SHIPYARD ASSOCIATES, L.P. VS. HOBOKEN PLANNING BOARDCITY OF HOBOKEN VS. SHIPYARD ASSOCIATES, L.P. SHIPYARD ASSOCIATES, L.P. VS. HUDSON COUNTY PLANNING BOARD, Â(L-4157-12, L-1238-12, L-3278-12, HUDSON COUNTY AND STATEWIDE)(CONDOLIDATED) ( 2017 )


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    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 NOS. A-4504-14T3
    A-4637-14T3
    A-4763-14T3
    SHIPYARD ASSOCIATES, L.P.,
    Plaintiff-Respondent,
    v.
    HOBOKEN PLANNING BOARD,
    Defendant-Appellant.
    _____________________________
    CITY OF HOBOKEN,
    Plaintiff-Appellant,
    v.
    SHIPYARD ASSOCIATES, L.P.,
    Defendant-Respondent.
    ______________________________
    SHIPYARD ASSOCIATES, L.P.,
    Plaintiff-Respondent,
    v.
    HUDSON COUNTY PLANNING BOARD
    and HUDSON COUNTY BOARD OF
    CHOSEN FREEHOLDERS,
    Defendants.
    _______________________________
    Argued February 28, 2017 – Decided August 2, 2017
    Before Judges Reisner, Rothstadt and Sumners.
    On appeal from the Superior Court of New
    Jersey, Law Division, Hudson County, Docket
    Nos. L-4157-12, L-1238-12, L-3278-12.
    Dennis M. Galvin argued the cause for
    appellant Hoboken Planning Board in A-4504-14
    (The Galvin Law Firm, attorneys; Mr. Galvin,
    of counsel; Mr. Galvin and Steven M. Gleeson,
    on the briefs).
    Joseph J. Maraziti, Jr. argued the cause for
    appellant City of Hoboken in A-4637-14
    (Maraziti   Falcon,   LLP,  attorneys;   Mr.
    Maraziti, of counsel; Christopher D. Miller,
    on the briefs).
    Eric S. Goldberg and Craig S. Hilliard argued
    the cause for intervenor/appellant in A-4763-
    14   Hudson    Tea   Buildings    Condominium
    Association, Inc. (Stark & Stark, attorneys;
    Mr. Goldberg, Mr. Hilliard, and H. Matthew
    Taylor, on the briefs).
    Kevin J. Coakley and Nicole B. Dory argued the
    cause for respondent Shipyard Associates, L.P.
    (Connell Foley LLP, attorneys; Mr. Coakley,
    of counsel; Ms. Dory, Christopher J. Borchert,
    and Nicholas W. Urciuoli, on the briefs).
    Renée Steinhagen argued the cause for amicus
    curiae Fund for a Better Waterfront (New
    Jersey Appleseed Public Interest Law Center,
    attorneys; Ms. Steinhagen, on the brief).
    PER CURIAM
    These three appeals arise from an application by developer
    Shipyard Associates, L.P. (Shipyard) to build two additional high-
    rise residential apartment buildings as part of its planned unit
    2                          A-4504-14T3
    development (PUD) on the Hoboken waterfront.          After reviewing the
    record in light of the applicable standard of review, we affirm
    the orders on appeal in each case.         See Nuckel v. Bor. of Little
    Ferry Planning Bd., 
    208 N.J. 95
    , 102 (2011).
    The history of the development dates back to a January 7,
    1997 resolution of the Hoboken Planning Board (Planning Board),
    granting Shipyard preliminary site plan and subdivision approval
    for   the   PUD.    As   approved,   the   PUD   included    several    luxury
    residential high-rise apartment buildings comprising about 1200
    units, multiple commercial retail units, parking garages, a park,
    a waterfront promenade or walkway, and a recreation pier.              The PUD
    contemplated that Shipyard might also construct a public marina
    and other amenities.      All of that construction was to take place
    on Blocks A through F of the site.          On Block G, the PUD was to
    include three tennis courts and a tennis pavilion, which would be
    available to the public for a fee, and thirty-seven surface parking
    spaces.1
    Shipyard     subsequently      obtained    final      site   plan     and
    subdivision approvals and built the approved residential high-
    rises, commercial space, waterfront promenade, park, recreation
    pier, a marina, a ferry stop, and all other amenities except the
    1
    We will refer to these amenities collectively as "the tennis
    courts."
