William Alworth and Douglas J. Janacek, on the brief).

PER CURIAM

Appellant Towers Associates, Ltd. (Towers) appeals from two October

18, 2018 resolutions of the Board of Commissioners of the New Jersey Sports

and Exposition Authority (NJSEA) relating to the approval of a use variance

permitting respondent MEPT Lincoln Crossing, LLC (MEPT) to construct a

warehouse on its property. We affirm.

I.

The following facts are derived from the record. NJSEA is an independent

authority created by statute with broad zoning authority over the Hackensack

Meadowlands District (District), a 30.4-square-mile area in Bergen and Hudson

Counties. See N.J.S.A. 5:10A-7 to -18; Infinity Broadcasting Corp. v. N.J.

Meadowlands Comm'n, 187 N.J. 212, 215-16 (2006).1

MEPT owns a 19.9-acre parcel (the Property) in the District's Regional

Commerce Zone zoned for commercial purposes, not including warehouses.

1 The New Jersey Meadowlands Commission was merged into NJSEA in February 2015 by the Hackensack Meadowlands Agency Consolidation Act. N.J.S.A. 5:10A-1 to -68. A-1391-18T3 2 The Property is improved with a 236,207-square-foot building most recently

used by the now-defunct clothing retailer Daffy's as a warehouse/distribution

facility, corporate headquarters, and accessory retail outlet, which MEPT

proposes to replace. The Property has been vacant since 2012.

Towers owns two adjacent lots, one of which is developed with a Home

Depot and the other of which is undeveloped. A principal of Towers testified

during a public hearing that it intends to develop the vacant parcel with a hotel,

although no application for such development has been submitted to NJSEA.

A private roadway, Daffy's Way, traverses portions of the Property and

Towers' parcels and is governed by a reciprocal easement agreement (REA)

executed in 1992 by Towers and MEPT's predecessor in title. In the REA, each

party granted to the other mutual and reciprocal easements for "vehicle and

pedestrian ingress, egress and passage and re-passage over" the portions of the

parcels on which the roadway is situated.

In 2015, MEPT filed a land use application with NJSEA for a use variance

to construct a warehouse on the Property. On February 23, 2016, MEPT

withdrew its 2015 application without prejudice.

In June 2017, MEPT filed another land use application with NJSEA

seeking a use variance for the construction of a warehouse and distribution

A-1391-18T3 3 facility on the Property. The 2017 application, the approval of which is

presently before this court, differed in significant ways from MEPT's 2015

application. The 2017 application featured a significant reduction in the

proposed warehouse's size, a relocation of the proposed facility's loading docks

and parking, changes to site circulation, and other revisions. Towers opposed

the 2017 application. 2

Over seven days in 2018, the NJSEA staff, comprised of a panel of

engineers and professional planners, held public hearings on MEPT's

application. Towers, through its counsel, appeared at each day of the hearings

and cross-examined MEPT's experts, presented evidence, and called witnesses.

After the hearings, NJSEA staff held the record open to allow MEPT and the

objectors, including Towers, to submit written summations, despite such

submissions not being typical of public hearings before NJSEA staff.

On August 24, 2018, NJSEA staff issued a fifty-one-page report

recommending approval of MEPT's application, subject to several conditions.

Towers thereafter filed a notice of appeal with the NJSEA, challenging

the staff's recommendations and seeking a hearing before the Office of

2 Respondent Vee Jay International, which operates a hotel on a neighboring parcel, also opposed the application but did not participate in this appeal. A-1391-18T3 4 Administrative Law (OAL) in accordance with N.J.A.C. 19:4-4.19(b)(1) and

N.J.S.A. 52:14B-3.2, a provision of the Administrative Procedure Act (APA).

MEPT opposed the request, arguing Towers lacked standing to demand a

hearing as a third-party objector.

On October 18, 2018, after receiving written submissions from Towers

and MEPT, NJSEA adopted a resolution denying Towers' request for a hearing,

concluding it did not have a sufficient particularized property interest affected

by MEPT's application to grant standing to demand a hearing (the Hearing

Resolution). NJSEA issued a detailed and comprehensive written statement

outlining the reasons for its decision.

On the same day, in a separate resolution NJSEA adopted the staff's

recommendation and granted MEPT the requested use variance subject to the

conditions recommended by staff (the Variance Resolution). The conditions

included MEPT: (1) providing an air quality plan for review that includes air

quality monitoring provisions for a minimum of one year from completion of

the building; (2) submitting an as-built noise evaluation within sixty days of

completion of the building in order to show compliance with N.J.A.C. 19:4-7.3;

(3) revising the site plan to eliminate seven trailer parking spaces, relocat e the

proposed guard booth, and include a sign prohibiting tractor-trailers from

A-1391-18T3 5 utilizing the drive aisle through the parking lot; and (4) producing a plan to

reconfigure the Daffy's Way driveway for enhanced two-way traffic flow to

reduce the potential for conflicting movements between vehicles travelling in

opposite directions. The Variance Resolution attached and incorporated the

staff's report, which comprehensively analyzed each factor in N.J.A.C. 19:4-

4.14(e)(2) as prerequisites to the grant of a use variance.

