NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Altho ugh 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-2658-17T2
IN THE MATTER OF HUNTERDON COUNTY, BOROUGH OF FLEMINGTON, SALE OF 90-96 MAIN STREET & ADJACENT PARKING LOTS (BLOCK 22, LOTS 7, 8, 9 & 10) APPLICATION FOR PROJECT AUTHORIZATION. ______________________________
Argued October 7, 2019 – Decided February 24, 2020
Before Judges Fasciale, Rothstadt and Moynihan.
On appeal from the New Jersey Department of Environmental Protection.
Erin Elizabeth Simone argued the cause for appellant Friends of Historic Flemington, LLC (Maley Givens, PC, attorneys; Maurice Maley and Erin Elizabeth Simone, on the briefs).
Janine Gail Bauer argued the cause for respondent Flemington Center Urban Renewal, LLC (Szaferman, Lakind, Blumstein & Blader, PC, attorneys; Maraziti Falcon, LLP, attorneys for respondent Borough of Flemington; Janine Gail Bauer, and Robert Beckelman, on the joint brief). John Paul Kuehne, Deputy Attorney General, argued the cause for respondent Department of Environmental Protection (Gurbir S. Grewal, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; John P Kuehne, on the brief).
PER CURIAM
Appellant Friends of Historic Flemington, LLC (Friends), describes itself
as an "advocacy group comprised of citizens, professionals and business and
property owners concerned with historic preservation in the [Borough] of
Flemington." In this appeal, Friends challenges a final decision of the New
Jersey Department of Environmental Protection (DEP) approving the Borough
of Flemington's sale of a historic building to a private developer as part of a
municipal redevelopment plan under the New Jersey Register of Historic Places
Act (HPA), N.J.S.A. 13:1B-15.128 to -15.132. On appeal, Friends argues that
the DEP's action was procedurally defective and not supported by sufficient
evidence. It also argues that the DEP should have exercised jurisdiction over
the redeveloper's entire project, which involved privately-owned properties. We
affirm, as we conclude Friends has failed to meet its burden to prove the DEP's
decision was arbitrary, capricious or unreasonable, or otherwise defective.
I.
A-2658-17T2 2 Friends' challenge arose from Flemington's May 23, 2017 application to
the DEP's Historic Preservation Office (HPO) to approve its sale of publicly
owned historic property. The DEP established the HPO, see N.J.A.C. 7:4-1.1,
under the New Jersey Register of Historic Places Rules (HPRs), N.J.A.C. 7:4-
1.1 to -8.9, to administer aspects of the HPA. Flemington's application sought
approval to sell a historic bank building (Bank) to a private developer,
Flemington Center Urban Renewal, LLC (Flemington Center), as part of
Flemington's agreement with Flemington Center for the redevelopment of
Flemington's downtown area. Flemington Center cooperated with the Borough
in the preparation of the application.
The Property
Flemington owns the Bank, which is part of a three-story brick and stone
structure located in Flemington's Historic District (District). Built in 1870, the
Bank is listed in the State and National Registers of Historic Places. The Bank's
façade was modified in the 1920s to include a stone façade addition to the first
floor.
The north and front of the building contains the Bank and is categorized
under Flemington's Master Plan as a "contributing property" to the District. The
portions located to the south and rear, are used for police offices and are
A-2658-17T2 3 categorized as "non-contributing" to the Historic District. The building is
surrounded by several parking lots, also owned by Flemington, for public use.
The District was registered with the State and National Registers of
Historic Places in 1980 and encompasses the downtown commercial area and
surrounding residences. Its buildings' architecture is considered its main
historic asset. While the District covers approximately sixty percent of
Flemington's area, it has been in economic decline for decades and has been
marred by failed development projects and vacant buildings.
Redevelopment Efforts
Flemington's attempt to redevelop the District began in 2010 with the
Union Hotel, a privately-owned, dilapidated historic building, that has been
vacant since 2008. After determining that the building qualified as needing
redevelopment under state law, Flemington adopted a resolution designating the
Union Hotel as an area in need of redevelopment and adopted the Union Hotel
Redevelopment Plan (2010 Redevelopment Plan). In 2012, Flemington issued
a request for development proposals for the Union Hotel property. Although
two developers were designated to implement the Union Hotel redevelopment
project, financial concerns prevented the anticipated development.
A-2658-17T2 4 In 2013, Flemington began evaluating a larger redevelopment plan for the
area, and as part of that plan, it directed its Planning Board (Board) to conduct
a study of buildings south of the Union Hotel, including the Bank and
surrounding parking lots. After considering an "Area in Need of Redevelopment
Study," prepared on the Board's behalf, the Board adopted the study's findings
on December 16, 2013, following a public hearing.
The study found that the expanded area qualified as an area in need of
redevelopment. The Bank was recognized as "significant" to Flemington's
Historic District, but the study concluded that the building was "substandard,
unsafe, unsanitary, dilapidated and obsolescent." It "[had] been unoccupied for
some time," and required "substantial upgrades to plumbing, electrical, fire
safety and adequate means of ingress and egress to meet current building codes."
