Riya Finnegan LLC v. S. Brunswick Tp.

962 A.2d 484, 197 N.J. 184, 2008 N.J. LEXIS 1802

• Court: Supreme Court of New Jersey
• Decided: December 22, 2008
• Status: Published

Opinions

Justice HOENS

delivered the opinion of the Court.

This appeal involves two inter-related zoning questions. First, we consider the standards against which courts may test the sufficiency of the reasons given by a municipality for rezoning a parcel from a previously-designated zone that is consistent with the existing Master Plan to a zone that is not. Second, we consider whether, and under what circumstances, the decision of a municipality to rezone a single parcel in a manner inconsistent with the Master Plan constitutes impermissible inverse spot zoning.

Because we conclude that the ordinance adopted by the municipality’s governing body, as explained in its supporting resolution setting forth that body’s reasons for changing the zoning applicable to this particular piece of land, was arbitrary and capricious, and because under the circumstances, the rezoning of this specific parcel constituted inverse spot zoning, we reverse the judgment of the Appellate Division and reinstate the judgment of the Law Division.

I.

Plaintiff Riya Finnegan LLC owns a sizeable parcel of undeveloped land in South Brunswick, where Route 27 borders both Franklin Township and North Brunswick. In 2001, following a two-year period during which South Brunswick studied land uses and traffic, the municipality adopted its Master Plan. In accordance with the Land Use Element of that Master Plan, plaintiffs parcel, and much of the other land along Route 27, was included in the C-l, or Neighborhood Commercial, Zone. At the time, most of the parcels included in the C-l Zone were already developed, and the Master Plan described this zone as being devoted to retad service businesses and professional offices, including multi-story mixed-use development. In accordance with the Municipal Land Use Ordinance, “[t]he intent of the C-l neighborhood eommer-cial/professional office/loeal services district is to permit the delivery of low-traffie-generating retail and professional services which directly benefit the residents of the surrounding neighborhood.” South Brunswick Township Code § 62-1146.

In 2003, plaintiff filed a site plan application, seeking to develop its parcel by constructing one professional and two retail buildings, one of which was to be a drugstore. The application fully complied with the requirements of the C-l Zone, but neighboring residents objected, contending that retail pharmacies were not a permitted use. After a preliminary consideration, both the Planning Board and the Zoning Board rejected that challenge and concluded that a drugstore was a permitted use in the C-l Zone.

In a continued effort to stop plaintiff from proceeding, the neighboring residents appeared before the Township Council and asked that plaintiffs parcel be rezoned. They pointed out that the surrounding area along Route 27 that was included in the C-l Zone was already largely developed. They argued that if plaintiff were also permitted to develop its land as allowed by the C-l Zone, there would be additional traffic, noise, odor, dust, and pollution. Instead of permitting plaintiff to do so, they wanted its land to be rezoned to Office Professional (OP).

The OP Zone, like the C-l Zone, was a previously-existing zone, included in the 2001 Master Plan. According to the Municipal Land Use Ordinance, “[t]he intent of the OP office park district is to permit planned office zoning for portions of the U.S. Route 1 corridor and to define new design standards for buffers, building orientation, and solid waste/reeycling containers in all office and commercial zones.” Id. § 62-1266. The matter was referred to the Planning Board for its input and, following a public hearing during which representatives of the neighboring property owners spoke in support of the measure, that body recommended that the Township Council rezone plaintiffs property.

On March 8, 2005, after hearing from the neighboring property owners and from plaintiffs representative, the Township Council adopted Ordinance 15-05, through which it rezoned plaintiffs parcel from the C-l Zone to the OP Zone. The accompanying resolution explaining its reasons recognized that the decision to rezone this parcel “would be inconsistent with the Master Plan,” but stated that “it will significantly protect the health, safety and welfare of the residents and motorists in the area.” More particularly, the governing body explained that it decided to rezone this property to “prevent an intensification of traffic congestion at the intersection,” and that “increased traffic from the site if it is developed as a commercial facility that is permitted by the C-l zone will significantly impact the flow of cars and trucks through the Brunswick Acres residential development and past the Brunswick Acres elementary school and park.” In addition, the Council pointed to existing parcels in the area that had already been developed in accordance with uses permitted in the C-l Zone, resulting in a large number of retail and similar commercial establishments.

Finally, the resolution reasoned that rezoning this property to the OP Zone would be appropriate because:

there is a minimal amount of nuisance from professional offices such as noise, lights and odors; offices are typically not open on weekends, when families in residential areas tend to use and enjoy their yards; offices often serve as a transition use between commercial and residential because of its intermediate intensity between a more intense use (in this case Route 27) and a less intense use (in this ease Brunswick Acres residential neighborhood); office use tends to generate less traffic than commercial since commercial can be open 24 hours a day while offices are generally closed nights and weekends.

