Township of Cinnaminson v. Cove House, LLC ( 2023 )

NOT FOR PUBLICATION WITHOUT THE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-0576-23
TOWNSHIP OF CINNAMINSON,
Plaintiff-Respondent,
v.
COVE HOUSE, LLC,
Defendant-Appellant,
and
SEASBREEZE DEVELOPMENT,
LLC,
Defendant-Respondent.
____________________________
Argued November 15, 2023 – Decided December 4, 2023
Before Judges Vernoia and Gummer.
On appeal from the Superior Court of New Jersey, Law
Division, Burlington County, Docket No. L-2096-22.
Richard P. DeAngelis, Jr. argued the cause for appellant
(Connell Foley LLP, attorneys; Richard P. DeAngelis,
Jr., on the briefs).
Justin Michael Strausser argued the cause for
respondent (The Platt Law Group, PC, attorneys; Stuart
A. Platt and Justin Michael Strausser, on the briefs).
PER CURIAM
Defendant Cove House, LLC appeals from a September 14, 2023 order
granting plaintiff Township of Cinnaminson the right to condemn and take
exclusive possession of and title to property owned by defendant and a
subsequent order denying defendant's reconsideration motion. In a resolution
issued in 2013, Cinnaminson's Township Committee had declared the property
blighted and part of an area in need of redevelopment pursuant to the Local
Redevelopment and Housing Law (LRHL), N.J.S.A. 40A:12A-1 to -49.
Because that designation was not supported by substantial credible evidence in
the record, we reverse the orders and remand.
I.
On January 7, 2013, the Township Committee adopted Resolution 2013-
33, authorizing and directing the Township Planning Board to conduct a
preliminary investigation into whether certain properties located along Route
130 in the Township could be designated as an "area in need of redevelopment
or rehabilitation" pursuant to the criteria set forth in the LRHL, N.J.S.A.
40A:12A-5. Those properties included two parcels currently owned by
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defendant: Block 1403, Lots 25 and 26, located at 305 and 307 Burlington Pike
(the property). Professional planner Barbara Fegley obtained information "from
a variety of Township [o]fficials, site visits, and [Geographic Information
Science] and tax record[s]" and prepared a report to "assist the Planning Board
in making a recommendation to the governing body of the Township."
In her April 4, 2013 report, Fegley described the property as follows:
Block 1403 Lots 25 and 26 have common owners.
Each lot has an old dwelling on it that has been used in
the past as offices. Both buildings have been vacant for
at least three years. Both buildings need to be
upgraded, inside and out, for future commercial use.
Both properties are also in need of site improvements.
Due to an apparent reluctance of the property owner to
make needed site improvements, the buildings remain
vacant. A sampling of tenant inquiries the Zoning
Official has received over the last three years has been
from Tarot Card Readers, Psychics, and massage
therapists. The property owner occasionally is
reminded that the property yards need to be cut or
maintained. Both properties are served by individual
septic systems or cesspools. Sanitary sewer is not
available on the highway, and the only way to access it
would be via an easement from and through a
residential property in the rear. Both properties have a
small garage/shed on them but due to their age and
condition, they have minimal value.
Fegley also stated the property had "[n]o fire violations" and that the
buildings on the property, which had been constructed sometime in the 1920s as
residences, had been used as offices in the past. During a site visit, Fegley
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observed no commercial activity on the property and concluded the property did
not appear to be "open for business." According to Fegley, the property was
located in a "BD-Business Development District" and the lots were "undersized"
for that zoning district. Fegley acknowledged the property was "listed as used
for commercial purposes" but found it had "the appearance of residential uses."
Fegley described the respective lots as having "Improvement to Land Ratio[s]"
of less than 1:1, "suggest[ing] that the land is not currently supporting
reasonable value of improvements or that the property would have a higher
market value if the improvements were removed, which could be evidence of
stagnation." Fegley also noted the property had tax liens in the past and "taxes
were delinquent for most quarters from 2007 to [2013]."