In pursuit of the expanded plan recommended by the study, in 2014,
Flemington and the Board considered a report prepared at the request of the
Flemington Business Improvement District, a non-profit district management
corporation that manages the Flemington Special Improvement District, which
includes the Main Street area. The report, entitled "Downtown Strategic Plan
Report Flemington, New Jersey" (2014 Strategic Plan), recommended
redevelopment of a larger portion of downtown Flemington, and described the
A-2658-17T2 5 Main Street area, including the Union Hotel and the Bank, as the "heart and
soul" of the plan. It recommended a mixed-use hospitality, retail, and residential
development "at a density that will maintain the character of Main Street," create
a residential character for surrounding streets, and "locat[e] parking resources
out of view." It called for the construction of 141 residential units and 19,500
square feet of commercial space in the Main Street area.
Thereafter, the firm that authored the 2010 Redevelopment Plan prepared
an "Amendment to Redevelopment Plan for the Union Hotel: Expanded Union
Hotel Redevelopment Area." (2014 Redevelopment Plan). The purpose of the
amended plan was to encourage redevelopment of the expanded area that "[i]s
compatible with and enhances the historic character of the Union Hotel and
Historic District," "[a]ttracts new visitors and residents" to Flemington,
"[s]upports the existing businesses and other uses," and "is cohesive with
adjacent residential uses."
In August 2015, Flemington adopted a "Reexamination of the Master
Plan" report (2015 Master Plan). It maintained the goals and objectives set forth
in the previously adopted 2010 Master Plan, but updated it to add elements
related to the economic revitalization of Flemington's downtown area,
A-2658-17T2 6 recommend concentrated retail, service, and entertainment uses, and identify the
"[e]xpanded Union Hotel" area as in need of redevelopment.
The Redevelopment Agreement
In February 2016, Flemington adopted a resolution designating John J.
Cust, Jr., the sole member of Flemington Center, as the redeveloper for the
downtown area. On March 13, 2017, Flemington adopted a new resolution
designating Flemington Center as the "redeveloper for the Redevelopment
Area." It then entered into a redevelopment agreement with Flemington Center.
The agreement included the Bank, the Union Hotel and other properties
not owned by Flemington as part of the redevelopment area,1 and it required the
project to conform with an attached "Concept Plan" and the 2014
Redevelopment Plan, with the latter controlling should any conflicts arise. The
project's purpose was to revitalize downtown Flemington to "compete within the
marketplace to attract people who will want to live, work and visit Flemington"
by "creat[ing] a vibrant and [d]ynamic [m]ixed-[u]se, [l]ifestyle [c]ommunity
1 It also identified several "Additional Propert[ies]" to add to the project as part of an "Expanded Redevelopment Area," which are not relevant to the current appeal. Counsel for appellant represents that appellant is challenging the designation of those properties in separate litigation. A-2658-17T2 7 that will be attractive to [the] local [c]ommunity, while promoting [t]ourism and
[h]igher [e]ducation."
Flemington Center's proposal was larger in scope than the 2014 Strategic
Plan recommendations. The project called for the construction of approximately
222 residential units, a 100-room hotel, a 45,000 square foot educational and
medical office building, 32,250 square feet of retail space, 4,800 square feet of
amenities, and 820 parking spaces. Notably, as originally stated, the proposal
did not retain the façades of the Bank or Union Hotel.
Pursuant to the agreement, Flemington Center was required to acquire title
from Flemington to all the properties within the redevelopment area using
private funding. That acquisition prompted Flemington's May 23, 2017
application to the DEP's HPO.
The HPO Application
According to Flemington's application, the redevelopment would preserve
the historic façade of the Bank and remodel its interior to include 4,200 square
feet of retail space and eight residential units. It also called for the removal of
the stone first floor façade that was added in the early twentieth century, the
restoration of the building's brick exterior, and the replacement of the building's
windows. Additionally, the project contemplated the complete removal of the
A-2658-17T2 8 "non-contributing" additions, and for the construction, and attachment, of a
seven-story building to the building's east side.
Renditions of the complete project depicted the Bank's façade facing Main
Street, albeit no longer an independent building. Additional stories would be
constructed onto the Bank and surrounding lots but would be set back behind
the façade. Regarding the Union Hotel, the proposal involved constructing two
stories on top of the existing Union Hotel, such that its historic façade would no
longer cover the entire front of the building.
The application included a brief "structural assessment" of the Bank,
noting the façade of the Bank would be preserved, its interior would be
redeveloped, and that the non-contributing portions of the building would be
demolished. A full structural assessment was not performed "[g]iven the limited
nature of the demolition proposed."
The application also included an "alternatives analysis" prepared by a
historic preservation consulting firm. The alternatives analysis described the
following public benefits to be derived from the proposed redevelopment:
rehabilitating the exterior of the Union Hotel and the Bank, creating "much
needed" public parking, improving the water supply system, creating modern
retail stores, increasing the residential population, and increasing the number of
A-2658-17T2 9 visitors. It also noted that Hunterdon County is the only county within New
Jersey that lacks any form of higher education, and the project sought to remedy
that by including educational facilities.
