Reddy v. Moorestown Twp. Planning Bd.
| Docket Number | A-3575-21,A-0752-22 |
| Decision Date | 21 June 2023 |
| Parties | VISHNU REDDY, Plaintiff-Appellant, v. MOORESTOWN TOWNSHIP PLANNING BOARD and LMC PROPERTIES, INC., Defendants-Respondents, and MOORESTOWN FAMILY APARTMENTS, LLC, Defendant/Intervenor- Respondent. VISHNU REDDY, Plaintiff-Appellant, v. TOWNSHIP OF MOORESTOWN, Defendant-Respondent, and MOORESTOWN FAMILY APARTMENTS, LLC, Defendant/Intervenor- Respondent. |
| Court | New Jersey Superior Court — 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.
Argued May 16, 2023
On appeal from the Superior Court of New Jersey, Law Division Burlington County, Docket Nos. L-1723-21 and L-1877-21.
Bernard M. Reilly argued the cause for appellant (Gasiorowski &Holobinko, attorneys; R.S. Gasiorowski, on the briefs).
Eric J. Riso argued the cause for respondent Moorestown Township Planning Board (Zeller &Wieliczko, LLP, attorneys; Eric J. Riso, on the brief).
Sherman, Silverstein, Kohl, Rose &Podolsky, PA, attorneys for respondent LMC Properties, Inc., join in the brief of respondent Moorestown Township Planning Board.
Douglas L. Heinold argued the cause for respondent Township of Moorestown (Raymond, Coleman, Heinold, LLP, attorneys; Douglas L. Heinold, on the brief).
Kristopher J. Berr argued the cause for intervenorrespondent Moorestown Family Apartments, LLC (Del Duca Lewis &Berr, LLC, attorneys; Kristopher J. Berr, on the brief).
Fair Share Housing Center, attorneys for amicus curiae Fair Share Housing Center, Inc. (Rachel N. Lokken, of counsel and on the brief).
Before Judges Messano and Perez-Friscia.
In these consolidated appeals of two related actions in lieu of prerogative writs, plaintiff Vishnu Reddy appeals from the June 10, 2022 order granting summary judgment and dismissing plaintiff's complaint against defendants, Moorestown Township Planning Board (Board) and LMC Properties, Inc. (Lockheed) (A-3575-21), and the July 26 and September 26 2022 orders granting summary judgment and dismissing plaintiff's complaint against the Township of Moorestown (Township) (A-752-22). Following our review of the arguments, the record, and applicable law, we affirm in part and reverse in part.
Plaintiff filed two complaints in lieu of prerogative writs, which arose from actions taken by the Township in furtherance of its affordable housing obligations. Relevant to both appeals was the participation of Councilman and Board member David Zipin on the approval of Township ordinances and Board resolutions related to affordable housing development while Zipin was employed by the New Jersey Housing and Mortgage Finance Agency (HMFA). We limit our recitation of the facts and procedural history to the relevant issues presented on appeal.
In 1988, the Township acquired an 11.23-acre lot, known as the Nagle Tract, for the purpose of affordable housing development. For years, the Township designated the property for affordable housing in the Township's "Housing Element and Fair Share Plan," which was created to meet its obligation in response to In re Adoption of N.J.A.C. 5:96 &5:97, 221 N.J. 1 (2015).[1]
On February 23, 2021, the court entered an order that required the Township to "select a developer for the Nagle [Tract]," "enter into a developer's agreement," and "provide . . . [a] construction schedule" within ninety days. The Township designated Walters-Cornerstone Development, LLC (WCD) as the developer, and authorized the mayor to "execute a Memorandum of Understanding [with WCD]." Pertinently, the order also required the Township to "expeditiously work with the designated developer" to submit "an application for mixed-income tax credit funding in the 2021 application cycle." The order required the Township to "inform the [c]ourt . . . [if] the developer [was] unsuccessful in securing tax credit funding in the 2021 applications." Further, if the developer failed to obtain tax credits, then the Township, as an alternative, was to "expeditiously pursue the increased setaside of [seventy-six] affordable family units on the Nagle [Tract] via municipal subsidy." Thus, the Township, from February of 2021 forward, was to work with the designated developer to obtain tax credit funding.