Analyzing the criteria required for a determination an area is in need of
redevelopment, Fegley found the property met the criteria set forth in
subsections (d), (e), and (h) of N.J.S.A. 40A:12A-5. Subsection (d) authorizes
a municipal governing body to designate the following as being "in need of
redevelopment":
Areas with buildings or improvements which, by reason
of dilapidation, obsolescence, overcrowding, faulty
arrangement or design, lack of ventilation, light and
sanitary facilities, excessive land coverage, deleterious
land use or obsolete layout, or any combination of these
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or other factors, are detrimental to the safety, health,
morals, or welfare of the community.
Fegley found the property was "stagnant and underutilized" and met the
criteria of subsection (d) because:
[T]he . . . buildings were originally constructed as
single family residences in the 1920s. These former
residences are now situated along the heavily traveled
Route 130 Corridor in a Business Development
District. The land use is deleterious and obsolete and
the design is faulty. Excessive drive entrances along
Route 130 with inadequate driveways for business use
are detrimental to the safety, health and welfare of the
community. Access to Route 130 is inadequate and/or
hazardous. The Zoning Official reported that at least
two of the structures need major improvements for
business use which confirms the building[s']
obsolescence. The fact that Lots 25 and 26 are on old
septic or cesspool fields adds to the Determination of
Need for Redevelopment.
Fegley attached to her report ten photographs of the property.
After conducting a public hearing on April 23, 2013, the Planning Board
adopted Resolution 2013-19 on May 14, 2013, recommending to the Township
Committee that the property was in an area in need of redevelopment. 1 Having
reviewed the Planning Board's resolution, Fegley's report, and "recent case law
1
The record contains neither a transcript of the April 23, 2013 hearing nor a
copy of Resolution 2013-19. We take our description of that resolution from a
subsequent Planning Board resolution.
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issued by the . . . Appellate Division, regarding the utilization of eminent domain
as a tool for redevelopment purposes,"2 the Township Committee adopted
Resolution 2013-105 on June 17, 2013, remanding the matter to the Planning
Board for "further investigation" as to whether the designated area "satisf[ied]
the constitutional meaning of the term 'blight'" and "to develop a record
regarding same . . . ."
The Planning Board directed Fegley to supplement her April 4, 2013
report "to specifically address the standard of 'blight.'" Fegley issued a revised
report on or about July 2, 2013, and testified during a public hearing conducted
by the Planning Board on July 23, 2013. The record does not contain a copy of
Fegley's revised report or a transcript of the July 23, 2013 hearing. 3 On August
13, 2013, the Planning Board issued Resolution 2013-29, in which it described
Fegley's testimony about the property as "Lots 25 & 26 are in very poor
2
The Township Committee was referencing 62-64 Main Street, LLC v. Mayor
and Counsel of the City of Hackensack, No. A-003257-11 (App. Div. May 3,
2013), rev'd, 221 N.J. 129 (2015).
3
After we heard argument, the Township moved to supplement the record with
a series of emails sent in August and September of 2022 regarding defendant's
request for copies of any audio recordings or transcripts of the April 23, 2013
and July 23, 2013 Planning Board hearings, among other things. We granted
the motion. Based on those emails, recordings of the hearings existed. Neither
the Township nor defendant, however, provided copies of the recordings or any
transcripts of them to the trial court or to this court.
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condition, are on septic and have a deteriorated condition negatively impacting
the surrounding area." 4 The Planning Board found the property met the
definition of "blight" and referred the matter back to the Township Committee.
On August 19, 2013, the Township Committee adopted Resolution 2013-129,
accepting the recommendations of the Planning Board and designating the
property as meeting the definition of "blight" and as being part of an area in
need of redevelopment.
On November 7, 2022, the Township filed a verified complaint,
referencing Resolution 2013-129 and stating its intention to acquire a fee simple
interest in the property for the purpose of implementing a redevelopment plan
pursuant to the LRHL.5 On the Township's application, a judge issued an order
directing defendant to show cause why judgment should not be entered
4
The Planning Board also stated Fegley had testified that "[a]t a prior hearing,
residents indicated their desire to minimize the impact of these commercial lots
on their neighboring residential property, particularly as to buffering." What
the Planning Board meant by "these commercial lots" and whether that phrase
included the property is not clear from the record.