    3                                A-4504-14T3
    tennis courts.   Some of that construction, including the ferry
    stop and a small increase in the number of residential units,
    required applications to modify the prior approvals. The Planning
    Board granted those applications, without challenge.
    A controversy ensued, however, when Shipyard applied to the
    Planning Board on August 25, 2011 for amended preliminary and
    final site plan approval, seeking permission to build two more
    residential towers (the Monarch project), comprising seventy-eight
    units, in lieu of building the tennis courts.2         Pursuant to
    N.J.S.A. 40:55D-10.3, Shipyard's application was deemed complete
    2
    For the proposed tennis court development on Block G, which
    included construction on a platform extending into the water (the
    North Platform), Shipyard needed a waterfront development permit
    and a water quality certificate from the Department of
    Environmental Protection (DEP).        However, the DEP denied
    Shipyard's application to build the tennis courts. Shipyard then
    submitted a revised application, seeking DEP's approval to build
    the two additional high-rises instead. The revised application
    involved a more extensive reconstruction of the North Platform so
    it could accommodate the high-rises. After an extensive review
    of the safety and environmental issues, DEP issued the permits.
    The City, the Fund for a Better Waterfront, and the Hudson Tea
    Buildings Condominium Association, Inc., filed an appeal
    asserting, among other things, that the DEP had given insufficient
    consideration to possible flooding and other safety concerns. We
    affirmed the DEP's decision, and the Supreme Court recently denied
    certification. In re Shipyard Assocs. LP Waterfront Devel. Permit
    & Water Quality Certificate No. 0905-07-0001.2 WFD 110001, Nos.
    A-4873-13 and A-5004-13 (App. Div. Feb. 3, 2017), certif. denied,
    ___ N.J. ___ (2017).
    4                          A-4504-14T3
    on October 13, 2011,3 but the application was not scheduled for a
    hearing until many months later.
    In the meantime, on March 2012, the City sued Shipyard in the
    Law Division (L-1238-12) to enforce the City's purported rights
    under a December 7, 1997 developer's agreement with Shipyard.
    Thereafter, on July 10, 2012, the Planning Board refused to
    consider the merits of Shipyard's application, although Shipyard's
    attorney and witnesses were present on the scheduled July 10
    hearing date and were fully prepared to present the application.
    Instead of hearing the application, the Board denied it "without
    prejudice," over Shipyard's vigorous objection, on the theory that
    the Board lacked jurisdiction to entertain the application while
    the City's lawsuit was pending.           In turn, Shipyard sued the
    Planning Board (L-4157-12), asserting that the Board's refusal to
    adjudicate the merits of its application within the statutory
    timeframe   set   forth   in   N.J.S.A.   40:55D-61,   resulted   in   its
    automatic approval pursuant to that section.4
    3
    The resolution deeming the application complete is not in the
    parties' appendices; we derive the information from the trial
    court's January 23, 2014 opinion, and there appears to be no
    dispute on this point.
    4
    The claim should have come as no surprise. Shipyard's attorney
    had sent multiple letters to the Board's attorney prior to July
    10, 2012, putting the Board on notice that N.J.S.A. 40:55D-22(a)
    obligated the Board to hear Shipyard's application despite the
    5                             A-4504-14T3
    In a separate action (L-3278-12), Shipyard sued the Hudson
    County Planning Board (County Board), which had denied, on the
    merits,    Shipyard's   application   for   approval   of   the   Monarch
    project.    Shipyard also sued the Hudson County Board of Chosen
    Freeholders (Freeholder Board), which had affirmed the County
    Board's action.5
    The Law Division eventually consolidated the three lawsuits
    and issued decisions favorable to Shipyard in all three cases.
