When is an Ordinance a “Zoning Ordinance”?

Shipyard Associates, L.P. v. City of Hoboken, 242 N.J. 23 (2020). [Disclosure: My firm, Lite DePalma Greenberg, LLC, represents the City of Hoboken and certain of its agencies and officials. We did not do so in this case, and do not ordinarily represent the City in matters of this type.].

N.J.S.A. 40:55D-52(a) of the Municipal Land Use Law (“MLUL”), N.J.S.A. 40:55D-1 et seq., provides that “[t]he zoning requirements applicable to the preliminary approval first granted and all other rights conferred upon the developer pursuant to [N.J.S.A. 40:55D-49] , whether conditionally or otherwise, shall not be changed for a period of two years after the date on which the resolution of final approval is adopted ….” This MLUL provision was at the center of today’s unanimous Supreme Court opinion, authored by Justice Timpone.

“A long and winding road” led this case to the Supreme Court’s door. Indeed, nearly half of the Court’s opinion is devoted to recapping the facts and procedural history. In summary, however, plaintiff obtained development approvals from Hoboken’s Planning Board (“the Board”) to construct high-rise residential buildings, retail, and other things along Hoboken’s waterfront. Among the other things was a tennis facility that would extend into the Hudson River on a platform.

After plaintiff had constructed most of the development in accordance with the approvals, plaintiff moved before the Board in 2011 to amend the approvals to allow plaintiff to construct two eleven-story residential buildings in place of the tennis facility. Plaintiff ultimately filed and won, at the trial level and on appeal, a case asserting that the Board’s failure to act resulted in an automatic approval of its amendment request as of July 2012, under section 61 of the MLUL.

In 2013, the City adopted two ordinances, labeled Z-263 and Z-264. Z-264 was designated as a zoning ordinance adopted pursuant to the MLUL, but Z-263 was styled as having been enacted under the City’s legislatively-delegated police power. Either ordinance, if valid, would have blocked plaintiff’s amended development.

Accordingly, plaintiff sued to block the ordinances from being applied. The Law Division granted plaintiff summary judgment, finding that both ordinances were “zoning ordinances” that the two-year protection of MLUL section 52(a) did not allow to affect plaintiff’s approvals. The protection began in July 2012, and the ordinances were adopted in 2013, less than two years later. The Appellate Division affirmed. Today, the Supreme Court, applying de novo review to the summary judgment in plaintiff’s favor, unanimously affirmed as well.

Since Z-264 was designated as a zoning ordinance when adopted, Justice Timpone focused on Z-264. Though recognizing that the City adopted Z-264 “to prevent flooding in the wake of Hurricane Sandy,” and that it adopted that ordinance pursuant to its police power, the Court did not find those facts dispositive. Instead, Justice Timpone said, the Court would consider “not only how the municipality characterizes the ordinance, but also how the ordinance functions in practice.”

Z-263 changed the permitted uses, specified floor heights for certain buildings, prescribed (for flood hazard areas) construction materials and methods, the design of utilities, and the manner of subdivision. All requests for variances from Z-263 were to go to the Board, “the same entity that issues land use permits for the City.” Functionally, Justice Timpone held, Z-263 “is a zoning ordinance because its provisions set specific standards, methods, and uses governing construction– should it occur at all.”

The City’s fallback argument was that if Z-263 were a “zoning ordinance,” the Court should still enforce it because MLUL section 52(a) exempts ordinances affecting public health and safety from the two-year protection. Justice Timpone did not agree. There was no such exemption in that section’s plain language, though other MLUL sections did contain such verbiage. The Court found the City’s reliance on B&W Associates v. Hackettstown Planning Bd., 242 N.J. Super. 1 (App. Div. 1990), inapposite on the exemption issue.

Finally, the Court held that the two-year protection period had been tolled during the pendency of the lengthy litigation surrounding plaintiff’s development. MLUL section 21 provides for tolling where a developer is prevented from proceeding with development by a “legal action instituted … to protect the public health and welfare or by a directive or order issued by any State agency, political subdivision or court.” The City had asserted public health and safety– arguments that are plainly within the ambit of the tolling provision.” For those reasons, the Court affirmed the lower courts’ rulings that section 52(a) blocked the ordinances and allowed plaintiff to proceed on its 2012 automatic approval.