Baltica Const. Co., Inc. v. Planning Bd. of Franklin Tp.

Decision Date05 February 1988
Citation222 N.J.Super. 428,537 A.2d 319
PartiesBALTICA CONSTRUCTION CO., INC., Plaintiff-Appellant, v. PLANNING BOARD OF the TOWNSHIP OF FRANKLIN, Mayor & Council of Franklin Township, Defendants-Respondents.
CourtNew Jersey Superior Court — Appellate Division

Francis P. Linnus, Somerset, for plaintiff-appellant (Francis P. Linnus and Carl Peer, on the briefs).

William T. Cooper, Somerville, for defendant-respondent Planning Bd. of the Franklin Tp. (William T. Cooper, on the brief).

McGimpsey & Cafferty, North Brunswick, for defendant-respondent Mayor and Council of Franklin Tp. (Thomas J. Cafferty, on the brief).

Before Judges HAVEY and STERN.

The opinion of the court was delivered by

HAVEY, J.A.D.

Plaintiff Baltica Construction Company, Inc., was granted a ten-lot subdivision approval by defendant planning board of the Township of Franklin (board). As a condition to approval the board required plaintiff to bear the entire cost of installing an off-site water line. Plaintiff protested the condition and instituted the present suit to compel the board to allocate plaintiff's pro-rata share of the improvement cost. The trial judge dismissed the complaint, concluding that plaintiff was precluded from recovering the cost in excess of its pro-rata share because it installed the improvement before judicial resolution of its challenge to the board's action. We now reverse. We conclude that under N.J.S.A. 40:55D-42, a developer is not barred from recovery if it protests the planning board's refusal to allocate costs and institutes suit within one year from the time it "pays" for the improvement by installing it. We therefore remand to the Law Division for further proceedings.

Plaintiff was granted subdivision approval at the board's meeting of October 16, 1985. As a condition to the approval, plaintiff was required to install a water line along Elizabeth Avenue in Franklin Township approximately 1,900 feet from the subdivision to an existing municipal water main at Amwell Road. 1 While plaintiff was prepared to install individual wells, it agreed at the October 16, 1985 meeting to extend the water line, providing the board allocate the cost of installation in a manner that plaintiff bear only its pro-rata share. The board refused to make a pro-rata allocation.

On November 6, 1985 the municipal engineer advised the board that the water line should be 16 inches as called for by the township's Water Master Plan, "with an agreement for reimbursement by the Township as others connect to the line." The township's director of planning instructed the board that a 16-inch pipe was necessary "to accommodate future development along the entire length of [Elizabeth Avenue]." At a November 20, 1985 board meeting, plaintiff presented evidence that an 8-inch pipe was adequate to service the subdivision. Nevertheless, plaintiff accepted the condition that a 16-inch pipe be installed but again insisted the board adhere to the township's off-site improvement ordinance which required the board to make specific findings as to whether the 16-inch pipe would benefit properties other than the subdivision and, if so, to fix plaintiff's pro-rata share of the improvement cost. No further action on plaintiff's request was taken by the board. It apparently was the board's view that pro-rata allocation and reimbursement to plaintiff were decisions to be made by the mayor and council.

On December 3, 1985, prior to construction of the line, plaintiff instituted the present action against the board seeking to compel the board to allocate the cost of the water line. By letters to the mayor and council dated December 18, 1985 and January 2, 1986, plaintiff requested reimbursement for the excess cost. After the request was denied, plaintiff amended its complaint on February 28, 1986 adding the mayor and council as party defendants. Sometime in February 1986, plaintiff began construction of the line.

At the bench trial, plaintiff produced evidence that a 6-inch or 8-inch pipe was adequate to serve the subdivision, that the cost differential between an 8-inch and 16-inch pipe was approximately $37,500, and that the ten-lot subdivision would utilize only 6.25 percent of the total flow from the 16-inch pipe. Plaintiff also established that existing one-acre zoning in the area would permit 49 buildable lots contiguous to the water line from the subdivision to Amwell Road, all capable of tying into the line. According to plaintiff, its subdivision represented only 24.85 percent of the total land abutting the water line. The township engineer testified the properties abutting the line could tie into the line but were not required to do so because the township had no mandatory tie-in ordinance. The engineer also noted that, in his view, a 10-inch pipe was necessary for fire-fighting purposes.

Robert Paulus, defendants' real estate appraiser, testified that, in his opinion, the properties abutting the water line did not increase in value by virtue of the water-line installation. He stated he attempted without success to find sales within the township in order to compare values of lots with and without public water. He therefore premised his opinion primarily on the fact that tax assessors in adjoining municipalities had advised him they did not increase tax assessments on lands having public water.

The trial judge found plaintiff's subdivision could have been serviced with an 8-inch line. He nevertheless entered judgment for defendants, concluding that any benefits to adjacent landowners resulting from the water-line installation "[are] too speculative to allow a determination that plaintiff is entitled to a reimbursement from them." The judge also concluded that plaintiff was precluded from recovering the excess cost of the improvement because it did not wait for judicial resolution of the dispute before installing the improvement.

Plaintiff first contends that the 16-inch water line mandated by the board exceeded that which was necessitated by its ten-lot subdivision, and thus it is entitled to recover the cost of the line in excess of its pro-rata share.

