By Ron Hine | FBW | August 9, 2017
August 22 Update: Monarch Towers decision appealed to New Jersey Supreme Court. On August 21, 2017, the Fund for a Better Waterfront, Hudson Tea Building Condo Association, Hoboken Planning Board and City of Hoboken petitioned the New Jersey Supreme Court to review the August 3, 2017 decision of the Appellate Court that upheld automatic approvals for the Monarch Towers. Although the NJ Supreme Court only considers a small number of appeals, the Appellants feel there is a strong case to be made that court precedents were ignored in the August 3 Appellate Court decision.
In 2011, the Shipyard Associates proposed to build two 11-story residential buildings on a pier. From the start, this development project, dubbed the Monarch Towers, was controversial. Hoboken’s mayor and city council, neighbors and the Fund for a Better Waterfront rose up in opposition. The proposal violated a developer’s agreement with the City for the developer to provide open space at this pier and also violated the terms of the Hoboken Planning Board 1997 approval of the 1160-unit Shipyard Project.
In March of 2012, the City of Hoboken initiated an action against Shipyard Associates to enforce the developer’s agreement. Subsequently, the Hoboken Planning Board denied the application without prejudice on the grounds that the Board lacked jurisdiction to hear the matter because of the pending litigation, the failure of Shipyard to receive Hoboken’s consent for the amended application and failure of Shipyard to submit variance applications required by the Planning Board’s staff. The planner for the Board had determined that the application was incomplete and that variances were required, yet the developer refused to comply. The Hudson County Planning Board and Board of Chosen Freeholders also denied the Monarch application because of concerns it had with respect to impacts on the county road.
Usually, decisions of a land use boards are given tremendous deference by New Jersey courts. The courts recognize that local boards are most knowledgeable concerning local conditions. New Jersey land use case law provides that decisions from zoning and planning boards will generally be upheld unless they are found to be arbitrary, capricious or unreasonable.
On August 3, 2017, however, a three-judge panel of the Appellate Court turned that rule on its head. The Court upheld rulings by two trial courts overturning the Hoboken Planning Board and County denials, and granting automatic approval for the Monarch Towers. The Appellate Division also approved a third trial judge’s opinion refusing to enforce the developer’s agreement despite Shipyard’s failure to prove changed circumstances before that court. Shipyard’s strategy to aggressively litigate at every turn paid off.
The Hoboken Planning Board has solid grounds for an appeal to the New Jersey Supreme Court. The Board denial of the Monarch application was neither arbitrary nor capricious plus there were several important New Jersey Supreme Court decisions that were misconstrued in the August 3 ruling.
The New Jersey Supreme Court in Amerada Hess Corp. v. Burlington County Planning Board 195 N.J. 616 (2008) determined that default approvals were required unless the government inaction is unintentional or inadvertent. But in this case, the Hoboken Planning Board did act, denying the application based on its reasonable belief that that it did not have jurisdiction. Furthermore, even assuming that automatic approval was justified, the Appellate Division did not discuss whether the time of application or the time of decision rule applied.
In general, regulations that are in effect at the time of an application govern the review of that application. The exception is regulations pertaining to the public’s health and safety. In this case, the Hoboken Planning Board acted on this application in July 2012. Four months later, Superstorm Sandy hit the region, forcing all levels of government to take action to protect against future storm surges and flooding events. Hoboken was especially hard hit with 75% of the town under water for a number of days.
A year later, the City of Hoboken amended its flood ordinance and corresponding zoning that included provisions for prohibiting residential development on piers over the Hudson River based on recommendations from its consultant, Princeton Hydro; the NJDEP and FEMA. The August 3 Appellate Court ruling disregarded the fact that the default approval occurred at a time when the safety ordinance had already been passed, and it should have applied, not the ordinances that were in effect at the time of the application.
With respect to the case involving the developer’s agreement, the New Jersey Supreme Court rendered its decision in Toll Brothers vs. Board of Chosen Freeholders of Burlington County 194 N.J. 223 in 2008. In his ruling of June 2013 dismissing the City’s lawsuit to enforce the Shipyard developers agreement, New Jersey Superior Court Judge Patrick J. Arre states: “Toll Brothers stands for the proposition that a developer may always as of right apply to the town and county planning boards for amendments to prior resolutions and site plan approvals based on changed circumstances. . . Pursuant to the Municipal Land Use Law and Toll Brothers, Shipyard has a right to move before the planning board seeking this amendment. . . The proper determination as to whether changed circumstances exist and to whether an amendment should be approved rests with the planning board, not the Superior Court.”
Yet, Shipyard never requested a “changed circumstances” hearing before the Board. The facts relating to the Toll Brothers case were dramatically different from Shipyard’s. There were no significant changes to the Shipyard project since it was approved in 1997 and unlike the Toll Brothers case, there were no requirements for offsite improvements. The Appellate ruling disregarded the requirement that Shipyard Associates must prove that there were changed circumstances beyond its control and that it would also need permission from the City to amend its 1997 developer agreement.
Unfortunately, few cases appealed to the New Jersey Supreme Court get heard. The acceptance rate is about one percent. The New Jersey Supreme Court declined to hear the City of Hoboken’s appeal of another Appellate Court ruling that upheld the NJDEP waterfront permit granted for the Monarch Towers.
If the New Jersey Supreme Court declines to hear an appeal, the final obstacle for the Monarch project is a case before Judge Peter F. Bariso, Jr. in New Jersey Superior Court. This is Shipyard’s challenge to the Hoboken amended flood and zoning ordinances. This case was originally before a federal court but Shipyard withdrew the case and refiled in state court after the federal magistrate dismissed several motions filed by Shipyard.
Last spring, Judge Bariso dismissed Shipyard’s motion for summary judgment due to the pending Appellate case. Now that the Appellate Division has ruled, this case is moving forward. A case management conference is scheduled for August 17. Discovery was completed during the federal court proceedings and the judge can now set a schedule for the case. If the court upholds the municipal ordinances, Hoboken’s Flood Plain Manager could deny Shipyard Associates a permit for the Monarch Towers despite the automatic approvals granted by the courts.
The Fund for a Better Waterfront is represented in the case before Judge Bariso by the Eastern Environmental Law Center and New Jersey Appleseed Public Interest Law Center. From the start, the Fund for a Better Waterfront has opposed the Monarch Towers due to the fact that it would privatize a portion of the waterfront that should be preserved for the public’s use. FBW has been a significant advocate for the development of the pier in accordance with the developer’s agreement and remains steadfast that such agreement must be honored.
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