IN RE CLINTON TOWNSHIP COMPLIANCE WITH THIRD ROUND MOUNT LAUREL AFFORDABLE HOUSING OBLIGATION (L-0315-15, HUNTERDON COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-2633-18T1
IN RE CLINTON TOWNSHIP
COMPLIANCE WITH THIRD
ROUND MOUNT LAUREL
AFFORDABLE HOUSING
OBLIGATION.
______________________________
Argued January 7, 2020 – Decided January 30, 2020
Before Judges Yannotti, Hoffman and Currier.
On appeal from the Superior Court of New Jersey, Law
Division, Hunterdon County, Docket No. L-0315-15.
Jeffrey Leon Kantowitz argued the cause for appellant
Clinton 94, LLC (Law Office of Abe Rappaport,
attorneys; Jeffrey Leon Kantowitz, of counsel and on
the briefs).
Kevin D. Walsh argued the cause for respondent Fair
Share Housing Center (Kevin D. Walsh, on the brief).
Jonathan Edward Drill argued the cause for respondent
Township of Clinton (Stickel, Koenig, Sullivan & Drill,
LLC, attorneys; Jonathan Edward Drill, of counsel and
on the brief; Kathryn J. Razin, on the brief).
PER CURIAM
In this Mount Laurel 1 case, defendant-intervenor Clinton 94, LLC
(Clinton 94) appeals from the final judgment of compliance and repose entered
by the Law Division on January 9, 2019, in accordance with Mount Laurel IV,
221 N.J. at 30. The final judgment approved a settlement agreement entered
between plaintiff Clinton Township (the Township) and the Fair Share Housing
Center (FSHC). The agreement established the Township's Third-Round fair
share obligation for affordable housing and provided a plan for its compliance.
On appeal, Clinton 94 argues the trial court should have required the
proposed compliance plan to include over-zoning, that is, planning and zoning
for more units than needed to satisfy the Township's fare share obligations , in
order to provide a realistic opportunity of success. Clinton 94 further argues the
trial court failed to evaluate the feasibility of the sites provided in the
Township's fair share plan. We affirm.
I.
On July 2, 2015, the Township filed a verified complaint seeking a
declaratory judgment establishing that it satisfied its fair share of affordable
1
"The Mount Laurel series of cases recognized that the power to zone carries a
constitutional obligation to do so in a manner that creates a realistic opportunity
for producing a fair share of the regional present and prospective need for
housing low-and moderate-income families." In re N.J.A.C. 5:96 and 5:97, 221
N.J. 1, 3-4 (2015) (Mount Laurel IV).
A-2633-18T1
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housing for its Third-Round Mount Laurel obligation. Clinton 94, the developer
of a property not included in the Township's proposed plan as a potential site,
filed a motion to intervene, which the trial court granted. The court also
appointed Michael Bolan, PP, ACIP, as a Special Master in the case.
Following immunity and intervention proceedings, the parties engaged in
extensive negotiations. While the Township and Clinton 94 failed to resolve
their differences, the negotiation process proved successful between the
Township and FSHC,2 which entered into an initial settlement agreement in
December 2017, and then an amended settlement agreement (the Amended
Agreement) in February 2018. The Amended Agreement set forth the
Township's total affordable housing obligations and provided a compliance plan
in order to meet those obligations. The agreement recognizes the Township has
the following affordable housing obligations:
Rehabilitation Obligation 10
Prior Round Obligation (pursuant to 335
N.J.A.C. 5:93)
2
In Mount Laurel IV, the Supreme Court endorsed FSHC's interest in the Third
Round proceedings under review. The Court explained, "If a municipality seeks
to obtain an affirmative declaration of constitutional compliance, it will have to
do so on notice and opportunity to be heard to FSHC and interested parties ."
221 N.J. at 23. Trial courts "will be assisted in rendering [their] preliminary
determination[s] on need by the fact that all initial and succeeding applications
will be on notice to FSHC and other interested parties." Id. at 29.
A-2633-18T1
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Third Round (1995-2025) 337
Prospective Need, which includes the
Gap Period Present Need, recognized
by the Supreme Court In re
Declaratory Judgment Actions Filed
By Various Municipalities, 227 N.J.