The application contained an analysis of four alternatives to the sale of
the Bank to Flemington Center. Alternative I was to develop nothing in the
redevelopment area—the "No Build" proposal. Without development, the
"entire Historic District [would] continue to be plagued by vacancies, disrepair
and underutilization."
Alternative II—the "reduced" build proposal—would reduce the scope of
the project such that no redevelopment would occur for the Bank. The number
of residential units involved in the project would be reduced from 248 to 83 and
the retail/restaurant space would be reduced from 48,900 square feet to 12,300
square feet. The result would be a reduction in tax benefits to Flemington by
forty-four percent. Further, it might require the developer to demolish other
buildings to maximize space.
Alternative III was "Full Build," meaning the redeveloper, after acquiring
the properties, would remove the existing buildings and redevelop from the
ground up. A full build would not "address the desire of the community to
preserve the historic structures."
A-2658-17T2 10 Alternative IV, termed the "Adaptive Reuse" proposal, was Flemington
Center's proposed project. This proposal would allow Flemington "to produce
a highly integrated and highly marketable and attractive design that will achieve
the goals of the Redevelopment Plan and Master Plan without adverse effects to
the existing historic infrastructure on and surrounding Main Street ." This
alternative was therefore preferred by the consulting firm.
The Supplement to the Application
After receiving Flemington's application, on June 6, 2017, the HPO
responded in a letter indicating that the application was incomplete and
requesting additional information. Flemington responded with a supplement to
the application on July 10, 2017. In that submission, Flemington limited its
response to the Bank only, arguing that the HPO was constrained from reviewing
the greater redevelopment project. It provided detail regarding the project's
physical effects on the Bank, explaining that while the non-contributing police
addition and the interior of the Bank were to be removed, the exterior elements
of the building would be restored and preserved to retain the historic façade.
Flemington also provided information about the planned uses for the
redeveloped Bank, describing that the ground floor would be repurposed for
A-2658-17T2 11 retail use, and that residential units would be constructed on the second and third
floors.
Flemington also supplied the HPO with a July 7, 2017 economic impact
analysis, a copy of the historic preservation element of the Master Plan, a
"parking analysis" from an engineering firm, and responses to both the public's
and the HPO's questions.
With respect to the impact of demolition and construction, Flemington
attached a letter from an engineering firm that described the specific procedures
involved in integrating the Bank's façade into the new building. Flemington also
explained the police building could be removed without impacting the Bank's
structural integrity, blasting would not be required for the adjacent construction,
and vibration monitoring would be employed.
In response to the HPO's request for an analysis of alternatives for the
proposed project, Flemington provided cost estimates comparing the costs of the
reduced build, full build, and proposed development alternatives. It represented
that the reduced build would have a total project cost of $54,269,954, the full
build would cost $91,329,417, without any rehabilitation of the Bank and Union
Hotel, and Flemington Center's proposal would cost $92,173,079, with
preservation of both building façades.
A-2658-17T2 12 Flemington also responded to the HPO's various questions regarding other
alternatives. In particular, the HPO asked Flemington to consider an adaptive
reuse alternative using the federal Standards for Rehabilitation, under 36 C.F.R.
§ 67.7, which could qualify certain certified historic structure redevelopments
for federal tax credits, under 26 U.S.C. §§ 46(1), 47. 2 In response, Flemington
described how a project under the federal standards could be developed, but
stated that it would not be financially feasible and would conflict with its
development interests. It also attached a letter from a certified public accountant
that stated the Bank and Union Hotel rehabilitations were too small for
rehabilitation tax credits under federal law.
Flemington also addressed other alternatives suggested by the HPO.
Regarding the HPO's inquiry about selling the property to a third party with
restrictions or conditions to preserve the exterior of the bank building,
Flemington noted that its proposed sale to Flemington Center included such
restrictions. In response to the HPO's inquiry about Flemington increasing the
size of the redevelopment area to enable the project objectives while adaptively
reusing existing buildings, Flemington indicated that expanding the
2 This alternative was referred to as "Alternative V" in subsequent communications. A-2658-17T2 13 redevelopment area "[was] not a viable strategy to meet the project objectives
primarily because of ownership and use constraints." According to Flemington,
the other surrounding properties were single-family homes not available for
redevelopment. Finally, Flemington responded to the HPO's inquiry about
selling the Bank with a preservation easement to keep development in scale with
the District, by explaining that it would not be economically viable. However,
Flemington stated it would be willing to grant a façade easement on the Bank as
a condition of approval.
