“Time of Application” Rule in Municipal Land Use Law is Construed in Favor of Developers

Jai Sai Ram, LLC v. South Toms River Planning and Zoning Bd., 446 N.J. Super. 338 (App. Div. 2016).  As Judge Reisner stated in her opinion in this case today, before the Legislature amended the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq. in 2010, “our courts applied the ‘time of decision’ rule, under which a decision concerning a land use application would be based on the municipal ordinance as it existed at the time the application or appeal was being decided.  The time of decision rule allowed municipalities to block proposed developments by changing the applicable zoning ordinances while the development applications were being considered.”

In 2010, the Legislature adopted N.J.S.A. 40:55D-10.5, known as the “time of application” rule.  Citing legislative history and the Governor’s signing message, Judge Reisner said that the statute’s “clear purpose was to assist developers and property owners by obviating the time of decision rule.”  The time of application rule states that “those development regulations which are in effect on the date of submission of an application for development shall govern the review of that application for development and any decision made with regard to that application for development.  Any provisions of an ordinance, except those relating to health and public safety, that are adopted subsequent to the date of submission of an application for development, shall not be applicable to that application for development.”

Today’s case, however, involved a post-application ordinance amendment that favored a developer,  Wawa, Inc., the developer, sought to build a combined convenience store and gas station on property that was located partially in a highway development zone and partially in a residential zone.  In neither zone was Wawa’s proposed use a permitted one under the zoning ordinance.  It also was not clear whether Wawa’s proposal would be considered as seeking two principal uses on the same lot, which the zoning ordinance did not allow.

After Wawa filed its application for site plan approval, bulk variances, and a use variance, however, the municipal ordinance was amended, in 2013, to rezone the property and its surrounding area as a special economic development (“SED”) zone.  “[T]he SED zone did not specifically provide for a combined gas station/convenience store use, and the 2013 zoning amendment did not change the ordinance’s prohibition against siting two principal uses on a single lot.”  The defendant Board thereafter granted all the relief sought, including the use variance, and found that the convenience store/gas station was a single principal use.

Plaintiffs appealed to the Law Division, but that court affirmed the approvals.  Plaintiffs then appealed to the Appellate Division.  “While this appeal was pending, the municipality amended its zoning ordinance to specifically designate ‘single use retail sales & gasoline filling stations operated by a single business entity … not part of a planned development’ as a permitted principal use in the SED zone.”  Judge Reisner found that this amendment was to be applied in favor of Wawa, and that it mooted plaintiffs’ appeal.

“[W]hile the literal terms of the statute could be construed to prevent a favorable land use amendment from applying to a pending application, that reading would be completely contrary to its purpose.  Accordingly, we conclude that the statute does not apply where the local zoning is amended to specifically permit the use which is the subject of a variance application.  In that situation, the variance is no longer necessary, and it would be absurd, as well as contrary to the Legislature’s purpose, to hold the applicant to the less favorable standards of the pre-existing ordinance.”  Judge Reisner cited the principle that courts will not follow plain statutory language “when to do so would produce an absurd result, at odds with the clear purpose of the legislation.”  The appeal was moot because even if plaintiffs won, Wawa could proceed without a use variance.

Judge Reisner then quickly disposed of other arguments that plaintiffs made.  One of those contentions was that Wawa lacked standing because it was the lessee of the subject property, not the owner, though the owner had given written consent.  Plaintiffs also asserted that certain Board members should not have participated in the proceedings, and that Wawa’s use actually constituted an “automobile service station,” thereby implicating setback requirements that the project did not satisfy.  None of those arguments succeeded.