Plaintiff filed its complaint in lieu of prerogative writs, asserting that Ordinance 15-05 was inconsistent with the Master Plan, was arbitrary and capricious, and constituted impermissible inverse spot zoning. Following a hearing during which professional planners testified on behalf of plaintiff and the Township, the Law Division judge issued a published decision granting plaintiff the relief requested. See Riya Finnegan, LLC v. Twp. Council of S. Brunswick (Riya I), 386 N.J.Super. 255, 900 A.2d 325 (Law Div.2006).

In summary, the trial court concluded that although the Township had complied with the technical requirements of the applicable provision of the Municipal Land Use Law (MLUL), N.J.S.A 40:55D-62(a), see Riya I, supra, 386 N.J.Super. at 265, 900 A.2d 325, because the governing body had based its decision solely on the assertions of the neighboring property owners, and because those complaints were not supported in the record, its decision was arbitrary and capricious. Id. at 267-68, 900 A.2d 325. In the alternative, the trial court concluded that because the Township had rezoned only plaintiffs parcel, and because there was no evidence in the record that the zoning change would further the comprehensive zoning plan in the Township, the change constituted impermissible inverse spot zoning. Id. at 268-71, 900 A.2d 325. The trial court therefore declared Ordinance 15-05 invalid and remanded the matter to the Planning Board for its consideration of plaintiffs site plan application. Id. at 271, 900 A.2d 325.

Defendant appealed and the Appellate Division, in a published opinion, reversed the judgment of the trial court and reinstated Ordinance 15-05. Riya Finnegan, LLC v. Twp. Council of S. Brunswick (Riya II), 394 N.J.Super. 303, 926 A.2d 402 (App.Div.2007). The Appellate Division applied a different standard of review, reasoning that because the Township Council was acting in a legislative rather than quasi-judicial capacity, its reliance on the objections of the neighboring residents alone was permitted. In addition, the appellate panel concluded that the Ordinance adequately complied with the MLUL, see N.J.S.A. 40:55D-62(a), by setting forth the reasons for the governing body’s decision to rezone the parcel in a manner that was inconsistent with the Master Plan. Id. at 313, 926 A.2d 402. Moreover, the Appellate Division also rejected the trial court’s conclusion that Ordinance 15-05 constituted inverse spot zoning, distinguishing as inapposite the authorities on which the trial court had relied, id. at 317, 926 A.2d 402, and finding that because the parcel was larger than the other parcels in the C-l Zone, the reasons given in the resolution justified singling it out for rezoning. Id. at 318-19, 926 A.2d 402.

We granted plaintiffs petition for certification, 192 N.J. 599, 934 A.2d 641 (2007), and granted leave to the New Jersey Planning Officials to appear as amicus curiae.

II.

In light of the fact that there are already two published opinions addressing the issues raised in this matter, our discussion need not be extended. Indeed, we are largely in accord with the reasoning expressed by the trial court. Nevertheless, we cannot adopt that opinion entirely, in light of the significant matters addressed in the appellate panel’s analysis. Instead, we now reverse the judgment of the Appellate Division and we reinstate the judgment of the trial court, with its invalidation of Ordinance 15-05 and its remand to the Planning Board for consideration of plaintiffs site plan application, and we add only the following observations.

A.

The MLUL grants the governing body of each municipality the power to “adopt or amend a zoning ordinance.” N.J.S.A. 40:55D-62(a). We have recognized that the role of courts in evaluating such enactments is “circumscribed” so as to “effectuate! ] that broad ... power.” Pheasant Bridge Corp. v. Twp. of Warren, 169 N.J. 282, 289, 777 A.2d 334 (2001). Nevertheless, the power to zone cannot be wielded arbitrarily. The MLUL itself provides that a zoning ordinance

shall be adopted after the planning board has adopted the land use plan element and the housing plan element of a master plan, and all of the provisions of such zoning ordinance or any amendment or revision thereto shall either be substantially consistent with the land use plan element and the housing plan element of the master plan or designed to effectuate such plan elements.

[N.J.S.A. 40:5ED-62(a).]