After considering Flemington's supplemental application, in July 2017,
the HPO informed Flemington that its application for approval was deemed
technically and professionally complete, and that the HPO would add the
application to the agenda for the August 16, 2017 meeting of the Historic Sites
Council (HSC).3 Just prior to that meeting, on August 14, 2017, Friends
submitted a letter opposing the application. That letter was one of several that
Friends sent to the HPO objecting to the proposal and requesting that the HPO
3 The HSC is an advisory body consisting of eleven members appointed by the Governor with the advice and consent of the Senate. N.J.S.A. 13:1B-15.108. It has the power to "consult with and advise the [DEP] commissioner and the director" with respect to historic sites, N.J.S.A. 13:1B-15.110, and provides written recommendations to the Commissioner regarding applications to approve public encroachments upon registered property, N.J.A.C. 7:4-7.2(e). A-2658-17T2 14 extend its jurisdiction beyond the sale of the Bank to the greater redevelopment
project.
HSC Consideration of Application
At the HSC meeting, an HPO staff member summarized the application
and recommended denial. Following the HPO's presentation, Flemington's
mayor testified about the Borough's economic difficulties since 2008 and argued
that the proposal would "reverse the decline," as several other attempts to
redevelop the area failed for financial reasons. An architect retained by
Flemington Center testified and provided details about the project. Cust and
other representatives of Flemington Center also testified in support of the
application, as did representatives from the Hunterdon Medical Center, the
Hunterdon County Board of Chosen Freeholders, and the Hunterdon County
Chamber of Commerce.
During the public comment portion of the meeting, several local residents
and business owners spoke in favor of the proposal. In addition to several
representatives of Friends, other individuals also testified against the project,
including a licensed professional planner, representatives from a historic
preservation consultant, and other interested members of the public.
A-2658-17T2 15 Following deliberations, the HSC recommended temporarily denying the
application and requesting additional information from Flemington.
The DEP's Response to the HSC
On September 5, 2017, the DEP followed the HSC's recommendations,
temporarily denied Flemington's application, and requested supplemental
information. The additional information included a condition assessment of the
interior and exterior of the Bank by an architect and engineer to determine
whether the building could be rehabilitated in accordance with the federal
standards, an archaeological survey, and an "evaluation of the appropriateness
of scale of the proposed new development of [the Bank] in the context of the
surrounding Flemington Historic District." The DEP indicated that a final
determination would be made within sixty days after receipt of the requested
information.
The DEP's request prompted an ongoing exchange of requests for
clarification and responses between Flemington, the DEP, the HPO, and the
HSC. On October 30, 2017, Flemington asked for clarification regarding the
HPO's request for an evaluation of the appropriateness of the scale of the project
and, in its November 1, 2017 response, the HPO explained that it only required
A-2658-17T2 16 a description of the scale of the development relating to the Bank itself and the
adjacent lots.
On November 3, 2017, Flemington provided the requested structural
analysis report prepared by a licensed engineer, a conditions assessment
prepared by an architect, the Phase I archaeological survey, a report prepared by
Flemington Center regarding the size, scale, and density of the project, and a
report about the appropriateness of the scale of the proposed development.
On November 16, 2017, the HPO requested that the HSC appoint a
subcommittee to review the additional documents and provide a
recommendation. On November 25, 2017, Friends submitted a letter to the HPO
challenging Flemington's November 3, 2017 submission as inadequate.
The subcommittee found that the condition assessment and structural
analysis did not adequately compare the proposed redevelopment to one under
the federal standards. It made no comment, however, about the archeological
report and, regarding the evaluation of the "appropriateness of scale," the
subcommittee believed that the evaluation lacked information as to the necessity
of the project's seven-story size. The subcommittee did not make any
recommendation to the DEP regarding the outcome of the application.
A-2658-17T2 17 In order to address the subcommittee's new concerns, HPO staff met with
Flemington's representatives to discuss the submission of additional
information. Flemington then provided the HPO with its December 12, 2017
amended redevelopment agreement with Flemington Center, which incorporated
the preservation of the Bank and Union Hotel façades as part of the concept
plan. It also supplied additional information about the conditions assessment
and structural analysis, explaining that rehabilitating the Bank in accordance
with the federal standards (Alternative V) would result in forty-six fewer
residential units. For the project to be viable under Alternative V, the developer
would then need to replace the Union Hotel. Regarding the appropriateness of
scale, Flemington explained that the height of the Bank increases from three to
seven stories as it moves away from Main Street to minimize the visual impact
of the taller portions, and that the redeveloper would use design features to
visually "break up" the building mass.
The increased scale was necessary, according to the redeveloper, to render
the project viable in light of substantial costs for items such as improvi ng
Flemington's sewer system and providing public parking. According to the
supplemental submission, Flemington Center "agreed to absorb these additional
costs in exchange for more density, scale and height."
A-2658-17T2 18 As to the suggestion that required limiting the height of buildings to four
stories, the redevelopment would then include eighty-one fewer dwelling units,
fifty-one fewer hotel rooms, and would prevent Flemington Center from
obtaining a liquor license for the hotel. 4 According to its financial analysis, this
alternative (Alternative VI) would result in a smaller tax revenue increase, and
preclude the ability to raise capital or secure financing, because it would yield a
return on investment (ROI) of 3.60%, whereas Alternative IV had an ROI of
8.61%. Flemington Center estimated that, under Alternative VI, the total project
costs would be greater than the overall value upon completion, meaning the
proposal was not viable.
