Court sets aside denial of Town Center
Attorney: Mid'town may appeal to N.J. Supreme Court
BY JAMIE ROMM Staff Writer

Middletown is weighing legal options after a Sept. 10 ruling by the Appellate Division of state Superior Court overturned a lower court ruling upholding the township's denial of the Town Center project.

 

The next step may be heading to the state's high court, according to Township Attorney Bernard Reilly.

Reilly said the Township Committee discussed the matter in executive session at the Sept. 15 meeting and will be looking into what action to take.

"The township is going to review what the next step is to be taken," Reilly said Monday. "If the Township Committee decides to do so, this could go to the state Supreme Court."

The ruling is a victory for developer Mountain Hill LLC, controlled by members of the Azzolina family, which has been involved in a 10-year struggle to have its Town Center project approved.

According to Gary E. Fox, Mountain Hill's attorney, the decision is a major victory for the Town Center proposal.

"The appellate court essentially agreed with us on every issue," Fox said. "They said that the Planning Board should have taken our January 2003 application."

Fox said the original January 2003 development application to the Planning Board would be going in front of the board in the near future.

He said that Mountain Hill's next step would be to go back and attempt to do what the developer wanted to do five years ago.

"We will be going forward with our application," Fox said. "We hope to have our hearing begin shortly."

According to the court's Sept. 10 opinion written by Appellate Division Judge C.L. Miniman, the 2003 master plan is invalidated and the 1993 master plan is now the one the township will have to follow.

The court overturned the 2006 decision by state Superior Court Judge Lawrence Lawson that ruled the Planning Board should follow the 2004 master plan. Lawson also ruled that former Mayor Joan Smith did not have a conflict of interest in voting on the Town Center application.

Miniman outlined the major issues in the opinion. In the appellate court decision, she wrote that the legal back-andforth between Mountain Hill and the township has lasted almost 10 years.

"The history of Mountain Hill's efforts, spanning almost a decade at the municipal and trial court levels, to create a planned development on property fronting on Route 35 in Middletown called the Town Center ended with the November 17, 2006, final judgment dismissing all three actions pending against defendants," the opinion states. "That history has been riddled with municipal conflicts of interest that were ignored at the municipal level."

One of the major conflicts was over which master plan the Planning Board would use for its decision,

According to Fox, the 1993 master plan supported the town center project while the 2004 master plan invalidated it.

The revised master plan in 2004 was approved to establish a model for land use in Middletown and infuriated proponents of a town center development.

The plan, unanimously adopted by the Planning Board on Jan. 29, 2003, was a policy document "to serve as a development and conservation guide for the 24,000-some acres that comprise the township," as described in the plan.

The appellate court ruled that Smith should not have had a vote on the Planning Board hearing to rezone former Assemblyman Joseph Azzolina Sr.'s property from town center to active adult community, because her title company had prior business dealings with Mountain Hill.

In the current ruling, the appellate court said the Planning Board should have heard Mountain Hill's January 2003 application.

Mountain Hill in 2003-2004 developed four plans that were to be heard in front of the Planning Board.

The first three plans included four single family homes and four apartments in the light industrial portion, which would have required special use variances. The township denied these variances in 2003. Mountain Hill challenged the decision.

There had been four other lawsuits filed between Mountain Hill and Middletown.

One challenged the adoption of a new master plan that designated the Mountain Hill property for active adult housing, strip retail and light industrial. Another, filed by 25 residents, including one of the principals of Mountain Hill, called for an investigation into the township's fiscal expenditures. The third alleged various violations of the Open Public Meeting Act regarding the Town Center.

And last, one sought approval to build the Town Center as a "builder's remedy" under the Mount Laurel doctrine, the state's affordable-housing law that requires each community to create affordable units.

All of the lawsuits have been disposed of with the exception of the first.

On Oct 31, 2003, the Planning Board denied Mountain Hill the ability to file any more applications for the Town Center.

The state also declared an injunction maintaining the same prohibition based on "the numerous lawsuits that were pending," according to the opinion issued by Lawson.

The proposed Town Center, a $150 million, 137-acre mixed-use development, would have been located on Route 35, from Kanes Lane to Kings Highway East.

Mountain Hill, which is controlled by members of Azzolina Sr.'s family, sought to overturn a zoning change adopted by the Middletown Township Committee about five years ago to stop the project from getting off the ground.

According to Fox, the Azzolina family acquired this property over a period of many years between 1954 and 1993 with the goal of building a shopping center.

The original zoning permitted the combination of retail, residential and commercial uses being proposed, but was changed to permit age-restricted housing.

The proposed Town Center was slated to be 1.5 million square feet of retail or office space, apartment or townhouse units, and parking space for nearly 5,000 vehicles.

Initially, the property was located in the M-1 (light industry) and B-2 (business) zones.

Azzolina learned that the Planning Board was revising the township's master plan and asked that all of his property be included in one business zone rather than two, according to Fox.

At the time, Azzolina owned 85 acres of land available for the town center project.

In 1993 the Planning Board amended Middletown's master plan and embraced the Town Center concept advocated by the state, according to the opinion.

It designated "one of the last and largest areas of contiguous developable land in the township" along Route 35 as the PD (planned development) zone, including the property owned by the Azzolina family.

The master plan recommended that the Township Committee "consider the positive aspects that a town center could bring to the community."

In 1994 the Township Committee adopted a zoning ordinance that followed the recommendations contained in the 1993 master plan, including a PD zone applicable to Azzolina's 85 acres along Route 35.

The Azzolina family, with the encouragement of municipal officials, began to acquire additional property for the Town Center, relying on the municipality's representation that the additional property would be included in the PD zone, according to the court opinion.

Between 1993 and 1999, they acquired another 50 to 52 contiguous acres.

All of this property was transferred to Mountain Hill, which was initially owned by Joseph J. Azzolina Jr. and his cousin Phil Scaduto,

In early 2000, Mountain Hill officials unveiled a concept plan for the Town Center to be located on all 137 acres and met with a number of Middletown officials, including the chair of the Planning Board, to ascertain whether the property zoned M-1 would be rezoned PD as first indicated in 1993.

Most of the officials reacted positively, although the Planning Board chair at that time expressed that the project was too big, according to the opinion.

About the time that Mountain Hill's concept plan was presented, Middletown commissioned T&M Associates to perform a traffic study of Route 35 and on May 3, 2000, T&M released its final Route 35 Corridor Study.

T&M analyzed the impact of Middletown's zone plan on traffic generation along Route 35 from the Holmdel border to Red Bank. It found the traffic conditions at the time of the study to be "generally acceptable although some approaches at a few intersections experience[ d] lengthy delays."

Fox said that a zone could be changed by the township if proper planning and a adherence to land-use law was demonstrated.

He said that the initial Superior Court ruling would not have allowed that to occur.

"However there are exceptions [to zoning law], and we should be an exception," Fox said. "Initially they said we shouldn't be, but this decision said we are."

Fox said that this decision is something that is unusual to the legal system.

"The Appellate Division, in a very interesting and fairly unique display, told Judge Lawson that he interpreted the laws incorrectly," Fox said. "His decision was dismissed."