Lockheed operated its facility on property adjacent to the Nagle Tract. When Lockheed learned of the proposed housing development near its facility, it informed its "primary customer . . . the U.S. Navy." On March 11, 2021, the Navy informed Lockheed of its objection, which stated: "It is the Navy's position that any residential or commercial development of the Nagle Tract property poses Counterintelligence (CI), Signal Intelligence (SIGINT) and Operational Security (OPSEC) threats." The Navy requested the Township work with Lockheed to consider alternative property solutions. Lockheed sent its objection to the Township and proposed the "exchange of a suitable parcel of nearby land" for the Nagle Tract and offered property Lockheed owned on Borton Landing Road (Borton site). Lockheed thereafter filed a minor subdivision application before the Board to create a 12.5-acre lot to be exchanged for the Nagle Tract. Plaintiff was an owner of property in Moorestown, which was located in "reasonable proximity" to the Borton site.
On June 14, 2021, the Township entered into a Development and Property Transfer Agreement with WCD affiliate Moorestown Family Apartments, LLC (MFA)[2] to develop the Borton site. The agreement provided, "in order for [MFA] to complete the project it will be necessary to obtain and close on the [t]ax [c]redit [f]inancing" with the HMFA. "Closing on the tax credit financing" implemented by the HMFA was a contingency "to commence and complete" the housing project. The agreement also provided the HMFA may require a "form of deed restriction." It is clear MFA and the Township Council contemplated tax credits would be necessary for the affordable housing development of the Nagle Tract and then the Borton site.
On the same date, the Township introduced two ordinances. The first ordinance, 20-2021, rezoned the two lots and the second ordinance, 21-2021, authorized the exchange of the properties. Zipin participated in and voted on the Township ordinances adopted on June 28, 2021.
The rezoning ordinance memorialized the objections from Lockheed and the Navy, as well as Lockheed's proposed exchange of a "suitable property within the vicinity to be used for affordable housing." The Township had referred the ordinance to the Board for review and recommendation. On June 17, 2021, the Board reviewed the ordinance and heard from its expert, Michelle M. Taylor, PP, AICP, who opined the ordinance was substantially consistent with the Master Plan for development of affordable housing, and with the Municipal Land Use Law (MLUL). The Board adopted Taylor's opinion, by resolution, 2021-28. Zipin had moved the proposed ordinance for consideration by the Board, recommended its adoption by the Township, and voted to approve the resolution.
The second ordinance authorized the property exchange of the Nagle Tract for the Borton site. The ordinance memorialized the necessity for the Township to "expeditiously[,] with the designated developer . . . submit an application for mixed income tax credit funding . . . to provide funding to create a yield of [seventy-six] affordable housing units." The ordinance also noted the objections and the public's interest in "the exchange of land . . . since the exchange will facilitate the development of affordable housing in accordance with the Township's constitutional obligations" and "[in] compl[iance] with the Conditional Judgment of Compliance and Repose entered."
On August 10, 2021, plaintiff filed the first complaint, which challenged the Township's adoption of both ordinances. Plaintiff amended the complaint on August 23, 2021, and alleged: (1) Ordinance 20-2021 was invalid as inconsistent with the Master Plan, N.J.S.A. 40:55D-62(a); (2) Ordinance 202021 was invalid for insufficient notice, N.J.S.A. 40:55D-62.1; (3) Ordinance 20-2021 was invalid as improper spot zoning; (4) Ordinance 20-2021 was invalid as improper contract zoning; (5) Ordinance 20-2021 was invalid as arbitrary, capricious, and unreasonable zoning; (6) both ordinances were invalid based on Zipin's conflict of interest; and (7) Ordinance 21-2021 was invalid as a violation of a proper land value exchange, N.J.S.A. 40A:12-16.
The Township filed an answer on September 20, 2021. MFA successfully moved to intervene, to protect its interest as the developer. FSHC successfully moved to appear as amicus curiae to ensure the Township "expeditiously satisfie[d] its constitutional obligations." Plaintiff asserted the conflict of interest claim was added to the amended complaint because plaintiff learned of the necessity for the HMFA funding for the Borton site, after receipt of the affordable housing litigation August 19, 2021 consent order, which provided "the Township and [MFA] are committed to ensuring" an application for tax credit to the HMFA would be submitted, and plaintiff learned of Zipin's employment at the HMFA.
On February 3, 2022, plaintiff moved for partial summary judgment seeking to invalidate the ordinances based on Zipin's participation in the adoption of the ordinances and resolution while he had a conflict of interest. The Township and FSHC opposed. MFA cross-moved for summary judgment on the conflict issue, and the Township joined in the motion. On July 26, 2022, the judge granted MFA's summary judgment motion, finding no conflict of interest existed, and dismissed the claim. The judge...
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