Shipyard Assocs., LP v. City of Hoboken

• Decision Date: 05 May 2020
• Docket Number: 082446,A-83/84/85 September Term 2018
• Citation: 230 A.3d 278,242 N.J. 23
• Parties: SHIPYARD ASSOCIATES, LP, Plaintiff-Respondent, v. CITY OF HOBOKEN, a municipal corporation of the State of New Jersey, Defendant-Appellant, and Fund for a Better Waterfront and Hudson Tea Buildings Condominium Association, Inc., Defendants/Intervenors-Appellants.
• Court: New Jersey Supreme Court

242 N.J. 23

230 A.3d 278

SHIPYARD ASSOCIATES, LP, Plaintiff-Respondent,

v. CITY OF HOBOKEN, a municipal corporation of the State of New Jersey, Defendant-Appellant,andFund for a Better Waterfront and Hudson Tea Buildings Condominium Association, Inc., Defendants/Intervenors-Appellants.

A-83/84/85 September Term 2018

082446

Supreme Court of New Jersey.

Argued January 22, 2020

Decided May 5, 2020

Christopher D. Miller argued the cause for appellant City of Hoboken (Maraziti Falcon, attorneys; Joseph J. Maraziti, Jr., of counsel, and Christopher D. Miller, Short Hills, on the briefs).

Rene´e Steinhagen argued the cause for appellant Fund for a Better Waterfront (New Jersey Appleseed Public Interest Law Center and Eastern Environmental Law Center, attorneys; Rene´e Steinhagen and Aaron Kleinbaum, Newark, on the briefs).

Craig S. Hilliard submitted a brief on behalf of appellant Hudson Tea Buildings Condominium Association, Inc. (Stark & Stark, attorneys; Craig S. Hilliard and Eric S. Goldberg, Lawrenceville, on the brief).

Kevin J. Coakley argued the cause for respondent Shipyard Associates, LP (Connell Foley, attorneys; Kevin J. Coakley, of counsel, and Nicole B. Dory and Michael J. Affrunti, on the briefs).

Frank G. Marshall, Jr., argued the cause for amicus curiae New Jersey State League of Municipalities (New Jersey State League of Municipalities, attorneys; Frank G. Marshall, Jr., on the brief).

Robert M. Washburn argued the cause for amicus curiae New Jersey Builders Association (Flaster Greenberg, attorneys; Robert M. Washburn, of counsel and on the brief, and Jeremy S. Cole, Cherry Hill, on the brief).

R. William Potter submitted a brief on behalf of amicus curiae New Jersey Association for Floodplain Management (Potter and Dickson, attorneys; R. William Potter and Peter Dickson, Princeton, on the brief).

JUSTICE TIMPONE delivered the opinion of the Court.

This appeal is the most recent of several proceedings between Shipyard Associates, LP (Shipyard) and the City of Hoboken (the City), which is joined by intervenors Fund for a Better Waterfront (FBW) and Hudson Tea Buildings Condominium Association, Inc. (Hudson Tea) (collectively, appellants).

Initially, as part of a larger development project, Shipyard planned to build tennis facilities on a pier extending into the Hudson River. The City issued land use approvals to that effect. Shipyard then amended that plan, replacing the tennis facilities with two high-rise residential buildings on the pier (the Project). The City ardently opposed that amendment and tried, unsuccessfully, to block the Project by instituting a breach of contract action against Shipyard and a challenge to Shipyard's application for a waterfront development permit.

Now, the City seeks to apply two ordinances -- passed after Shipyard obtained final site plan approval for the high-rises -- that would prohibit residential uses on the pier. In other words, the City asks us to halt Shipyard's proposed construction even though Shipyard's right to build has vested under the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163.

We find that these are unquestionably zoning ordinances subject to the limitations of the MLUL, the plain language of which contains no exception for the retroactive application of changes in zoning requirements within two years of the issuance of a final approval. The City therefore cannot apply either ordinance to the Project, because they became effective within two years of the issuance of Shipyard's final approval. As such, we affirm the judgment of the Appellate Division.

I.

We adduce the following facts from three trial court opinions and a decision of the New Jersey Department of Environmental Protection (DEP) that addressed lawsuits between Shipyard and appellants, which are described more fully below.

A.

Shipyard is the owner of several pieces of property on the City's waterfront abutting the Hudson River. On August 21, 1997, the Hoboken Planning Board (Board) adopted a resolution approving Shipyard's proposal for several luxury high-rise apartment buildings, multiple commercial retail units, parking garages, a park, and a waterfront promenade or walkway. The proposal also included three tennis courts and a tennis pavilion available to the public for a fee on a platform extending into the Hudson River. Shipyard and the City subsequently entered into a developer's agreement memorializing the application approved by the Board.