This appeal followed. Towers raises the following arguments.

POINT I

TOWERS HAD A CLEAR LEGAL RIGHT TO APPEAL THE STAFF RECOMMENDATION TO THE OAL FOR A HEARING SINCE IT HAD A PARTICULARLIZED PROPERTY RIGHT THAT WAS DIRECTLY AND NEGATIVELY AFFECTED BY THE GRANTING OF THE USE VARIANCE.

POINT II

THE NJSEA ERRED IN GRANTING A USE VARIANCE AS THE APPLICANT UTTERLY FAILED TO MEET ITS BURDEN TO ESTABLISH ALL OF THE PRECONDITIONS FOR APPROVAL CONTAINED IN N.J.A.C. 19:4-4.14(e)(2) AND N.J.A.C. 19:4-1.14(f).

POINT III

TOWERS' DUE PROCESS RIGHTS WERE VIOLATED BY THE NJSEA STAFF AND THE NJSEA BOARD OF COMMISSIONERS BECAUSE NJSEA['S] STAFF'S COUNSEL BARRED CROSS-

A-1391-18T3 6 EXAMINATION ON RELEVANT MATTERS, REFUSED TO PERMIT THE INTRODUCTION OF RELEVANT DOCUMENTS INTO EVIDENCE DURING THE HEARING AND BECAUSE THE NJSEA BOARD OF COMMISSIONERS ABDICATED THEIR RESPONSIBILITY TO REVIEW MEPT'S APPLICATION.

II.

A "strong presumption of reasonableness attaches to the actions of the

administrative agencies." In re Carroll, 339 N.J. Super. 429, 437 (App. Div.

2001) (quoting In re Vey, 272 N.J. Super. 199, 205 (App. Div. 1993)). The

scope of our review of a final decision of an administrative agency is limited

and we will not reverse such a decision unless it is "arbitrary, capricious, or

unreasonable, or . . . not supported by substantial credible evidence in the record

as a whole." In re Stallworth, 208 N.J. 182, 194 (2011) (citing Henry v. Rahway

State Prison, 81 N.J. 571, 579-80 (1980)). When making that determination, we

consider:

(1) whether the agency's action violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; and (3) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

A-1391-18T3 7 [Ibid. (citing In re Carter, 191 N.J. 474, 482-83 (2007)).]

We are "in no way bound by the agency's interpretation of a statute or its

determination of a strictly legal issue . . . ." Carter, 191 N.J. at 483 (quoting

Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973)). We will, however,

generally "afford substantial deference to an agency's interpretation of a statute

that the agency is charged with enforcing." Patel v. N.J. Motor Vehicle Comm'n,

200 N.J. 413, 420 (2009) (quoting Richardson v. Bd. of Trs., 192 N.J. 189, 196

(2007)). Substantial deference must be extended to an agency's interpretation

of its own regulations, particularly on technical matters within the agency's

expertise. In re Freshwater Wetlands Prot. Act Rules, 180 N.J. 478, 488-89

(2004).

III.

Under the APA, an "applicant" is entitled to request an adjudicatory

hearing with respect to a decision by the NJSEA on its application for a use

variance. The APA defines "applicant" as an entity seeking an "agency license,

permit, certificate, approval, chapter, registration[,] or other form of permission

required by law . . . ." N.J.S.A. 52:14B-3.2. Where an applicant files an appeal

from an NJSEA staff recommendation, the appeal is transmitted directed to the

OAL for a hearing. N.J.A.C. 19:4-4.19(b). An appeal filed by a non-applicant,

A-1391-18T3 8 however, may not be forwarded to the OAL for a hearing unless the NJSEA

determines the non-applicant has a sufficient interest as defined by the APA.

N.J.A.C. 19:4-4.19(b)(4).

The APA prohibits any state agency from adopting a regulation that gives

a "third party" the right to appeal a permit decision in a contested case hearing

at the OAL. N.J.S.A. 52:14B-3.3(a); N.J.S.A. 52:14B-3.1(d). A third party is

defined as any person other than:

a. An applicant . . . .

b. A State agency; or

c. A person who has a particularized property interest sufficient to require a hearing on constitutional or statutory grounds.

[N.J.S.A. 52:14B-3.2.]