508 (2017)
In order to satisfy the Township's Third-Round prospective need of 337
units, the Agreement identifies multiple compliance mechanisms. It included
four projects: the Marookin site, a 100-percent affordable site for 58 units and
58 bonus credits (116 in total); the LeCompte site, 3 a 100-percent affordable
housing site for 89 units; Headley Farms, an inclusionary development, for 104
units, based on a 26-percent set aside; and Alton Place, an inclusionary rental
development for 28 units, based on a 20-percent set aside. All the proposed
sites, except the Marookian site, were subject to durational adjustments pursuant
to N.J.A.C. 5:93-4.3, because the Township did not have adequate new water
and sewer capacity at the time. Thus, about 65 percent of the Township's
proposed third-round obligation was subject to a durational adjustment.
3
The initial agreement included the 89-unit Windy Acres site. The LeCompte
site replaced Windy Acres site in the Agreement and contains the same number
of units.
A-2633-18T1
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In sum, the four proposed Third-Round sites included two developments,
Marookian and LeCompte, that were 100-percent affordable and publicly
subsidized, as well as two inclusionary developments, Headley Farms and Alton
Place, that would include a mix of market-rate and affordable homes. Together,
the four sites anticipated 279 affordable homes, plus 58 rental bonuses, which
satisfied plaintiff's 337-unit third-round obligation. Nonetheless, three of the
four sites did not have access to adequate utilities at the time but were entitled
to a durational adjustment.
The Township agreed to make substantial efforts in order to obtain access
to the necessary public utilities. The Amended Agreement requested the trial
court continue its appointment of the Special Master for the purpose of assisting
the Township with compliance and advising the court regarding its efforts to
obtain approvals from state and local agencies. The Township also agreed to
adopt a housing element and fair share plan, a spending plan, and ordinances
providing for the amendment of its affordable housing ordinance and zoning
ordinance. In addition, the Township agreed to make a $30,000 donation to the
FSHC to use for the advancement of affordable housing.
Clinton 94 timely filed written objections to the Agreement, along with a
summary of testimony and exhibits from its principal, David Meiskin. Its
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written objections contended the Agreement's proposed compliance plan failed
to meet the constitutional standard of "realistic opportunity." See S. Burlington
County NAACP v. Mt. Laurel, 92 N.J. 158 (1983) (Mount Laurel I).
The Special Master issued a report dated February 5, 2018 recommending
the trial court approve the Amended Agreement's proposed compliance plan.
The trial court initially scheduled a fairness hearing for February 12, 2018. In
light of the Amended Agreement, the court rescheduled the fairness hearing for
March 19, 2018.
On March 2, 2018, Clinton 94 filed a supplemental written objection
letter. In a supplemental report dated March 12, 2018, the Special Master
continued to recommend the approval of the Amended Agreement.
At the fairness hearing, the Township, FSHC, Clinton 94 and all other
interested parties appeared, represented by counsel. The Township and Clinton
94 each presented expert testimony.
The Township relied on the testimony of Joseph Burgis, an expert in city
planning, who previously served as a court-appointed special master in other
affordable housing cases. Burgis summarized the Agreement and reviewed the
water and sewer issues, updating the court as to the Township's latest
compliance efforts. He opined "that the [Amended] Agreement is fair and
A-2633-18T1
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reasonable to the needs of low- and moderate-income households[,]" and
provided extensive testimony regarding the basis of his opinion. Addressing the
Township's infrastructure issues, he explained:
Clinton Township has a problem of overcoming the water
and sewer issue that we talked about, but the plan even
addresses that. It goes so far as to say after a certain period
of time if those issues cannot be overcome, then the
municipality should then be considering alternatives to
that in terms of increasing densities on the inclusionary
sites or finding other sites. But given the fact of the
capacity issue, I think this is about as good as you're going
to get and I think it clearly enables the construction of all
the Affordable Housing developments spelled out in a plan
[over time].
David Meiskin, a real estate developer, testified for Clinton 94. The
Township and FSHC objected to Meiskin testifying as an expert, citing his lack
of professional licensure and formal education. The trial court permitted his
testimony as an expert in site selection and development, finding he
demonstrated expertise beyond that of a layperson in those areas. Nonetheless,
the court consistently sustained opposing counsels' objections to answers
provided by Meiskin regarding his opinion as to the various sites' likelihood of
success. Meiskin presented opinion testimony concerning the economic
feasibility of the Marookian and Headly Farms sites due to inadequate utilities.
He also claimed the LeCompte site presented environmental issues.
A-2633-18T1
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On the second day of the fairness hearing, the court heard the testimony
of its Special Master, Michael Bolan, who provided testimony consistent with
his reports, recommending the court approve the Amended Agreement. On
cross-examination, Clinton 94 asked Bolan whether he was able to evaluate the
financial information provided regarding the 100-percent affordable
developments. Bolan confirmed his prior experience in evaluating project pro
formas and indicated that he would review what the Township submitted during
the compliance phase. At the close of the fairness hearing, the court allowed
Clinton 94 to place its remaining contentions on the record. Noting the various
conditions the Township must satisfy for the proposed plan to succeed, Clinton
94 requested the court consider over-zoning and aggressive monitoring.