    These appeals followed, and we have consolidated them for purposes
    of this opinion.
    In A-4637-14, the City of Hoboken, and intervenors Fund for
    a Better Waterfront (FWB) and the Hudson Tea Buildings Condominium
    Association, Inc. (Hudson Tea),6 appeal from a June 27, 2013 order
    pending litigation, and that a refusal to decide its application
    on the merits would result in automatic approval under N.J.S.A.
    40:55D-61.
    5
    The County Board has limited jurisdiction to review land use
    applications for "land development along county roads or affecting
    county drainage facilities." N.J.S.A. 40:27-6.6. Its review is
    "limited for the purpose of assuring a safe and efficient county
    road system." 
    Ibid.
     The Freeholder Board has authority to review
    the County Board's decision. N.J.S.A. 40:27-6.9. Neither of those
    two entities is participating in these appeals.
    6
    Hudson Tea operates a large residential condominium located
    nearby but not directly on the waterfront. Its apparent concern
    is that the Monarch project towers will block its residents' water
    view.
    6                               A-4504-14T3
    granting summary judgment dismissing the City's complaint seeking
    to enforce the developer's agreement.              In A-4504-14, the Planning
    Board and the City, as intervenor, supported by amicus curiae FWB,
    appeal from a February 4, 2014 order, declaring that Shipyard was
    entitled to automatic approval of its application, and from a May
    9, 2014 order denying reconsideration.              In A-4763-14, Hudson Tea
    and amicus curiae FWB challenge a May 21, 2015 order, which
    overturned    both    the   County       Board's    resolution   disapproving
    Shipyard's   application     and    the      Freeholder    Board's    resolution
    affirming    the   County   Board    decision,       and   directed    that   the
    application be approved.7
    I
    In A-4637-14, we affirm the June 27, 2013 order dismissing
    the City's lawsuit against Shipyard, substantially for the reasons
    stated by the trial judge in his cogent oral opinion issued on
    June 21, 2013.       We agree with the judge that, in Toll Brothers,
    7
    Although the appeals were not consolidated for briefing purposes,
    the City included, in its brief on A-4637-14, arguments about
    automatic approval, which should have been briefed in A-4504-14.
    The Planning Board's brief in A-4504-14 included arguments about
    the developer's agreement that should have been briefed in A-4637-
    14. Likewise, Hudson Tea addressed all of the issues pertaining
    to each appeal in one brief, filed in A-4763-14. FBW's brief in
    A-4763-14 also addressed issues pertaining to A-4637-14.
    Nonetheless, except for issues not raised in the trial court, we
    have considered all of the parties' arguments.      See Nieder v.
    Royal Indem. Ins. Co., 
    62 N.J. 229
    , 234 (1973).
    7                               A-4504-14T3
    Inc. v. Board of Chosen Freeholders of Burlington, 
    194 N.J. 223
    (2008), the Supreme Court clearly held that a developer's agreement
    cannot be enforced so as to prevent a developer from applying to
    a   planning    board   for   a   modification   of   a   previously-issued
    approval.      "A vital aspect of the planning process is the ability
    of developers to return to the planning board and present evidence
    that a sufficient change in circumstances exists to warrant a
    modification     of   previously    imposed   conditions.    A   developer's
    agreement is not an impediment to such a proceeding." 
    Id.
     at 256-
    57.
    As the Court explained:
    By its very nature, a developer's
    agreement is not . . . an independent
    contractual source of obligation. Indeed, as
    the developer's agreement in this case
    expressly   declares, its purpose is to help
    carry out the conditions imposed by the Board
    . . . .