It is now well-settled that the expense of installing off-site improvements may be imposed upon a developer as a condition to subdivision approval, including the installation of water and sewer lines. N.J. Bldrs. Ass'n v. Bernards Tp., 108 N.J. 223, 236, 528 A.2d 555 (1987); Divan Builders v. Planning Bd. Tp. of Wayne, 66 N.J. 582, 596, 334 A.2d 30 (1975); Ellis v. Larchmont Pharmacy Plaza, Inc., 208 N.J.Super. 359, 364, 506 A.2d 22 (App.Div.1986). The Municipal Land Use Law (MLUL) expressly authorizes the governing body, by ordinance, to impose such costs. See N.J.S.A. 40:55D-42. However, the cost assessment shall be limited to the developer's:

... pro-rata share of the cost of providing only reasonable and necessary ... water ... facilities ... located outside the property limits of the subdivision ... but necessitated or required by construction or improvements within such subdivision.... [Id.]

The off-site ordinance must establish:

... fair and reasonable standards to determine the proportionate or pro-rata amount of the cost of such facilities that shall be borne by each developer or owner within a related and common area, which standards shall not be altered subsequent to preliminary approval. [Id.]

Thus, imposition of the cost of improvements on a developer "must be accompanied by provisions for partial reimbursement if the improvement specially benefits property other than that of the developer." Ellis, supra, 208 N.J.Super. at 364, 506 A.2d 22 N.J.S.A. 40:55D-42 is a codification of pre-MLUL decisional law which addressed a municipality's unexpressed power to impose off-site improvement costs upon a developer under the Municipal Planning Act of 1953, specifically N.J.S.A. 40:55-1.21, now repealed. See Divan Builders, supra, 66 N.J. at 596, 334 A.2d 30; Deerfield Estates, Inc. v. Tp. of East Brunswick, 60 N.J. 115, 122-123, 286 A.2d 498 (1972); Longridge Builders, Inc. v. Planning Bd. of Princeton Tp., 52 N.J. 348, 350, 245 A.2d 336 (1968). The common theme presented by each case is stated cogently in Longridge Builders, Inc.:

It is clear to us that, assuming off-site improvements could be required of a subdivider, the subdivider could be compelled only to bear that portion of the cost which bears a rational nexus to the needs created by, and benefits conferred upon, the subdivision. It would be impermissible to saddle the developer with the full cost where other property owners receive a special benefit from the improvement. [52 N.J. at 350, 245 A.2d 336; emphasis supplied].

As the court expressed in Divan Builders, the reason for the nexus requirement is clear: "[b]eyond that, Planning Board impositions, although purportedly authorized by the Planning Act or the local ordinance, amount to impermissible exactions." 66 N.J. at 600, 334 A.2d 30, quoting Brazer v. Borough of Mountainside, 55 N.J. 456, 466, 262 A.2d 857 (1970).

We have found no pre or post-MLUL case defining with specificity the manner by which a developer's pro-rata share is to be determined. Longridge provides some guidance in holding that a subdivider's pro-rata share must "bear[ ] a rational nexus to the needs created by, and benefits conferred upon, the subdivision." 52 N.J. at 350, 245 A.2d 336 (emphasis supplied). Reference to "needs created" suggests that the municipality must measure the capacity required to service the subdivision against the gross capacity provided by the off-site improvement. Divan Builders, by its reference to Ridgewood Country Club v. Borough of Paramus, 55 N.J. 62, 259 A.2d 218 (1969), implies that increases in land value attributable to construction of the off-site improvement is significant in deciding the "special benefit" conferred upon the affected landowners. Divan Builders, supra, 66 N.J. at 600-601, 334 A.2d 30. Divan Builders...

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  • Holmdel Builders Ass'n v. Township of Holmdel
    • United States
    • New Jersey Superior Court – Appellate Division
    • March 30, 1989
    ......the Planning Board of the Township of Holmdel, . ...and Cross-Respondents. . CALTON HOMES, INC., Plaintiff-Respondent, . v. . TOWNSHIP OF ...52:27D-307. See also generally Hills Dev. Co. v. Bernards Tp. in Somerset Cty., 103 N.J. 1, ... N.J. Const. (1947), Art. IV, § VI, par. 1; see also ...at 237, 528 A.2d 555; see also Baltica Const. v. Planning Bd., 222 N.J.Super. 428, 433, ......
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    • United States
    • New Jersey Superior Court – Appellate Division
    • January 13, 1992
    ...443-44, 147 A.2d 28 (1958); Squires Gate v. County of Monmouth, 247 N.J.Super. at 9, 588 A.2d 824; Baltica Const. v. Planning Bd., 222 N.J.Super. 428, 432-33, 537 A.2d 319 (App.Div.1988); Ellis v. Larchmont Pharmacy Plaza, Inc., 208 N.J.Super. 359, 364, 506 A.2d 22 (App.Div.1986). The requi......
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    • New Jersey Superior Court – Appellate Division
    • August 5, 1991
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    • United States
    • New Jersey Superior Court – Appellate Division
    • October 17, 1994
    ...which arose as a direct consequence of the particular subdivision or development under review"); Baltica Constr. Co. v. Planning Bd., 222 N.J.Super. 428, 434, 537 A.2d 319 (App.Div.1988) ("in determining a developer's pro-rata share, the [planning] board may consider the fact that but for t......
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2 books & journal articles
  • Land Development Conditions
    • United States
    • Bargaining for Development Article
    • July 19, 2003
    ...1990); Frisella v. Town of Farmington, 131 N.H. 78, 550 A.2d 102 (1988); Baltica Constr. Co. v. Planning Bd. of Franklin Township, 222 N.J. Super. 428, 537 A.2d 319 (1987); Batch v. Town of Chapel Hill, 326 N.C. 1, 387 S.E.2d 655 (1990); Unlimited v. Kitsap County, 50 Wash. App. 723, 750 P.......
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