Final Decision
On January 2, 2018, the DEP issued its final decision approving the sale
subject to several conditions after finding, in light of the supplemental materials,
that the application satisfied the governing criteria for sale approval. In reaching
its decision, the DEP considered the public benefit of the project, the existence
4 According to the December 2017 redevelopment agreement, the redeveloper "may secure a liquor license in connection with the construction of the hotel with at least one hundred (100) rooms." The agreement notes that the redeveloper has already obtained another liquor license within Flemington and requires that license to be used for the hotel if the redeveloper cannot obtain another liquor license. A-2658-17T2 19 of feasible and prudent alternatives, and measures to mitigate the impact of the
development on the property. The public benefit of the proposal included the
attraction of new residents and businesses to the community, substantial
infrastructure improvements that Flemington Center agreed to make, and the
increased tax revenues. It concluded that of the alternatives presented,
Flemington's proposal was "the more prudent and feasible alternative."
Accordingly, it authorized the sale, but imposed twenty-one detailed "mitigating
conditions."5
After the DEP issued its decision, Friends wrote to the DEP asking it to
reconsider and reverse the decision. The DEP declined to reconsider, and
Friends filed this appeal. Afterward, Flemington accepted all the DEP's
conditions to its approval of the sale.
5 One condition required Flemington Center to "retain all of the [façade] of the [Bank] and the front and side [façades] of the Union Hotel." Another condition required it to stabilize and brace the front and side façades of the Bank and Union Hotel, and to rehabilitate them in accordance with the federal standards. The DEP also required existing windows to be repaired, not replaced. If replacements were necessary due to irremediable deterioration, Flemington Center was to replace windows with windows of the same appearance, size, design, proportions, and profiles, all with the HPO's approval. The HPO also imposed twelve conditions regarding archaeological tests and surveys, three conditions regarding architectural documentation, conditions regarding streetscape improvements and interpretive signage, and a condition requiring a contribution from the developer to the Preservation Grant Fund. A-2658-17T2 20 II.
A.
We begin our review of the DEP's final administrative agency decision by
acknowledging that it is limited. In re Herrmann, 192 N.J. 19, 27 (2007). "We
will not reverse an agency's decision unless it is arbitrary, capricious, or
unreasonable, or lacks fair support in the record." In re Project Authorization
Under N.J. Register of Historic Places Act, 408 N.J. Super. 540, 558 (App. Div.
2009). In our review, we "determine whether the agency decision violates
legislative policies, lacks the support of substantial evidence in the record, and
unreasonably applies legislative policies to the relevant facts." Id. at 559. If the
agency's decision is not otherwise arbitrary, capricious, or unreasonable, or
lacks fair support in the record, "we owe substantial deference to its expertise
and superior knowledge in a particular field, and to its interpretation of its own
regulations." Ibid.
B.
Applying our deferential standard, we turn first to Friends' contention that
the DEP should have denied Flemington's application because of procedural
defects. First, Friends argues that Flemington's initial response to the temporary
denial was "incomplete" under the applicable regulations, and that any
A-2658-17T2 21 subsequent submissions were untimely and should have been rejected. Second,
it claims that the DEP's approval failed to set forth reasons for deviating from
what Friends claims were the HSC subcommittee's recommendations. We find
these contentions to be without merit.
According to Friends, Flemington's response to the HSC failed to comply
with N.J.A.C. 7:4-7.2(e)(9)(iii), a regulation promulgated by the DEP under the
HPA. The regulation states if the DEP issues a temporary denial due to a "need
for additional information, exploration of additional alternatives for avoidance
or mitigation of the encroachment, damage, destruction or other adverse
effects," the DEP "shall deny the application" if "the applicant[t] [fails to]
respond . . . within [sixty] days from the date of issuance of a temporary denial."
N.J.A.C. 7:4-7.2(e)(9)(iii). Friends argues that the regulatory language includes
an "[i]mplicit" requirement "that if an incomplete response is made, the denial
shall stand." In its view, Flemington's November 3, 2017 submission was
"incomplete" because it did not contain an adequate condition assessment or a
sufficient justification for the scale of the project. Friends also argues that any
information submitted after November 3, 2017, was "untimely." Friends finds
further support in the regulation's language that states: "[i]f the applicant
submits a complete response including all information requested by the [DEP],
A-2658-17T2 22 it shall be within the discretion of the [DEP] as to refer additional information
to the [HSC], and the [DEP] shall make a final determination within [sixty] days
after receipt of the response." N.J.A.C. 7:4-7.2(e)(9)(iii). We disagree.
Here, the DEP issued its temporary denial on September 5, 2017.
Flemington responded with supplemental information on November 3, 2017,
within the sixty-day period allotted by the regulations. After the HSC
subcommittee reviewed Flemington's submission, and following a meeting with
HPO staff, Flemington submitted additional information in December 2017.
Although that second submission was beyond sixty days of the temporary denial,
it was in response to a request for clarification and additional information. The
plain language of the regulation only compels denial when no response has been
made. Here, Flemington not only submitted a timely response, but it followed
up with additional information the DEP needed to reach its final determination.
