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N.J.S.A. 40:55D-42 states in pertinent part: The governing body may by ordinance adopt regulations requiring a developer, as a condition for approval of a subdivision or site plan, to pay the pro-rata share of the cost of providing only reasonable and necessary street improvements and water, sewerage and drainage facilities, and easements therefor, located off-tract but necessitated or required by construction or improvements within such subdivision or development. Such regulations shall 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.
Defendant Raymond Plaza's application sought permission to develop three multi-story residential buildings on a property in the Township's Industrial Zoning District, which did not permit multi-family residential housing. He amended his application to limit eighty percent of the condominium units to persons at least fifty-five years old. Accordingly, Plaza's application sought a use variance as well as other variances. Defendant Plaza's application was opposed by Plaintiff 520 Victor Street Condominium Association, which operated an adjacent multi-family residential development called Saw Mill Commons. Defendant Board of Adjustment voted to approve defendant plaza's application. Defendant Board granted a use variance and other variances and approved the site plan. Defendant Board made the approval subject to sixteen conditions, one of which was that defendant Plaza make the $400,000 contribution. Plaintiffs filed in the Law Division a complaint in lieu of prerogative writs, seeking to void the Board's resolution. After trial, the judge dismissed the complaint with prejudice and affirmed the Board's actions, finding they were not arbitrary, capricious, or unreasonable. Plaintiffs appealed the decision and raised numerous challenges to the Board's resolution, including its requirement of a $400,000 contribution by Plaza.
Did the Defendant Board comply with N.J.S.A. 40:55D-42 or the pertinent Township ordinance when it required the contribution?
The court concluded that the defendant Board did not comply with N.J.S.A. 40:55D-42 or the pertinent Township ordinance when it required the $400,000 contribution. The defendant Board did not calculate the $400,000 figure after determining the improvements necessitated by the proposed development, estimating the costs of those improvements, and applying the required formulas to ascertain the pro-rata share of defendant Plaza and others. Instead, the $400,000 figure arose through the offer, counteroffer, and negotiation. The court found that the resolution made the contribution a condition for approval of a subdivision or site plan under N.J.S.A. 40:55D-42. The court further held that defendant Board's argument to the contrary was irreconcilable with the language of its resolution, and would leave its demand for $400,000 without any statutory basis. Thus, the Court vacated defendant Board’s approval of Plaza's application and remand the matter to make a new determination.