Although the Master Plan itself has no independent force, the requirement that the zoning ordinance be “substantially consistent” with it connotes a recognition by our Legislature of the importance of comprehensive planning. As we have commented, that language “permits some inconsistency, provided it does not substantially or materially undermine or distort the basic provisions and objectives of the Master Plan.” Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 384, 658 A.2d 1230 (1995). At the same time, the MLUL permits the governing body to adopt a zoning ordinance or an amendment to the zoning ordinance that is inconsistent with the Master Plan, but “only by affirmative vote of a majority of the full authorized membership of the governing body, with the reasons of the governing body for so acting set forth in a resolution and recorded in its minutes.” N.J.S.A. 40:55D-62(a). Taken together, the statutory directive that the zoning ordinance be “substantially consistent” with the Master Plan and the separate directive that the governing body explain its reasons for adopting an inconsistent ordinance preclude the governing body from making its decision arbitrarily.

There is no doubt in this record that the municipality complied with the technical requirements of the MLUL by referring the matter to the planning board for its review and by including in the resolution that accompanied Ordinance 15-05 a series of reasons that the governing body found sufficient to explain its decision to rezone this parcel. In the view of the appellate panel, courts should look no further, deferring to that legislative body’s authority to act on a request, like this one, from some of its citizens. See Riya II, supra, 394 N.J.Super. at 313, 926 A.2d 402. Adopting that approach, however, would require us to step aside even if a municipality responds to what may be baseless demands of some of its citizens and, potentially, to abandon our role in protecting the rights of the few when the voices of the many speak more loudly. See Lewis v. Harris, 188 N.J. 415, 441, 908 A.2d 196 (2006).

It is entirely appropriate for a governing body to hear testimony from its citizens and to respond. Indeed, it may be that the testimony offered by those citizens, without expert analysis, will be sufficient. But that testimony must be grounded in facts and must be analyzed in light of a comprehensive plan, such as is expressed in the Master Plan. Complying with the formalities of the statute alone will not shield a decision that lacks such a basis. At a minimum, the statutory language of the MLUL makes clear that the owner of rezoned property has the right to challenge the adequacy of the reasons expressed by the governing body for zoning it in a manner inconsistent with the Master Plan.

That being the case, we note that the reasons expressed by the governing body for its decision to rezone this parcel fall short. The Township’s reference to traffic concerns is illustrative. Although we do not share the trial court’s view that the Township’s failure to consult its professional planner or to take testimony from experts about traffic concerns made the ordinance inadequate on its face, see Riya I, supra, 386 N.J.Super. at 265-67, 900 A.2d 325, the failure to point to any support for the concerns expressed by the neighboring residents makes it inadequate.

First, one can always argue that development brings more traffic and that a commercial establishment brings more congestion and more intensive use of the nearby local roadways. That, however, was true when the parcel was first included in the C-l Zone as designated in the Master Plan. More to the point, if concerns expressed by the neighboring residents about traffic congestion will suffice to support a rezoning ordinance, it may become impossible for any undeveloped parcel to be utilized, thus fueling faster and more intensive development as each property owner hurries to avoid being the owner of the last piece of undeveloped land.

Second, the concerns expressed about traffic that might be generated from the proposed development were generic complaints. Even the assertions that appeared to be based on a comparison of the proposed development, which fully complied with the requirements for the C-l Zone, to a hypothetical development in accordance with the OP Zone, were flawed. That is, although the neighbors argued that an office building would generate traffic at hours that they found preferable to plaintiffs proposed twenty-four-hour drugstore, it is not necessarily true that rezoning the property to the OP Zone would address that concern. In fact, the OP Zone is not limited to office buildings, but would also include banks, health clubs, fitness centers and dance studios, nursing homes, extended stay facilities, assisted living and laboratory or research facilities, see South Brunswick Township Code § 62-1267, as permitted uses. There is no evidence in the record that those uses would not also generate traffic congestion in the volume or during the hours that were of concern to the residents.

The resolution, moreover, is enlightening for what it does not include as a part of its rationale. There is no explanation about why this parcel, zoned as C-l and located along a corridor dotted with other areas so zoned, suddenly became appropriate to be zoned OP. That zone was designed for an entirely different part of the municipality, the Route One corridor, and prior to this decision, existed only there. That zone was created to ensure that development along the Route One corridor proceeded on a particular path well-suited for that part of town, which is why the Master Plan defined the OP Zone solely in terms of the comprehensive plan for Route One.

At the same time, the Master Plan defined the C-l Zone in terms of Route 27, where plaintiffs parcel is located. In light of the role that each of these zones played in the comprehensive plan as expressed in the Master Plan, the failure of the municipality to explain why or how it became appropriate to apply to plaintiffs land a zone that by definition applies to a part of town with unique planning characteristics suggests that the choice was entirely arbitrary.