    . . . [A] developer's agreement is an
    ancillary   instrument,   tethered    to   the
    conditions of approval, and exists solely as
    a tool for the implementation of the
    resolution   establishing   the    conditions.
    Accordingly, if the resolution establishing
    the   conditions  remains   in   effect,   the
    developer's   agreement   can   be   enforced.
    However, if the resolution changes, the
    developer's agreement enjoys no independent
    status and must be renegotiated. . . .
    To suggest, as the County does, that the
    developer's agreement should somehow bar Toll
    Brothers from making the changed circumstances
    8                              A-4504-14T3
    application    that   the   MLUL    recognizes
    misconceives the relationship between the
    conditions and the developer's agreement; it
    is the developer's agreement that is dependent
    on the conditions and not vice versa.
    . . . [W]e do not view the ancillary
    developer's agreement as a bar to Toll
    Brothers' application for modification of the
    resolution setting the conditions of approval.
    [Id. at 249-50 (citations omitted).]
    Appellants' efforts to distinguish Toll Brothers are patently
    insubstantial.      The    above-quoted         language    is   not   limited      to
    developers' agreements pertaining to off-site improvements.
    We agree with the trial judge that the Municipal Land Use Law
    (MLUL) signals the Legislature's intent to permit a developer to
    apply to a planning board to modify the terms of approval of a
    PUD.     See N.J.S.A. 40:55D-45.6(a).                 In fact, the developer's
    agreement between Shipyard and the City contemplated possible
    amendments     to   the    resolutions         granting    the   approvals     ("the
    building plans shall reflect the requirements of the [Board] as
    contained in its Resolutions . . . and any amendments thereafter
    . . . .").
    We also agree with the trial judge that the merits of an
    application to modify prior approvals are to be decided by the
    board,   not   by   a     trial    court       in   litigation   to    enforce    the
    developer's agreement.            As in Park Center at Route 35, Inc. v.
    Zoning Board of Adjustment of Woodbridge Township, 
    365 N.J. Super. 9
                                     A-4504-14T3
    284 (App. Div. 2004), the Planning Board should have decided
    whether building the tennis courts was an express condition of its
    prior approval and, in any event, whether a modification was
    justified.      Consequently,       the    parties'     arguments   about   the
    relative merits of Shipyard's application to the Planning Board
    are irrelevant to this appeal.
    The additional contentions raised by the City and the other
    appellants,    including    their     estoppel    arguments,     are   without
    sufficient merit to warrant discussion here.             R. 2:11-3(e)(1)(E).
    II
    In A-4763-14, we affirm the May 21, 2015 order, reversing
    both the County Board's resolution and the Freeholder Board's
    resolution, and ordering approval of Shipyard's application.                For
    the reasons cogently stated by the trial judge in his May 21, 2015
    written opinion, we agree that the County and Freeholder Boards'
    decisions    were     arbitrary,    capricious,    inconsistent     with    the
    opinions of the County Board's own engineering consultant, and
    unsupported by the evidentiary record.           Therefore, the trial court
    reached the correct result in ordering that Shipyard's application
    be approved.     Because the judge's written opinion on this issue
    is comprehensive, little more discussion is required here.
    The     County    Board's     jurisdiction    is    very   limited.    Its
    responsibility is limited to "assuring a safe and efficient county
    10                               A-4504-14T3
    road system," including drainage issues affecting county roads.
    N.J.S.A. 40:27-6.6, -6.6(e).          See Kode Harbor Dev. Assocs. v. Cty.
    of Atlantic, 
    230 N.J. Super. 430
    , 432 (App. Div. 1989).                   In this
    case,     the    Board    had    jurisdiction      to     consider   Shipyard's
    application because the Monarch project bordered Sinatra Drive, a
    county road.        However, the project presented no drainage issues
    affecting Sinatra Drive or any other county road.                 Moreover, once
    Shipyard modified the project's internal road system to eliminate
    a   proposed      connection    between     an   internal    walkway/emergency
    roadway    (the    walkway)     and   Sinatra    Drive,     the   Board   had    no
    jurisdiction over any alleged traffic or emergency access issues
    concerning the walkway.          We agree with the trial judge that the
    County Board's decision was not supported by the record, and the
    Freeholder      Board's   decision    was   equally     arbitrary    because     it
    simply adopted the County Board's findings "by reference."