Based on these facts, we have no cause to disturb the agency's decision.
C.
Next, Friends contends that the DEP failed to "provide[] an adequate
explanation" for not following the HSC subcommittee's recommendation to
deny the application after it considered Flemington's November 3, 2017
submission. For that reason, Friends argues we should not defer to the DEP's
A-2658-17T2 23 final decision because there is no basis for this court to have the requisite
"confidence that there has been a careful consideration of the facts in issue and
appropriate findings addressing the critical issues in dispute." Bailey v. Bd. of
Review, 339 N.J. Super. 29, 33 (App. Div. 2001). We conclude that this
contention is without merit as its premise is flawed.
Friends cites nothing from the record suggesting that the HSC
subcommittee ever recommended permanent denial of Flemington's application.
The subcommittee's two-page document stating its observations about
Flemington's November 3, 2017 submission does not contain a recommendation
to reject the application, although it did find certain deficiencies that Flemington
addressed in its December 2017 submission. Although it is unclear from the
record whether the subcommittee even reviewed the later submission, there is
nothing to indicate that the DEP based its approval on anything less than all of
the information submitted. Based on that review, the DEP presented detailed
reasons explaining why it believed its approval was appropriate. Moreover, and
contrary to Friends' additional argument, there was no reason for the DEP to
provide an explanation for allowing untimely submissions by Flemington
because, as already noted, there were none.
D.
A-2658-17T2 24 We turn our attention to Friends' argument that the DEP's decision was
arbitrary, unreasonable, and capricious, not supported by the record, and
contrary to the HPA. According to Friends, the DEP based its decision upon
inadequate information it received from Flemington in response to numerous
requests for additional information during the process. Also, Friends believes it
would have been better for the community had the DEP required Flemington to
pursue one of the other alternatives it considered or required more from
Flemington as a condition to the DEP's approval. It also claims that the DEP's
approval conflicts with the purposes of the HPA because several preservation
groups opposed the application and it is contrary to the HPA "to approve a
project where reasonable and feasible alternatives exist but remain unexplored ."
We reject Friends' contention that Flemington acted arbitrarily or
capriciously as we conclude the DEP properly exercised its authority by
honestly considering the evidence before it and choosing a reasonable
alternative relating to the protection of historical sites, as contemplated by the
HPA.
"[A] determination predicated on unsupported findings is the essence of
arbitrary and capricious action." In re Certificate of Need of the Visiting Nurse
Ass'n of Sussex Cty., 302 N.J. Super. 85, 95 (App. Div. 1997) (quoting In re
A-2658-17T2 25 Application of Boardwalk Regency Corp. for Casino License, 180 N.J. Super.
324, 334 (App. Div. 1981), modified, 90 N.J. 361 (1982)). The judicial inquiry
into whether an administrative agency action was arbitrary or capricious
is restricted to three inquiries: (1) whether the agency's action violates the enabling act's express or implied legislative policies; (2) whether there is substantial evidence in the record 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 by reaching a conclusion that could not reasonably have been made upon a showing of the relevant factors.
[In re Petitions for Rulemaking, N.J.A.C. 10:82-1.2 & 10:85-4.1, 117 N.J. 311, 325 (1989).]
As long as an agency's action is not arbitrary and capricious, and is
statutorily authorized, we may not substitute our judgment for the agency's, In
re Adopted Amendments to N.J.A.C. 7:7A-2.4, 365 N.J. Super. 255, 264 (App.
Div. 2003), even if we would have chosen a different course of action, Clowes
v. Terminix Int'l, Inc., 109 N.J. 575, 587 (1988); Sussex Cty., 302 N.J. Super. at
95.
Moreover, "[a] strong presumption of reasonableness" must be accorded
to an agency's statutorily authorized actions, which presumption is "even
stronger [when] the agency has [then] delegated discretion to determine the
specialized and technical procedures for its tasks." City of Newark v. Nat. Res.
A-2658-17T2 26 Council, Dep't of Envtl. Prot., 82 N.J. 530, 539-40 (1980); Sussex Cty., 302 N.J.
Super. at 95. If there are two possible courses of action, "an administrative
decision will not be deemed arbitrary and capricious if exercised honestly and
the course ultimately chosen is a reasonable one." Sussex Cty., 302 N.J. Super.
at 95.
Applying these guiding principles, we find Friends' contentions about the
DEP's final decision being arbitrary, capricious, unreasonable, or unsupported
by the evidence to be without sufficient merit to warrant discussion in a written
opinion as the decision was supported by sufficient credible evidence in the
record. R. 2:11-3(e)(1)(D). Suffice it to say, as the Court has observed:
If a subject is debatable, the agency determination must be upheld. Quite obviously, if we were to decide the underlying merits, we would thereby perform the administrative function itself. Upon that approach the court would become the legislative body. The judiciary can interfere with such a determination only when it is plainly demonstrated to be arbitrary. The most that here is revealed is that men can earnestly disagree. This being so, the [agency] alone bears the responsibility for decision. It is not for the judiciary to agree or disagree.
