Middle Moves to Restart Patsy’s Way Development

COURT HOUSE – Resolution 21 on Middle Township Committee’s Oct. 4 agenda authorized the committee to enter into a developer’s agreement with CKJR LLC, the current owner of 1-19 Patsy’s Way, “in order to enable the completion of the Patsy’s Way subdivision.”
The resolution states that “the township and CKJR LLC desire to have the improvements at the subdivision completed for the health, safety, and welfare of township residents and those property owners in the subdivision.” 
The discussion at the meeting focused on access, roads, and sidewalks rather than the plan for actual housing units.
CKJR purchased the property “on or about Feb. 15, 2019,” which was one month after the municipality sought court protection against exclusionary zoning lawsuits. What sent the municipality to court was potential litigation by a previous developer over the same property on Patsy’s Way.
Background
The potential development of Patsy’s Way dates to Jan. 27, 2005, when the municipality’s Planning Board approved the granting of subdivision approval to the original developers. 
The municipality required a performance guarantee in the amount necessary to secure the improvements for the subdivision. In 2006, Harvest Community Bank issued an irrevocable standby letter of credit for $609,000.
Delays followed and in 2017, a decade after the letter of credit was issued, Harvest Bank became insolvent. The bank was closed by the New Jersey Department of Banking and Finance, with the Federal Deposit Insurance Company named as receiver. First, Citizens Bank and Trust assumed the deposit accounts. In all of this, the letter of credit was lost.
In February 2019, one week before the property was sold to CKJR, the municipality adopted a resolution acknowledging the missing letter of credit. 
The resolution that passed this month removed the requirement for a letter of credit for the completion of the improvements. After a review by the municipal engineer, the decision was made that CKJR was “in a position to complete said improvements without obtaining a replacement letter of credit.”
With that settled, the resolution concluded with the authorization for the municipality to enter into the developer’s agreement.
FSHC Litigation
As this latest effort to complete the Patsy’s Way subdivision advances, so too does litigation brought against the municipality by the Fair Share Housing Center (FSHC), an affordable housing advocacy nonprofit with a court-appointed role in New Jersey’s judiciary-driven affordable housing process.
The FSHC June 1 filed a notice of motion against the municipality, beginning a legal process that seeks to strip the municipality of a 2-year-old temporary judgment and grant of immunity that protected the municipality from exclusionary zoning lawsuits.
The temporary judgment, obtained in January 2019, was the result of municipal action to avoid litigation over the same Patsy’s Way subdivision.
In 2019, there was a proposal to construct an affordable housing complex at Patsy’s Way for individuals with handicaps. The municipality was open to litigation because it did not have court protection as part of a process of developing a plan to meet its affordable housing obligations.
Affirming its intent to modify its Housing Element and Fair Share Plan “to comply with its current fair share obligations,” the municipality was granted the temporary judgment.
According to court papers filed in June by the FSHC, what followed were two-plus years in which the municipality did not achieve “meaningful progress” on such a plan.
Over those two years, the municipality was granted several extensions of its temporary immunity against exclusionary zoning lawsuits. The last extension expired in November 2020, leaving the municipality without protection.
As a result of the new FSHC litigation, the court has ordered mediation before hearing arguments on the motion to dismiss the 2019 temporary judgment. In the interim, the municipality introduced an affordable housing set-aside ordinance in July, but then tabled the ordinance when it came up for a vote to adopt in August.
The court extended the mediation period once and has now set Nov. 19 for hearing arguments on the FSHC motion should no plan be agreed upon before then.
It is in this context that Patsy’s Way came up again, with the waiver of a required letter of credit and an authorization to enter into a developer’s agreement for the property. At present, no set-aside ordinance is in place and the municipality is still in mediation over the FSHC action.
In June, the municipal administrator issued a statement: “A balanced plan to chart a future course on affordable housing in the township is nearing final form.” 
That plan has yet to be released.
Next Steps
The next steps for Patsy’s Way are opaque. The municipality authorized officials to enter into a developer’s agreement, but whether that agreement will become entangled in the affordable housing mediation is not clear. 
The nature of the full plans for the subdivision, if they exist, were not shared with the public when the resolution was voted.
The only subdivision plan approved by the Planning Board was in 2005 for the development of 14 single-family homes on Patsy’s Way.
Sixteen years after the Planning Board meeting in 2005, the municipality is still dealing with the future of Patsy’s Way.
To contact Vince Conti, email vconti@cmcherald.com.