    We do not reach the issue of whether Shipyard was entitled
    to automatic approval of its application to either board. However,
    we note that, because Shipyard participated in the County Board
    hearings and only claimed a right to automatic approval after its
    application was denied, its argument may be barred by the doctrine
    of laches.       See Amerada Hess Corp. v. Burlington Cty. Planning
    Bd., 
    195 N.J. 616
    , 641 n.5 (2008).
    11                                 A-4504-14T3
    III
    Turning to A-4504-14, we affirm substantially for the reasons
    stated by the motion judge in her thorough written opinions issued
    on January 23, 2014 and May 9, 2014.       We add these comments.
    The result in this case is controlled by well established
    legal principles, set forth in Amerada Hess, supra, 
    195 N.J. at 616
    .    In that case the Court rejected prior case law that more
    liberally   extended   relief   to   municipal   land   use   boards,   and
    clarified the narrow circumstances in which a board may obtain
    relief from the automatic approval provisions of the MLUL:
    [I]n the absence of mistake, inadvertence, or
    other unintentional delay, there should be no
    such reluctance [to affirm imposition of
    automatic approval]. Indeed, South Plainfield
    Properties, L.P. v. Middlesex County Planning
    Board, 
    372 N.J. Super. 410
     (App. Div. 2004),
    is emblematic of our view. There the board
    simply granted itself a six-month delay to
    review "extenuating" traffic concerns and
    impacts, and the Appellate Division had no
    hesitation in holding that the action was
    "precisely the conduct that the automatic
    approval provision was designed to prevent."
    
    Id. at 419
    .
    That is what the Legislature intended. It has
    made   the   policy   judgment   that   timely
    disposition is of great institutional value
    such that automatic approval is the proper
    remedy for delay. Under Manalapan, the
    statutory timetables are to be strictly
    enforced;    permissive   interpretation    is
    unwarranted;   and   only   where   delay   is
    inadvertent or unintentional will a public
    entity be excused from automatic approval.
    12                            A-4504-14T3
    [Id. at 636 (citing Manalapan Holding Co. v.
    Planning Bd. of Hamilton, 
    92 N.J. 466
    (1983)).]
    The court also emphasized that an applicant need not show
    that the board acted in bad faith.            Id. at 637.   "Where a board
    fails   to   act   within   the   statutory    limits,   even   for   what   it
    considers 'good' reasons, the statute is violated and automatic
    approval comes into play.         Only where the board establishes that
    its delay was inadvertent or unintentional can its conduct be
    excused."     Ibid.
    In this case, there was nothing inadvertent or unintentional
    about the Planning Board's action.            It was aware of the statutes
    requiring that it hear Shipyard's application, regardless of the
    pending litigation, on pain of automatic approval if it did not.
    See N.J.S.A. 40:55D-10(a); N.J.S.A. 40:55D-22; N.J.S.A. 40:55D-
    61. Indeed, multiple letters from Shipyard's attorney put the
    Board on notice of its obligations.            Moreover, the transcript of
    the Board hearing reveals its expressed intent to circumvent the
    automatic approval statute by "denying" Shipyard's application
    "without prejudice."        However, its expressed legal reasons for
    doing so, as articulated by the Board attorney, were palpably
    meritless. Toll Brothers clearly precluded the City from enforcing
    the   developer's     agreement,    and   N.J.S.A.   40:55D-22(a)     plainly
    13                               A-4504-14T3
    obligated    the    Planning   Board     to   hear    Shipyard's     application
    notwithstanding the City's pending lawsuit.8
    We    agree    with   the    motion     judge    that   in   denying    the
    application without prejudice, the Board was unlawfully granting
    itself an extension of time to hear the application, until the
    City's lawsuit was decided.         "We cannot countenance such an end-
    run around the statute."       South Plainfield Props., supra, 
    372 N.J. Super. at 417
    .       The Board could have heard the application and
    granted it, conditioned on the outcome of the City's lawsuit.
