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Supreme Court Declines to Hear Undesignated Redeveloper's Appeal

Co-authored by Brian J. Shemesh and Kyle J. Campanile

The Supreme Court of New Jersey recently denied a petition for certification in the matter of Applied Monroe Lender v. City of Hoboken Planning Bd. and City of Hoboken, 234 N.J. 10, 187 A.3d 858 (Table). The petitioner, developer Applied Monroe Lender, LLC (“Applied”), owned property that had been designated as an area in need of redevelopment pursuant to the Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq. (“LRHL”) and was subject to a redevelopment plan adopted by the City of Hoboken.

Even though it had never been designated as a redeveloper, Applied sought to develop its property in accordance with the redevelopment plan, claiming that a redeveloper designation was not necessary based on the language of the redevelopment plan. The redevelopment plan did not specifically require such a designation, but made repeated references “redeveloper” and “redeveloper designation.” The City maintained that the plan required a redeveloper designation and refused to deem Applied’s submission for site plan approval “complete” until it had been designated.

Applied brought suit in the Superior Court, Hudson County, in April 2015. Ultimately the parties made competing motions for summary judgment, at which point the trial judge found that “the policy as interpreted and in practice requires that a plaintiff who wishes to develop in a redevelopment area must first be qualified and approved as a redeveloper.” Applied Monroe Lender v. City of Hoboken Planning Bd., et al., 2018 WL 1219453 at *2 (App. Div. 2018). On that basis, the judge granted the City’s motion and dismissed the case. Applied appealed.

The Appellate Division heard the case in November 2017 and issued its decision in March 2018. See Id. The Appellate panel affirmed the trial judge’s ruling in holding that designation as a redeveloper was required under the plan, emphasizing the plan’s repeated references to “redeveloper” and “redeveloper designation.” Since Applied never obtained such a designation, it lacked standing to pursue site plan approval.

This ruling confirmed what practitioners have understood to be the law for some time – that once a property has been designated as an area in need of redevelopment and the municipality has adopted a redevelopment plan inclusive of that property, the municipality has the ability to restrict redevelopment of such properties in accordance with the redevelopment plan to qualified redevelopers.  Seee.g.Jersey Urban Renewal, LLC v. City of Asbury Park, 337 N.J. Super. 232 (App. Div. 2005).  In addition to reaffirming this principle, the Appellate decision expanded the scope of Jersey Urban Renewal by applying its rule regardless of whether the redevelopment plan contains language explicitly requiring a redeveloper designation.

In denying Applied’s petition for certification and refusing to hear its appeal, the Supreme Court of New Jersey leaves the Appellate ruling undisturbed, and as a result, it will remain as valuable guidance to developers and land use practitioners unless and until the state’s high court speaks more fully and clearly on this issue.

It is important to note a possible future limiting factor of the Applied Monroe Lender v. City of Hoboken holding and that is in the context of redevelopment areas designated as “non-condemnation” areas under the LRHL.  In the Applied case, the applicable redevelopment plan was adopted in 1998 and was therefore subject to the pre-2013 amendment to the LRHL.  At that time, the LRHL did not permit municipalities to designate properties as “areas in need of redevelopment” without condemnation power.  The 2013 amendment to the LRHL provides municipalities with the ability to designate properties as areas in need of redevelopment with or without condemnation authority.

Designation of a property as an area in need of redevelopment, especially when coupled with the specter of condemnation, is a powerful tool for municipal entities.  It confers control over property owners and developers and facilitates their participation in redevelopment agreements, which further afford municipal entities control in the redevelopment process – enabling them to charge fees, defer various redevelopment costs to developers, to control the project timeline, and to impose accountability and timelines upon owners and developers in the form of contractual obligations, enforcement and remedies.

Accordingly, in future cases an important distinction that may impact the Court’s analysis is whether a subject property has been designated as a condemnation or non-condemnation redevelopment area under the LRHL.  As of now, whether that distinction is enough to sway the court’s view of redevelopment by a property owner without an official redevelopment designation remains unclear.

© 2018 Giordano, Halleran & Ciesla, P.C. All Rights Reserved

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About this Author

Michael A. Bruno, Giordano Law Firm, Real Estate Attorney
Shareholder

Mr. Bruno, shareholder in Giordano, Halleran & Ciesla's Real Estate, Land Use & Development practice area, focuses his practice area on real estate transactions and approvals with an emphasis on redevelopment, planned residential development, affordable housing, and mixed use development. Mr. Bruno represents and counsels companies and developers in every phase of real estate acquisitions, financing and development including redevelopment agreements and long and short term financial agreements and other state, regional and local agency financing programs available in connection...

732-741-3900
Marc D. Policastro, Giordano Law Firm, Business Attorney
Shareholder

Mr. Policastro is a transactional, business attorney, who focuses his practice in development, redevelopment, environmental compliance cases, corporate transactional matters, land use, zoning and business counseling. Admitted to practice in New Jersey and New York, he has represented numerous national developers, manufacturers, cogeneration facilities and utilities, automobile dealerships, lenders, borrowers and municipal boards in myriad land use contexts, including commercial and residential development and due diligence matters. He also focuses on complex remediation cases and general environmental compliance counseling. He has significant experience in ISRA, Spill Act, LSRP, UST and related hazardous substance regulatory matters and redevelopment of contaminated sites. Mr. Policastro is originally from New York City and was raised in Holmdel, NJ. Mr. Policastro attended Christian Brothers Academy, University of Richmond and Seton Hall Law School. He now resides with his two children in Little Silver, NJ.

732-741-3900
Donna A. McBarron, Giordano Halleran Law firm, real estate lawyer, redevelopment attorney

Donna A. McBarron is of-counsel to the Real Estate, Redevelopment and Planned Real Estate Department and the Leasing Department. Ms. McBarron has over 15 years of experience dealing with complex commercial real estate matters, negotiating commercial leases, and has represented multiple municipalities in connection with their affordable housing litigation and compliance. Ms. McBarron received her BA from Rutgers University and her JD from Rutgers University School of Law.

732-741-3900
Associate

Mr. Shemesh, an Associate in the firm's Real Estate, Redevelopment and Planned Real Estate Development Practice Area, focuses his practice on all land-related matters, including redevelopment projects, commercial real estate transactions, and landlord-tenant disputes.

Prior to joining the firm, Mr. Shemesh worked as an associate in the corporate group of a global law firm, assisting with corporate matters including, but not limited to, mergers and acquisitions, equity financings, corporate governance, private equity transactions, and capital...

732-741-3900