5
In addition to Cove House, LLC, the Township also named as a defendant
SeasBreeze Development, LLC (SeasBreeze), "for any interest it may have in
the property by virtue of an Agreement for the Purchase and Sale of Real
Property dated December 29, 2021." The trial judge indicated SeasBreeze had
filed a "brief answer" but did not otherwise oppose the Township's action.
SeasBreeze has not submitted any briefs in this appeal.
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determining the Township was "duly vested with and ha[d] exercised its
authority to acquire the property being condemned," appointing commissioners
to fix the compensation required to be paid for the property pursuant to N.J.S.A.
20:3-12, and giving the Township "the right to immediate possession of the
property" on its compliance with the provisions of N.J.S.A. 20:3 -19. In its
answer, defendant included separate defenses challenging the Township's
designation of the property as an area in need of redevelopment, contending the
designation was "both procedurally and substantively flawed" 6 and not
supported by substantial credible evidence in the record.
After hearing argument, the trial judge entered an order with an attached
statement of reasons on September 14, 2023, directing that the Township would
be vested "with the right to the immediate exclusive possession of and title to
the property" when it made a monetary deposit with the court and filed and
served a declaration of taking. Rejecting defendant's argument that Fegley's
report was a net opinion and finding the "'substantial evidence' standard [to be]
a relatively low evidentiary threshold," the judge held "Fegley's findings
6
The trial judge subsequently held the Township had failed to demonstrate it
"provided sufficient, contemporaneous notice regarding its declaration of blight
to the owners of [the property]" and, accordingly, allowed defendant to
challenge substantively in this action the blight designation.
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constitute[d] substantial evidence for [the Township's] designation of blight "
pursuant to the criteria set forth in subsection (d) of N.J.S.A. 40A:12A-5. The
judge found the record did not contain sufficient evidence to support a finding
of blight under the criteria of subsections (e) and (h) of N.J.S.A. 40A:12A-5.
Having found the Township had submitted substantial evidence to support a
finding of blight under the subsection (d) criteria, the judge held the Township
could proceed with its condemnation of the property.
Defendant moved to stay and for reconsideration of the order. In
opposition to the motions, the Township submitted documents concerning the
alleged current condition of the property. After temporarily enjoining the
Township from taking possession of the property, the trial judge heard
argument. During argument, the judge summarized the legal standard he had
applied:
So [the Township does not] need that much to connect
the dots. I mean the standard is if there’s evidence in
the record and there is evidence in the record, I’m not
supposed to second-guess the judgment of the
Township in that regard. There’s some evidence in the
record that an expert testified, who has expertise,
appropriate expertise in this area, and testified as to
obsolescence and that the obsolescence was
detrimental.
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The judge entered an order on October 23, 2023, denying defendant's motions
and dissolving the temporary restraints.
On appeal, defendant argues the trial judge erred in finding the record
contained substantial credible evidence to support the Township's
redevelopment designation under N.J.S.A. 40A:12A-5(d). We agree and,
accordingly, reverse the orders granting the Township's order to show cause and
denying defendant's reconsideration motion.
II.
Article VIII, Section 3, Paragraph 1 of our State's Constitution "authorizes
the taking of private property to 'redevelop[] . . . blighted areas' as a public
purpose." Malanga v. Twp. of W. Orange, 253 N.J. 291, 309 (2023) (quoting
N.J. Const. art. VIII, § 3, ¶ 1). "The power to redevelop property 'is a valuable
tool . . . municipalities' have to address 'decaying and disintegrating . . . areas'
in their communities which have become 'blighted.'" Ibid. (first quoting
Gallenthin Realty Dev., Inc. v. Borough of Paulsboro, 191 N.J. 344, 365 (2007);
and then quoting 62-64 Main St., LLC v. Mayor & Counsel of the City of
Hackensack, 221 N.J. 129, 134 (2015)). But "[t]hat important power is limited
by the Constitution and state law," ibid., and "is not unfettered," id. at 314
(quoting Levin v. Twp. Comm. of Bridgewater Twp., 57 N.J. 506, 537 (1971)).