[Animal Prot. League of N.J. v. N.J. Dep't of Envtl. Prot., 423 N.J. Super. 549, 559 (App. Div. 2011) (quoting United Hunters Ass'n of N.J., Inc. v. Adams, 36 N.J. 288, 292 (1962)).]
A-2658-17T2 27 For that reason, "[w]e will affirm an agency decision if we find that the evidence
and the inferences to be drawn therefrom support the decision, even if we would
have reached a different result," let alone an appellant. Id. at 560 (emphasis
added).
Further, we need not consider Friends' contention, that the DEP's decision
was inconsistent with the purposes of the HPA, as Friends has not offered any
factual or legal support for that contention. "Where an issue is based on mere
conclusory statements by the brief writer, we will not consider it." Nextel of
N.Y., Inc. v. Borough of Englewood Cliffs Bd. of Adjustment, 361 N.J. Super.
22, 45 (App. Div. 2003).
E.
Friends' final argument is that the DEP failed to satisfy its obligation to
exercise its jurisdiction over the entire redevelopment of Flemington, not just
the Bank and public parking lots, because Flemington's redevelopment
agreement with Flemington Center was an "undertaking" within the meaning of
the HPA. While Friends recognizes that an "undertaking" does not include a
development project on privately owned land, it argues, contrary to the DEP's
A-2658-17T2 28 interpretation of its own regulation,6 that the redevelopment agreement was "an
agreement or other form of permission allowing use of a registered property"
within the meaning of N.J.A.C. 7:4-1.3, and therefore the entire redevelopment
project required DEP approval. We find this contention to be unsupported by
the applicable law.
"In interpreting a regulation, [we] give deference to the views of the
administrative agency that implements the determinations." In re J.S., 431 N.J.
Super. 321, 329 (App. Div. 2013); see also Lasky v. Borough of Hightstown,
426 N.J. Super. 68, 73-74 (App. Div. 2012) ("'[A]n agency's interpretation of its
own regulations is entitled to substantial deference[,]' when it does not 'flout the
statutory language and undermine the intent of the Legislature.'" (second
alteration in original) (citations omitted) (first quoting I.L. v. Dep't of Human
Servs., 389 N.J. Super. 354, 364-65 (App. Div. 2006); and then quoting GE Solid
State, Inc. v. Dir., Div. of Taxation, 132 N.J. 298, 306-07 (1993))).
6 Although the DEP's final decision did not analyze this issue, the HSC's resolution following its meeting acknowledged the limited scope of the DEP's jurisdiction when it stated: "Of the [fourteen] properties included in the redevelopment agreement, the scope of this Council's review pertains only to those owned by . . . Flemington (the Bank Building and the parking lots . . .) and the direct or indirect effects of their sale on the larger . . . District." A-2658-17T2 29 Affording the DEP our substantial deference, we conclude that its
interpretation of its regulation is reasonable and consistent with the enabling
statute. N.J.A.C. 7:4-1.3 distinguishes between actions taken by a municipality
with respect to its own property or property it is in the process of acquiring,
which may constitute an undertaking, and administrative functions involv ing
government supervision over the use of private property, which do not qualify
as undertakings. That distinction is consistent with the HPA, which expressly
limits its applicability to projects undertaken by a public entity, without
referring to projects undertaken by a private entity relating to privately owned
property. N.J.S.A. 13:1B-15.131.
N.J.A.C. 7:4-1.3 illustrates the "actions" that constitute public
undertakings by including the following: "acquisitions, sales, leases, transfers
of deed, easements, an agreement or other form of permission allowing use of a
registered property, cyclic maintenance, and alterations or relocation of a
registered property." All of these actions involve public ownership of the
registered property at issue. There is no support in this regulatory language for
Friends' contention that the regulation's reference to an "agreement or other form
of permission" is not limited to public ownership or interest in the subject
property.
A-2658-17T2 30 The regulation expressly identifies those municipal actions that are not
considered undertakings to include "(1) [c]hanges in local zoning ordinances;
(2) [i]ssuance of building or demolition permits to private individuals or
corporations; (3) [g]ranting of zoning variances to private individuals or
corporations; and (4) [h]ousekeeping and routine maintenance." N.J.A.C. 7:4-
1.3; see also Hoboken Env't Comm., Inc. v. German Seaman's Mission of N.Y.,
161 N.J. Super. 256, 270-71 (Ch. Div. 1978) (deferring to the DEP's
interpretation of "undertake any project" to require "active participation" by a
municipality and to exclude any administrative functions such as the issuance
of a demolition permit).
Here, then, there is no reason for the DEP to assume jurisdiction over the
entire redevelopment project. As between Flemington and Flemington Center,
the agreement only addresses the sale of public property that is contingent upon
Flemington Center acquiring title to other privately owned property and then
pursuing any necessary municipal approvals under the Municipal Land Use Law
(MLUL), N.J.S.A. 40:55D-1 to -163,7 which involves municipal actions that are
not considered "undertakings."