On April 3, 2018, the court issued an amended order approving the
Amended Agreement preliminarily. In its inclusive accompanying opinion, the
court evaluated the Amended Agreement under the five-part analysis set forth
in East/West Venture v. Borough of Fort Lee, 286 N.J. Super. 311, 329 (App.
Div. 1996). The court concluded that the settlement "provides for a substantial
amount of affordable housing and satisfies the criteria set forth by the Appellate
Court in East/West Venture."
A-2633-18T1
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As to "consideration of the number of affordable units being constructed,"
the court found the Amended Agreement's 337 total units of credit were
reasonable. The court noted the methodology used to calculate the number of
affordable units provided followed the prior round methodology used by the
Council on Affordable Housing (COAH) in 1994. The court found that COAH's
methodology had "been utilized in over 170 settlements throughout the State.
Of those, approximately 45 of the settlements involve municipalities in Vicinage
XIII.4"
Next, the court considered "other contributions by the Township and
other components of the [Amended Agreement] that contribute to the
satisfaction of the constitutional obligation." In addition to the Township's
extensive individual assurances, the court noted the Township's commitment to
take the steps necessary to amend and implement its fair share plan, includ ing
zoning for inclusionary developments and pursuing water and sewer utilities for
inclusionary and municipally-sponsored projects.
4
A Vicinage is an administrative unit of trial divisions of the New Jersey
Superior Court comprising of a specific geographical area, which includes one
or more counties. Vicinage XIII includes Somerset County, Hunterdon County,
and Warren County.
A-2633-18T1
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The court also addressed Clinton 94's objections. After a thorough review
of those arguments, the court found it "unnecessary and unwarranted under the
circumstances" that the Township include additional projects, such as Clinton
94's property. The court noted that once a reasonable number of affordable units
have been determined and included in the plan, it becomes the Township's
reasonable discretion as to whether it would or should include additional units.
The court declined to include a requirement that the Township over-zone to meet
its fair share obligation. Further, the court rejected much of the testimony
provided by Meiskin, finding his testimony
(1) lacked the necessary expertise to opine on key facts
and issues that [supported] his oppositions; (2) [his]
testimony was oft times spotty, not buttressed by credible
documentation and lacked coherence; and (3) [his]
testimony appeared to the Court to be a thinly veiled effort
to support his own proposal and thus his testimony was
tainted with bias.
The court concluded Clinton 94's arguments that the proposed plan was
"unrealistic and unachievable" were meritless.
Instead, the court found the Township's plan "provides an imaginative,
proactive, comprehensive and realistic plan to accommodate for the needs of
low- and moderate-income households." Furthermore, the court recognized that
issues and conditions may arise and cause the proposed projects to change;
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however, it found the Amended Agreement "certainly anticipates those events
in several ways that protect the interests of the parties and the [p]rotected
[c]lass." The court also acknowledged the Amended Agreement provided
numerous monitoring and reporting requirements which would ensure the
protected classes' interests are advanced. The court therefore agreed to the
continued appointment of the Special Master for the purpose of assisting the
municipality and advising the court regarding agency approval and general
monitoring.
The court found the Amended Agreement adequately advanced the
interests of low- and moderate-income households and approved it subject to the
conditions and milestones contained within the Special Master's report. The
court scheduled a compliance hearing for December 20, 2018.
In advance of the compliance hearing, Clinton 94 again submitted written
objections and an exhibit, maintaining its argument that the mechanisms were
unsatisfactory and again requested the court consider over-zoning. The
Township produced documentation demonstrating its compliance with the
court's April 3, 2018 order and the approved Amended Agreement. At the
hearing, the Special Master reviewed the documents submitted by the parties
and Clinton 94 continued its request for over-zoning.
A-2633-18T1
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On January 9, 2019, the court entered a final judgment of compliance and
repose through 2025 in favor of the Township. The order provided the
Township's fair share plan and other documents satisfied "the Township's Mount
Laurel constitutional obligations under the Fair Housing Act of 1985, N.J.S.A.
52:27D-301 et seq. [] and under the Mount Laurel line of cases, specifically,
Mount Laurel IV, 221 N.J. 1 (2015), and Mount Laurel V, 227 N.J. 508 (2017)."