    N.J.S.A. 40:55D-22(a).         But the Board could not lawfully refuse
    to hear the application, which is what it did here.9
    Thus,    we    agree   with   the      motion    judge   that    Shipyard's
    application was automatically approved, and that the automatic
    approval occurred by operation of law when the statutory period
    set forth in N.J.S.A. 40:55D-61 expired.                  "[F]ailure of the
    planning board to act within the period prescribed shall constitute
    8
    The Planning Board's argument, that the developer's agreement
    amounted to a deed restriction that stripped the Board of
    jurisdiction to hear Shipyard's application, is without sufficient
    merit to warrant discussion in a written opinion. R. 2:11-
    3(e)(1)(E).
    9
    As previously noted, we decline to consider arguments not raised
    in the trial court, including the Board's arguments about an
    alleged lack of notice pursuant to N.J.S.A. 40:55D-10.4. See
    Nieder, supra, 62 N.J. at 234. We also decline to consider
    materials, improperly included in FWB's appendix, which were not
    part of the trial court record.
    14                                A-4504-14T3
    approval of the application. . . ."                N.J.S.A. 40:55D-61 (emphasis
    added).     At that point, Shipyard obtained the                      vested rights
    associated with preliminary and final site plan approval. N.J.S.A.
    40:55D-52(a).
    The two principal statutes on which our decision rests –
    N.J.S.A.    40:55D-22(a)       and    N.J.S.A.      40:55D-61    –    represent       the
    Legislature's        considered       policy        judgment     that      land       use
    applications should be heard promptly and local governments should
    not give developers the runaround.                 See Amerada Hess, 
    supra,
     
    195 N.J. at 630
    ; South Plainfield Props., supra, 
    372 N.J. Super. at 419-20
    .      Like    the    motion    judge,       we   are   bound   to   honor      the
    Legislature's       choice.      In   this     case,     implementing      those      two
    statutes requires automatic approval of Shipyard's application.
    If there is a lesson to be learned from this case, it is that
    the rule of law is paramount and cannot be sidestepped to avoid
    deciding unpopular land use applications.                     As here, failure to
    follow the law may insure the success of an application that local
    objectors    vigorously       oppose.         We   appreciate    that      it   may    be
    difficult for planning board members, who are unpaid appointees,
    to stand firm in the face of vocal objectors and carry out their
    statutory duty.       We have read the transcript of the July 10, 2012
    Board     hearing,     in     which     objectors        were   interrupting          the
    proceedings and shouting, "we want tennis courts."                      However, the
    15                                     A-4504-14T3
    Planning Board was obligated to hear Shipyard's application, no
    matter how controversial it was.
    Ironically, had the Board considered the application on its
    merits, it had authority to deny the application unless Shipyard's
    evidence   justified      modifying     the   original   PUD    approval    which
    included the tennis courts.             But, because the Planning Board
    yielded    to   public    pressure,     and   refused    to    hear   Shipyard's
    application, the result is automatic approval of the application.
    Finally, we note that the application Shipyard submitted, and
    which was automatically approved, promises that Shipyard will
    construct a publicly accessible waterfront walkway around the
    perimeter of the Monarch project development.             Shipyard's counsel
    has represented that Shipyard must build and maintain the publicly
    accessible waterfront walkway as a condition of DEP's approval of
    its   permits   (see     supra   note   2).     We   likewise    construe    that
    commitment to be a condition of the automatic approval.
    Affirmed.
    16                               A-4504-14T3