COURT HOUSE – Middle Township is playing catch up with respect to its status regarding affordable housing obligations.
In January, the township instructed a special Mount Laurel counsel to “swiftly take action” to file a motion with the New Jersey Superior Court requesting temporary immunity from builder’s remedy lawsuits while it amended its Housing Element and Fair Share Plan “to comport with its current fair share obligations.”
On Feb. 4, the governing body took action to bar the issuance of building permits for subdivided lots on Patsy’s Way, the site of a previous attempt to construct an affordable housing complex. That proposed project had met with community opposition and permits were reluctantly issued for it only after the developer filed two lawsuits that left the township vulnerable to a higher-density development.
Background
Developer Ronald Ruckenstein had plans for a Patsy’s Way subdivision encompassing nine residential lots. His stated desire was to create a special-needs housing development on the almost four acres of land.
Neighboring residents opposed the plan. They formed a group called the Friends of Patsy’s Way. The opposition focused on the lack of necessary amenities in the area, amenities they believed were needed to support a special-needs community.
Ruckenstein claimed that Middle Township sided with the residents and unreasonably erected “artificial roadblocks to the project.” He made that claim in one of two lawsuits he filed in 2016, one in federal court and the other in state court.
The township, at the time vulnerable to an affordable housing builder’s remedy lawsuit, settled with Ruckenstein in December 2016 only weeks before he was expected to lose portions of his financing at the end of the year. That his financing was in danger due to his inability to obtain the necessary permits from the township was an element of his court case.
As part of the settlement, the township issued the necessary permits. Theoretically, the project had a green light to proceed.
What actually happened, all went silent. No development was initiated. The financing did not materialize and the FDIC (Federal Deposit Insurance Corporation) eventually took ownership of the property.
As a condition of the settlement, any developer of the property was required to maintain an irrevocable standby letter of credit. One had been issued in the amount of $609,000 by Harvest Bank in 2006. The bank has since become insolvent with its assets and liabilities assumed by First Citizens Bank and Trust Company in North Carolina. According to the township, First Citizens has no record of any Patsy’s Way letter of credit.
The Feb. 4 action by the township stated, “No certificate of occupancy or building permit shall be issued with regard to any of the subdivided lots on the site until such time as a viable letter of credit or bond is posted in accordance with the requirements of the subdivision resolution.”
The land is in the hands of the FDIC and the agency is offering it for sale. An FDIC site advertising the property values the combined lots at $245,000.
According to township Solicitor Marcus Karavan, the attempts by the FDIC to sell the subdivision led the governing body to take action that would make clear to any interested buyer the requirement to reestablish the letter of credit before any permits could be issued.
Middle Township and COHA
More than 40 years ago, the New Jersey Supreme Court ruled that municipalities must establish inclusionary zoning regulations that provide a realistic opportunity for the development of low- and moderate-income housing.
The decision has had a long and tortuous history of litigation leading to a ruling in 2015 that shifted control to an executive agency created by the state to the courts.
As part of that state Supreme Court decision, municipalities were allowed to file plans requesting declaratory judgment actions. That process, even before the plans were approved, granted the municipalities temporary immunity from a special kind of litigation termed a builder’s remedy lawsuit.
Middle Township elected not to file for declaratory judgment in 2015 when many other county municipalities did so. This left the township without immunity.
A builder’s remedy lawsuit is a special type of litigation in which a developer sues a municipality for practicing exclusionary zoning and not allowing the reasonable development of its fair share of affordable housing. The developer then proposes a higher-density project on its property than would otherwise be allowed. The project would also have a “substantial” affordable housing component.
It was the threat of losing a builder’s remedy lawsuit that led the township to the 2016 settlement with Ruckenstein in which the building permits for the proposed Patsy’s Way development were finally issued.
The possible link between the two actions taken by the township committee in January and February of this year lies in its desire to avoid the same situation in which it found itself when sued by Ruckenstein in 2016.
Taking action for “violation of the conditions of site approval” because of the lapse in the irrevocable letter of credit, provided notice to any potential developer that the township would enforce the terms of the settlement with Ruckenstein regarding any proposed project at Patsy’s Way.
Filing for temporary immunity while seeking an overall settlement with the Fair Housing Center, an advocacy group, regarding the township’s affordable housing plan is a way for the township to gain protection from the very type of lawsuit it felt forced to settle in 2016.
Recently, a series of settlements with the fair housing advocacy group has been approved by the courts including settlements in Avalon, Stone Harbor, Ocean City, Sea Isle City and Cape May.
According to Karavan, the township’s negotiations with the Fair Housing Center have begun.
Over the last few years, Middle Township has attempted to address some of its obligation for affordable housing. Two Conifer projects, one each in Rio Grande and Court House, added 160 affordable housing units to the township inventory.
A proposed project for a combination townhouse and apartment complex in Rio Grande was described as part of Mayor Timothy Donohue’s State of the Township 2019 Address Feb. 21. Donohue said during his address that the proposed complex anticipated a 20 percent set aside for an affordable housing component.
If the township is able to reach a settlement regarding its affordable housing obligations and that settlement gains court approval, the municipality would gain immunity from lawsuits until 2025 when affordable housing obligations must once more be revisited.
To contact Vince Conti, email vconti@cmcherald.com.
Dennisville – As a parent of a Tech student it would be great if the school would update their staff directory. So many old staff still listed and no new teachers listed. What gives?
