Blackridge Realty, Inc. v. The City of Long Branch, ___ N.J. Super. ___ (App. Div. 2025). Pursuant to a written developer’s agreement, plaintiff (“Blackridge”) was a designated redeveloper under the City of Long Branch’s Oceanfront-Broadway Redevelopment Plan. That plan was adopted pursuant to the Local Redevelopment and Housing Law (“LRHL”), N.J.S.A. 40A:12A-1 et seq. Blackridge successfully completed its redevelopment project.
Thereafter, as Judge Berdote Byrne’s opinion for the Appellate Division today, another entity, 290 Ocean LLC, “proposed a redevelopment project to the City that would require an amendment to the Redevelopment Plan. The resulting Plan Amendment relaxed several previous restrictions contained within the original Redevelopment Plan. The City's planner, City council, and mayor all approved the Plan Amendment, finding it consistent with the City’s Master Plan and in the City’s best interests.” The City and 290 Ocean then entered into a developer’s agreement that required, among other things, that 290 Ocean pay a $2 million fee to the City’s Developer Contributions Trust Fund, a limited purpose fund.
Blackridge challenged the Plan Amendment and the required $2 million payment in a Complaint in Lieu of Prerogative Writs. The Law Division granted summary judgment to defendants City and 290 Ocean. Blackridge appealed, but today the Appellate Division affirmed the Law Division’s ruling.
Judge Berdote Byrne first discussed the applicable standards of review in some detail. The panel’s review of the grant of summary judgment was de novo, as was review of a statute or ordinance. But “[m]unicipal actions have a presumption of validity and reasonableness,” and that presumption may be overcome only upon a showing that the municipal action was arbitrary, capricious, or unreasonable. The Appellate Division would not “pass on the wisdom of the ordinance as that is exclusively a legislative function.”
The biggest issue involved the $2 million payment from 290 Ocean to the City. As Judge Berdote Byrne summarized Blackridge’s allegations regarding that payment, it “was unlawful because it was ultra vires, lacked standards to determine the amount of the $2 [million] fee in any ordinance, was unrelated to the impact of the development of [290 Ocean's project], had no relationship to the ‘costs of the redevelopment entity’ as those terms are used in N.J.S.A. 40A:12A-8(f), and was not authorized by the LRHL.”
Judge Berdote Byrne observed that the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq. (“MLUL”), which governs the general run of development applications, expressly allows municipalities to charge developers “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.” Moreover, that same section of the MLUL, N.J.S.A. 40:55D-42, limits payment only to “reasonable and necessary” improvements. The MLUL thus created “a strict nexus between a developer's project and any payment required by the municipality,” codifying pre-MLUL caselaw.
But “the LRHL contains no explicit nexus requirement regarding the amount of payment a municipality may charge a redeveloper to defray its costs associated with redevelopment. [Citation]. The statute instead empowers a municipality to ‘negotiate and collect revenue from a redeveloper to defray the costs of the redevelopment entity’ in order “to carry out and effectuate the purposes of [the LRHL] and the terms of the [municipality’s] redevelopment plan.” N.J.S.A. 40A:12A-8(f). The statute’s plain terms permit a municipality to ‘negotiate’ any payment amount from a redeveloper without requiring a causal connection between the payment and the redeveloper’s project, as long as the municipality demonstrates the payment will defray costs to the municipality associated generally with redevelopment.”
This was a critical difference between the MLUL and the LHRL. Judge Berdote Byrne concluded that “[t]he Legislature's use of the word ‘negotiate,’ failure to set forth a pro-rata or other formula for calculating the amount of payment, and failure to limit the payment to a specific sum or type of improvement demonstrates its conscious choice to afford municipalities discretion in the amount of the payment and its intended use.” Had the Legislature intended to limit payments under the LHRL to those permitted by the MLUL, the Legislature would have included different language in the LHRL, which was adopted nearly 20 years after the MLUL.
The $2 million payment was later designated by ordinance to be used to renovate the City’s senior center, “a group impacted by the redevelopment of the City’s waterfront.” That was consistent with stated goals of the Redevelopment Plan and the LRHL’s purpose of addressing “deterioration in . . . public services and facilities.” N.J.S.A. 40A:12A-2(a).
Though Judge Berdote Byrne rightly recognized the need for transparency in payments from a developer to a municipality, there was no transparency issue here. The $2 million payment “was placed in the Developer Contributions Trust Fund, not a general fund. The senior center is to be in close proximity to the structure the redeveloper sought to build, and either within the Redevelopment Area or abutting it.” The Plan Amendment was the subject of public hearings at which Blackridge participated, and the subsequent ordinance was also enacted in public and specified use of the funds for the senior center. There was no basis to find impropriety in any of that.
The other two issues were easier. Blackridge’s contract as a designated developer under the Redevelopment Plan provided that Blackridge’s status as a designated developer would terminate “’upon the earlier of the [c]ompletion of the [p]roject or five (5) years from its [e]ffective [d]ate.’ Because Blackridge had completed its redevelopment project by the time the Plan Amendment was enacted, its agreement with the City had terminated, thereby extinguishing the City’s obligation to obtain Blackridge's consent before amending the Redevelopment Plan.”
Finally, Blackridge’s spot zoning argument failed. Though the panel rejected the City’s argument that spot zoning had no application to the redevelopment context, there was no genuine issue of fact as to the absence of spot zoning, given that all relevant bodies found the Plan Amendment consistent with the Master Plan and in the City’s best interest. The fact that 290 Ocean was the only developer that would benefit from the Plan Amendment did not mean there was spot zoning. The Plan Amendment was “part of a comprehensive plan to benefit the community and not simply enacted to benefit certain individuals.”