7 The MLUL requires municipalities to refer all applications for permits relating to historic sites to the local historic preservation commission. N.J.S.A. 4 0:55D-
A-2658-17T2 31 Contrary to Friends' perception, the agreement did not create a partnership
between Flemington and Flemington Center that involved the municipality
acquiring or developing any property, public or private. Similarly, we reject
Friends' contention that under the LRHL, the redevelopment agreement here
required Flemington to be "responsible for implementing redevelopment plans
and carrying out redevelopment projects." N.J.S.A. 40A:12A-4(c). Under the
LRHL, Flemington would only be responsible for carrying out the project if it
engaged in "any work or undertaking pursuant to a redevelopment plan," which
may include:
[A]ny buildings, land, including demolition, clearance or removal of buildings from land, equipment, facilities, or other real or personal properties which are necessary, convenient, or desirable appurtenances, such as but not limited to streets, sewers, utilities, parks, site preparation, landscaping, and administrative, community, health, recreational, educational, and welfare facilities.
[N.J.S.A. 40A:12A-3.]
111. Under Friends' interpretation, if the resolution of such a permit involves any cooperation or support between the municipality and an applicant, DEP approval under the HPA would be required. However, neither the HPA, the MLUL, nor the Local Redevelopment and Housing Law (LRHL), N.J.S.A. 40A:12A-1 to -73, declares that DEP has a role in such matters. If we were to accept Friends' interpretation, we would expand the DEP's authority beyond the scope of the statutes and implementing regulations. A-2658-17T2 32 While a municipality may delegate such tasks to a private developer, see
N.J.S.A. 40A:12A-8(f), it doing so does not establish an "undertaking" under
the HPA. The statutes do not cross-reference each other and nothing in the
language of either act calls for such an interpretation. As previously discussed,
the HPA is expressly limited to government "action" and the regulations
expressly exclude administrative, supervisory functions over land use from that
definition.8 To hold otherwise would require the DEP to review all
redevelopment agreements that affect, directly or indirectly, a registered
We also find no merit to Friends' contention that the DEP should have
assumed jurisdiction over the entire project under the Long Term Tax
Exemption Law (LTTEL), N.J.S.A. 40A:20-1 to -22. According to Friends,
when Flemington entered into a financial agreement with Flemington Center,9 it
8 Notably, the LRHL was enacted twenty-two years after the HPA but does not reference or amend the HPA provisions at issue here. L. 1970, c. 268, § 1 (HPA); L. 1992, c. 79, § 1 (LRHL). As originally enacted, the HPA could not have intended to include redevelopment agreements as defined by the LRHL as public undertakings, because the LRHL did not yet exist. 9 Friends raises the existence of this financial agreement, entered into after the agency's final decision, for the first time in its reply brief, as its merits brief merely states Flemington "intend[ed] to enter into a financial agreement" with Flemington Center. We will not, however, consider an issue not presented in a
A-2658-17T2 33 was required by the LTTEL to "retain all necessary authority and control for the
redevelopment of the redevelopment area," and that the private redevelopment
project had to be "deemed a delegation of the powers of the municipality to
undertake the project." N.J.S.A. 40A:20-4. Given that the DEP approved the
sale of the property in January 2018, and this financial agreement was approved
in October 2018, to the extent Friends relies on it, we are limited to the record
in front of us. "[A]ppellate review is confined to the record made [below], and
appellate courts will not consider evidence submitted on appeal that was not in
the record [below]." Scott v. Salerno, 297 N.J. Super. 437, 447 (App. Div. 1997)
(citations omitted); see also R. 2:5-4(a). Even so, we conclude Friends' reliance
upon this law is misguided.10 A municipality may supervise redevelopment
under the LRHL and the LTTEL, without engaging in an "undertaking" within
the meaning of the HPA.
party's merits brief and shall deem it to have been waived. See Gormley v. Wood-El, 218 N.J. 72, 95 n.8 (2014); Drinker Biddle & Reath LLP v. N.J. Dep't of Law & Pub. Safety, 421 N.J. Super. 489, 496 n.5 (App. Div. 2011) (claims not addressed in merits brief deemed abandoned, and could not properly be raised in a reply brief); see also Pressler and Verniero, Current N.J. Court Rules, cmt. 5 on R. 2:6-2 (2020). 10 Similarly to the LRHL, the LTTEL, L. 1991, c. 432, § 4, enacted twenty-one years after the HPA, does not reference or amend the HPA provisions at issue here.
A-2658-17T2 34 In this case, the only action taken directly by Flemington was the sale of
the Bank and the parking lots, registered properties it owned, to Flemington
Center. This action constituted an "undertaking" under the HPA. See In re
Project Authorization, 408 N.J. Super. at 546, 556-57 (holding that municipal
redevelopment authority, established for the "acquisition and disposition of
properties for [re]development purposes," was statutorily mandated to seek the
DEP's authorization prior to its acquisition and demolition of historic property).
The DEP had no jurisdiction under the HPA to review the remainder of the
redevelopment, which involved private development upon private property.
Affirmed.
A-2658-17T2 35