New Jersey Case of Hillsborough Properties v. Township of Hillsborough Demonstrates Difficulty in Challenging Zoning Ordinances

February 2012Articles In the Zone

In Hillsborough Properties v. Township of Hillsborough (Docket No.: HNT-L-14-08; decided: December 22, 2011), the landowner sought invalidation of the Hillsborough Township’s Economic District (ED) Zoning.

Of the landowner’s 334 acres of property, 308 were zoned ED and the remaining were zoned AG (Agricultural). The landowner’s property was bordered to the north by active recreational uses, including a baseball field; to the south by a tract planned for recreational use; to the east by single family homes; and to the west by fields and vacant woodland. The property had limited vehicular access and is essentially a large flag lot with a convoluted access configuration.

The primary principal permitted uses in the ED zone are offices and office buildings, but corporate centers, restaurants, theaters, recreational facilities, fiduciary institutions or banks, libraries, museums, medical centers, hotels, motels, retail sales (but only in relation to a permitted product manufacturing of a company located on the site), childcare centers and schools are also permitted. Light manufacturing is allowed as a conditional use.

The record reflected that over the years, a number of developers made proposals to alter the zoning for the tract, including to permit warehouses and the introduction of mixed use development such as residential development. Moreover, the size of the ED zone became smaller over time, with the township rezoning much of the area, but not the landowner’s property, to more restrictive uses allowed by the RD zone.
Finally, the tract had some wetlands affecting access to the site, as well as site contamination and environmental areas of concern, which needed to be addressed.

The court, in reviewing the existing legal framework, found that courts do not zone — localities do. The court’s task (as previously stated in many prior cases) is not to determine what the judge or court in his or her wisdom might have decided but whether the municipal decisions and issues are arbitrary.

The court found that an ordinance did not have to be a perfect fit, or even a very good one, as long as it had some tendency to produce the desired result. Ordinances have a presumption of validity, which can only be overcome by a showing that the ordinance is clearly arbitrary, capricious, unreasonable or plainly contrary to fundamental principles of zoning. Municipalities are entitled to deference and the usual rule is that in cases where an ordinance has both a valid and invalid purpose, a court should credit the valid one.

The stated purpose of the ED zone is to recognize interrelationships between industrial and office park development and limited retail uses. Moreover, the ED zone is intended to generate an employment area designed and developed according to a plan as a single entity. The court then determined the ordinance must be sustained if it has some tendency to produce employment and nonresidential ratables.

The court found that neither the landowner nor the township was terribly clear about the palette of uses that would be appropriate for the property. While the landowner argued strenuously that a corporate user was unlikely given the remoteness of the property and the other site constraints, the landowner’s experts never opined that, from a planning standpoint, nonresidential zoning was inappropriate.

While the township’s expert conceded that large corporate users were unlikely, she defended the ordinance by asserting that small, incremental class-B type office buildings would be appropriate on the site because smaller developments do not require major visibility and may be accomplished in small pieces over time. Moreover, smaller developments would have less impact on the local roadway network.

The landowner objected to the township planner’s opinions and argued her opinion was a net opinion.

The case contains an interesting discussion of the methods to attack an expert opinion but ultimately found that since the planner articulated the purposes of zoning to be served by the particular ordinance, the landowner’s property was not the appropriate focus for residential development and the township expert’s opinion was valid. Interestingly, the court felt that even if the development needed an extended period of time to take place, the zoning scheme was not arbitrary. The court further found that some of the delay in making the property desirable for development under the ED zone was because the landowner did not move forward with remediation or address the site contamination.

The court further found the record had no evidence of efforts to market the property for nonresidential use. The court found the present real estate slow-down was a reason why the property had not been developed during a 22-year period.

The landowner further attacked the ordinance on the grounds that it violates the Municipal Land Use Law because the MLUL requires that a zoning ordinance shall be drawn with reasonable consideration to the character of each district and suitability for particular uses in order to encourage the most appropriate use of the land. The court, in discussing that argument, found there is no case law and the particular suitability must be reviewed in context of the overall rationality of the ordinance under the circumstances, including the principle that municipal decisions are entitled to significant deference. Where the validity of the ordinance is debatable, the validity must be upheld under the “no discernable reason” standard.

Finally, based upon the township’s admission that smaller scale developments would be feasible on the property, the court struck down the 50-acre minimum lot area requirement and remanded the matter for consideration of an appropriate smaller, minimum-acreage size – more consistent with its own justification for the ordinance. The court then dismissed the attack on the ED zoning classification for the landowner’s property and ordered a revision of the minimum lot size in the ordinance within 90 days.

In concluding, the court found that much of the landowner’s case depended on the alleged lack of market for the zoned use and this argument requires a far higher degree of proof than was elicited in the case. The court found that ordinances cannot be valid one day when the market is good and then suddenly become invalid when the market turns sour.

The case demonstrates the difficulty in challenging a zoning ordinance. Municipalities are given substantial deference by the courts, and an ordinance will be invalidated only upon a clear showing that the ordinance is plainly arbitrary, capricious or unreasonable.

For more information, please contact Jack Plackter.