Shipyard developed most of the property in substantial accordance with the agreement. However, on August 25, 2011, Shipyard filed an application with the Board seeking to amend the site plan approval and replace the tennis facilities with two eleven-story residential buildings. The Board set a date of July 10, 2012, for a hearing on Shipyard's application.

The City was dissatisfied with the proposed changes and attempted to block Shipyard from moving forward. For example, the Project necessitated a new waterfront development permit from the DEP, which the City opposed. Before the scheduled hearing before the Board, Shipyard submitted a revised application to the DEP accounting for the required rehabilitation of the pier to accommodate the two proposed high-rises. Notwithstanding the City's opposition, the DEP issued Shipyard the permit. In an unpublished decision ( Shipyard I ), the Appellate Division affirmed the DEP's decision and ruled that the City and Hudson Tea -- the appellants in that matter -- were neither constitutionally nor statutorily entitled to an evidentiary hearing. We denied the City's and Hudson Tea's petitions for certification. In re Shipyard Assocs. LP Waterfront Dev. Permit, 230 N.J. 401, 168 A.3d 1168 (2017) ; 230 N.J. 397, 168 A.3d 1166 (2017).

The City also filed suit against Shipyard on March 7, 2012, to compel completion of the construction in accordance with the original developer's agreement that provided for tennis facilities. The trial judge, however, dismissed the lawsuit because the City did not have an interest in Shipyard's properties. The judge explained that the developer's agreement contemplated amendments and, alternatively, existed solely to facilitate the execution of the Board's 1997 resolution issuing site plan approvals to Shipyard. As a result, the judge did not allow the agreement or the City to prevent Shipyard from applying to the Board for a modification of the approvals.

Before the trial judge's ruling, on July 10, 2012, the Board voted to deny Shipyard's application for the Project without holding a hearing. The Board was concerned with the City's pending litigation, among other things, and determined it best not to rule on the merits of Shipyard's application.

In response, Shipyard filed suit seeking automatic approval of its application under the MLUL. Shipyard argued that the Board's denial was an impermissible delay rather than an act. A different trial judge heard the case and agreed, finding that the Board's "complete disregard of its statutory duty to hold a hearing on the merits constitute[d] a failure to act." Such failure to act "within the statutory period compel[led] the enforcement of automatic approval" under N.J.S.A. 40:55D-61, a provision of the MLUL. The judge entered a corresponding order finding Shipyard's application automatically approved. Later, the judge denied the Board's motion for reconsideration and clarified that Shipyard's approval was retroactive to the close of the Board's statutorily prescribed period to act: July 2012.

The Board appealed that decision, and the City appealed the ruling dismissing its breach of contract suit. In an unpublished decision ( Shipyard II ), the Appellate Division consolidated the cases and affirmed the rulings. We denied certification. Shipyard Assocs., L.P. v. Hoboken Planning Bd., 232 N.J. 148, 178 A.3d 1266 (2018) ; 232 N.J. 133, 178 A.3d 1257 (2018) ; 232 N.J. 106, 178 A.3d 73 (2018).

B.

In late 2013, during the pendency of those proceedings, the City passed two ordinances: Ordinance Z-263 (Z-263) and Ordinance Z-264 (Z-264) (collectively, the Ordinances). The Ordinances became effective in January 2014 and, as found by the trial court below, were "part of a larger push by State and Federal agencies to deal with issues relating to Hurricane Sandy." The City designated Z-264 specifically as a zoning ordinance adopted pursuant to the MLUL. Z-264 provides, in pertinent part, that "no new construction or substantial improvement of existing structures shall be permitted on piers or platforms projecting into or over the Hudson River or Weehawken Cove." The application of Z-264 to the Project would prevent its completion altogether.

Z-263 expressly provides that it was enacted pursuant to the City's legislatively delegated police power. It amends the City's municipal code to reflect the Federal Emergency Management Agency's Advisory Flood Hazard Map. It is virtually identical to the DEP's Model Flood Damage Prevention Ordinance.

Z-263 further establishes coastal high hazard areas (V Zones) in which "[a]ll construction shall be landward of the mean high tide." The only exceptions for construction "seaward of the mean high tide" are limited to certain uses: (1) those "located or carried out in close proximity to water," such as port facilities designed to unload cargo and passengers or "ship[-]building and ship[-]repair facilities"; or (2) "open space and outdoor passive and active recreational uses." Notably, the pier in question is seaward of the mean high tide in a V Zone, but if the ordinance were applicable here, the Project would not satisfy either of Z-263's permitted uses.

Z-263 restricts construction in other ways as well. For instance, it establishes an additional permit requirement governed by the City's Floodplain Administrator for all proposed construction in V Zones. It also specifies floor heights for certain elevated buildings. Moreover, in "all areas of special flood hazards," Z-263 provides "specific standards" for construction...