As we have previously held, “the fundamental question in all zoning cases ‘is whether the requirements of the ordinance are reasonable under the circumstances.’” Pheasant Bridge Corp., supra, 169 N.J. at 290, 777 A.2d 334 (quoting Vickers v. Twp. Comto. of Gloucester, 37 N.J. 232, 245, 181 A.2d 129 (1962), cert. denied, 371 U.S. 233, 83 S.Ct. 326, 9 L.Ed.2d 495 (1963)). Tested against this standard, we conclude, as did the trial court, that the decision of the municipality to rezone plaintiffs property was arbitrary, capricious and unreasonable.

B.

We are persuaded by plaintiffs alternate argument that the decision to rezone this property constituted inverse spot zoning as well. Generally, we have defined spot zoning to be “the use of the zoning power to benefit particular private interests rather than the collective interests of the community.” Taxpayers Ass’n of Weymouth Twp., Inc. v. Weymouth Twp., 80 N.J. 6, 18, 364 A.2d 1016 (1976), cert. denied, 430 U.S. 977, 97 S.Ct. 1672, 52 L.Ed.2d 373 (1977).

We afforded the concept, and the underlying principles that inform the court’s analysis of a spot zoning challenge, an expansive description when we stated:

The test is whether the zoning change in question is made with the purpose or effect of establishing or furthering a comprehensive zoning scheme calculated to achieve the statutory objectives or whether it is “designed merely to relieve the lot of the burden of the restriction of the general regulation by reason of conditions alleged to cause such regulation to bear with particular harshness upon it.” Cordon v. Board of Public Works of City of Paterson, 11 N.J. 363, 366, 94 A.2d 660 (1953). If it is in the latter category, the ordinance is invalid since it is not “ ‘in accordance with a comprehensive plan’ ” and in effeet is “ ‘a special exception or variance from the restrictive residential regulation, thereby circumventing the board of adjustment to which is committed by our Zoning Act ... the quasi-judicial duty of passing upon such matters, at least initially, in accordance with prescribed standards____’” Speakman v. Mayor and Council of Borough of North Plainfield, [8 N.J. 250, 257, 84 A.2d 715 (1951)]. Our inquiry therefore has been directed to ascertaining whether in view of the purposes of the zoning act the action of the borough in rezoning ... represents sound judgment based on the policy of the statute “to advance the common good and welfare” or whether it is arbitrary and unreasonable and furthers “purely private interests.” Schmidt v. Board of Adjustment of City of Newark, 9 N.J. 405, 422, 88 A.2d 607 (1952). [Borough of Cresskill v. Borough of Dumont, 15 N.J. 238, 249-50, 104 A.2d 441 (1954).]

As we have explained it, “[s]pot zoning is the antithesis of ... planned zoning____ [T]he test is whether the particular provision of the zoning ordinance is made with the purpose or effect of furthering a comprehensive scheme or whether it is designed merely to relieve a lot or lots from the burden of a general regulation.” Palisades Props., Inc. v. Brunetti, 44 N.J. 117, 134, 207 A.2d 522 (1965).

In our most extended discussion of these concepts, we addressed a property owner’s claim that changing the zoning designation that affected only his property was inverse spot zoning. See Petlin Assocs., Inc. v. Twp. of Dover, 64 N.J. 327, 316 A.2d 1 (1974). In Petlin, the trial court found that the municipality had merely capitulated to the demands of nearby residents by “hastily enact[ing]” a change in the zoning to preclude the proposed development of one parcel, while rejecting the advice of its professional planner about the effect of the zoning change on the overall plan. Id. at 330-31, 316 A.2d 1. Although changing a zoning ordinance in response to a site plan application is not presumptively prohibited, see Manalapan, supra, 140 N.J. at 378-79, 658 A.2d 1230, the zoning change in Petlin constituted inverse spot zoning because it would have applied a zoning designation to the particular parcel that was both out of character with the surrounding area and designed for a part of the town from which the affected parcel was significantly separated. See Petlin, supra, 64 N.J. at 331-32, 316 A.2d 1. We explained that As the United States Supreme Court has recognized, any “land-use decision which arbitrarily singles out a particular parcel for different, less favorable treatment than the neighboring ones” is reverse or inverse spot zoning. Penn Cent Transp. Co. v. N.Y. City, 438 U.S. 104, 132, 98 S.Ct. 2646, 2663, 57 L.Ed.2d 631, 633 (1978); see Manalapan Realty v. Twp. Comm. of Manalapan, 272 N.J.Super. 1, 13, 639 A.2d 318 (App.Div.1994), aff'd, 140 N.J. 366, 658 A.2d 1230 (1995). Although the MLUL does not define either spot zoning or inverse spot zoning, both concepts are imbedded in the principles of sound and comprehensive planning that pervade that statutory framework, and we see no basis on which to conclude that the post-Petlin adoption of N.J.S.A. 40:55D-62(a) suggests otherwise. See generally William M. Cox, Zoning and Land Use Administration § 34-8.2 (2008). The emphasis, of course, is on the arbitrary nature of the decision rather than simply upon whether a particular parcel has received beneficial or detrimental treatment.