Accordingly, a non-applicant can demand an adjudicatory hearing only

where the non-applicant can demonstrate: (1) a right to a hearing under an

applicable statute; or (2) a "particularized property interest of constitutional

significance that is directly affected by an agency's permitting decision." In re

NJPDES Permit No. NJ0025241, 185 N.J. 474, 481-82 (2006). "[T]hird parties

generally are not able to meet the stringent requirements for constitutional

standing in respect of an adjudicatory hearing." Id. at 482.

A-1391-18T3 9 These limitations are "intended to prevent the processing of permit

applications by State agencies from being bogged down by time-consuming and

costly formal hearings" which "consume substantial public and private

resources." In re Riverview Dev., LLC, 411 N.J. Super. 409, 424 (App. Div.

2010). As the Legislature found, giving third parties the right to hearings would

"give rise to a chaotic unpredictability and instability that would be most

disconcerting to New Jersey's business climate and would cripple economic

development . . . ." N.J.S.A. 52:14B-3.1(c).

Having considered the record in light of the applicable legal precedents,

we affirm the Hearing Resolution for the reasons expressed in the

comprehensive written final agency decision accompanying the Resolution. R.

2:11-3(e)(1)(D). We add the following comments.

Towers concedes it is not an applicant before the NJSEA. It argues it has

a statutory right to a hearing on MEPT's variance application because: (1)

increased truck traffic on Daffy's Way will directly affect the viability and

efficiency of the business on Towers' adjoining property and the future

development of its vacant parcel; and (2) its rights under the REA will be

affected by the reconfiguration of a curbed island within Daffy's Way on

MEPT's property and the increased costs of repairing and maintaining Daffy's

A-1391-18T3 10 Way as a result of MEPT's proposed use. We agree with the NJSEA's final

determination that none of those purported interests are sufficient to create a

right to a hearing.

"[L]andowners objecting to the development of neighboring property" do

not, by proximity alone, "have a particularized property interest warranting an

adversarial hearing before an administrative law judge." In re Freshwater

Wetlands Gen. Permits, 185 N.J. 452, 470 (2006) (citing Spalt v. DEP, 237 N.J.

Super. 206, 208-11 (App. Div. 1989)). Our courts have consistently held that a

generalized property right shared with other property owners, such as collateral

economic impacts, traffic, views, quality of life, recreational interest, and

property values, are insufficient to establish a third-party right to an adjudicatory

hearing. In re Freshwater Wetlands Gen. Permits, 185 N.J. at 470; In re

Riverview Dev., 411 N.J. Super. at 429; In re AMICO/Tunnel Carwash, 371 N.J.

Super. 199, 212 (App. Div. 2004); In re Waterfront Dev. Permit No. WD88-

0443-1, Lincoln Harbor Final Dev., 244 N.J. Super. 426, 436 (App. Div. 1990);

Normandy Beach Improv. Ass'n v. Comm'r, DEP, 193 N.J. Super. 57, 61 (App.

Div. 1983).

The record supports NJSEA's determination that Towers' expressed

interest in the impact of increased traffic on Daffy's Way on its tenant's business

A-1391-18T3 11 is a generalized property right not of the type creating a right to an administrative

hearing on MEPT's variance application. The same is true for NJSEA's

conclusion that Towers' argument the Variance Resolution will adversely affect

the future development of its vacant parcel is speculative and, thus, legally

insufficient to create a right to a hearing.

In addition, the record supports NJSEA's determination that, although

Towers has a property interest in the REA, that interest is not directly affected

by the Variance Resolution. As the agency aptly explained,

While Towers undoubtedly has a property interest in the REA, that interest is not weakened by the grant of a variance to MEPT. Towers['] rights under the REA remain subject to enforcement in an action in Superior Court. Since the variance does not enable MEPT to violate its obligations under the REA and because Towers is still entitled to initiate an action under the REA to enforce such obligations, the NJEA's grant of a variance does not "impact" whatever constitutional rights Towers has with respect to the REA.

If, as Towers claims, MEPT's proposed use of its property, realignment of

a portion of Daffy's Way, and other improvements to the roadway violate the

REA, Towers can pursue available remedies under the agreement. The NJSEA

variance approval process is not the appropriate forum for resolution of any

disputes MEPT and Towers may have with respect to the scope of their rights

under the REA.

A-1391-18T3 12 IV.

Our review of the record revealed ample support for NJSEA's issuance of

a use variance to MEPT. We therefore affirm the Variance Resolution for the

reasons expressed in the extensive and detailed written decision of the agency.

R. 2:11-3(e)(1)(D). NJSEA adopted its staff's report that exhaustively addressed

each of the preconditions for approval set forth in N.J.A.C. 19:4-4.14(e)(2) and

(f), considered Towers' objections, and included written findings of fact

supported by the record. We defer to the agency's expertise where, as is the case

here, the record fully supports its decision.

We have carefully considered Towers' remaining arguments, including its

claim to have been denied due process, and conclude they lack sufficient merit

to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

A-1391-18T3 13