The court issued a second comprehensive decision, accepting the Special
Master's recommendations and again rejecting Clinton 94's over-zoning request.
II.
On appeal, Clinton 94 challenges the compliance judgment issued by the
trial court, contending the Township's Amended Agreement with FSHC, as
incorporated into the Township's fair share plan, does not provide a realistic
opportunity for the construction of affordable housing. It argues the compliance
plan required over-zoning to provide a realistic opportunity of success. It further
argues the trial court erroneously gave undue deference to the Township's
Amended Agreement with FSHC without adequately evaluating the feasibility
of the proposed developments. Based on our review of the record and the trial
court's two comprehensive written opinions, Clinton 94's arguments lack
substantive merit.
A-2633-18T1
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A final determination made by a trial court conducting a non-jury case is
"subject to a limited and well-established scope of review." Seidman v. Clifton
Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011). We review a trial court's
interpretation of law de novo, Manalapan Realty, LP v. Twp. Comm. of
Manalapan, 140 N.J. 366, 378 (1995); however, we give "deference to the trial
court that heard the witnesses, sifted the competing evidence, and made
reasoned conclusions." Griepenburg v. Township of Ocean, 220 N.J. 239, 254
(2015). We will not “not disturb the factual findings and legal conclusions of
the trial judge” unless convinced that those findings and conclusions were “so
manifestly unsupported by or inconsistent with the competent, relevant and
reasonably credible evidence as to offend the interests of justice.” Rova Farms
Resort v. Investors Ins. Co., 65 N.J. 474, 484 (1974).
Under Mount Laurel I, a municipality has a constitutional obligation to
provide a "realistic opportunity" for the development of its fair share of affordable
housing. 92 N.J. at 221. Whether an opportunity is "realistic" is determined in a
practical and objective way: "whether there is in fact a likelihood — to the extent
economic conditions allow — that the lower income housing will actually be
constructed." Id. at 222. "Municipalities need not guarantee that the required
amount of affordable housing will be built, but must only adopt land use ordinances
A-2633-18T1
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that create a realistic opportunity to meet the regional need and their own
rehabilitation share." In re Adoption of N.J.A.C. 5:94 & 5:95 By New Jersey
Council On Affordable Housing, 390 N.J. Super. 1, 54 (App. Div. 2007).
Trial courts adjudicating Mount Laurel declaratory judgment actions "should
employ flexibility" in assessing a municipality's compliance plan. Mount Laurel IV,
221 N.J. at 33. The Fair Housing Act of 1985 (FHA) and the Municipal Land Use
Law authorize municipalities to use various means to provide for their "fair share of
low[-] and moderate[-]income housing." N.J.S.A. 52:27D-311(a). See also N.J.S.A.
40:55D-8.7(a).
The rules used by COAH, which Mount Laurel IV requires trial courts use,
support the judgment under review. See 221 N.J. at 29-34. The applicable rules do
not mention over-zoning, which has not been required for municipalities voluntarily
complying in Mount Laurel actions for more than three decades, since the adoption
of the FHA, N.J.S.A. 52:25D-301 to -329.9, in 1985. The trial court addressed over-
zoning in both of its opinions, properly concluding the Township has discretion
whether to over-zone and it reasonably elected not to do so, finding it unnecessary
and unwarranted.
In addition, the rules broadly permit municipalities to incorporate publicly
subsidized, 100-percent affordable developments into their fair share plans, so long
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as municipalities support those developments if they do not receive the expected
funding. The court and the Special Master both scrutinized the fair share plan and
were satisfied with its feasibility, given the Township's extensive assurances.
Moreover, the court noted that the Township is required to adjust the plan if certain
benchmarks are not met. The judgment also provides for the ongoing involvement
of the Special Master to assist in overseeing compliance.
We conclude the record contains sufficient credible evidence to support
the trial court's finding that the Amended Agreement sets forth a plan that
provides a realistic opportunity for the Township to meet its Third -Round
obligation under Mount Laurel. The court correctly found that the Township
established a prima facie case of compliance, and the burden then shifted to
Clinton 94 to establish that it failed to do so.
The record also supports the trial court's finding that over-zoning is not
required. As noted by the FSHC, the Township is required to adjust its plan if certain
benchmarks are not met with regard to sites for which new water or sewer capacity
is not available. Clinton 94 failed to identify any issue the trial court failed to address
in concluding the Township's fair share plan presented a realistic opportunity for the
development of affordable housing. We discern no basis to disturb the trial court's
judgment.
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Affirmed.
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