[T]he zoning changes affecting the property in question were not in furtherance of sound comprehensive zoning____The record demonstrates that no real consideration was given to how the property would fit into an integrated and comprehensive zone plan, but rather that the various enactments were designed to affect only the use of plaintiffs property, i.e., inverse spot zoning.

[Id. at 331, 316 A.2d 1.]

Tested against these criteria, Ordinance 15-05 constitutes inverse spot zoning and therefore cannot be sustained. It is not simply that the zoning for plaintiffs parcel was changed, or that it will now be more difficult for the owner to develop it in accordance with the new zoning designation when its proposed site plan was completely in accord with the previously-designated zone. It is not only that the neighboring property owners were the impetus . for the change, or that the new zone was originally designed for an entirely different part of the town and for different planning purposes or that the new zone does not further a comprehensive plan. It is not merely that the planning board or the municipality’s governing body acted without hearing from expert planners or consultants that makes this ordinance defective. Rather, it is the combination of those facts that marks this decision as an example of inverse spot zoning and makes the choice of the governing body both arbitrary and capricious.

We do not intend to imply that it can never be appropriate to change the zoning designation of what is, in effect, the last undeveloped parcel in a town or in a discrete geographic area of a municipality. To be sure, the zoning designation of undeveloped land can be changed either as part of a reexamination of a Master Plan or through the statutorily-authorized enactment of a zoning ordinance inconsistent with the Master Plan. In the case of a zoning change based on a Master Plan reexamination, the process itself will be founded on a broad focus and the creation of a comprehensive plan for overall development in the community. Altering the zoning designation of any particular parcel as a part of that process presumably will be based on a vision for the future and a plan that will balance the rights of the owners of all of the parcels, both developed and undeveloped.

Similarly, in the case of the enactment of an ordinance inconsistent with the Master Plan, see N.J.S.A. 40:55D-62(a), requiring the governing body to articulate its reasons for departing from the comprehensive plan envisioned in the Master Plan serves to prevent the municipality from acting in an arbitrary or capricious fashion.

There are sound reasons for requiring that zoning decisions be based on broad, comprehensive plans for growth and development throughout the community at large. Much of our zoning and land use jurisprudence is based upon constitutional concerns, balancing vested property rights, protected by the takings clause, against the larger concerns for the general good and welfare of the public as expressed through their elected and appointed officials. See, e.g., Penn Cent. Transp., supra, 438 U.S. at 123-30, 98 S.Ct. at 2659-62, 57 L.Ed.2d at 648-52. In that context, the broader view expressed through a comprehensive planning process ensures that zoning decisions do not violate property owners’ constitutional rights.

In those situations that we have come to refer to as spot zoning and inverse or reverse spot zoning, we see these competing concerns clearly. In the case of spot zoning, the owner of a particular parcel seeks to reap the benefit of a zoning decision, by special ordinance or by variance, which treats his or her property more favorably than the comprehensive plan would allow, to the detriment of the larger community or the immediate neighbors. In inverse spot zoning, it is the neighboring community that seeks to reap a benefit by imposing its particular view, contrary to the previously generated comprehensive plan, upon the specific parcel, to the detriment of the rights of that parcel’s owner.

This dispute well illustrates the intersection between the interests of the larger community and the vested interests of a particular property owner. The former, ordinarily expressed through a comprehensive planning mechanism, would permit this property owner to develop its parcel in accordance with the site plan application that it submitted. The interests of the neighboring property owners, however, demanded that a different zone, presumably with a different eventual development of this parcel, would be more to their liking, regardless of the effect on this property owner and regardless of whether or not the new zone would coincide with a comprehensive plan. Although we respect the authority of the legislative body to respond to the citizens, unless we can be confident that its power has not been exercised for a purpose that arbitrarily imposes a burden on this property owner, we cannot permit it to stand.

III.

The judgment of the Appellate Division is reversed and the judgment of the Law Division is reinstated.