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A municipality's "governing body must 'rigorously comply with the statutory
criteria' to determine whether property is in need of redevelopment." Ibid.(quoting 62-64 Main St., 221 N.J. at 156). A court defers to a municipality's
determination that an area is in need of redevelopment only if "[it is] supported
by substantial evidence on the record." Ibid. (alteration in the original) (quoting
Gallenthin, 191 N.J. at 372-73).
"The Legislature enacted the LRHL . . . to implement the Constitution's
clause and give meaning to the term 'blighted.'" Id. at 309. "The LRHL outlines
the process to determine whether an area is 'in need of redevelopment' -- a phrase
synonymous with 'blighted.'" Ibid. (citing N.J.S.A. 40A:12A-6); see also 62-64
Main St., 221 N.J. at 146 ("The [LRHL] substituted the term 'area in need of
redevelopment' for the pejorative term 'blighted area' . . . ."). "The record must
. . . contain sufficient credible evidence that the designation [of being an area in
need of redevelopment] satisfies the requirements of the LRHL." Malanga, 253
N.J. at 314. "'[M]ore than a bland recitation of applicable statutory criteria and
a declaration that [they have been] met' is required." Ibid. (alteration in the
original) (quoting Gallenthin, 191 N.J. at 373). "A blight determination based
on a net opinion or insubstantial evidence cannot stand." 62-64 Main St., 221
N.J. at 157; see also Bryant v. City of Atl. City, 309 N.J. Super. 596, 610 (App.
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Div. 1998) ("A determination predicated on unsupported findings is the essence
of arbitrary and capricious action").
Subsection (d) of N.J.S.A. 40A:12A-5 – the only statutory provision the
trial judge found supported the Township's redevelopment determination –
"requires two things: (1) sufficient proof that areas with buildings or
improvements suffer from one or more specified conditions; and (2) sufficient
proof that, as a result of the particular condition or conditions, the areas 'are
detrimental to the safety, health, morals, or welfare of the community.'"
Malanga, 253 N.J. at 311-12 (quoting N.J.S.A. 40A:12A-5(d)). Subsection (d)
"does not ask whether property could potentially be more useful or valuable; it
requires proof of a current problem, such as 'dilapidation,' 'obsolescence,' or
'overcrowding.'" Id. at 313. "[S]ubsection (d) does not presume harm; it
requires a showing of actual detriment." Ibid. "[P]roof that a property is not
used in an optimal manner or that it could function better is not an independent
basis for redevelopment under subsection (d)." Ibid. "[S]ubsection (d) requires
more than a showing that a building could function better . . . ." Id. at 319.
Malanga may have been about a library, but the legal standard articulated
by the Court applies equally here. And the trial judge misapplied that standard.
A standard that requires "substantial evidence" does not bespeak "a relatively
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low evidentiary threshold." The standard requires not just "some evidence in
the record" to support a need-of-redevelopment determination but substantial
evidence.
The Township's determination was not supported by substantial evidence
in the record demonstrating the property met the criteria set forth in subsection
(d) of N.J.S.A. 40A:12A-5. Fegley's April 4, 2013 report, the references to her
subsequent report, and the summary of her testimony – the only evidence in the
record – consist of the types of bald conclusions and "bland recitation[s]" of the
statutory criteria the Court has held insufficient to support a finding under
subsection (d). See Malanga, 253 N.J. at 314. Fegley proclaimed in her report
the property's "land use [was] deleterious and obsolete and the design [was]
faulty" and its driveways were "inadequate" and "detrimental" to the
community. But she did not identify what, if any, underlying characteristics of
the property had led her to reach those conclusions and did not give any detail
to support those blanket statements. She asserted the buildings needed to be
"upgraded" and that the property needed "site improvements," but she did not
specify what upgrades or improvements were needed. And those details are
critically important in making and reviewing a redevelopment determination.
"The fact that an older building needs repair work does not necessarily mean it
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is out of date or obsolete. . . . Changes in style or design standards, likewise, do
not necessarily establish obsolescence under the LRHL." Malanga, 253 N.J. at
317. With nothing more, the Township failed to meet the substantial-evidence
standard.
Reversed and remanded for proceedings consistent with this opinion. We
do not retain jurisdiction.
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