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Automatic Approval Of Site Plan Application Not Thwarted By Board’s “Denial Without Prejudice”

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The validity of an automatic approval of an amended site plan application was affirmed by the Appellate Division in a procedurally complex series of consolidated cases. (Shipyard Associates, L.P v. Hoboken Planning Board; City of Hoboken v. Shipyard Associates, LP; Shipyard Associates, LP v. Hudson County Planning Board and Hudson County Board of Chosen Freeholders)

The developer, Shipyard Associates, was seeking an amended site plan approval to construct two additional buildings in a location that was originally earmarked for tennis courts, and it submitted its application to the planning board in October 2011. The City subsequently sued Shipyard  in March 2012 to enforce its (the City’s) purported rights concerning the tennis courts under a Developers Agreement.

Thereafter, on July 10, 2012, the Planning Board refused to consider the merits of Shipyard’s amended application, although Shipyard’s attorney and witnesses were present on the scheduled July 10 hearing date to present the application. Instead of hearing the application, the Board denied it “without prejudice,” over Shipyard’s objection, on the theory that the Board lacked jurisdiction to entertain the application while the City’s lawsuit was pending. In turn, Shipyard sued the Planning Board, asserting that the Board’s refusal to adjudicate the merits of its application within the statutory timeframe set forth in N.J.S.A. 40:55D-61, resulted in its automatic approval of the application.

The Appellate Division affirmed the lower court’s order that Shipyard’s application was entitled to an automatic approval. The Appellate court stated that in denying the application without prejudice, the Board was unlawfully granting itself an extension of time to hear the application, until the City’s lawsuit was decided. The court stated “[w]e cannot countenance such an end-run around the statute,” citing South Plainfield Properties, L.P. v. Middlesex County Planning Board, 372 N.J. Super. 410, 417 (App. Div. 2004). According to the court, the Board could have heard the application and granted it conditioned on the outcome of the City’s lawsuit, (or denied it) but the Board could not lawfully refuse to hear the application, which is what it did here.

Another lesson from the case, said the court, it is that the rule of law is paramount and cannot be sidestepped to avoid deciding unpopular land use applications. The court stated “we have read the transcript of the July 10, 2012 Board hearing, in which objectors were interrupting the proceedings and shouting, ‘we want tennis courts.’ However, the Planning Board was obligated to hear Shipyard’s application, no matter how controversial it was.”

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